Gary Cohn talks federal response to Puerto Rico, tax plan

This is a rush transcript from "Sunday Morning Futures," October 1, 2017. This copy may not be in its final form and may be updated.

MARIA BARTIROMO, HOST: Good Sunday morning everybody, welcome. This week, the White House and congressional Republicans put on the full-court press for tax reform. President Trump heads to Puerto Rico to survey hurricane damage on Tuesday and the Trump administration looks for a replacement for former Health Secretary Tom Price.

Good morning I'm Maria Bartiromo, thanks so much for joining me this morning, this is "Sunday Morning Futures."

With health care in the rearview mirror now, for the time being, President Trump and Republicans are turning their attention to tax reform. How will it affect you, the American taxpayer? The Director of the President's National Economic Council, Gary Cohn will join me live in studio coming up.

Also, could tax reform be used to help peel back the Dodd-Frank financial regulation? I'll talk with House Financial Services Committee Chairman Jeb Hensarling of Texas coming up. Then an emotional scene on Capitol Hill this past week. House Majority Whip Steve Scalise returning to Congress for the first time since being shot in June, at a baseball practice game. What was the mood like inside that chamber? I'll talk with his fellow Congressman Louie Gohmert as we look ahead right now on "Sunday Morning Futures." And Republicans are making their push on tax reform after the latest health care failure, the stakes are high.

This new plan tries to simplify our complicated tax code consolidated the number of tax brackets from seven down to three, sitting individual tax rates at 12 percent, 25 percent, and 35 percent. The President describing it as a "rocket fuel" for the economy saying, it will de live a "middle- class miracle." Joining me right now is President Trump's chief economic adviser and the director of the National Economic Council Gary Cohn.

Director Cohn, good to see you.

GARY COHN, DIRECTOR, NATIONAL ECONOMIC COUNCIL: Maria, it's great to be here.

BARTIROMO: Thank you so much for joining us. You've got a lot on your plate I know that and this tax plan is so important for the economy and for jobs. Can you talk us through what's most important in terms of this plan? What do Americans need to understand?

COHN: Absolutely, Maria. But before I do that, let me just stop and hesitate for a second and talk about Puerto Rico for a second. I just want to reiterate how involved the Administration continues to be. We've spent the entire weekend as we have last weekend working on Puerto Rico, making sure we're out saving lives sustaining lives and making sure everyone in Puerto Rico and the U.S. Virgin islands is taken care of. The United States has gone through extraordinary efforts to deliver goods to the island. Right now, our big challenge to get those goods delivered to the citizens of the island that need those goods.

BARTIROMO: And it's hard, it's an island. You can't get there right?

COHN: It's hard and the infrastructure has been destroyed so we're working full speed ahead. As you know the President and many of the cabinet members will be there on Tuesday to see what more if anything we can do.

BARTIROMO: Yes, but let me just say this because that Mayor from San Juan really gave an aggressive and you know, sort of adamant interview with Geraldo Rivera and she's angry at the President. I mean, is this politics or is this really maybe there could have been more done sooner?

COHN: Look, I think when we look at the history of this, the administration has done an extraordinary job of delivering goods and services and people to the island. We started with 4,500 National Guard there. We now have over 10,000 U.S. government people on the island. There are more ships in the harbor full of material, food, medicine, things to build infrastructure than you could imagine. The challenge now is to get them unloaded and distributed around the island.

BARTIROMO: Well, I know you'll be there, the administration will be there on Tuesday, we'll be watching that. We're going to cover that live obviously and the President has been tweeting about it all weekend. Let me ask you about taxes now because you released a very important plan and it's been a detailed plan but we still don't understand who falls where. So12 percent, 25 percent, 35 percent of the rates, if I make $200,000 where does that fall? Am I getting taxed 25 percent or 35 percent?

COHN: So Maria, remember what we did. We released an outline of the plan. And in the plan, as you point out, we really have four rates. What people are forgetting is we really enlarged the zero rate. We doubled the zero rate. So if you're a family today, you now get the first $24,000 of your income at a zero rate. You then kick into the 12 percent rate, then you go to the 25 percent rate, then you go to the 35 percent rate. We have not determined the breakpoints for that. We have given the ability to determine the breakpoints to the Senate and the House as they write the legislation. The reason we've done that is because one of the two big bright line tests in our tax plan is that we must -- an the keyword is there -- we must have a middle-income tax cut when we're done. So we have told the tax writers, set the brakes where you need to set the brakes to make sure that we end up with a middle-income tax cut.

BARTIROMO: All right. That makes a lot of sense as what you've been talking about the whole time. You want to cut tax for the middle class but I want to show you what Andrew Cuomo tweeted this weekend. And of course, this is the governor of New York where you've got a lot of tax income levels and he tweets out this. "Under the GOP tax plan, every New Yorker, every New York region will see a tax increase. Is this true?"

COHN: Well Andrew tweeted, I completely disagree with that. So first of all --

BARTIROMO: He's saying -- he's saying every New York region is going to see taxes go up.

COHN: Well, I don't know what -- I don't know what he means by every region. I really don't know what he means by that. First of all, we haven't even delivered enough details for him to come to that calculation.

BARTIROMO: Well, let's talk about the elimination of the state and local income tax deduction. This is something I think that he's referring to. Talking about tax rates in New York of 10 percent on a state level, you're talking about property taxes that have been going up and are very significant, so if you eliminate that deduction, that is a tax increase for New Yorkers right?

COHN: It's not necessarily a tax increase. In fact, it's a tax decrease because we're going to replace that with other pieces. What people haven't seen yet and this is -- this is what people have to do. They have to take a look at the plan in its entirety. We going to elongate the brackets. We may change the brackets. We're going to increase credit quite dramatically, the child care credits, where they phase out is going to dramatically change. The size of the child care credit is going to change quite dramatically. We keep talking about the deductibility of state and local taxes and how important that is. Let me give you -- let me give you something that is an absolute and is a fact. Under the old tax system, 25 percent of families actually itemized and took advantage of the state and local tax deduction. So 75 percent of the families in America did not use the itemized deduction to deduct the state and local taxes.

BARTIROMO: Yes, but if you make$200,000 or more, 90 percent of you use that deduction.

COHN: Like I said it's 25 percent. We are designing a tax plan for the United States of America where this is the federal tax plan. We are designing a tax plan to deliver middle-income tax relief to America.

BARTIROMO: I feel like you keep getting bullied though by the left. We knew that the talking point after you released this plan would be this is a tax cut for the rich. And I feel like you're constantly on defense having to defend lower taxes. I saw you were in a review the other day and he kept throwing these gotcha questions at you and you're there saying no, this is not a tax cut for the rich. What's wrong with wealth? What's wrong with coming from nothing working really hard, making money and achieving success? Why do you have to defend that?

COHN: We shouldn't have to defend the American dream. This is America. This is where people come to succeed. This is where people come to earn money. This is where people come with ideas. Look at Silicon Valley. We have Silicon Valley because people can come here with great ideas and build businesses and succeed. This is what makes America great. We want people to succeed but we want people to pay their fair share of taxes.

BARTIROMO: Now you sound like a globalist and that's what they say that there's one faction in the White House whose the globalist as one hire taxes for the rich. And then there's another faction that just wants to cut across-the-board. Where do you sit?

COHN: I want a fair and equitable tax system. One that allows the United States economy to compete on a global basis and one that is fair and allows middle-class families to keep more of what they earn.

BARTIROMO: Isn't it true that the top 10 percent of taxpayers pay 70 percent of the tax? So if you don't cut taxes on the very people that are paying all the tax, you're not really cutting taxes.

COHN: In broad brush terms, that's a relatively true status.

BARTIROMO: So, there you -- there you go. What's the answer then? If you're not cutting taxes on the highest earners, then you're not cutting taxes if they're paying 70 percent of the tax.

COHN: We're -- our objective here is to continue to give middle class, middle-income families a tax cut. Allow middle-income families to keep more of what they earn. They still are paying taxes even though the wealthier people are paying more taxes, middle-income families are still paying taxes and yes, we do believe as an administration, we can have them pay lower taxes.

BARTIROMO: Are you going to have -- well, you say you are already at four rates because of the zero and I understand that. Are you going to have another bracket 44 percent for the -- for the millionaires, 5 million and up? Is that what you're working on right now, another bracket so that the highest do in fact see a higher rate?

COHN: We have given the tax writers both in the House and the Senate latitude. If they need an additional rate to make sure that the tax budget works, that we have given them the ability to put in a fourth rate if they need it. We prefer not to have it but if they need it, they have that ability. That's why when people come out with these definitive statements of what the tax plan is going to do, or what the tax plan is not going to do, I find it hard to believe because we don't even know what the tax plan is going to look like in its entirety.

BARTIROMO: So what -- do you think you can get this done by year-end?

COHN: Absolutely. I'm very convinced that we can get this done by year- end.

BARTIROMO: So where is the -- where is the debate right now? Is there an alternative to this state and income tax deduction for example? I know that was supposed to raise $1.25 trillion over 10 years. Can you find that money somewhere else? I mean, if you were to not eliminate that deduction if you got so much pushback from Republicans as well?

COHN: So remember where the House started and the House blueprint was the one that had the deductibility and the non-deductibility of state and local taxes. We took the House blueprint as we tried as a group of six to work together with a plan that would work for everyone. We took the House blueprint and incorporated that into the group of six. We are very negotiable on a lot of factors in the tax plan. What we're not negotiable on is two points. We're not negotiable on whether we end up with a middle- income tax cut, not negotiable. What we're not negotiable on is a 20 percent tax rate for C corporations and a 25 percent tax rate for pass- through corporations.

BARTIROMO: Just what I want to talk about next. Let's take a short break and when we come back, I want to zero in on the business tax breaks here because a lot of people say this is the most important part of this plan. That's going to move the needle on economic growth. When we come back, we'll talk about the corporate rate and others. Follow me on Twitter @MariaBartiromo, @SundayFutures. Let us know what you want to hear from Gary Cohn. I'll check Twitter right now. Stay with us as we look ahead on "Sunday Morning Futures," back in a moment with Gary Cohn.

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BARTIROMO: And we are back talking taxes with the President's top economic advisor talking about the new Republican tax reform plan. Want to get into the business side of things Gary, and that, of course, is the corporate rate at 20 percent as what you put forth, and a pass-through rate LLC's Etcetera at 25 percent. Why had you come out with these numbers, why are these the right rates?

COHN: Look, Maria, we've spent a lot of time on this. This is a red line test for us where we end up with the corporate rate. The President has spent an enormous amount of time pushing us on where we are in the corporate rate and this matters enormously to us. It matters because we have to be competitive with the rest of the world. When we look at the rest of the world, the developed world today, the average tax rate for the rest of the developed world is in the low 20s. You know, 22, 23, 24 depending on it.

BARTIROMO: Ireland is at 13 percent.

COHN: Look, I said the average. There's exceptions to every rule

BARTIROMO: I know why you know, companies are moving to Ireland. That's all I'm saying.

COHN: We understand that but we feel like we've got to get below the average of the developed world. 20 percent gets us below the average of the developed world and that's why it's a bright line test. We can't go below -- we can't go above that because then we get non-competitive with the rest of the world.

BARTIROMO: If you've got a pass-through business, let's say you own a hardware store on Main Street, whatever and you'll going to get that 25 percent rate. Is there a risk here that people can game the system, that you know, you're supposed to be paying the35 percent highest rate or even higher than that and you call yourself an LLC. How do you -- how do you avoid gaming the system?

COHN: We've talked a lot about this. There will be quite extensive anti- abuse language in the pass-through definition so we make sure someone that really is earning 100 percent wage income, that they should be taxed as ordinary wage income is not transferred into pass-through income.

BARTIROMO: You're talking about a repatriation rate as well which is what -- I mean, are you talking about 10 percent or lower? Is this a one-time charge? You've said $2 trillion plus overseas, you want that money to come back

COHN: We know it's at the high 2 trillion, could be $3 trillion at this point overseas. We are deeming the rate, meaning, we are not giving companies the choice. They are going to pay the rate if they have money overseas. That's how we catch up from the worldwide system to the territorial system. We will end up with a bifurcated rate. We will charge you one rate if you have liquid assets offshore, we will charge you a different rate if you've got bricks and mortar and you've turned that -- those earnings into bricks and mortar or investments offshore. We will give you some period of time to pay it but you will incur the tax liability the minute the tax referendum goes through.

BARTIROMO: So, even if you have property overseas then the same thing to brick and mortar?

COHN: Yes. If you have property, you will owe us the tax over some period of time at a lower rate.

BARTIROMO: And is that at 10 percent or lower than that?

COHN: It's -- okay so we're going to have two separate rates, we're going to have a higher rate for liquid assets, a lower rate for illiquid assets. Again, we've given the tax writers in the Senate and the House the ability to adjust those knobs, adjust those numbers, it will be in that 10 percent range.

BARTIROMO: How much does the estate tax and the AMT generate because I'm wondering if you -- if you don't eliminate that state and local deduction, is that a place for wiggle room? Is that an alternative because the estate tax is one tax that people might say OK, well that is helping the rich. Maybe that's something that you could give on.

COHN: Again Maria, let's talk about the estate tax. Let's talk about the people being caught in the estate tax. Let's talk about the people that are really against the estate tax. The American Farm Bureau and small businesses, they're the ones that come out and really advocate the repeal of the estate tax. They are the people that get caught in the estate tax. We want America to be a place where you can have multi-generational family businesses, where you can build a family business and pass it from generation to generation and not be forced to sell your business upon death. Death should not become a taxable event if you're in a small business. Death should not become a taxable benefit if you're a farmer. If you're a farmer, you should be able to pass it on to your family. We know the statistics.

Wealthy people can use estate planning and get around the estate tax. So look, when you're looking at the estate tax as a whole, it really affects (AUDIO GAP) more than anyone. On the alternative minimum tax, again, it's something that's even the IRS tax advocate and a bunch of non-partisan groups that come out and said, look, this has not worked. What happens with the alternative minimum tax is it was a pretty good concept. It was a good concept to say that everyone should pay their fair share. Again, wealthier (AUDIO GAP) figure out how to not pay the alternative minimum tax, where middle-income taxpayers end up paying the vast majority of alternative minimum tax. Good concept failed execution. So let's get rid of it and simplify the tax code. One of our core principles is to simplify the tax code.

BARTIROMO: When do you think you're going to have more of these details like for example, the specifics on brackets, the level of income, and the - - and the debate over the deduction on state and income tax? Is that -- that's an open debate right now right?

COHN: This is in the hands of the tax writers both in the House and the Senate. We are confident that we're going to get a tax bill done in this calendar year. To do that we've got to get out of the House relatively soon. To get out of the House, we're going to have to have real details. This bill is going to have to be in markup, hopefully in October.

BARTIROMO: Yes. Real quick before you go, there's a lot of speculation about changes in the White House. Some people think you're going to get this tax reform done and then you're going to leave. Is there any truth to that that, you would leave after this?

COHN: Maria, I've got a great job. Think of what I'm involved in. We started down a regulatory path which was our number one objective. We're starting to have some wins on regulation. We've got a tax path, we're working on taxes, we've got infrastructure to do. The President and I agree on an agenda and we agree on an agenda to drive this economy to places that people don't think we could be. Think about the fact that we just published a 3.1 percent GDP for last quarter. People didn't think that was attainable.

BARTIROMO: Yes, 3.1 percent is a great number. Garry, it's good to see you.

COHN: Maria, it's great to be here.

BARTIROMO: We will be watching for sure. Gary Cohn is the Director of Economic Policy at the White House and we'll be right back. We're talking regulation coming up.

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(BEGIN VIDEO CLIP)

REP. PAUL RYAN, R-WIS., HOUSE SPEAKER: Our prayers have been answered. His bravery and his family's strength have been such an inspiration to this House and to the people it serves. America is grateful for this moment. The Chair now proudly asks for what purpose is the gentleman from Louisiana seek recognition?

REP. STEVE SCALISE, R-LA.: To speak out of order Mr. Speaker.

(END VIDEO CLIP)

BARTIROMO: Wow. House Majority Steve Scalise made an emotional return to Congress this past Thursday for the first time since he was shot on that Virginia baseball field back in June. The Louisiana congressman also thanked members of both parties for their support during his recovery before casting his first vote since the shooting, for a bill that would in part extend tax benefits to hurricane victims. Texas Congressman Louie Gohmert was there to welcome back his colleague and he joins me now. Congressman, it's good to see you. Wow, that must have been really emotional. Watching it from here, I'm getting the chills. How was it in that room?

REP. LOUIE GOHMERT, R-TEXAS: Well it's emotional watching him from here. It was such a moving event because so many of us had prayed so fervently and I didn't know the President was coming to the hospital that first night. I was there about 10minutes before he got there, but to stand beside the President and First Lady as the doctor said that night, President was trying to put a happy spin on it. Well you know, been 13 hours so looks like this is a good sign and the doctor said I've put a tremendous amount of blood in him today, I'm going to put a tremendous amount of blood in him tomorrow if he makes it through the night, but we don't know. I'm going to be on pins and needles. To pray so fervently for his recovery and then see him back in the chamber was just overwhelming.

And Steve is such a modest guy, but one of the hardest working guys. It's just a triumph of answered prayers and of someone really -- it's been tremendous amount of work. People don't realize to get to that point where he is was taking enormous work in addition to the answered prayers. And a lot of people don't know, I haven't heard this in the media because it was told to me privately. Barry Loudermilk Congressman from Georgia was in a position behind the fence, behind the home plate as the shooter was moving from the third base dugout around toward first where he was going to be able to shoot fish in a barrel. They were lying on the ground in the dugout, the first base dugout and Barry says, he's about -- I'm about to be exposed and I'm looking around there's no place for me to run, no place to go and he saw Crystal Griner, that Capitol Police firing shot in the ankle and she was trying through tremendous pain to shoot, and he realized that I'm about to be wide open exposed, he says a prayer and he sees David Bailey, Capitol Policeman at that moment come out from behind his cover, the suburban. He's completely exposed, yells twice, drop your weapon, drop your weapon and the guy shoots at him twice.

And as soon as he says drop your weapon, the second time, he fires twice and takes him out. David Bailey as Steve said in the chamber saved his life. He is the ultimate hero and between the efforts of Crystal and David, they saved lots of lives, probably two dozen or so of the Republicans out there. And I was also gratified to hear Steny Hoyer of Maryland, Democrat, honorable man say that this was a hate-filled shooter and that you only hear people from the left normally say that we had a leftist full of hate shooting but the President knew that the very night, the very day he said there are problems on both sides after Charlottesville because he had been there when he knew Steve Scalise nearly didn't make it because of the hate of someone on the left. But it's just been an emotional ride. Thank God and Jennifer, Steve's wife has been amazing. She has been really a testimony of what people ought to be going through such things.

BARTIROMO: Well, you're right. There really are a lot of heroes here and certainly David Bailey and officer Griner, they really are our heroes, as are all the first responders and police everywhere. But let me ask you. He made this vote. I believe Steve Scalise's last interview was here on this program before that horrible shooting. He goes back, he votes. Now is he back in terms of voting and he's going to be doing rehab along with coming into the office?

GOHMERT: That's what I understand. He's going to be back and he's the guy that stood up for me to get me able to cook ribs again for the rest of the members of Congress. It's the one time I'll leave a good taste in people's mouths. But Steve made that happen and I said -- and Steve said so when ribs and we chose a day right there on the House floor. I'm going to be cooking and make sure he got some again.

BARTIROMO: Wow.

GOHMERT: I brought some to the hospital and to him and David Bailey, because, David, when I said thank you for saving so many of our friend's lives, he said no, thank you for all the ribs. I mean what an incredible, modest guy.

BARTIROMO: What an incredible person. Really it's true.

GOHMERT: But David, I said David, did you really go completely uncovered? Barry Loudermilk said, he said, it hit me, I have to make it him or me, him or me and that's when I stepped out and he said thank god it was him.

BARTIROMO: That's incredible. Congressman let me switch gears while I have you and ask you how are you going to vote on the tax plan.

GOHMERT: Sure.

BARTIROMO: I can see there's some pushback here. We're just talking with Gary Cohn. Are you OK with the elimination of the state and local deduction, number one and what about a higher rate if they come up with another rate for the highest earners and the millionaire camp of up to 37 or 39 percent, is that something you would be OK with?

GOHMERT: Yes, depending on what we did with the other areas, and by the way, Gary -- it thought Gary Cohn did a good job and your questions were terrific but Steve Moore says I have the best description of the corporate tax and it's accurate. We placed the highest tariff of any industrialized nation on our own products. That's the corporate tax. It's also an insidious tax because who pays the biggest percentage of their income for the corporate tax? Corporations don't pay that. They pass it on to their purchasers, to their customers, and who buys a bigger percent or pays a bigger percentage of their income? It's the poor and the middle class. So they're the ones that are paying this. It a straight pass-through tax. When you lowered the corporate tax, you're lowering the tariff we put on our goods.

BARTIROMO: So what about (INAUDIBLE) Congressman. Are you OK with this deduction being eliminated? Are you going to vote yes?

GOHMERT: Yes absolutely because Bill Gates, Warren Buffett, these billionaires, they never pay the estate tax. They have estate planning to get around. It but my aunt Lilly lost over 2000-acres of her estate. She was land rich and cash poor. The IRS took every acre, they took everything and I was there for the estate sale. We all, the family bought what we could to try to keep things in the family. I've seen what the estate sale does to the middle class, to those that have spent a hundred years building farmland and they can't pay the taxes.

BARTIROMO: Well he made that case as well. Congressman, it's good to see you, Sir. Thanks very much.

GOHMERT: Great to see you too. Thanks so much Maria.

BARTIROMO: Congressman Louie Gohmert joining us. We'll be right back with Jeb Hensarling.

(COMMERCIAL BREAK)

BARTIROMO: Welcome back. As Republicans roll out their new tax reform plans, some of them on Capitol Hill say that the new plan could help do something the GOP is been after for years, peeling back the Dodd-Frank regulations. Joining me right now is the Chairman of the House Committee on Financial Services Jeb Hensarling of Texas. Congressman, it's good to see you this morning. Thanks so much for joining us.

REP. JEB HENSARLING, R-TEXAS, CHAIRMAN, COMMITTEE ON FINANCIAL SERVICES: Well thanks for the invitation.

BARTIROMO: Would you like to see a rollback of Dodd-Frank attached to any tax plan?

HENSARLING: Oh, I'd like to see it attached to any bill across Congress. So fundamental tax reform is so critical to our economy but so is regulatory reform. And our Speaker Paul Ryan has called the Financial Choice Act which effectively repeals and replaces Dodd-Frank, the crown jewel of our regulatory efforts. So we passed it in the House with only one dissenting Republican vote. Unfortunately, we're still awaiting action in the Senate. But I look for any opportunity to advance both tax reform and regulatory reform. We're going to look at the appropriations process, we're looking at what the Senate can do. But it's an important part of releasing capitol in our society and tax reform will be important but so is regulatory reform.

BARTIROMO: Yes, for sure. And already we've seen as a result of the President's executive orders on regulation peeling back certain regulations. We're seeing the economy actually respond and companies, you know, loosen up their purse strings to invest more in durable goods type things and big-ticket items, 3.1 percent GDP this last week. Tell me what else you would like to see in this tax plan. Are you happy with the current form that's framework that the leadership has released?

HENSARLING: Well again, if I can harken back you're right.3.1 percent GDP growth is not by accident. I mean, we've got a President who is already rolled back hundreds of rules, used the Congressional Review Act 14times to rollback onerous Obama regulations where it had only been used once. So this President really is poised to be the deregulation President since -- the most regulation since President Reagan with respect to the tax reform plan. I cannot envision a plan that I would not end up supporting. I'm very excited as it is all Republicans if this prospect of having a fair, flatter, simpler, more competitive tax code. And by reducing both the C Corp and the pass-through rates on businesses, I think this economy is poised yet again for three maybe 3.5 percent economic growth. So again, this is a framework, this is an outline but I think they are off to a great, great start.

BARTIROMO: Well the Committee for Responsible Budget says that these tax cuts are going to cost $2.2 trillion, so the question then becomes, how do you pay for it? Do you need this to be revenue neutral? Gary Cohn who was just with us and Treasury Secretary Steve Mnuchin have said many times that they are expecting growth to pay for this in a big way. Do you think that's achievable?

HENSARLING: Oh, absolutely. I mean, I'm not sure there's any time in America's history in the last century where we haven't had fundamental long-term tax reform that hasn't generated both economic growth and more revenues. You can go back to the Reagan tax cuts. There were three different tax cuts and we had 4 percent sustained economic growth in 1984, I think it was seven percent economic growth. And when President Reagan left office, revenues were 19 percent higher. You can go back to the Kennedy tax really. You can go all the way back to the Coolidge tax. And so what we see is revenue feedback. It's not just theory that I have, it's economic history.

BARTIROMO: It's a great point. I was talking with Senator Ted Cruz about this last week and he points out that in 1984, the GDP was 7.3 percent which is like China numbers. I mean, you know, we haven't seen that in so long, we forgot that that's actually achievable living in this one in two percent growth world. Infrastructure package, Gary Cohn just told me during the commercial break actually that an infrastructure package is ready now and you can also attach that to a tax plan should you need to do so to get the votes required to pass this thing. Is -- what would you like to see? Do you want to just do a clean tax reform package like the framework says now or do you want to have this unraveling of Dodd-Frank or an infrastructure package attached to it?

HENSARLING: Well the most important thing right now is to get the votes to get the tax reform package done. That's --

BARTIROMO: Well you don't have the votes though on the state income tax deduction though, right?

HENSARLING: Well I don't know -- I don't know that. What I hope is that people will look at what is the difference in take-home pay between a 1.7 percent GDP economy and a three to 3.5 percent GDP economy. And so, I hope that people will look at that a generous doubling of the standard deduction. There are all types of provisions in this outline. They're going to help working families, middle-income families, but the most important aspect of this is, this is a tax reform plan built for economic growth. I hope in some respects, people look at the entire painting and not a few brush strokes in the corner. If you look at the entirety of the plan, I have no doubt.

Again, based upon economic history that we are once -- again, capable of three percent plus economic growth. You know, Maria, we've essentially come out of a lost decade from the years of Obamanomics. And so the average middle-income family is probably $14,000 achieving $14,000 less in income than they otherwise would have had had we had sustained three percent economic growth. That's what I hope all my colleagues will focus on and that is the tax plan built for economic growth that will bring jobs back to America, capital back to America and lead to not just more jobs but bigger paychecks and greater take-home pay.

BARTIROMO: Yes, that's the key isn't it? The wages which haven't moved in so many years. Congressman, it's good to see you, Sir. Thanks very much.

HENSARLING: Happy to be here.

BARTIROMO: Jeb Hensarling joining us there. A high-profile departure from the Trump administration, meanwhile, Health and Human Services Secretary Tom Price resigned, President asked him to after reports of his use of expensive private jets on the taxpayer dime. Our panel is weighing in on that as we look ahead on SUNDAY MORNING FUTURES. Back in a moment

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BARTIROMO: Welcome back. The big news Friday, Health and Human Services Secretary Dr. Tom Price resigning amid reports of his use of extensive private charter flights for government business taxpayer paid for. We want to bring in our panel on that. Ed Rollins is a former White House Adviser to President Reagan and a Fox News Contributor, Ian Bremmer is with us, President of the Eurasia Group and it's good to see you both.

ED ROLLINS, FOX NEWS CONTRIBUTOR: Thank you.

BARTIROMO: Thank you so much for joining us. Right, move by the President to tell Tom Price to get going?

ROLLINS: The sad part is he lectured him for two hours. He should have just told him to go. Price failed miserably as the leader of that Department in getting the health care bill through the Congress. Obviously, the fights and all that stuff was sidebar stuff. He was a very respected member of Congress but couldn't ever quite get on top of the job that was very important.

BARTIROMO: Well, I guess it's not just all this use of private plane but health care.

ROLLINS: Well the bottom line--

BARTIROMO: No health care -- no Obama repeal and replace.

ROLLINS: I'm not a big advocate of Congressman, having worked with congressman of coming in running a big 80,000 person department and my sense is he was a very passive player in the health care debate where I think the plan was for him to go take care of the Congress because he had been a Chairman of one of the committees and close to leadership. That didn't happen.

BARTIROMO: Do we know who's going to take his place at this point?

ROLLINS: No we don't. There's several people in name but --

BARTIROMO: There's a Pence -- Mike Pence prodigy.

ROLLINS: Whose the head of the very important part.

BARTIROMO: Medicaid.

ROLLINS: But I think the key thing is you need someone who knows the department that a lot -- health care is not done yet. Whether you get us to repeal or not, you've got to make the other run the program as it is today and you need someone who doesn't have to (INAUDIBLE) incur someone can walk in and make it happen.

BARTIROMO: Let me switch gears and ask about foreign policy Ian because Secretary Tillerson is in China meeting with Chinese officials. Obviously North Korea top of mind. What can he do at this point to reign in the North?

IAN BREMMER, PRESIDENT, EURASIA GROUP: Look, while everyone is talking about Trump reigning fire and fury against the North Koreans, the reality is you have15 countries of the Security Council led by the United States increasing sanctions step by step. The Chinese are absolutely cracking down on smuggling from North Korea into China and also on joint ventures with the North Koreans giving a lot of money. And now Tillerson is also working with the Chinese to try to develop more direct diplomatic negotiations with the North Koreans as well and has admitted that the Trump administration is in direct contact with the foreign ministry around Kim Jong-un. In other words, despite all the headlines, there's more been accomplished on North Korea by this administration largely because Kim Jong-un has been escalating so much than the prospect of military strikes, which you know--

BARTIROMO: Isn't that fascinating?

BREMMER: Yes, well we need it, right? I mean --

BARTIROMO: Does the U.S. economy get impacted if we keep putting pressure on Chinese banks because of North Korea?

BREMMER: The U.S. economy gets impacted if we move from a constructive path with the Chinese where we're both trying to constrain the North Koreans financially to one where we say, you know what, the Chinese haven't done enough, we've given up, now we're going to start putting our own squeeze on the Chinese directly. We haven't done that yet and you've had people like Gary Cohn who you just had on, Wilbur Ross who have been saying, you know what, let's -- we should -- we need to be careful before we start putting a lot of tariffs directly on the Chinese. I think the go- slow approach is better for --

BARTIROMO: It feels like he's had more success on foreign policy than anything else.

ROLLINS: I think his foreign policy team is the strongest team you have. I think it was stronger than -- and I think, General Mattis and others who have been there have given him good counsel. And I think to certain extent, he respects their council and has been a positive thing.

BARTIROMO: There is a referendum going on in Spain, Catalonia. Tell me about that?

BREMMER: Well you have hundreds of people that have been injured by the Spanish Police. It was illegal to hold this referendum according to the Spanish Courts but what the Prime Minister should have done was ignore it and just let it go on and be symbolic. Instead, he said, I'm going to crack down. Most people who wanted to vote voted any way but now the secessionist, the people that want independence in Catalonia have a much stronger case and it's one more place in Europe where you're seeing the center not hold. We've seen it in Brexit. We've seen it with the French and German elections and now we're seeing it in Spain.

BARTIROMO: This is extraordinary actually. What a story. We'll take a break and then there's the hurricane response in Puerto Rico, Hurricane Maria. The President's war of words with the Mayor of San Juan, we'll play some of that sound and have our panel react to that next on SUNDAY MORNING FUTURES. Back in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MAYOR CARMEN YULIN CRUZ, SAN JUAN, PUERTO RICO: When people are dying, it is hostile.

GERALDO RIVERA, FOX NEWS CORRESPONDENT: But I don't see people dying Mayor. That's my -- that's my --

CRUZ: Well, there's -- I don't think you're going to the right place.

RIVERA: You're talking about people starving?

CRUZ: Yes. People don't have food, people don't have water, people can't have their dialysis. People can't have their oxygen tank, so maybe you haven't gone to the right places. You know, if you -- if you are a mother and have to give your child water from a creek, I don't think that's something that people want to see in any country.

(END VIDEO CLIP)

BARTIROMO: That was the Mayor of San Juan, Puerto Rico talking to our own Geraldo Rivera about her war of words with President Trump. And of course, she's been very critical of the President and his response. But she was answering the question FEMA said that she's not helpful, that she's not going to meetings, she's not being helpful with anything, pushing back on her criticism of President Trump. Your thoughts on how this is taking place?

ROLLINS: My thought is she is not as relevant as FEMA getting in there and making things happen and I don't think she can stop things. I think the problem the President had is you got to show empathy in something like this in addition to the efficiency and he certainly has not shown any empathy and I think has backfired on him.

BARTIROMO: He says you're going on Tuesday Ian.

BREMMER: Empathy is the one thing that we can't expect from this President. We didn't -- he wasn't voted for empathy. It's not what he does, right? And so -- I mean, the idea that he's going to be able to show his human side, no, like right? I mean, what he needs to do is let the professionals actually handle it. He already is in the worst possible spot on this, tweeting and taking on the NFL as opposed to Puerto Rico, when everyone was saying, come on you've got to do something about Puerto Rico because this is the problem. So the optics couldn't be worse and he doubled down on it by attacking the Mayor who's facing all this.

Now, I'm not -- I have no interest in saying the Mayor is the most wonderful mayor or the worst mayor, it doesn't matter. You don't go after the first responders. You're above it, you have to lead by example. This is the (INAUDIBLE) of leading by example here and I think this trip on Tuesday frankly, I mean, never mind that it's a distraction and it's going to be hard for people. It's not going to go well.

BARTIROMO: You don't think it's going to go well?

BREMMER: I don't at all.

BARTIROMO: You know, to be fair, Gary Cohn said to me, look, Maria, I just want to say that -- this was during the commercial break also -- he said, just want to say that there are 78 mayors in Puerto Rico and there's one governor, 77 mayors agree with the President and so does the governor. This is one Mayor. I don't know.

ROLLINS: I go back to the point and I don't disagree with anything you said. You can't be beaten up on little people when you're supposed to be in there as the President. You're the big player, you're going in there, you got your government in there fixing it. He did a very effective job in Houston and a very effective job in Florida.

BARTIROMO: They did get good grades.

ROLLINS: And he needs to get -- he needs to get good -- this is about making it. This -- we don't forget that Bush's Presidency got destroyed by Katrina. Trump is Presidency is not going to get destroyed but this but he had a real opportunity to make it work.

BREMMER: Despite all of the problems in Katrina, nobody believes that Bush didn't care about the people. They believed that it was incompetently handled right? And now here, the Trump administration has shown competence in two major disasters and FEMA isn't ready to handle three at the same time. The problem is not that. The problem is that Trump is not seen as acting like a human being with three plus million Americans.

BARTIROMO: What should he have done differently?

BREMMER: Well, he shouldn't be attacking anyone in Puerto Rico. He shouldn't have yesterday and then again today doubling down and saying, political ingrates. You just don't do that especially when you're also taking it as someone whose -- he's being criticized for saying you don't -- you don't care about brown people. Right?

BARTIROMO: Yes. Well, the devastation has been incredible in Puerto Rico so it's hard.

ROLLINS: Again, going back, Katrina, we lost a city. Here we're losing a territory. And I think to a certain extent, everybody sees this story and it's a terrible, terrible story.

BARTIROMO: All right, we will leave it there. Ian Bremmer, Ed Rollins, great to see you both. Thanks so much for joining us this morning on "Sunday Morning Futures." I'll see you tomorrow morning on the Fox Business Network. Join me 6:00-9:00 a.m. Eastern on "Mornings With Maria" but first, "MediaBuzz" with Howie Kurtz begins right here on Fox News.


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