This is a rush transcript from "Your World," October 20, 2017. This copy may not be in its final form and may be updated.
NEIL CAVUTO, "YOUR WORLD" HOST: And what has that going is a budget that passed late last night out of the United States Senate. It was close. But what we seem to telegraph from that, or at least what traders are telegraphing from that, is that it's full steam ahead to get those tax cuts done, and hopefully by the end of the year.
Now, there are some wrinkles. It's not going to be a slam dunk, after all. Nothing in Washington is.
We're getting indications from the speaker of the House that there might have to be an additional bracket for the very rich -- we don't know at what level that income level would kick in -- in order to show that this isn't just something that would benefit the well-to-do.
Now, again, the details are what bracket that would be, where would that kick in.
But there's slight differences now between the speaker of the House and the president of the United States on this subject. Take a look.
(BEGIN VIDEO CLIP)
REP. PAUL RYAN, R-WIS., SPEAKER OF THE HOUSE: The president is the one who has been very insistent that we reintroduce what we call the fourth bracket, meaning we don't lower taxes for high-income individuals.
That, I think, is what he's talking about, so that all that revenue goes to the middle-class tax cut.
SEN. RAND PAUL, R-KENTUCKY: When Paul mentions maybe one more category, which I would rather not have, it may not happen, but the only reason I would you have -- and he does say this -- he's very plain in what he said -- is if, for any reason, I feel the middle class isn't being properly taken care of.
(END VIDEO CLIP)
CAVUTO: All right, that was a very important distinction on the part of the president of the United States talking to my colleague and friend Maria Bartiromo of Fox Business Network about whether he would entertain another bracket for the well-to-do.
Now, the understanding was there that they don't want to make this look -- that is Republicans -- like it's a bennie to the rich, like the rich are getting a disproportionate share of the tax break, even, of course, though the rich pay the disproportionate share of the taxes.
Now, again, what isn't clear, is whether that would even happen or what the rate would be. Remember, the top rate now under the president's plan falls from 39.6 percent to 35 percent. Now, would that top rate then go back up for a certain group of Americans all the way to 39.6 percent, in between?
Let's ask a guy who is going to have a very, very important role in all of this, North Carolina Republican Congressman Mark Meadows, who chairs the Freedom Caucus, better than 30, 35, almost 40-odd strong conservatives in the House of Representatives.
Congressman, good to have you.
REP. MARK MEADOWS, R-NORTH CAROLINA: Neil, great to be back with you and talking tax reform.
CAVUTO: What do you make of what both Speaker Ryan and Donald Trump seem to be delineating here, a new rate, one that would ensnare the very rich?
MEADOWS: Well, I think part of that is getting down to what we have been saying for a long time.
We need to go ahead and settle on a plan and debate it. And I can tell you, having spoken both with the speaker and with the president of the United States, his focus, the president's focus, is really on those middle- income wage-earners and making sure that they get the greatest benefit possible.
That being said, I think that even three brackets, we should be able to figure it out and not even look at adjusting that. It's more on the income levels with the brackets that we have out there. Ultimately, in the end, this is going to be a huge tax savings for moms and dads on Main Street. And the traders were right to be optimistic about us getting it done, Neil.
Steve Mnuchin, the treasury secretary, had indicated that the markets will fall -- he didn't say how much or what the impact would be -- if tax cuts don't materialize. Do you agree with the?
MEADOWS: Well, I think they would.
I think -- but I don't know that all of that has been baked in. I think there's been some real skepticism on, can we get anything done?
And, Neil, we try to make sure that, if there's any significant news, that we share it with you here. And I can tell you that, within the last couple hours, members of the Freedom Caucus held a conference call where we were discussing that Senate budget.
And most of the feeling that came out of that particular conference call was that if we can move the time frame up and really be aggressive in making sure that not only we vote on that budget next week without going to conference, but that we start the markup the following week, and ultimately vote on this before Thanksgiving, we're all on board to do that.
And so, as we start to look at that, that should be good news to those that are wanting tax cuts and tax reform. The president had called me to ask and say, could you consider shortening the process? And we have been in communication with the leader and the speaker to let them know that as long as...
CAVUTO: But when did he call you to express that?
MEADOWS: He called yesterday, in anticipation of the vote that he was hopeful that would pass last night. Indeed, it did.
CAVUTO: And to vote on that budget, then, Congressman, not that one that you have already agreed, but on that budget, and then proceed from there?
MEADOWS: And what would happen, Neil, is that Senate budget would come back, instead of going to conference, which may delay this for two to three weeks.
If we can make sure that we're actually rolling out a real plan that lowers taxes for Americans, I think most of the conservatives are willing to say we will get on board and move this forward, so that we can get it done and get it on the president's desk before the end of the year.
CAVUTO: Well, wait a minute. That's a pretty big deal, Chairman.
So you would hold your noses. There are a lot of issues there in that Senate budget that you and your colleagues in the House are not fans of, but you would go ahead, vote on that, let's say you pass it, and proceed from there, to avoid the whole back and forth?
MEADOWS: Well, that's right.
And it's really -- it would be a three-part step. We would go ahead and vote on the Senate bill next week. We should start the markup process the following week.
MEADOWS: And then hopefully have a floor vote in the House seven to 10 days after that, but certainly by Thanksgiving.
MEADOWS: And I'm very optimistic that we will get there.
CAVUTO: All right, so, then, quickly, on this additional rate, you're against that. You don't think that is necessary?
MEADOWS: Well, I mean, really, what it's about is, is, I'm against having a top rate.
If we're going to do that, then we need to just admit that, at times, that having a top rate for those that earn a million dollars or more is maybe a political reality, but it doesn't necessarily boost the economy. I'm for giving everybody a break and putting more of their money back in.
CAVUTO: You're talking about beyond the 35 percent rate.
MEADOWS: Right, beyond the 35 percent.
CAVUTO: Regardless of who you would set that higher rate beyond 35 for, let's say $1 million up, that you would be philosophically against it at least.
MEADOWS: Philosophically. It's not a line in the sand. I think that we can work with the three tax brackets that we are now, and just be aggressive about making sure we lower...
CAVUTO: But why is it talked about so much? I just want to be clear.
Is it just that Republicans, some of your colleagues are afraid of looking like they're giving up benefits to the rich? Is that it?
MEADOWS: Well, I think that that's part of it.
MEADOWS: I think the other part of it is any time that you're there, if you're not being aggressive on those million-income wage-earners and making sure that they get a benefit, it's all about the special interests and well-connected.
And we're not for that. We're for that forgotten man and woman. So, as long as we can manage that process, hopefully, we can keep it to three. If not, then certainly we will look at the details. But it's time to start talking about the details and hopefully we will start doing that next week.
CAVUTO: All right, would it still be, if you had your druthers, a tax cut that is retroactive to the beginning of the year, or whatever point at which it's agreed to?
MEADOWS: Without a doubt.
We need to do that, to go ahead and put this capital to work on everybody's behalf and get the economy going again.
CAVUTO: All right, sir, thank you very much, Mark Meadows, the House Freedom Caucus chairman.
MEADOWS: Thank you, Neil.
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