White House expects Senate to pass spending bill

This is a rush transcript from "Your World," March 22, 2018. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: White House Legislative Affairs Director Marc Short with us right now.

Marc, a confluence of weird events here, but the worry seems to be that there could be some hell to pay with this stuff. I know you don't obsess over the markets to the degree maybe your boss did when they were going and running up, but are you worried?

MARC SHORT, WHITE HOUSE DIRECTOR OF LEGISLATIVE AFFAIRS: Well, Neil, I think, putting it in perspective, the markets were a little over 18000 on Election Day 2016. So, we have had about a 30 percent increase in the markets.

You have unemployment at a 17-year low. You have the Fed announcing just yesterday, when they raised rates, expectations of continued reduced unemployment and actually boosting their GDP forecast.

So the fundamentals of our economy remain strong. The president's policies on regulations and taxes continue to boost our economy. And now what the president is looking to do is to try to protect American workers and American companies whose intellectual property has been stolen by the Chinese.

CAVUTO: You had said and the president had echoed that you weren't fans necessarily of this $1.3 trillion spending plan, but it allows you to move forward. You get what you want on the military and some of these other priorities. Some of the Democrats get what they want. And it should pass.

What if it doesn't?

SHORT: Well, Neil, we fully expect the bill to pass. As far as to when I think is a guess, for tonight, tomorrow night.

But the reality is that Congress has provided us with six continuing resolutions since the fiscal year ended on September 30. What that means is that rather than actually doing their job and passing appropriations bill, we're stuck with legislation that General Mattis tells us puts them at a great handicap, because they're basically repairing old, worn-out equipment, as opposed to purchasing new equipment they need to continue to fight the war on terror.

So, from an administration perspective, you're right. There's a lot things in the bill we like. We like that is the first, the most significant pay increase for our men and women in uniform in 10 years. It's the biggest build-up in military resources since World War II that can help make sure that America safe.

It does provide a lot of the border security measures. It does provide legislation that we were asking for as far as protecting our schools and making them safer.

But the price tag is something that, if we had sufficient Republican votes, of course we wouldn't want as much non-defense spending is in this bill. But, ultimately, we have to make a decision as administrations, do you shut down the government, have another continuing resolution, or actually provide our troops the resources they need to make sure America is safe?

CAVUTO: This tariff thing, any response from the Chinese yet? They have promised that they're going to do something. They vowed all necessary measures. They deny that they force companies to hand over technology, some of the things that the president outlined.

But they are almost assuredly going to target U.S. companies or even industries or even the agriculture community, that they could go after our farmers. Are you worried that this gets out of control?

SHORT: Well, Neil, I don't think any of us wants a trade war. And we certainly want to protect the farmers in America. And I know that China looks at that and knows how much of the agricultural products they import.

But at the same time, for decades, we have had administrations talk about the intellectual theft. It's nothing that is just an accusation. It's something that's been documented and proven, when basically they force American companies to partner with them. They steal the intellectual property. And they will go set up competing companies inside China that's owned by a communist government.

So the practices have been grossly unfair. This administration's trying to do something to make sure that American intellectual property is protected.

CAVUTO: Let's talk about where this goes, because many on Wall Street have were rattled by that.

They have memories that trade wars have started and they sort of can't stop. They just grow and grow. You're clearly not worried about that.

But I'm wondering what kind of advice the president is getting from foreign leaders, other countries who all say, almost to a country, that be careful what you start here, Mr. President, German finance minister, a number of others?

Do you fear that it's going to get in the way of some of the other deals you hope to make with some of these same foreign players, the Chinese included, on other big items?

SHORT: Well, my role, obviously, is working more with Capitol Hill.

And I can tell you there's a lot more bipartisan support for these actions on China. I think members in Congress have been anxious to see this for quite some time.

CAVUTO: Well, I don't know. I don't know, Marc. Kevin Brady., the House Ways and Means chief, does worry about this wiping out the benefit of those tax cuts that you guys worked very hard to get. Are you worried?

SHORT: Well, actually, in some of our meetings here in the White House, Kevin Brady has reiterated his support for going after China and believing that they are stealing our intellectual property.

So as we focus on the 301 measure, I think there actually is broad bipartisan support for it.

CAVUTO: All right, so, ultimately now with the markets -- and you're quite right to say, I mean, the trend has definitely over the course of this president's tenure in the White House been very, very productive.

But, you know, like you say, people look for a correction, they look for a reason to move back. And there's this fear that all of a sudden spending is out of control again, and we're looking at likely a trillion-dollar deficit now, and that the timing couldn't be worse for the midterm elections and all of that. What do you say to that?

SHORT: Well, again, I think it's a one-day reaction in the markets.

I would look at the long term trend. I would certainly expect as we continue to roll back the regulatory front, we continue to make sure that this administration is working with business across America, including in this case trying to protect their intellectual property, I think the markets will respond affirmatively.

And as I said, just yesterday, you saw testimony from the new Fed chairman saying that the unemployment rate is actually expected to continue to drop and growth now at high -- elevating their forecast as to how high we're going to go.

CAVUTO: And the irony of that is that good news was greeted as a concern, because the better things look, the more likely he will keep raising interest rates more than was originally thought to be the case.

What do you think?

SHORT: Well, I think that we have had such historically low interest rates that, in many cases, the growth that we saw during the Obama years, when for eight years GDP only grew at 1.8 percent, in many cases, that was artificially low by a Fed keeping interest rates so low.

CAVUTO: You're right about that.

SHORT: The reality is that -- the reality is, yes, Neil, you're right, there is -- as you grow, that -- that higher interest rates could begin to slow that growth. That is certainly a concern.

But we have had so historically low, artificially low rates, that actually you're seeing a response to growth. And in some cases, you're seeing a response to wage inflation, which is something Americans have been dying for, for many years.

So a lot of this is actually, as you say, a reaction to very positive news.

CAVUTO: This might not be your area exactly, Marc, but if you will indulge me.

John Dowd stepping down as the president's lead attorney, did he quit or was he pushed?

SHORT: You know, Neil, I apologize, but that's just not an area that I'm working in, and I'm not familiar with the inside conversations on that.

CAVUTO: Were you surprised?

SHORT: Neil, I don't know what extent there is surprise.

I think, that as we have expressed many times, there's a growing frustration of the length and duration of the special counsel investigation into collusion with Russia, when there's been no evidence of whatsoever of collusion with Russia.

And I think that taxpayers have spent millions and millions of dollars on this so far.

CAVUTO: You're right. There's a great deal of attention to this entire case and where this whole case will go.

And the president now has mentioned Bob Mueller's name when he talks about this. A lot of Republicans are saying, go slow there, be careful about that there.

Was there concern building among some of the people you talk to, because you work legislatively with the other side of Capitol Hill, that the president is going too far?

SHORT: No, I don't think so, Neil.

I think that the administration has had many conversations with members on the Hill on this topic. And I think that, typically, what we're hearing is an affirmation from many Republicans that there's no been evidence in their investigations of collusion with Russia. And I think that there's, I think, a growing frustration in the American people that this continues to drag on.

CAVUTO: You have been very patient.

SHORT: Yes, sure.

CAVUTO: But I want to get sort of a big picture view of the White House of what comes next.

In order to look at these tariffs that have been slapped on the Chinese, and no response as of yet, let's assume they make a decision over the weekend to target either an industry or Boeing, for example, Boeing plane orders.

Is there a plan for a follow-up response to that response?

SHORT: Well, Neil, I'm not going to put out a hypothetical response as to how the administration will respond.

CAVUTO: Feel free. Feel free. Go ahead.

SHORT: No, no, no, no, no.

No, but, again, I think I come back to making the case that this administration is going to continue to make sure that the American worker is protected. And that was a priority the president laid out in the campaign. This is something he talked about for quite some time.

It actually, I think, as I said, has bipartisan support. And I don't think there should be surprise over it.

CAVUTO: All right, now, very quickly back to this measure, this $1.3 trillion spending measure.


CAVUTO: It's your hunch that this is ultimately passed and we avoid a government shutdown?

SHORT: Yes, it is, Neil.

I think that, again, the process in Washington has been broken for quite some time. They have not completed a normal appropriations process in 22 years.

For your viewers, we submit a budget in February that Congress is supposed to complete by September 30. We're now in mid to late March without having that process completed, which is why you have these large omnibus bills.

I can't sit here and tell you and your viewers that we love everything in the bill. It's the nature of a compromise. But we think that we got many of our priorities funded, particularly funding our military and making sure that we're getting resources to begin the down payment in building the wall the president's promised.

CAVUTO: Now, you're the legislative affairs director.

I'm sure you're aware of the Freedom Caucus, a conservative group of Republicans, not a fan of this latest spending plan, saying that it's not consistent with what we told the American people. We have let them down. You have heard variations of that argument from some of their members.

How do you keep them happy? And are you worried that right now they're not?

SHORT: Well, the Freedom Caucus has been some of our greatest partners in our legislative accomplishments to date.

They partnered with us on the tax relief legislation. They have partnered with us significantly in rolling back the regulatory burden that the Obama administration had on this economy. So, we maintain, I believe, very strong relationships with the Freedom Caucus.

I understand their perspective. Again, from a White House perspective, what we say back to Congress is, put your own house in order and put the process in place that you can get us appropriations bills on time.

Otherwise, we won't have to deal with a large omnibus. But in light of Congress not doing its job, we have -- we're put in a position of, do you want another shutdown, or are we going to give Secretary Mattis the resources he needs to make sure America is safe, make sure that DHS has the resources it needs to begin protecting our border?

It has a 10 percent increase in funding for ICE, about a 12 overall increase in DHS funding. And it also provides some of the priorities the president said after the tragedies with the school shootings and providing for the Stop School Violence Act, as well as opioid dollars we have asked for, as well as beginning a down payment on the infrastructure plan.

So there's a lot of things in this bill that we had asked for and we're pretty excited about.

CAVUTO: All right, Marc Short, thank you very much for taking the time.

Marc is the White House legislative affairs director. We threw a lot at him in this interview.

Thank you, Marc, again.


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