You know, whatever committees I get, I will serve on.
I'm an electrical engineer.
I'm an MIT grad.
So I definitely have interests in transportation and infrastructure issues, science issues, environmental and climate change issues, just because of my science background.
Obviously, you're in the progressive pockets.
Are there any other caucuses that you're looking to join?
Of course, I will be a member of the CHC.
So far, that's it.
I haven't made any decisions past that.
Okay, thank you.
Thank you so much.
Thank you.
Live now in Manaus, Brazil, with President Joe Biden on his way to the G20 summit in Rio de Janeiro, where the president is expected to set a focus on environmental preservation and forest protection.
This is the first ever visit by a U.S. president to the Amazon region.
It should be getting underway shortly.
Live coverage here on C-SPAN.
Welcome back.
We're joined now by Oren Cass, who's the founder and chief economist at American Compass.
Welcome to Washington Journal.
Thanks for having me.
Can you tell us a little bit about your mission at American Compass and how your organization is funded?
Sure.
Our mission directly is to restore an economic consensus that emphasizes the importance of family, community, and industry to the nation's liberty and prosperity.
And, you know, so what that means in practice is really focusing a lot on economic policy, trying to get away from this model that just says all growth is equally good and we'll somehow make it up to everybody who gets left behind, making sure it's a much more broad-based growth.
And as a result, we're funded by a really interesting set of sub-individuals, some corporations, and a lot of foundations all the way across the political spectrum.
Speaking of the political spectrum, where would you say that your group sits in terms of ideology in politics as well as economics?
Well, we're definitely on the right of center.
I think we're clearly identified as a very conservative group.
But at the same time, it's interesting.
We spend most of our time on arguments within the right of center, really working on a lot of these fights that are going on among conservatives about how to move forward.
Obviously, the Republican Party today is not the same one of John McCain and Mitt Romney and Paul Ryan.
And so, you know, we work a lot with folks like now Vice President-elect JD Vance, now nominee for Secretary of State Marco Rubio on trying to shape the future direction of the conservative movement.
You had an op-ed in the New York Times, or a guest essay, I should say.
Trump is about to face the choice that dooms many presidency.
What is that choice, and why did you need to write this now?
Well, I think it's an especially interesting situation for Mr. Trump because it's been 100, almost 150 years since we've had a president who was out of office and then coming back into office.
So he kind of gets a second chance at doing a first term.
And typically what we see when a new president is coming in, they've just spent all of this time campaigning, making commitments to voters, trying to win their support.
And all of a sudden, everything flips.
Now you're the president-elect.
Now all of those special interest groups, all of those donors, everybody's trying to get your support for their own priorities.
And I think it's a place where right at the beginning, we typically see administrations really struggle, where they do a lot of the stuff that the activists really want, that the donors really want.
And the voters kind of look around and say, wait a minute, this isn't what we were expecting at all.
And typically then in the next midterm election, you see the president's party get wiped out.
And so, you know, I think the point of the piece that I wrote and what is such an important moment right now is to see, can Mr. Trump remember why it is he was actually elected, what he's going to have to do to be a successful president, or does all the attention, you know, focus to what people are talking about at the bar at Mar-a-Lago, which isn't the stuff that's going to get it done.
Now, when it comes to Trump's first administration, how close do you think he got to some of these pro-worker economic policies that you support?
And in general, what did you think of his economic record?
Well, I think his first term was a really interesting situation where, you know, I like the metaphor of the dog that caught the car.
Obviously, people were very surprised that he won.
And it was a situation where there hadn't been a lot of work done to develop the kinds of policy ideas, to develop the bench of talent that you could bring into an administration that was going to do that kind of work.
And so what I think you really saw in his first term was, you know, he gets to the White House, who's in Congress?
Well, Paul Ryan is the Speaker of the House.
And so what are the big legislative priorities?
It was a big corporate tax cut, and it was trying to repeal Obamacare.
And I think those probably weren't the right places to focus.
On the other hand, in places where a lot of thinking and work had already had been done in terms of stronger immigration enforcement, in terms of much more aggressive trade policy and confronting China, that's where you saw him get more done.
And I think especially on trade, you know, Ambassador Bob Lighthizer, who was U.S. Trade Representative, who's a candidate for Treasury Secretary now, he knew exactly what needed to be done.
Trump gave him the power and the space to go do it.
And so I think we've made a tremendous amount of progress on the trade issue with China.
Now, you mentioned earlier that you're working with Vice President-elect JD Vance.
Want to play a portion of his speech accepting the vice presidential nomination in July?
Never in my wildest imagination could I have believed that I'd be standing here tonight.
I grew up in Middletown, Ohio.
A small town where people spoke their minds, built with their hands, and loved their God, their family, their community, and their country with their whole hearts.
But it was also a place that had been cast aside and forgotten by America's ruling class in Washington.
When I was in the fourth grade, a career politician by the name of Joe Biden supported NAFTA, a bad trade deal that sent countless good jobs to Mexico.
When I was a sophomore in high school, that same career politician named Joe Biden gave China a sweetheart trade deal that destroyed even more good American middle-class manufacturing jobs.
When I was a senior in high school, that same Joe Biden supported the disastrous invasion of Iraq.
And at each step of the way, in small towns like mine in Ohio or next door in Pennsylvania or Michigan, in states all across our country, jobs were sent overseas and our children were sent to war.
Orin Cass, what is your assessment thus far of President-elect Trump's picks for his cabinet, as well as what you're hoping to see from Vice President-elect JD Vance when it comes to economic policy?
Well, I think something really interesting that you notice in that clip from JD Vance is that he's actually pairing together two different issues where the Republican Party has really shifted, you know, on free trade and economic policy.
The Republican Party, and for that matter, the Democratic Party, as he noticed with Joe Biden, was overwhelmingly focused on just embracing free trade and ignoring places like Ohio that were going to be hurt by it.
And also then on foreign policy, it was sort of a parallel process.
You had both Democrats and Republicans just kind of going around looking for wars to start and not thinking about the people who were going to have to fight in those wars.
And so what I think what you see with Trump and Vance and in the picks they've started to make is obviously a different way of thinking about that.
So far, the picks have been more on the foreign policy and military side.
And so, you know, I think somebody like Senator Rubio at the State Department is a really excellent pick.
You know, he has been really at the forefront over the last decade of making the case that we need to rethink all of this.
We need to recognize that our main adversary is China, that our economic and foreign policies are entangled.
What we do on economics has a huge effect on what we can do in foreign policy, what it means for our national security.
And so I think he's going to bring much needed change leadership to the State Department.
On the economic side, it's interesting to see those are the picks that haven't really been made yet, right?
There's still a debate about Treasury Secretary, you know, who's going to be somebody who actually will carry forward President Trump's vision and not just kind of be another Wall Street banker, which we tend to see, especially in Republican Treasury departments.
And then likewise, picks like commerce, labor.
These are now the issues that are at the heart of our economic policy.
And I think as someone like JD Vance has spoken about a lot, having a labor policy that is much more focused on the interests of workers.
Having a Commerce Department, for instance, is in charge of the CHIPS Act, which is all of the investment that we're doing to bring semiconductor manufacturing back to this country.
So those are the kinds of things I think we still are kind of waiting to see on, but hopefully that we get right because that's what's going to determine the direction of our economic growth.
We'll be taking your calls with questions for Mr. Cass.
Democrats can call in at 202-748-8000.
Republicans at 202-748-8001.
Independents at 202-748-8002.
Now, we've talked a lot about what's happening in the White House, but Republicans have also gained control of Congress.
And a big thing on their agenda when they come into office is going to be taxes with the expiration of some provisions of the 2017 Tax Cuts and Jobs Act.
And you actually have something on your sub stack about this.
The coming tax fight will not be what you're expecting.
So what do you think most people are expecting and what should we expect instead?
Yeah, I just, I wrote about this week at the Substacks called Understanding America because that's what it's about is in all of these dimensions, trying to really understand what's going on that a lot of times I think is different from what people are expecting.
And so this tax fight is a great example.
You know, if you think back to 2017, the Republicans pushed very hard on a large tax cut that wasn't paid for at all.
It just went straight into a bigger deficit.
And the argument was somehow that you've heard the phrase, this, it will pay for itself somehow.
And the reality is that it didn't.
I think there isn't really any dispute at this point that it added significantly to our deficit.
And as did certainly many of the things on the spending side that the Biden administration has since done.
And so now we have just a much worse fiscal picture.
We're looking at deficits of almost $2 trillion a year.
Even just the interest payments on our debt at this point are that we are spending more on interest payments than we spend on our military.
And that just can't go on.
People have been predicting a fiscal crisis for a long time.
We're now in the fiscal crisis.
And I think the really interesting thing is that a lot of Republicans know this, especially in the House of Representatives.
There are a lot of Republicans who have already said, if anything, we actually need to be raising some more revenue to address our deficit problem.
And so the idea that even with Republican control, we're just going to take the tax cuts from 2017 and just extend them all, just do it all again and not worry about the cost, I think that's totally unrealistic and does not have the votes that it would need.
And so, frankly, that's a very good thing.
It means there's going to be a much more serious look at what can we afford?
How do we pay for it?
And as a result, we're not going to be able to extend everything.
There's going to have to be a much bigger fight about which parts of these tax cuts really were valuable and we want to keep them because there were some very good things in there.
You know, the child tax credit that helps a lot of working families, some very good incentives to encourage businesses to invest more.
So there are things we want to keep, but there's going to be a lot more work and a lot more fighting to be done about what this looks like going forward.
It's not just going to be a blank check to spend the money and not worry about the deficit.
President-elect Trump has suggested tariffs as one way to raise revenue.
What do you think of this policy, particularly in terms of maybe 60% tariffs on goods coming from China, 20% across the board?
I think it's a very good policy.
This is one that we do a lot of work on at American Compass and really focusing on where we started with this question of what does pro-worker policy look like?
How do we build a model of economic growth that actually creates good jobs in America for American workers and doesn't just sort of promise everybody cheap stuff that somebody else will pay for?
And in reality, we've just kind of been putting on the national credit card.
So I think that kind of policy is very much needed, especially when it comes to China.
The fight that we're now going to have goes all the way back to a fight that we had back in 2000.
And this is you heard JD Vance mention in that speech at the convention.
There was a huge fight over should we essentially grant free trade to China, what's called permanent normal trade relations.
And all of the economists said, yes, absolutely, this is going to be great.
It's going to be great for us.
It's going to be great for China.
And obviously it has been a disaster for us.
And so what people are now finally starting to think about, you know, it's actually, it's interesting, it was a bipartisan recommendation of the House of Representatives China Committee.
It's in the Republican national platform, is saying, no, we are not going to have normal trade relations with China.
We are going to treat them like the adversary and the bad actor in the economic system that they are.
And if China is trying to send a lot of cheap stuff that it makes in some cases using slave labor with heavy subsidies from the Chinese Communist Party, there are going to be high tariffs on that because that's not where we want to be buying stuff from.
It's certainly not something we want to be dependent on.
And the good news, to go back to your question a moment ago, about taxes, is that tariffs also generate revenue.
And so as we're thinking about how do we pay for the kinds of tax cuts that we want to have that do benefit families, that do encourage economic growth, tariffs can help do that.
Let's go to your calls for Oren Cass, the founder and chief economist of American Compass, starting with Richard in Augusta, Georgia, on our line for Democrats.
Good morning, Richard.
Good morning.
The Economist Conservative Paper and also the Nobel Prize economists have all said that Trump's agenda again will be doom and gloom.
Now, I've seen the charts that Steve Ratner have shown and that they have shown how the deficit went up on Trump and came down with Biden.
How can you guys continue to believe that Trump is going to provide a good cost of living wages for American people, support a good cost-to-living wages, and that now you guys want to go back to the doom and gloom of tariffs that stop the farmer from selling their products to China, which would them have made more money, such as the pork prices,
the soybeans and corn and other agricultural products.
And then you want to eliminate the people who picks the fruits and vegetables for this country that keeps the prices down, whereas they're going to go up once he starts.
So Richard, you've raised a bunch of points there.
I want to let Oren respond.
I mean, Richard's talking there about immigration, retaliatory tariffs, lots of things.
Yeah, well, I guess I would just start with a couple of factual points.
You know, one is it's certainly not the case that the deficit went up under Trump and then down under Biden.
It went up under both.
The problem of too much deficit spending and irresponsible budgeting has been an entirely bipartisan one that we certainly need to address.
And on the flip side, it's important to say that at this point, the tariff policy is an entirely bipartisan one.
I mean, as much as people complained when Trump put tariffs on China into effect, the Biden administration kept essentially all of those tariffs and, in fact, put on even more in some cases.
So, you know, this is a place where nobody wants to admit it, but President Trump has been proved entirely correct.
And people are in general very encouraged by and supportive of what he did there.