Station:   KDMT, 1690 AM

Guests:    Coffman, Mike

Link:       https://omny.fm/shows/business-for-breakfast

Date:        May 30, 2018

Topics:     Trump, Mike Pompeo, Iran Agreement, North Korea, Strategic Patience, National Security Team, China, Money Laundering, Sanctions on Banks, Theft of Intellectual Property, Dumping of Steel, Tariffs, Leverage, DACA, Deferred Action for Childhood Arrivals; BRIDGE Act, Discharge Petition, Tax Cuts and Jobs Act, corporate tax rates, Individual Tax Rates, Queen of the Hill, NAFTA Renegotiation, Obrador, Mexico, Wage Growth, Repatriation, Doubling the Standardized Deduction, Child Tax Credit, Federal Student Loan System, College, Trade Schools,

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HOST JIMMY SENGENBERGER:  [00:00:26] You know, there’s a lot of issues that are going on in Washington D.C. right now, and it’s always great to check in with the Congressmen for the 6th Congressional District to get his take on the goings on there. Congressman Mike Coffman rejoins us on the airwaves — I think the first time for a live interview specifically on Business for Breakfast. So, welcome to the show, sir.

 

U.S. REPRESENTATIVE FROM COLORADO’S SIXTH CONGRESSIONAL DISTRICT, MIKE COFFMAN:  [00:00:45] Hey, thanks for having me. Appreciate it.

 

SENGENBERGER: [00:00:46] Thanks for coming. I want to start by asking about a topic we talked about some yesterday that is not as economic, but it really does impact the markets. I want to get your take on what’s going on with the North Korean negotiations and this possible summit.

 

COFFMAN:  [00:01:01] Well, I think it’s very exciting that the Trump administration is — stands, potentially, to have a breakthrough on this, that — you know –for so long this country has been engaged in what’s called Strategic Patience, and that’s clearly a failure. And so I think that there is an opportunity here. I think the President was really right to pull back, because I think that there is there’s a concern among a lot of people that he might be too eager for a deal. You don’t want to be like President Obama in the Iran agreement, where the president, you know, wanted a deal, they smelled it — [laughs] a really bad one. And so, I think this president’s — he’s got a great team around him. I worked with Mike Pompeo — just an — he’s just such an extraordinary Secretary of State — and General Mattis as Secretary of Defense. He’s got John Bolton as his National Security Adviser, and of course Nikki Haley at the U.N.. He’s surrounded by an incredible team when it comes to national security. And so I’m confident that we’re going to do the best we can. I do think there — we’ve got to put pressure on China. I mean, China is the only ally that North Korea has. China is their largest trading partner. You know, I don’t — China does not want to see a unified Korean peninsula. And I think that China has got to be involved in this. And we have to use our leverage in terms of trade as part of this equation.

 

SENGENBERGER:  [00:02:35] So, we’ll talk about trade in just a moment with you, Congressman Coffman. But in regards to putting some pressure on China, does that mean, for example, going forward with some of the sanctions on specific banks and financial institutions in China that are money laundering for North Korea?

 

COFFMAN:  [00:02:51] Well, I think the administration has to have that on the table. I mean, we clearly have problems with trade with China and the administration is trying to deal with that — that, you know, they’re — what I would consider theft of intellectual property, you know, dumping of steel. And so, I think there are a lot of issues that the United States has with China in terms of trade. But China is dependent — their economy is very dependent upon the United States in terms of the United States as an export market. And so the fact is we have some leverage. We need to use it, and to try and strike a deal with North Korea. China has been disingenuous in terms of North Korea for a very long time.

 

SENGENBERGER:  [00:03:35] In regards to the trade issue, the Trump administration seems to have an on-again-off-again relationship with tariffs, right now. The news yesterday was that they’re reconsidering putting out forward at least a starting point fifty billion dollars in tariffs up to 150, kind of blindsiding — it seems — China a little b it. In terms of negotiations, do you think that there’s a appropriate level of consistency there?

 

COFFMAN:  [00:04:02] You know, I — I’m concerned about it. You know, the fact is that we — I mean, we had the highest corporate tax rates in the world. The regulatory environment made it difficult for American businesses to compete. We still have a lot of issues to deal with. But we’re — you know, given what’s occurred in terms of regulatory relief and tax reform, I think American businesses are in a better position to compete. And I think we ought to see where that that brings us, I think, before we are too aggressive on the tariff side.

 

SENGENBERGER:  [00:04:38] I think one of the important things that you hit the nail on the head with, in regards to China, is the intellectual property concern. My concern with the President’s approach, with regards to China in trade, is that there’s so much emphasis on the trade deficit to the exclusion of really focusing on what matters — for example, intellectual property or liberalizing the trade relationship.

 

COFFMAN:  [00:04:59] Sure. I think to do business in China, you know, they’re required to have a Chinese partner. We’re required — a U.S. firm is required to share all our intellectual property with them. And then — and then I think that there’s — there’s just, um — there’s not a respect, I think, for the rule of law relative to the intellectual property in terms of just the cyber attacks that are going on, and the theft of that intellectual property by Chinese operatives.

SENGENBERGER:  And so what’s your hope for a deal or negotiations with China, here? What would be your vision for the endgame?

COFFMAN:  [00:05:37] Well, it has to be not just a suspension of the nuclear program. It has to be a dismantling of their nuclear program with –.

 

SENGENBERGER:  [00:05:46] North Korea’s. .

 

COFFMAN:  [00:05:46] I mean North Korea. –with a robust inspection program to make sure it’s not reassembled. I think that’s the main thing. I think that, you know, China can play a role. I mean, where the United States is kind of the guarantor of South Korea’s security along with our South Korean allies, I think the — you know, China has a mutual defense relationship with North Korea. So, in terms of their concerns or, you know, would the United States attack them, or would we see another 2003 post-,– I think it was — I’m trying to remember when Lebanon was, where Gadhafi, in 2003, gave up his weapons of mass destruction only to be–

 

SENGENBERGER:  [00:06:32] [correcting Coffman] In Libya. .

 

COFFMAN:  [00:06:33] In Libya,– subject to regime change down the road. And so I think — but I think the time is ripe. I mean, we have to deal with a situation now, simply because of the fact that North Korea is not far away — not that far away from having a nuclear-capable weapon that could reach the United States.

 

SENGENBERGER:  [00:06:54] Back to that trade issue, NAFTA is being renegotiated. Of course, one of the concerns: Speaker Ryan, a couple of weeks back, said we had this May 17th deadline. We passed that deadline. You’ve got the Mexican elections, where a socialistic/populist kind of presidential candidate looks likely to win on — I think it’s July 1st. It looks like there’s a tough road ahead with regards to NAFTA renegotiation. Do you — do you have thoughts on whether or not President Trump should get out of NAFTA if there isn’t a deal reached, whether he should stay in there, or just keep [inaudible] in there to renegotiate the deal? .

 

COFFMAN:  [00:07:28] Well, I think if we could get it done before this election I think that would be nice. I do worry that Obrador could very well be the next president of Mexico. And he is far left. And he is pretty antitrade. And so, I do worry that that could hurt us.

 

SENGENBERGER:  [00:07:46] And so, what would you like to see the President do in regards to the NAFTA issue?

 

COFFMAN:  [00:07:50] Well, anything we can do to bring it to a conclusion, I think, would be nice.

 

SENGENBERGER:  [00:07:54] But keep it — keep in it?

 

COFFMAN:  [00:07:56] Oh, I think if we — I think of we can keep it, modify it, update it, but keep it, I think would be good. .

 

SENGENBERGER:  [00:08:01] Yeah, I think it is absolutely essential to the American economy. I mean, one of the things that I want to talk about in just a second is the success of the Tax Cuts and Jobs Act. I worry that some of the trade policies may have an undoing effect on that.

 

COFFMAN:  [00:08:14] Whenever you create uncertainty in the economy, through all these negotiations, through the threats of tariffs — and some of them do have to occur — but you create uncertainty. Then people hold back in terms of investment, and then you slow the forward movement of the economy down. So I think there is a real concern about what does this have — you know, does this ultimately hurt the U.S. economy in terms of growth?

 

SENGENBERGER:  [00:08:40] [We’ve] got to be very strategic in how we approach the issue of trade. That’s for sure. Let’s talk about the Tax Cuts and Jobs Act. This is some legislation that you voted in favor of late last year. [It] certainly has some big changes to the tax code. How do you think it’s percolating through the economy?

 

COFFMAN:  [00:08:56] Oh, I think it’s very important. I think — particularly, we’ve been talking about trade, and so the notion of having, you know, a 35% rate, the highest in the industrialized world. And then also, um, having, uh — how we treated repatriated earnings, that is U.S. based corporations doing business overseas, trying to bring their money back. It just wasn’t coming back to the United States. We double-taxed it. I mean, they pay taxes in the host country and then when they try to bring their earnings back, we tax them again. And we were alone in the industrialized world in terms of doing that. So, there’s a fix going forward on that. I think that’s going to make the United States more competitive. I think the first time in tax reform, we tried to deal with pass-throughs, or particularly Small Business’s Subchapter S that received tax reform — were part of the tax reform package. And then, also, then to the individual side, we need to go back and make those tax cuts permanent. That was an issue with the Senate rules, in terms of budget reconciliation that we had to use to try to block a filibuster so we could get it through with a simple majority in the Senate. So, I think we’re going to circle back and make those individual tax cuts permanent. I think it’s something for all Americans. I mean, if you think about the individual that — in this congressional district, the average household income is $76,000. The, um — that takes — the federal tax comes down from 15% to 12%, a 3 point rate reduction. But then it doubles the standard deduction for a married couple. That’s now $24,000 that is tax-free — where they don’t have to itemize — and doubles the child tax credit. So I think that there is — you know, when I think you hear about, “This is all the big corporations,” and stuff like that, I think that’s just really not true. .

 

SENGENBERGER:  [00:11:09] In regards to the doubling of the standard deduction, when you consider the amount of Americans who already were not itemizing — you know, according to the IRS numbers I think a majority of Americans do not itemize. So, this helps those those folks even more and take the strain of having to deal with the process of figuring out, “Okay, which deductions do I use? Which don’t I use?”

 

COFFMAN:  [00:11:31] This is tax simplification. I mean that more and more Americans, thanks to this Act, will not have to itemize. The complexity of itemizing will simply take that — for a married couple — simply take that [$]24,000 deduction. I think is [$]12,000 for an individual, [$]24,000 for a couple.

 

SENGENBERGER:  [00:11:51] Yeah, that’s right. Congressman Mike Coffman is our guest here in studio on the program. In regards to the wage question, do you see wages as increasing now, and do you see that picking up?

 

COFFMAN:  [00:12:03] I see it picking up. I think it’s been a little bit slow. But whenever you have a tight labor market like this, the net result is going to be you’re going to increase wages. Obviously, one of the problems we have with the American economy is we don’t have enough skilled labor. And I think that that’s a problem with our education system being misaligned with the needs of this economy. And we just really need to restructure that. I’m cosponsor on a bill in the in the House that requires much more transparency in terms of if you study this degree, you know, what is your — are your job prospects going to be? And what–and how about your ability to pay back these student loans you’re taking. And so I think we need to be tougher in that area, and encourage people to go into skills training. My father — my late father, a retired Army master sergeant with a GED, when he got out of the Army he went to heating and air conditioning repair school, I think for a year. And then he worked swing shift at Buckley [Air Force Base] in base maintenance, and then took his truck and his tools out during the day and did jobs until he had enough work to quit his job and had a very successful small business. So, I just think that, um — I think we have a very elitist view in education, in terms of looking down on people that work with their hands. And I just think it’s wrong.

 

SENGENBERGER:  [00:13:30] I think there is kind of a renewed emphasis on trade schools and this idea that we should encourage people to consider other options if college isn’t the best fit for them, or the greatest opportunity.

 

COFFMAN:  [00:13:43] You know, I do these — well, we used to call them Job Fairs. And then we’ve renamed them, because we used to have employers show up, and then the employers weren’t getting — we weren’t — you know, the people showing — the constituents showing up didn’t have the skills that the employers were looking for. So now it’s more of a resume writing — and it’s more about how to look for a job. And so we do seminars about that. And so — but it breaks my heart to meet these young people that come out of college and without the kind of skills that are necessary to this economy. And the kind of jobs that they can get at the end of the day are no different than if they’re never gone to college, but yet they’ve got debt on top of it. And so, this whole notion where, in higher education, they try and just push you into saying, “Oh, just study whatever you’re interested in!” You know, “This is an intellectual experience!” Well, [laughs] you know, I think we’ve got to rethink that.

 

SENGENBERGER:  [00:14:42] Yeah, just one more thing about higher education is — obviously, trade schools is one aspect in encouraging folks to choose options means that there’s some competitive pressures that can hopefully help to reduce some costs, as well. But in regards to higher education — and we’ll get back to tax cuts in a moment — what else do you think needs to be done to bring down costs? I mean, I think there needs to be some real systemic changes to — at the federal level — in terms of how the student loan systems are being done and some other things need to be changed.

 

COFFMAN:  [00:15:12] Well, I think the federal government has just fed the cost. I mean, just, you know, it seems like whenever the federal government gets involved in something — whether it’s health care or whether it’s higher education — the cost goes up! And so I think we need to tighten these student loan programs. I know the prior administration, they certainly tied it up on proprietary schools because they didn’t like these private, for-profit schools. But we have the same problems in our in our public universities. I mean, people [are] not getting the necessary skills to be successful. I mean, we want people to come out of college and have a path into the middle class to earn a living wage and to make the necessary resources — money, wages — to be able to pay back their student loans, right? Our default rate is horrible when it comes to student loans, federal student loans. .

 

SENGENBERGER:  [00:16:05] A few months back, Nancy Pelosi — who of course wants to be the Speaker of the House, once again — she said that the tax cuts amounted to crumbs for people. What did you make of that comment when she said that?

 

COFFMAN:  [00:16:18] I was kind of amazed at that. I mean, I think — you know, of course she’s from San Francisco and I don’t know, you know, “Let them eat cake” I guess, sort of attitude. But I think that it’s — you know, this is — I mean, I think I laid it out to the average middle class family. And then when you’ve got — you know, what do people have their 401ks in? Well, it’s these publicly traded corporations. And so they benefit from from those cuts as well, and their employees f or many of these firms. And then the fact that it helps small business. I mean, their attitude was, “Let’s have more regulation. Let’s have higher taxes.” And that was choking the ability for this economy to grow. And so, thank God things are changing now.

 

SENGENBERGER:  [00:17:05] Once again, Congressman Mike Coffman of the sixth congressional district is our guest. I want to shift gears to an issue that I know is of great import in Congress right now, which is immigration and the Deferred Action for Childhood Arrivals program, what to do about that. Let’s talk about immigration, broadly speaking. What is your feeling on the importance of immigration to the American economy?

 

COFFMAN:  [00:17:26] Well, I think — I think it’s important to the American economy. But we do need a better balance than what we have. And I think the President has spoken about this, that we need a better balance between familial-based immigration and merit-based education. And so, whereas on the familial-based system it’s the relative of a relative of a relative, without consideration to what skills they bring into the United States. So I think there needs to be a balance between the two. I think that’s very important. I think immigration is important to the United States. I think we have a completely broken immigration system. I think that — in so many ways, I mean, if you think about the border, the fact is that a lot of people now that come up to the border — they want to come into the United States — [they] understand loopholes in the law. And they actually look for the Border Patrol to — if they know what to say,in terms of political asylum. It is a low threshold. And if you say the right thing to the Border Patrol, they have no choice but to let you into the country. And you have to be adjudicated through a process that takes years and people can just disappear. And we — I remember in the summer of ’14 I think we had 60,000 young people come up from Central America, unaccompanied minors, based on a loophole in the law — a 2008 law that was well-intentioned — that said — that was [a] bipartisan bill signed by President George W. Bush that said, “We want to stop the international sex trafficking of children.” And so, then what — but they wrote the law to say that if a child comes up — a minor comes up, unaccompanied minor comes up — to the border with the United States, and they’re from a contiguous country, the Border Patrol can wave them off. If they’re from a noncontiguous country, the Border Patrol has to let them in and adjudicate them through the process. That’s where we get all these children coming up from Central America. So, I think that there’s so many things that need to change in our immigration system. I think we need to make it much tougher to come to America illegally and easier to come to America legally.

 

SENGENBERGER:  [00:19:40] Once again, you’re listening to Business for Breakfast, here at KDMT, empty with Congressman Mike Coffman here in studio. Let’s talk about the DACA program. Tell me a little bit about where things are at in terms of state of play in your thoughts.

 

COFFMAN:  Well, I really think we need to get something done. And I think that we need to get something done that, you know, has to be DACA [in exchange] for border security. And if you look at the President’s plan on border security, I think he always referred to it as “the border at the wall.” In part, there is — there is a lot of — I think, what? — barriers that are really not very effective. And so, most of it is a replacement of those barriers that are just not effective, and there’s some extension of that. But it’s also increasing the Border Patrol, and it’s taking the application of technology, and it’s closing some of the loopholes that I mentioned to you earlier. And so I think — I really hope that there is the ability to do that. I think the DACA thing I’d like to resolve that. I feel differently about them — these young people that were taken to this country illegally as children, grew up here, went to school here, oftentimes know no other country. I’d like to find a permanent solution for them and I think the President’s willing to consider that with this border security and so I hope — I’m trying to force the issue to a vote through a discharge petition. And I know that — I’m hoping that that’s not necessary and that leadership can find some proposal to come to the floor that will encompass what I would consider a permanent solution in DACA, and that is for these young people to have a path to permanent residency and to citizenship if they wish to, but based on affirmative behavior. It has to be an earned path to citizenship, based on education, based on the work history, based on military service. So, I feel very differently about them than I do about the adults who knowingly broke the law.

SENGENBERGER:  So, in regards to addressing this issue through a discharge petition, what is that exactly? And that — my understanding — is a fairly rare thing that gets done in the House. And I understand as well that you’re getting some pushback from some members for it.

COFFMAN:  Sure. It is a very rare thing. And so, you know, to get a debate on the floor, I think we have something like 213 signatures right now. You need 218. Most of them are Democrats and some Republicans. And so it’s a Queen of the Hill rule, without getting too technical. It’s about four different bills that would be going to the floor and to see whichever one gets the most votes and passes that 218 threshold with the most votes then would go on to the Senate. So I think that we have an opportunity to have a negotiation, obviously, between the House and the Senate on whatever bill passes. I think it could very well be amended in the Senate, negotiated with the White House, to come up with something that has, again, a permanent solution for these young people with border security.  I think the philosophy of the President is, “Okay, I’ll sign off on DACA. But I want something done to where it just doesn’t happen again.” And that’s where it’s about border security.

SENGENBERGER: And just about out of time with you, Congressman Mike Coffman. But I want to ask you, in that regard, is this the BRIDGE Act that you are putting forward with a discharge petition? Or is there some more drawn out, long term, permanent solution here, like you’re talking about?

COFFMAN:  So the BRIDGE Act I introduced early on. Here’s the problem–there’s a fundamental problem with DACA. From my perspective, it’s unconstitutional! The President — President Obama — through executive action essentially initiated this. But the President United States cannot make immigration law without the Congress, without the consent of Congress. And President Obama did. So the DACA program is not constitutional. And so that’s why we have to pass legislation on it. The BRIDGE Act I introduced early last year, that would have extended DACA for three years, in giving then  — and making it constitutional by virtue of passing it through Congress, having it signed by the President, and giving the Congress three years in which to find a solution to how to deal with these young people. I think right — I think we have an opportunity right now to just go ahead and find a solution, and in addition with border security in the same package to meet the requirements of the President, which I think a reasonable.

SENGENBERGER: Very much so. We’ve got about 30 seconds. What’s the final word for our listeners this morning, Congressman Coffman?

COFFMAN:  Well, I tell you, when we go back I’m very excited about a bill that’s in front of us. I didn’t vote for the Farm Bill last time, because I am not a big subsidy person. But, 80% of the Farm Bill — the spending on the Farm Bill — is actually food stamps, the SNAP program. And so, we’re putting welfare reform into the SNAP program by having a work requirement. You have to be – you know, yeah, we have exceptions, you know: obviously, if you’re disabled, if you have – you’re the only single parent with a child at home. But everybody else, all of these able bodied individuals– particularly without dependent children — they need to either be at work, or they need to be in a work training program. And I think this is a fundamental welfare reform proposal that I’m excited about and I hope it passes.

SENGENBERGER: Congressman Mike Coffman, always a pleasure, sir. Thanks for joining us this morning on the program.

COFFMAN:  Thanks for having me I appreciate it.

SENGENBERGER: That is it for us today. We’ll be back tomorrow morning at 6:00 a.m., [with] more Business for Breakfast. Join us then.