 This is Think Tech Hawaii, Community Matters here. Aloha, and welcome to another episode of Talk Story with John Waihe. I think today's the day I find out whether our series has been renewed or not, so all of you out there, I hope that you're sitting on the edge of your chairs in anticipation for another great show, and we are going to deliver. I have with me today the special advisor to Senator Brian Schott. His name is Mr. Chuck Frieden. He is probably known to a lot of you out there that no government who have been active in it. And he is here today to talk to us about the recently passed tax legislation that just recently passed in the United States Senate. Right? Right. So, Chuck, welcome. Well, good to be here. It's always a pleasure to have you here, and how is this good Senator these days? He's working pretty hard back there. Yeah, you know, it was amazing because he voted a very strong no. He did vote a very strong no, and in fact, all 48 Democrats voted no on this. Yeah, I was going to ask you whether any Democrats at all voted no. Not even the sort of blue dog type thought this was in any way, shape, or form in their view good for the country. Well, you know, you might as well explain to us what a blue dog type is. A more conservative Senator Manchin from West Virginia has a constituency that has a certain level of capital D Democratic values, but at the same time as a conservative streak to him. So, he represents that. So, in other words, there was no adjustment made to win any Democratic votes? No. Well, that brings us to the bill. I mean, there are three pieces that we can talk about today. This bill, one is how it actually passed, what happened, and from a government standpoint was that good. The contents of the bill and what that means to people, and then the longer-term impacts with respect to the first question about how this bill... Well, see, that's why you're a special advisor, because you break these things down into neat little packages. So, let's start off. How in the world did we end up with a bill that passed a 51 to 48, I guess, or 49? Because one Republican... He was a viewpoint Republican, exactly. And he's the Republican that voted no was a very conservative Republican. President Corker from Tennessee is a very conservative, but he's stalwart, solid conservative, and voted no because he was concerned about the impacts on the deficit. So anyway, the result was 49, 51, this bill passes. What was the process? I mean... Well, and that's why people like Senator Manchin, even though he's a bit more of a conservative Democrat, stayed together with the Democrats for 48, because basically the Republicans put this together in the cloakroom pretty much by themselves, didn't hold hearings... There were no hearings on the bill? There were no hearings on the bill. And so you had a lack of what people would reasonably call transparency, which is a concern. But the Republicans argued, well, we knew all along what we were going to do. We've been talking about this for a long time, but they were talking to themselves, not to the general public and not to people other than lobbyists with broader concerns. And so we ended up with a bill that passed in darkness that was on straight party lines with the exception of Senator Corker. Well, the one person that crossed the party line was a conservative Republican. And my understanding was that he crossed the party line because this bill will in fact increase the deficit way beyond what people are willing to admit. I don't know if this is an exact dollar figure because nobody's at this point sure what's in the Senate version of the bill. And of course, it still has to go back to the House and there may be a conference on it. But they're talking about $1.5 to $1.7 trillion and for... Well, wait, we say that slowly, so I'll listen to that. $1.5 to $1.7 trillion. Trillion! Yeah, a trillion here, a trillion there. Yeah, it ends up to be real money. Yeah, real money with real impacts on the country. And for people like Senator Corker, it's an issue of, you know, where's... What are you going to do with the operating budget for the United States of America if you're at that level of deficit? I got an email from, you know, I, along with several thousand people, got an email from Senator Schott. And in it, he describes this bill as nobody winning except lobbyist. Well, what does that mean? I think the corporate America would seem to, you know, they're going to... If the bill holds, the highest tax rate will... For corporate America will be reduced from 38 to 20. So that's a substantial reduction. There's a lot of ins and outs about that. The corporate tax rate is 38%, but that's not the adjusted corporate tax rate. Nowadays, because there are so many ways corporations can deduct this or that. Well, like Donald Trump, I mean... Like Donald Trump, the operating tax rate for corporations is probably closer to 16% in reality. But back to the issue, it's a tremendous reduction for corporations and a high value savings for the upper end of the private citizen and their income tax as opposed to lower and medium ends. It's not a balanced tax cut at all for people. You know, when somebody tells me that this was a great bill for the lobbyists, one thing I know absolutely is that the average citizen, the average person, doesn't hire a lobbyist. So, I mean, you know, the people who hire lobbyists are those that have the ability to afford it. And organizations that represent the common person were in no way, shape, or form at a hearing or at the table. They really had zero opportunity to comment, which is a pretty shocking state of affairs for the United States. So this is the United States Senate passes the bill. There are some members I'm told that didn't even know what's in the bill. I mean, most of the members don't know what was actually in the bill. I think it's fair to say that the actual bill that passed had not been read by any of the 100 senators in full because they were making adjustments up to the end. They were writing adjustments and amendments. When you're writing adjustments, you mean literally writing on the piece of paper. You're writing adjustments under the side of the bill like your cliff notes in high school. Yeah, it was really being cranked out the last minute. There's no way anybody read the bill. So no hearings. No hearings. Nobody read the bill. In full nobody. And people were amending it until the last minute. I mean, that must have been like a Senate leader's dream. You know, you do this. Yeah. And the guy, somebody, someplace was the only person that actually knew what was going on. And did the bill at least get through the staff? What is it? The congressional office? Well, the congressional budget office does the assessment, the economic impact of the bill. And in fact, after the bill passed and the bits and pieces are the ones who are estimating the 1.5 to 1.7 trillion dollar budget deficit that will be created by the bill. But I think even at that, it's very difficult to get a precise figure because of the way the bill was promulgated. Okay, so then there's no scoring. There's no really any review. So, and I know the American people are tired of hearing about a comprehensive approach to things and that sort of political language that bores everybody. But this is tax reform and it was done in fits and starts trying to what we call Christmas tree, which in political talk means you put different things on the Christmas tree to help somebody here and somebody there. This is tax reform. But it was done with the Christmas tree as they tried to help this guy and that guy. And there are some pretty big losers in this bill. Well, before we get to losers though, I mean, tell me if we did this, if the state legislature did any, if they passed the bill, saw the similar to this. I suspect somebody would be on their way to Halawa. You know, it's absolutely illegal in Hawaii to do what the United States Senate did when they passed this bill. I've seen some pretty sneaky stuff in the Hawaii State Legislature. I don't want to raise the flag quite so high on that, but generally speaking, in terms of a major piece of legislation by the United States Congress at this point, with the Senate, with the House version, it is sadly amazing that this thing happened the way it did. And it's caused for real concern just the process for getting the content. All right, so let's talk about the winners and the losers. Yeah, it looks like corporate America is going to come out way ahead based on the reduction in rates. Wealthy people, things like the... There are over so many hundred billionaires, including people like Gates and the rest of it, who actually wrote to Congress saying don't pass this bill. Yeah, that's the odd part. The more benevolent, wealthy didn't want it to pass because they knew it wasn't good for the country. It would make them look bad. They already had their share. The robber barons of the country, on the other hand, seemed to be very the hedge fund people. You mean the hedge fund people in New York, the people who bought us the crisis of 2008. To begin with, yeah. Yeah, they sliced and diced everybody's home mortgages and created the recession, essentially. Yeah, it's nothing... They all got resurrected. They made out again, yeah. It's the Lazarus effect, for those of us who know their own story. Yes, the country is doing well now, so what do we do? We start to move into the same problems that created the issues that almost took us down in 2000. So who are... What happened to the average person? Well... What happens to you and me? I'm getting... This is starting to get personal. It is starting to get personal. We have to wait and see what actually comes out of the house because there is indeed still an issue about reconciling Senate and House versions. But it sure does look like, for example, that people in states where there are high taxes are going to be losers because those are the state and local taxes are no longer going to be deductible under this plan. And so... What's the rationale? There's just a way to... I wasn't there in the cloakroom, but I think it was one place they felt they could take cuts from the average person, give them sort of flatten their rate and eliminate certain deductions and rationalize it. It's also politically expedient because the states that tend to have higher taxes are the more liberal seaboard states that are doing more to help their populations in reality. You say seaboard, you're talking New York and California. New York and California. And the furthest seaboard. They did vote for Trump, right? Where's the furthest seaboard? Well, in Hawaii. Hawaii. And, you know, I think we pay... We're so seaboarded we're surrounded by sea. Yeah. So I don't think for people who are paying high taxes here that they're going to do well as a result of this bill. Well, you know, do you think, as I do, that there was a political motivation in that particular aspect of this bill? Well, I worked for a United States senator, so I try not to be too opiny. But he's a Democrat. I mean, this is the time to stick it to the Republicans, you know? There you go. So let's stick it. Well, what do you think? Do you think it was political? Yeah. I do. Absolutely. Does that get you off the hook? I cleverly turned the worm on that one to get you to say it instead of me. Yeah, does that get you off the hook? I'm this man's former communications director. Yeah, okay. So it's happened before. I'll come over here. We are going to take a break, I think, right now. And what we are going to do is we're going to come back. And I want to talk a little bit more about the winners and the losers. What happened, really, to middle-class America? Now, there is some counter-arguments, and we'll be bringing that up as well. But it looks like somebody is going to have to carry all of this, and it may be you. You and me. Yeah. Aloha, I'm Richard Concepcion, the host of Hispanic Hawaii. You can watch my show every other Tuesday at 2 p.m. We will bring you entertainment, educational, and also we'll tell you what is happening right here within our community. Think Tech Hawaii. Aloha. I just walked by and I said, what's happening, guys? They told me they were making music. Welcome to Sister Power. I'm your host, Sharon Thomas Yarbrough, where we motivate, educate, empower, and inspire all women. We are live here every other Thursday at 4 p.m. Welcome you to join us here at Sister Power. Aloha and thank you. Aloha and welcome back to Talk Story with John Waihe. I have as my special guest this afternoon Chuck Friedman, special advisor to Senator Brian Schatz. Today our phone number is 808-374-2014-808-374-2014. You don't really get a chance very often to call a senior advisor to a United States senator and ask him, what are those guys doing there? Anyway, I have a chance today. So we're talking about winners and losers. Who's going to pay for all of this stuff? Yeah, that's really the fundamental question. The third part of the three questions is when's the day of reckoning on this and what happens on that day when... Okay, the Republican theory, try to defend it a little bit, is that this will grow the economy so much that there will be the trickle-down effect of more jobs, better jobs, more revenue for government, and that somehow, somewhat magically, like the bean and the beanstalk, it's going to pay for itself and this thing will be a perfect circle and there will be no day of reckoning. Unfortunately, it has not happened in the past with this... More than trickle-down, we get trickled on. We get trickled on. We have been trickled on. Making some weird images. Is that what you're talking about? It's going to be that devastating? I think the potential for it. There's no demonstrable evidence that... Well, I know one thing. The last time we did this with Ronald Reagan, the trickle-down didn't really happen. What happened was the deficit exploded because people still needed... Government still needed to do what government does, which is take care of those who can't take care of themselves, build the infrastructure that makes it possible for us to process it. There is no infrastructure plan. There's a real question about what kind of money there would be to pay for it, seeing as how the deficit is going to... President Trump is calling. It doesn't mean that he doesn't tweet us. I'm sorry, Mr. President. You really got to wait a little bit. I'd much rather talk to Chuck. Okay, so now we are in this situation. And trickling down for whatever its word may or may not happen, it never happened in the past. There's some great skepticism that it's not going to happen again. I mean, that it'll ever happen. But in the meantime, there are actual front-line people who are going to suffer. That's right. So what happens to social programs and the rest of it on their own? Yeah, what's the long-term future for Medicare? They are eliminating the mandate, the Obamacare mandate, so a bunch of people are going to fall off the rolls. A bunch of people means like 60 million people. I don't think we know exactly, but as many as 10, probably more, 10 million or more, and the real dangers of that. And it sort of violates the Republican assurance that if they eliminated Obamacare, they were going to replace it with something that would work for the general population, including all people. And there is no evidence of that whatsoever in this bill. Or it doesn't seem to be the will to do it by the Republicans who passed it. So that's an example. No, let me ask you a question. Why would somebody like John McCain, who literally was a hero in my mind and a conscience of the United States Senate when he voted against the repeal of Obamacare, vote for something like this kind of reform? His statements had been he wanted to return. He didn't like the process. He wanted to return to general order. And he objected to what was going on with the medical insurance issues because it just violated all what they call general order. They're slightly back to general order now. But I don't know about the Senator Flakes and the Senator McCain's who I think have a more balanced view of what should be happening in the country. The other side of it for the Senator McCain Republicans is their desire to increase defense spending, their recognition that it's a dangerous world, and now we're risking, unless trickle down works, not having the kind of revenue to fund a government that can protect the country the way Senator McCain would like it protected and probably most people and still sustain people in need education. The programs that are special to communities, those are the first ones that will go. And they're small programs, but they mean a lot to people. Hawaiian education and issues like that here, health care, not a small issue. Those are all at risk. So is Obamacare at risk? I mean, are we going to lose the universal, at least the foundation for universal health care? One of the elements that was critical to Obamacare was the mandate for people to buy into the insurance plan, kind of complicated here, but that created the pools that you need, the larger pools that you need. Well, the lower risk and higher risk people are in the same pool and it helps even out the cost. Well, that's the reason why Hawaii has the lowest health insurance in the nation. And it was actually sort of a Republican concept way back in the beginning. Richard Nixon actually proposed the employer mandate. We stole it from Nixon. And Mitt Romney instituted it after us in Massachusetts. So it's not the private domain of Democrats, but that mandate is gone now. And there is nothing in its place to secure the medical insurance system as it works. I don't know what's going to happen. I think a lot of people are going to be awful. Well, what about President Trump's threat to stop, to not pay the Medicare subsidies that he was, that are required? The pieces of this... I don't know if he actually went ahead and did that. And how the pieces of this... Somebody's going to have to face the facts that the medical insurance system for America is going to devolve very quickly. And the result of that is going to be, you know, not just that people have no insurance or less insurance, but our rural hospitals, which are already in danger, will be in more danger and will fold in the country. And that emergency rooms, as they were in the past, will begin to pile up because people without insurance will run to emergency rooms. You know why you're talking about places like Molokai Hospital? Well, I don't know what's going to happen because we have a wonderful state that steps up for its rural areas, like probably two states in the country. But I think as a general rule, the risk across the country that rural areas are going to suffer more, that emergency rooms are going to become overcrowded, unless somebody steps up now on the Republican side with a plan to replace what they've cut away, we're going to fall back to the kind of emergencies we had before Obamacare. So, Chuck, how long you and I have known each other at least over 30 years, right? Pretty well over 30 years. Yeah, pretty well over 30. So that means that both of us are social security eligible, right? What does that mean for us? Well, I think those of us that are, you know, as I said, social security eligible. Social security is kind of always at risk whether you're asking me what... As a result of this... I don't know, I don't know, because I'm getting all these emails from all my... But I think the medical side of Medicare, Medicaid, that's the side that is probably going to be at risk first the most. Social security comes from a pool, a funding pool that for the time being is stable and I can't see even the Republicans trying to raid that. Well, did they though? Did they in fact do something that might impact our social security payment? I'm not aware of that poison pill in this bill, no. But it's 500 pages long and like I said, I certainly haven't read it yet and I don't know if anybody... And then we don't know of any senators that actually read it when they raised their hands in favor of it. I think it's more likely that you're going to see the real devolvement of the federal budget on almost everything else except social security. That's my guess because that's such a hot plate to touch. Whether they will later on try to change social security in the way it works... Well, they're trying to privatize it, you know. Yeah, they want to privatize it. They want to privatize it. Well, you know, so then we get to, you know... Invest your money and open it. We give the same Wall Street hackers that caused us the recession of 2008 to run our social security system. That is a very cynical way to look at it and probably accurate. Yeah. Well, I'm a little worried about that, you know. I kind of... Now, let's talk about Donald Trump. He's obviously celebrating because this passed. It's a big deal for him. It's really weird, but this guy, you know, in a strange and almost diabolical way, has succeeded with three groups by doing crazy things. I mean, he just remained corporate America very, I think. He just gave them a Christmas present of enormous size. That's what he called it this morning. Yeah, he gave them, you know, and that's corporate America. He appointed an ultra-right-wing justice for the Supreme Court and kept the balance going in a direction that most of us find unthinkable. And, you know, he's demonstrated his bigotry. And so, you know, when you add up all three... And there's a fourth one. Which is? He's staffed his departments with... People who are going to destroy them. People who are ideologically really against the notion that government can do good. So, quick prediction from the special advisor to the... What happens in the... To the Senate, the show? What happens in the 2008 election, 18 election? Does any of this resonate with the American people? I think the large question is what is going to resonate and whether what's happening in this country and what's occurred in the last couple... Well, last year or two where the truth seems to be a frivolous thing, you know, people... Well, with partisanship is more important. But do we or do we not see some change occurring in 2018? Real quick. You've got 10 seconds. You've got to do it from the bottom up. Work real hard. The old-fashioned way. Say yes. You can. You can. Yeah. Thank you for joining us for another edition of Talk Story with John Wahee and Chuck Friedman, special advisor to Senator Brian Schott.