What do you think? Leave a respectful comment.

Tax cuts alone won’t answer U.S. economic needs, Bloomberg says

Michael Bloomberg, former mayor of New York City and billionaire investor and business owner, wrote a column this week calling the tax bill a “trillion-dollar blunder.” He tells Judy Woodruff why he thinks Congress and President Donald Trump put politics ahead of true tax reform.

Read the Full Transcript

  • Judy Woodruff:

    And now a tough assessment about the impact of this bill.

    It's part of our continuing coverage of this major legislation.

    Michael Bloomberg is a former mayor of New York City and, of course, a billionaire investor and business owner. He wrote an opinion column this weekend calling it a trillion-dollar blunder.

    I spoke with him a short time ago.

    Mayor Michael Bloomberg, welcome.

    The Republicans and President Trump say this tax bill is going to make historic changes to a system that is way out of whack. You are a successful businessperson. Why do you think it's not going to work?

  • Michael Bloomberg:

    Well, I think it will make an historic change to our system. Unfortunately, it's all in the wrong direction.

    What this bill is going to do is create a $1.5 trillion, $1.7 trillion deficit over the next 10 years. And that means we're not going to have money to do for infrastructure what the president was calling for today.

    We're not going to have any money to improve our school systems, which are falling apart. We're not going to do any of these things. And it exacerbates the income inequality problem at the same time.

    It's really hard to see how you could call this bill reform. It has no reforms in it whatsoever. So, if you had tax breaks before, basically, you still have them. You're just going to have a lower tax rate for some people, mainly for the very wealthy, and those people are just going to have a bigger percentage of the pie.

  • Judy Woodruff:

    Well, just yesterday, Treasury Secretary Mnuchin said that this is a bill that's going to lead to massive economic growth. He said as high as 6 percent in some quarters, and he said it's going to lead to wage increases, average wage increases of $4,500 a year.

  • Michael Bloomberg:

    Well, number one, if the treasury secretary really believes that, everybody is holding with bated breath, waiting with bated breath for him to give us the report that he said he had 100 people in Treasury working on.

    What he did is, he came — one piece of paper, one page, and it just said, all is going to be good.

    But the truth of the matter is, we have never had growth for a long period of time like that. And in the past, when we have reduced taxes, it has not gone to increase wages or really to stimulate economic activity.

    If you think about it, without a tax increase, the stock market in the last year is up 25 percent, 27 percent. I don't know what stimulation you can get beyond that.

  • Judy Woodruff:

    You have said — you agree that the corporate tax rate is too high. You run a global business. Do you think this is going to lead businesses to bring jobs back to the United States?

  • Michael Bloomberg:

    I think there is a reason to reduce corporate taxes. We are much higher than everybody else. And to be competitive, you have to do that.

    But doing things that will stimulate economic activity is very different than just cutting taxes. We need to take money and invest it in things like infrastructure, not reduce our ability to go and invest in infrastructure.

    This is a political bill, Judy, that was designed so the president of the United States made a campaign promise, wants to fulfill that campaign promise. And Congress has gone ahead and passed a bill in the dead of night, if you will, where nobody has read this bill, nobody knows what's in it.

    The Congress is going to vote for this bill without having done any due diligence, without having consulted any experts. It is about as irresponsible a way to create policy and laws as anybody could possibly think of.

  • Judy Woodruff:

    You also mentioned, Mayor Bloomberg, education, that the burden is going to fall heaviest here on cities with the poorest students. How so?

  • Michael Bloomberg:

    Well, we have a group of people in this country who are poor and don't seem to be able to work their ways out of poverty.

    And one of the real reasons for that is they don't get a good education. We put teachers in the classroom who can't — in many cases shouldn't be there, can't — aren't qualified, unfortunately.

    And we should spend money to take those teachers and give them the help they need to become better teachers, so they can help these people get an education. And if you get an education, then you can work yourself out of poverty.

    By taking the away the state and local deductions in the big states, where they have more of the people with — who, unfortunately, have been mired in poverty for a long time, we're taking away their ability to give the poor people of this country what they need to work themselves out of this spiral, the succession of generation after generation that remains poor.

    We keep talking about helping them, and we're not helping them, and this is going to make it harder to do that.

  • Judy Woodruff:

    One other thing this bill does is to do away with the individual mandate under Obamacare, health insurance, that people are required to purchase health insurance.

    What effect do you think that's going to have on premiums?

  • Michael Bloomberg:

    Well, somebody's got to pay. That's what the dirty little secret here is, medical costs keep going up, and we're unwilling to do anything about the costs, like negotiating with pharmaceutical companies for lower prices, which other countries do.

    But, regardless, whatever the cost of medicine is, we want to have everybody covered. We have made a decision in this country we're not going to let anybody die in the streets. If you need hospital care, medical care, the government will pay for it, either through an insurance program, like Obamacare, or direct subsidies from the taxpayers to hospitals and doctors that have to provide that care.

    And to take away the mandate is really saying, the only people who are going to pay are those who need health care. And the way health care works is, everybody pays, so it reduces the cost so that people that need health care can afford it, because, otherwise, they could never afford it on their own.

    That's what an insurance plan is. Everybody pays in, some people benefit. Why would you pay into that? Because it might be you some day that needs the benefit.

  • Judy Woodruff:

    Final question.

    You have been critical of President Trump since before he was elected. What grade would you give him after 11 months in office?

  • Michael Bloomberg:

    Well, I think the president has to learn the job, and he's still doing that. He's doing it slower than I would have thought.

    He has to build a team, and he's really not done that. And now it's harder for him to attract good people.

    But the bottom line is, this president, as all presidents, need a team, and let them make decisions. You have got to hire people and give them authority to go along with responsibility. And you have got to hire people who are experts in each facet of government, rather than people who just happen to agree with your political point of views.

    And he's not separated out the politics from the knowledge that we need.

    And to sit there and say to CDC, the Centers for Disease Control, you can't use certain words, or we can't talk about climate change, we can't talk about certain things that are politically not what the president believes in, but you can't manage science.

    We're almost going back to the Dark Ages of saying what science is, what things they can look at, and what their conclusions have to be from a political point of view, regardless of whether the science gets there.

    The president has to understand that he's the president of all the people and that his political views, he has a right to those — and there is nothing wrong with him trying to push those — he was elected by 63-odd million people. But certain things, you just have to do based on the facts and have experts, nonpolitical experts, do it.

  • Judy Woodruff:

    Former New York City Mayor Michael Bloomberg, we thank you.

  • Michael Bloomberg:

    Judy, thank you for having me.

Listen to this Segment