Jennifer: Good day. Welcome to the conference. My name is Jennifer and I will be your conference operator today. Welcome to Cozen O'Connor Public Strategies Series about the latest developments in politics and policy in DC. Our call today will be moderated by Blake Rutherford a member of Cozen O'Connor Public Strategies. Our speakers are Howard Schweitzer, managing partner and Mark Alderman, chairman of Cozen O'Connor Public Strategies. This recording will also be available on iTunes and sound cloud by searching for Cozen O'Connor. For any questions, please email [email protected] Please go ahead Mr. Rutherford.
Blake: Thank you very much and thanks to everyone for joining us today. My name is Blake Rutherford and as always I am joined on this call today by Mark Alderman, the chairman of Cozen O'Connor Public Strategies and Howard Schweitzer the managing partner of Cozen O'Connor Public Strategies. Mark, Howard, great to be with you yet again.
Howard: Blake thanks.
Blake: Well, the bass in your voice, Mark it just, it rings loud and clear. You were up late. Clearly writing the Democratic response to the president's speech.
Mark: I'm coming to you from a secure undisclosed location Blake. That's what you're hearing.
Blake: Okay. Good. Good for you. Good for you. That's where I want to begin our call because certainly it is the talk of the town, as we sit in Washington today, which is the president's first address to a joint session of Congress last night. In the context of presidential pomp and circumstance, it's an enormous deal. The first time that a new president addresses the Congress, it gives the new president opportunity to not only reiterate the themes that were present in his campaign since we're still male dominated in this particular industry, but also to talk about the path forward from a policy perspective. I certainly want to get both of your insights on those issues because it's what Washington's talking about today and I suspect will talking about for the next few days, particularly as we get into the issue. Mark, I thought I would begin with you. What are your general reactions to the president's speech last night?
Mark: I think Blake that you have to distinguish between form and substance, style and content. The president gave what was in my opinion the best speech that Donald Trump has ever given, at least the best political speech. I don't know about speeches at his beauty pageants back in the day. This was a very polished, a very poised, a very professional, a very presidential speech in tone and in style. He gets great points for that. I think there was a real question after the first 40 days whether he had it in him and he proved last night that he does. He proved last night that he can read a good teleprompter speech and that's what he did. That is good. That is good for the country that he presented himself as presidential.
I don't think in content, I don't think in substance we heard anything new and I don't think we heard much at all actually. I doubt that this changes anything except again the important perception that he is capable of acting presidentially.
Blake: Howard, your thoughts?
Howard: Yeah, that's exactly the thing that Mark has been saying for months, that he's incapable of doing and that we were never going to see, and that he'd never make that turn and give a speech without talking about crowd size or electoral college margin. He did. It's a step. It's a very positive step. I thought it was, I thought good on substance and really good on form. Really presidential. The turn that we've been looking for which isn't to say that everybody sitting here isn't thinking well between sometime in the next two days he's going to do something that undermines it, undermines that presidential nature of the speech. If you are the, whether you voted for him or not, I think you breathe a little bit easier this morning, today because the president got up there and acted like the president and articulated a vision in inspirational terms, in unifying terms and I think the fact that the Democrats had a flat response further demonstrates that.
Mark: Wildly premature to declare this a turn. We've seen Trump pivot, we've seen his non-pivot ten times already in the course of the campaign and ...
Howard: But Mark you did say over and over again ...
Mark: This is the same man who before he stood before the country and condemned the attacks on Jewish cemeteries suggested to the state attorneys general that the attacks were being coordinated by the Democrats to make him look bad. That all happened within the space of six hours yesterday. Wildly premature to declare that there is a different man in the White House today than when he said that, but he gave a good speech.
Howard: You are the one who has said over and over again that last night was never going to happen, so it did. You were wrong.
Mark: No, what I have said and I still say is that we don't have a different man in the White House than the one we elected. I didn't think he would give that speech. I started out by saying that. He's the same man who said that the attacks on Jewish cemeteries were caused by the Democrats. I haven't quite seen this great pivot that you're declaring here, but let's see what today brings.
Howard: Look, today's going to bring something different, but a very positive and ... Look I think whether you're for him or against him, you're for the country. That was a really positive speech in tone for the country. I think wherever you're located, wherever you voted, again as I said, I think you breathe more easily this morning.
Blake: Here's something I do want to talk about because I think in the context of the first 40 days, a collective concern, and I base this on what we're seeing from polling data that does show people really feeling like the perception is that this White House is in disarray, this president is truly a shoot from the hip kind of guy. By all accounts this speech not only was it delivered in a manner that was different from what we had seen, the preparation was serious and not something that he just happened to read off a teleprompter. This was days in the work, in the same way that you would ... I mean look, we know that State of the Unions are months in the works, but certainly in 40 days this speech was days in the works, lots of advisors.
The agencies seemed to be engaged in the process, had a line into the White House. We can quarrel with whether he cherry-picked some facts, Arizona on healthcare and some other things but I think what's interesting to me and I would like your take on this because I think that for the first time, unlike contrast it with what we saw with the travel ban which seemed to be hastily put together, not thought through, agencies not engaged, this speech seemed to be the exact opposite which is what happened. What happened is my question. What happened?
Howard: What happened is they are beginning to understand that they have to govern differently than they've run for office. It's what I say every week on the call. They did prepare. They were methodical about it. He clearly practiced that speech.
Blake: He did. There are news reports out that he ... They pulled a teleprompter into the White House and he rehearsed the speech which you would expect anyone to do.
Howard: Right, and by the way Mark, not withstanding your snarky comment about speaking from a teleprompter, Barack Obama never ever ever ever ever gave a speech that wasn't off of a teleprompter on anything. He spoke at campaign rallies off the teleprompter so there's nothing wrong with speaking off a teleprompter. I think Black it reflects, it reflects a seriousness and an understanding about where they are and what they have to do. Is it the answer to everything? No Mark it's not the answer to everything but is it a really positive sign that they took the time to prepare, that they were methodical, that they were thoughtful about it, that they were inclusive? Yeah. Today they pushed back, releasing the new travel executive order. Look I think there are signs of hopefulness here. As I said last week, getting rid of Flynn, putting a guy like McMaster in there, giving a speech like this, symbolism matters. The way they conduct their business in the office matters and that's what we're seeing.
Blake: Mark, Washington is nothing if not a symbolic town. In the context of Trump's shift here and even if, I'm not declaring it a pivot because I know you would disagree with that and have, but the shift in approach which is now pretty clear that there was this methodical preparation, that there was thoughtfulness. Quarrel with the policy which we will, which I know you will in a minute, but do you sense that this is something that Trump can continue? Is it something that his staff can look at and say you know what, this way works and we ought to stick with it for a little while?
Mark: We are going to find out. I want to be real clear that I'm rooting for this to continue because I am obviously, as we all are, rooting for what's better for the country and the country is obviously better served by a presidential president. Let's see if this can continue. That would be a good thing for the country. I do have my doubts. I do think that it was a tremendous improvement as I've said from the afternoon and his inexcusable remarks to the attorneys general. The trend line is good and let's see what the next days and weeks bring.
That is all on tone and style and yes tone and style are important and he gets points for that. When you drill down into the content of the speech, while there were some conciliatory words, we still have the hard right policies of Trumpism. It's not even Republicanism as Howard likes to point out. The spending alone in his speech and in his budget the day before are hardly mainstream Republicanism. There is a lot yet to be determined after what was admittedly a good night for the country.
Blake: Let's talk about, let's talk about some of the policy initiatives that the president addressed in his speech.
Howard: Blake, before we do that, can we talk about the Democratic response?
Blake: Well, we can because I sense that very few people on this call will remember by noon that there was one, but let's talk about it. I was on Twitter last night, talking to some friends of mine about the Democratic strategy here in trying to understand what their strategy was. Very interested to get both of your takes. Certainly Howard, your comments on what the Democrats did in response to the speech.
Howard: I mean Beshear and putting a former governor up there to give a response to me was highly questionable from a political point of view. Really kind of weak, weak. Even more striking to me was ... I can't remember what channel I was watching afterwards, but ...
Mark: Fox News.
Howard: No, I think it was CNN and it was ... No it was MSNBC and it was Schumer followed by McConnell and McConnell called Schumer out on the phone and Schumer couldn't articulate a clear sentence. He was completely flatfooted. He had no message. He had no response. And for Chuck Schumer, that's a big deal. Yeah, we'll see what tomorrow brings, but what last night brought was not a good night politically for the Democratic party because they had nothing to say in response. No clear message.
Blake: Mark, what do you think about the tack the Democrats took in response to this speech?
Mark: Well I thought it was impressive that in a medium, the opposition speech to a presidential address that has been distinguished by very poor and bizarre performances, Bobby Jindal, Marco Rubio. I thought it was impressive that the Democrats reached a new low. That was not my idea of a response, with no disrespect to Governor Beshear, who's a good man and did a good job as governor of Kentucky. I don't know whose idea that was. It sure wasn't mine. I don't think many people thought that was the way to present the loyal opposition.
Howard: But Mark, what about your friend Chuck? I mean, you know him. You deal with him. You sit in rooms with him. Have you ever seen him flatfooted? I've never seen him publicly flatfooted like that.
Mark: I didn't see what you saw. I saw him on a different network, where I thought he was trying to walk the tightrope he was on and I don't think he exactly fell off but it wasn't a graceful high wire act. He is in a tricky position and I think that he was unprepared for the address that the president delivered. He was prepared with a different response and he was trying to edit his response to make it fit the speech that was actually given while he was speaking. It wasn't his most impressive performance, but you don't ... Again, you don't turn around everything in an evening. If it continues in this direction, Schumer will respond appropriately. By this morning he had figured out something a lot more encouraging to say.
Howard: I think one thing that is really striking to me, Blake and Mark is that regardless of who you talk to on either side of this thing, whatever sides there are, everybody ... What I keep hearing from everybody is well you can say what you want about Trump but he's doing what he said he was going to do, whether you like it or not. I guess I look at this speech last night through that lens because State of the Union, these kinds of ... This wasn't technically a State of the Union, but the State of the Union speeches involve presidents getting up there, saying all sorts of things that don't have any meaning, that everybody knows they're never going to follow through on and love him or hate him, the thing that people are saying about Donald Trump 41 days into his presidency is that he's actually going to do what he said he was going to do. That's a big difference.
Blake: Actually 56% of the country said that and I think that's the polling data ... I know we have disputed on this call whether polling matters. I think that statistic matters if you are Trump's policy people. I think that's in a lot of ways why to Mark's point there really wasn't anything new because there didn't have to be anything new. I think it had to be addressed differently, and it was.
Howard: It was.
Blake: No question.
Mark: Can we just talk for a minute about this idea that he's going to do what he said he was going to do. Before we chisel another profile into Mt. Rushmore for President Trump here, Howard, he did exactly what you said he did. He gave a State of the Union type address where there was lofty rhetoric and aspirational commitments and all sorts of big promises, almost none of which he's going to be able to actually deliver. Now we get back to the ... Well this is something you and I have actually written on. Maybe you want to remove your byline but I stand by what we wrote.
Now we get back to the hard work of actually governing. He's going to build a wall that he can't pay for. He's going to give massive tax cuts that his own party is worried about paying for. He's going to repeal and replace Obamacare instead of on day one, now it will day 41. We all know that's not happening. In terms of the promises, I absolutely agree. This president is trying to do what he said he would do. I just think we are a long way from all of these wonderful or not wonderful, depending on your view, from all of these Trump things happening and I don't know what happened last night that changes much of that.
Blake: My favorite headline from last night was that Trump spiked the ball in the first quarter. To a degree I think that what is behind his, the strategic element of the speech ... We know what's behind the style element of the speech. We know that the president needs, by all accounts from people I've talked to and from people who were there, really recognized, I'm walking into Congress. I've got to change the tone. My communication really isn't working. His statement that he would give himself C, C- on message, I suspect some of his aides would probably think behind closed doors it was lower than that. We know that strategic element but I think on the policy piece, this does come back to his desire to reiterate, achievable or not, what he has told people is the core of his presidency. This speech reaffirmed that, although it just did it in a different manner.
Howard: I think people are, what resonates with the country at large is keeping promises. That's why this guy won, because the people are tired, sick and tired of morally bankrupt politicians getting up in front of them and telling them their going to do a whole bunch of stuff that they have no intention of doing. At least Donald Trump is articulating priorities that he has an intention of trying to do. I think he has an intention of trying to pass tax reform. I think he has an intention of trying ... He intends to try to get an infrastructure bill done, and yes he intends to repeal and repair and replace or whatever you want to call it Obamacare. I think, I just think people are looking at this through a different lens than they normally do and that's very appealing.
Blake: Let's talk about where we go from here because we are by all accounts, and you guys, we're all on the Hill and headed to the Hill today. The process has begun, whether it's on tax reform, repeal and replace, repair and, whatever is going come about. We know it's being debated. Infrastructure, Trump has an infrastructure plan. We commented on it, our group has commented on it and analyzed it publicly. He has a plan. Whether it's an achievable plan, we'll see, but he actually has an infrastructure plan that he put forth during the campaign. Arguably the most substantive part of his policy platform, and he has said unequivocally that he's going to build this wall and that there's going to be some sort of tax mechanism to pay for it. Mark you are less optimistic that these things get done, but if we're ...
Mark: Yeah ...
Blake: I'm sorry?
Mark: So let's take the president at his word and let's talk about what he has actually submitted to Congress. Thus far, he has submitted to Congress one and only one actual package, which is his budget, which has like all presidential budgets ... He is acting very presidential and he is consistent with precedence in this. He has submitted a budget that is dead on arrival in Congress by declaration of his own party. That isn't Chuck Schumer's judgment. He wants to increase defense spending by tens of billions of dollars and pay for it by cutting the State Department and EPA budgets by double digits, which together will produce only nickels and dimes compared to what he wants to spend for defense.
None of this has been worked out yet and all of it is about to go into the sausage maker of Congress and we'll see. We'll see what comes out the other end, but I think that before we give him all of these accolades for being the first president in history to intend to keep his promises, you have to start with a budget that doesn't keep them. He knows and everyone knows that that budget isn't passing, as no president's budget ever does.
Blake: Well right, that's exactly right Mark, but Howard to the schematic of keeping your promises, the Democratic response this morning and I got this from Senator Schumer's office. It's headlined, "Broken Promises." Very much this notion that the Trump folks and the Trump administration want this to be about, here's what we promised and right now we're working towards delivering on that and the Democrats already want to position the administration as falling down on that. Even still I'd go back to, this was a speech that I think the Democrats have found very difficult to respond to. That's a sign of, to be fair to the administration, that's the sign of a pretty good speech. I think that's interesting.
Mark: Howard and I wrote something earlier in the campaign, Blake, about Trump's use of his unpredictability as a tactic. He surprised the Democrats with an unpredictably presidential speech last night.
Blake: Howard I want to talk about some of the other issues because we're hearing from our friends and contacts on the Hill. Let's talk about tax reform. We know and as you guys talked about on our last call, everything's connected but in tax reform we are starting to see some tried and true meaningful movement and getting down into the substance of how we're going to tax corporations. How we're going to tax LLCs, how we're going to tax owners of those entities and the income that the received and really getting into the minutia of that, this border adjustment tax and what to do about that. What are your general thoughts about tax reform and where's the interplay with other issues on the Hill right now?
Howard: Well the most significant interplay is with what they do on the ACA because in many respects that too is a tax bill. Unless you deal with the Obamacare taxes, you can't deal with taxes as a whole and also I think just politically, even though people have begun to suggest they go first on tax reform and then take up the Affordable Care Act, that isn't going to fly. They can't do that. But I think, look this is Paul Ryan's lifelong priority. This is why he is in the position he's in. This is why he came to Washington. There's broad agreement that I think we need to make the corporate tax code in the US more internationally competitive. Repatriate some of the money that US corporations have been stashing overseas that they won't bring back because the corporate tax rate is among the highest in the world.
There's momentum around reforming the tax code. I think it will get done. I do not think it will get done this year. I think it will be one giant negotiation. I don't know that it will go through on the 50 vote budget reconciliation process. I think it may go through a 60 vote normal legislative House and full Senate process and I think it will be bipartisan. I think this is something that the Democrats around going to have to, they're going to have to play ball. Corporate America wants it. People want it. It's good for jobs. It's good for the economy. I think it's going to happen Blake.
Blake: Mark, what are your thoughts looking at this from a healthcare perspective, recognizing that to Howard's point, these two are almost inextricably linked. What do you see as the path forward on the ACA because we're hearing out of ... Certainly from the Hill, from Republicans that factions within the Republican party certainly can't agree on what to do about the Affordable Care Act, to say nothing of Democrats and Republicans more broadly, and then factoring in the White House. We've gotten at times mixed messages from the administration about what their goals are. No one's standing up to sort of wave the flag, to truly say I can solve this problem, with the exception I think of maybe Senator Rand Paul of Kentucky. What are your thoughts about the ACA in the context of the policy priorities of this administration?
Mark: Well the president of course continuing the theme of his big week here, the president taught the country a lesson that we apparently needed teaching when he declared earlier this week that no one knew that healthcare was so complicated, but he has figured out that it's complicated and he's going to now share that with us. Once again he's right. It is very complicated. I think that where we are with healthcare is that the Republicans politically need to do something, anything that they can call a repeal. I believe that sometime this spring they will take some action and declare it a repeal and move on to the hard work of replace which really means repair or reshape or remake, but it isn't going to be starting over.
There are healthcare plans out there. The Speaker, along with now Secretary Price has a comprehensive legislative proposal. I think last night, I think the president sort of said in his speech that he mostly is okay with what Ryan is trying to do. I know he keeps saying the White House will produce something any day now. I think as Howard said offline, there is messaging going back and forth here about who is going to own the blueprint, who's going to go first anyway. What I expect to see is Speaker Ryan to start pushing this through the house but it is going to be a long time before he gets his caucus on the same page and then it's got to go to the Senate, where you have a whole different thing going on, where you have competing plans. You have the Collins-Cassidy plan which may at the end of the day be what this mostly looks like, but the one thing I think that is clear for the however many days, 41 days into this administration is that some substantial part of the Affordable Care Act is here to stay.
Howard: I think if Mark and his friends in the snarky Northeastern liberal echo chamber aren't careful ...
Mark: Where you live and work Howard, if I'm not mistaken? Did he move?
Howard: I live and work there but I listen to people better ...
Mark: I didn't realize you'd moved overnight.
Howard: I listen. I listen to both sides Mark. This is going into the sausage making of Washington and out will emerge some version of the healthcare package and that's good. That's what's supposed to happen. Probably if you got Barack Obama in a quiet moment, he would say that that's what he wants to happen. Everybody knows that the ACA ...
Blake: Actually he said that during the campaign.
Howard: Everybody knows the ACA isn't perfect. Hillary said it.
Mark: He said that for seven years.
Howard: You'll be able to argue whether at the end of the day they kept their promise or not as a political matter, but I think what's going on here and you can sit there and argue about promises kept. You don't repeal day one, blah, blah, blah, blah, blah. This is what's supposed to happen. This is what needs to happen and this is what's going to happen.
Blake: From a political perspective Mark ...
Mark: I think there's a fundamental, Blake just if I may for one minute. Well two things. Number one that's twice I've been called snarky this morning, so I'm going to hope that that doesn't happen a third time. I'm trying not to cause that to happen with what I'm about to say. Blake there is a fundamental unresolved tension that underlies most of Trump's policy proposals. That is how are you going to pay for any of this?
The problem with healthcare coming back to that specifically is that the Ryan plan, the Price plan uses tax credits instead of cash subsidies to enable the uncovered population above the Medicaid cutoff to purchase insurance in the marketplace. A big part of the Republican party is unhappy with the idea of creating a further entitlement as they see it. The question on all of this stuff ... There are two questions. One, is it a good idea? Is it a bad idea? The Republicans won and they're going to win on the debate about is it a good idea or bad idea. The debate within the party that is slowing all of this down and is yet to approach a resolution is how are you going to pay for any of it.
Blake: Yeah, and the question that I'd ask you from a political perspective is if there is one issue that the Republicans have to deliver on, it's the Affordable Care Act.
Howard: Yeah, absolutely.
Blake: Politically, the other stuff, they're feeling less political pressure but I think you both agree that they got to figure out how to deliver on that. I want to look at this in a macro context before we wrap up our call because of all the things that we've talked about, the things that are highlighted in Trump's speech, the Affordable Care Act, not a small thing to get done. Tax reform, not a small thing to get done. Infrastructure reform, not a small thing to get done. Immigration reform, not a small thing to get done. Perhaps the easiest thing for the Trump administration to get done is a boost in Defense spending although you've got to figure out even still how that works.
Then you have, he talked about family leave and childcare and then the wall. Boy, any one of these in the first year is a pretty significant achievement. He's got six on the table. Howard, those all seem like, pardon the pun, swinging for the fences. Where are the singles and doubles? Where are the things that show that Congress can begin some forward progress, that Trump can start signing some legislation. Put another way, how do we get out of this executive order system and get Congress moving through some pieces of legislation that advance some form of an agenda?
Howard: Yeah well I think by introducing pieces of legislation. There are people hard at work on that, both on the Hill and in the White House and in the agencies. You know, I think back to the theme of prior calls, the biggest hurdle this administration faces right now is getting staffed up and getting the substance onto their teams so they can actually have an impact on policy and roll out policy and govern. Legislating and governing are not one and the same, and they need to ... It's a big government, and the president's job, the White House's role, it's a big role. They need to, they can work on many, many, many different things at the same time as long as they have the people in place to do it. That's most fundamentally what they need. They need to govern.
Blake: Mark, from your perspective, I mean in the context of the way this government is staffed. It is understaffed. That's not an editorial comment. I mean by nature, there are number twos at major departments aren't even in place to say nothing of the lower level staff. What do you sense, you know the next week to ten days looks like for this administration as they try and capitalize on the good will generated from this speech? Do you see anything significant, anything significant happening or just Washington normalized by the weekend?
Mark: I think the likelihood is that we revert to the Washington norms by the weekend and we're back where we were the day before the speech, maybe a little a farther down the road towards getting something done. I think I'm agreeing with Howard because we both live in the snarky Northeast here ...
Howard: Northeastern liberal echo chamber.
Mark: What? Well I didn't hear that but I'm sure I disagree with whatever you said. I think that what we need to do is see action. I think the administration and it's a challenge being it's understaffed as it is, but let's see the White House propose some legislation to Congress. Let's see Congress start to act on it and let's see if we can get something done. Senator Schumer kept saying there he stands ready to work with the White House. He hasn't heard from them. I think Congress at large needs to hear from the White House about specific legislative packages that they are proposing beyond the budget which has already died and then they can get to work. My prediction is that the White House is going to have a hard time, whether you're for them or against them, for all the reasons of staffing and distraction and the rest. I think you're going to see a Congress led legislative agenda. I think they're going to just start moving on this stuff and then we'll see if we can have a Congress centric government that gets some things done.
Howard: I saw Chairman Bill Shuster, the Chairman of House T & I last night, transportation and infrastructure before the speech out in town. He was extremely positive about the prospects for getting something done on infrastructure this year, in the near future, maybe into early next year. Extremely positive. Look, I think politics is an expectations management game and Mark, you're right. That piece about unpredictability. I think if you're the Trump administration this morning, you are emboldened by the fact that you can have all the fiascos you've had over the course of the past 41 days and come out and give a speech like that and leave the Democrats kind of tongue tied and leave your opponents ... I think it's to say the Democrats, people who were second guessing your agenda and your ability to operate in this town, tongue tied. I think this guy is the master of expectations management and he is going to do a lot more than people think he can do over the course of the next year.
Mark: I'm going to just interrupt Blake to say that Chairman Shuster was so bullish on getting something done because he thinks our colleague in the White House counsel's office is going to make it happen. I give credit where credit is due on that one.
Blake: Well, I think as I was saying, as the political world turns, a week ago we were anticipating this speech. Now we're on the other side of it and perhaps the political tide has turned in the president's favor. We'll see and next week when we're back together to discuss it, we'll have a better sense of what it all means. I want to thank everyone who's listened to the call today. Thanks everybody who continues to engage with us in these calls, certainly comments, questions, criticisms, especially the moderator, always welcome. You can reach us at [email protected] Mark, Howard, thanks for being here and great to be with you always.
Howard: Thanks Blake. Thanks Mark.
Blake: Thanks everybody for listening.