Tax bill fails?

Schumer takes hard line with Trump on taxes

'There is a path forward, but only after this tax bill fails,' Schumer says in a new 'POLITICO Money' podcast.

By BEN WHITE

Chuck Schumer has shown he’s willing to cut deals with President Donald Trump. But the Senate minority leader says Democrats will take a hard-line approach with the White House on taxes — and everything else — until Trump’s GOP-only approach hits a dead end.

“There is a path forward, but only after this tax bill fails,” Schumer says in a new “POLITICO Money” podcast to be released Wednesday. “The hard right, which cares so much about just reducing taxes, has a stranglehold on the Republican Party right now. And I don’t think they’ll give it up unless this bill fails.”

While Schumer has an odd-couple friendship of sorts with Trump, the Senate Democratic leader says it’s a purely transactional relationship. “I think he likes to talk to me because I’m a New Yorker,” Schumer said in the interview in his Manhattan office. “We’re both direct. We’re both blunt. I tell him what I think.”

Schumer’s comments about how Democrats will approach a tax overhaul took on added significance this week as Trump dug deeper into a bitter feud with Sen. Bob Corker (R-Tenn.) over the GOP’s tax efforts. Corker has expressed skepticism about supporting any bill that adds to the deficit. Republicans can lose only two votes in the Senate if they hope to pass tax reform along party lines, which is their current plan.

The White House is trying to woo red-state Senate Democrats up for reelection in 2018. But Schumer tried to lay down a marker: The party would hold fast to demands that any final tax bill deliver relief to the middle class and not tilt to top earners.

“If this bill fails, what we saw in health care in a small way, we could see in a bigger way and actually come up with some kind of bipartisan compromise,” he said. That compromise would have to include no tax breaks for the top 1 percent and deficit neutrality. If that happens, Schumer said, “there are a lot of Democrats who would be willing to reduce the corporate rate.”

Schumer also took sharp aim during the interview at Treasury Secretary Steven Mnuchin, calling him a liar and a “suck-up” to Trump.

“I don’t know if the man’s deliberately lying, but it seems so,” Schumer said, referring to Mnuchin’s earlier remarks to POLITICO about the potential impact of tax cuts on the deficit. “His statements are outlandish, and he seems just to want to — I don’t know if I’m allowed to use this word; I think I am — suck up to Trump.”

Schumer also attacked Mnuchin’s assertion that failure to pass the GOP’s tax bill would lead to a major sell-off on Wall Street. “It’s absurd. No one believes Steven Mnuchin,” he said. “He has lost his credibility because of statements like that. Wall Street was going up at a dramatic rate before the president even took office, and it’s doing fine now, because the economy’s doing well, because corporate profits are way up.”

A Treasury spokesperson said "we are surprised to hear the minority leader express these comments about the secretary.”

“The secretary is committed to delivering a major middle-class tax cut, more competitive business taxes that create jobs and wage growth and a fairer tax system,” the spokesperson said. “This would be a good time for Sen. Schumer to stop the obstruction and help hard-working Americans get meaningful tax relief."

Trump this past week spoke of his relationship with Schumer, telling Fox News he likes the New York senator but has some issues with him.

“I like Schumer, but before he even knows the plan, he’ll say, ‘Oh, this is for the rich,' so he doesn’t even know what the plan is, and he’s screaming it’s for the rich,” Trump said. He added that he didn’t think he’d ultimately need Schumer’s help on anything. “I don’t think it matters; I mean, I really don’t.”

Speaking of his relationship with Trump, Schumer described in detail what happened after he and House Minority Leader Nancy Pelosi, who previously cut a surprise deal with Trump on the debt limit and government funding, thought they had another deal to extend protections for undocumented immigrants who came to the U.S. as children.

“We thought we had a deal and no wall. We’d do border security,” Schumer said. “The right wing starts killing him. Laura Ingraham says impeach him. And I think Breitbart called him Amnesty Trump. So he backs right off. Same thing just happened on health care.”

Schumer said he would not describe his relationship with Trump as a friendship. “He does like talking about mutual people we both know in New York. But the relationship is not founded on what I would call friendship, but transaction, you know?” Schumer said. “But I’m direct with him. There’s no BS, and I think, in Washington, where there’s so much, he does like the directness.”

On other topics, Schumer said he urged Trump to consider renominating Janet Yellen to serve another term as chair of the Federal Reserve. Trump is expected to announce his pick soon, and most Republicans expect him to move on from Yellen.

“He actually, in one of our meetings, asked me what I thought of Yellen. So I didn’t lobby him. I was responding,” Schumer said. “And I said: ‘I think she’s been a very good chair. I think she’s kept inflation low and at the same time focused on job creation, which is, I think, where the Fed should be focusing.' And he said: ‘Good. I like her, too.’”

Schumer also rejected the idea that Democrats have no chance of retaking the Senate given the number of red-state seats they have to defend. “We have a chance to win the Senate. Our incumbents are doing extremely well,” he said. “In our challenger races, we’re doing real well. We’re doing real well in Utah, in Nevada. We’re doing real well in Arizona. We have a lot of candidates interested in Tennessee. Texas — watch that one.”

Asked why Hillary Clinton lost the White House, Schumer laid the blame on himself and other Democrats. “We needed a stronger, positive message about what we were going to do for people,” he said. “When that didn’t happen, Trump filled the vacuum with a negative message.”