[Whitfield:] President Trump is making a big push for his newly unveiled tracks reform plan, saying, it's centered around, quote "a giant, beautiful, round, massive tax cut that will help American companies grow."
[Donald Trump, President Of The United States:] For decades, the policy of Washington, D.C., on the subject of manufacturing was a policy best summarized in one word: surrender. They surrendered. Under my administration, the era of economic surrender is over.
[Whitfield:] The president insists the GOP tax plan will also help average everyday Americans. How does it aim to do that? CNN's chief business correspondent, Christine Romans, explains.
[Christine Romans, Cnn Chief Business Correspondent:] This is the opening argument in tax reform. The president unveiling what he and Republicans would like to do in terms of your taxes. And it looks like what they have on paper here is real tax reform. Real tax reform different from just tax cuts. In real tax reform, you simplify the tax code. That's what they want to do here, make it much easier to follow your taxes on maybe a form the size of a postcard. Close loopholes. Lower tax rates, and boost growth and hiring. That's the point. Let's talk about what's in here. Cutting the tax brackets. The middle-class tax income, 25 percent. Top income would be taxed at 35 percent. And the low end of the spectrum, 12 percent. Taking seven tax brackets and shrinking it down to three. This one's higher than the lowest tax bracket now. Today, the lowest tax bracket is 10 percent. This is 12 percent. What the White House says is that by doubling the standard deduction for families, the first $24,000 of income for a married couple is tax free, that would help people, millions of families would pay no taxes whatsoever. Let's talk about what this eliminates. Most itemized deductions. If you live in a state, like California, Connecticut, New Jersey, New York, these are states where you pay big state taxes. Today, you could write those off your federal return. This would eliminate that. That's why you're already seeing pushback from Republican Congress members of those states. It gets rid of the alternative minimum tax and estate tax. These are two points the critics said benefits the rich and companies more than anyone else. Here's what individuals keep in this plan. The mortgage interest deduction, very popular. Charitable giving deduction. And some higher education. And retirement plans, 401K, for example, 529 plans, those are still tax advantaged. Here's the corporate tax rate. Today, it's 35 percent. Proposed, 20 percent. You look at the small business rate, this would help small business and entrepreneurs. So this is the business part of the tax reform plan that's on the table. Again, an opening argument, this is the part of the plan that Wall Street really likes. They think this will boost profits and boost growth.
[Whitfield:] Thank you very much, Christine Romans. So how will that plan play out on Capitol Hill and on Main Street? Here to discuss, CNN political analyst, Margaret Talev, in Bedminster, New Jersey, traveling with the president. And in Washington, CNN political analyst, Rebecca Berg. Good to see both of you. Let's begin with the huge cut on corporate taxes. Republicans and the White House saying it will bring jobs and business back to the United States. Democratic leaders say it's the same old failed trickle-down economics formula and gift to the Americans. Margaret, what is the White House strategy to try to counter those arguments?
[Margaret Talev, Cnn Political Analyst:] The White House strategy is to talk about this on two fronts. Number one is the idea of job creation. You saw him do that with the manufacturers yesterday. The other is emphasizing that this goes hand in hand with relief for middle-class Americans. And the president already feels like he's made a really big concession. He had wanted to hold out for a reduction of the corporate tax down to 15 percent. Internal divisions inside the White House saying that's just not possible. There's no way that it could pass. It wouldn't work, wouldn't 0- he sort of agreed that he can live with 20 percent. But look, there's going to be a tremendous amount of debate. And when you pile on some of those considerations about Republican representation in blue states, where the reduction, the elimination of some of those itemized deductions is playing out, you see that, again, this is not really that much easier than health care in terms of a legislative push.
[Whitfield:] And so, Rebecca, that potential clash between Republicans that Christine was talking about, you know, involving the the scrapping, you know, of particular measures. How much more complicated might this be for the White House? He has really no political clout, thus far. He's counted on members of the Hill for crafting his legislation without a lot of involvement. That's been the criticism. Will he be approaching that differently this time?
[Rebecca Berg, Cnn Political Analyst:] Well, as we like to say, the devil is always in the details with a major piece of reform like tax reform. So this could get very messy. But actually, in the first week or so, with this rollout, this has been surprisingly easy, positive for Republicans and for the administration rolling this out. And the big difference that we're seeing so far between the health care fight on Capitol Hill and this tax reform proposal that they're putting forth is that Republicans so far are actually coming together and all sides of the Republican spectrum are supporting this bill so far. The Freedom Caucus has said in principle that they plan to support this on the House side. You've had a range of conservative to moderate Republican groups coming out and saying they plan to support this. So assuming that Republican lawmakers are able to pass this through what we call the reconciliation process, so you would only need a simple majority, they could pass this with Republicans alone, if Republicans stick with together on, this they could get this done. And the political pressure, Fred, is really there for them to do that because they weren't able to get health care done. Republicans and the president really feel like they need to get something big done before the end of the year here.
[Whitfield:] Yes. And so, Margaret, what is different? Why is there a much greater consensus thus far?
[Talev:] Part of it is the absence of that resolution on health care and the feeling that, really, they can't have the only major accomplishment of Republicans before the end of the year being holding out the possibility of relief for undocumented immigrants. So there is a real push to move ahead on this issue. But watch the calendar for a clue as to whether the process is becoming bogged down or not. We're talking about officials inside the administration, talking about timelines of as early as late October, early November for House votes, and sometime the end of November for Senate votes, a goal to get this done by year's end. If you start to see some of the timetables slip, it means the process has become complicated.
[Whitfield:] And then, Rebecca, the president's handling of Puerto Rico right now, how might it his handling impact this push for tax reform or any other big-ticket legislative item that he still wants to get under his belt?
[Berg:] Well, certainly, if it is taking a share of his attention as we have seen that it is, he's traveling to Puerto Rico this week. As we can see from the president's tweets this morning, this is consuming a large share of his thinking at this time. So it really just crowds out some of the other things like tax reform that he could be thinking about, strategizing, and also speaking with Congress about, as well. If you look at the congressional side of the ledger, you could have Congress needing to address Puerto Rico as well, sending them relief money as they did with Texas and Florida. And so that adds to the legislative schedule, as well. Obviously when you have more on your plate, things just become more complicated. But I think the administration and Congress are hoping that they can walk and chew gum at the same time on this.
[Whitfield:] Rebecca Berg, Margaret Talev, thank you very much to both of you. Appreciate it.
[Berg:] Thank you.
[Talev:] Thank you.
[Whitfield:] All right. We'll be right back.