[Christine Romans, Cnn Anchor:] President Trump, looking to strike a compromise to keep the government open. He's said to be ready to wait to fund the border wall, at least for now. The president also ready to slash the top corporate tax rate. How low will he go? And what could stand in his way? And why is the State Department giving promotion to the president's Mar-a-Lago resort? We'll show you the explanation for a very controversial article. Good morning and welcome to EARLY START. I'm Christine Romans. It is Tuesday, April 25th. It is 5:00 a.m. in the East. Good morning, everyone. President Trump this morning showing some flexibility on funding for his promised border wall, indicating it might not be a deal-breaker on ongoing talks to fund the federal government past Friday's shutdown deadline. White House officials now signaling that an offer from Democrats for funding border security measures rather than funding the wall itself, that might be enough to satisfy the president. Trump telling conservative journalists at a private meeting that he is open to delaying funding for the wall construction until September. So there's no deal yet, but a strong sign the White House may not force a showdown over the wall as that Friday deadline looms. The new wiggle room eases back from earlier administration demands that at least sounded like the White House was insisting on funding for the wall as part of any deal to keep the government open. White House Press Secretary Sean Spicer said it this way to our Jim Acosta who asked why wall is even an issue if Mexico was supposed to pay for it.
[Sean Spicer, White House Press Secretary:] Well, I think, Jim, that the president has made very clear that, initially, we needed to get the funding going. And there's several mechanisms to make sure that that happens. We feel very confident the government is not going to shut down. Number two, is I think the president has been clear in the past, about the fact that and this is not a new thing. He talked about this. That in order to get the ball rolling on border security and the wall, that he was going to have to use the current appropriations process. But he would make sure that that promise would be kept, as far as the payment of it.
[Romans:] Some Democratic support in the House and especially the Senate, where 60 votes are required, will be needed to pass the spending bill. Senate Democratic Leader Chuck Schumer put out a statement late overnight, saying, "It's good for the country that President Trump is taking the wall off of the table in these negotiations. Now, the bipartisan and bicameral negotiators can continue working on the outstanding issues." The White House is floating the proposal to cut the corporate tax rate to 15 percent. Here's why the U.S. has the highest corporate tax rate among developed nations, at 35 percent. The average worldwide is about 23 percent. Now, critics will tell you this makes the U.S. less competitive. They say it forces companies to use, shall we say, innovative tax practices and keeps huge piles of cash overseas. But cutting the corporate rate won't solve those problems entirely. Two main issues. First, the effective corporate tax rate is 14 percent, that's not 35 percent 14 percent is how much big profitable companies paid between 2006 and 2012. This is according to the Government Accountability Office. One in five big profitable companies paid no tax at all. Tax credits and loopholes allow these companies to legally reduce their tax burden. If the White House leaves those in place and reduces the corporate rate, revenue will simply plunge. That's the second issue. Tax cuts are expensive. If companies pay less, individual taxpayers would be on the hook to make up the difference. A Tax Policy Center study from last year, which looked at Trump's initial 15 percent proposal shows it will cost $2.4 trillion in vanished revenue over the next decade. That's about $240 billion a year gone. It's about the same the government spent on food stamps, jobless benefits, child nutrition for some context. So, the big question now how will the administration pay for it. The proposal will have to be revenue neutral to pass, as part of the budget process. Steven Mnuchin, the treasury secretary, has said they'll pay for it through stronger growth, something that people who score budget could be really tough to do. Let's talk politics with our panel, politics and money. Here with us in New York, political analyst Ellis Henican, author of 'The Trump's America" column for Metro Papers, and at CNN Center, political economist Greg Valliere, chief strategist for Horizon Investments. Good morning, gentlemen. Good Tuesday morning.
[Ellis Henican, Political Analyst:] Good morning.
[Romans:] Greg, let me start with you and this 15 percent floated tax rate. Is this just where, I guess, the president is starting his negotiation here? It seems like he's jumping out there, he wants to get this tax reform debate started.
[Greg Valliere, Political Economist:] Yes, he will say he wants 15 but, you know, Christine, I think he would take 20 or 21 or 22. That's still a dramatic cut from 35 percent. The other big part of this story, maybe not a good story for the bond market in the long-term, is that they really don't have a clue on how to pay for it and I think they will pay for it by assuming growth that will be extraordinary and maybe illusory.
[Romans:] Yes, we're calling it in our CNNMoney story, we're calling that the magic wand of growth to pay for it. Magic wand is right there in that headline. Let me ask you, Ellis. We also heard the president may be stepping away, may be blinking on this promise to put wall funding in budget negotiations. Has he learned something from the healthcare debate? What did you see in his negotiating tactics here?
[Henican:] Well, yes, don't bet all the marbles on something that you can't make happen in Washington. Clearly, this was really going to be a problem keeping the government open. If the president insists on this and Republicans in the Congress are willing to stand by him, you really could have had a government shutdown at the end of the week. I think that's looking increasingly less likely now. And that, you know, we will fight about it in the fall.
[Romans:] You know, we've heard so much, Greg Valliere, about this fight with Mexico and Mexican the president has said about Mexico, taking advantage of the United States, but it's interesting to me that the wall, then, is out perhaps. I mean, indications are that the wall is out of the budget negotiations and the first tariffs the president puts on are on Canadian companies.
[Valliere:] Yes, what a story. You've got a Republican party in control of both houses and the White House and they can't get what they want on the wall, they can't get what they want on a lot of things, maybe not even on the extent of the tax cuts. So, the Democrats are feeling kind of emboldened. They're going to get their way on a lot of this stuff. As far as Canada goes, we now have two big fights, lumber and dairy where this administration is really going after Justin Trudeau and the Canadians. I question why we would want to get into a fight with one of our strongest allies.
[Romans:] Yes, and the commerce secretary saying this was a bad week for U.S. and Canadian trade relation. Guys, let's talk about 100 days, the White House has called it ridiculous, has called it arbitrary. Last year, it was a contract with the American voter for 100 days, so it really has changed its view on that. You know, we've had some executive orders, Trump has issued some executive orders. He's had a big legislative accomplishment which is Gorsuch, but I want to stack up Trump, Obama, Bush the laws signed in the first 100 days. And, Greg, you say we are watching a transformation of this president into a typical center right politician with Goldman Sachs faction in control and no real legislative accomplishments here.
[Valliere:] Not a lot yet. I went back the other day and looked at 1933, Franklin Roosevelt in his first 100 days. That was extraordinary, epic, unprecedented. This president said a week or so ago that he has had the most impressive 100 days ever in the history of the presidency. Not quite sure I'm buying that.
[Romans:] I'm glad you bring us FDR, because, Ellis, here's what's interesting. Why we look at the first 100 days is because that construct was introduced by FDR because we were in a national emergency. And President Trump won by convincing voters that we are in a national emergency second only to the Great Depression.
[Henican:] First of all, FDR is a pretty high bar, I don't know that we should be comparing any modern president go ahead and try with that one if you like. But you know what? You're right, on the campaign trail and even in the early days of the administration, the president was really talking about America as being a very dire and bleak place and I've got to tell you, we've got some challenges. But I don't think that's the national mood at this point. Most people are middle class folks, particularly, it's tough but I don't think there is a sense that oh my God, we've got to turn over everything and I think the rhetoric didn't quite match the mood out there, and that's part of the reason why these things are not turning into actual serious legislative accomplishments.
[Romans:] I mean, when you look at investors, investors are making a ton of money, banks are making a ton of money, housing market looks good for the spring selling season, existing home prices up something like 7 percent. I mean, the question is, is the job market going to continue humming and can the president, Greg, take credit for that?
[Valliere:] Some credit but I do think a fundamental shift has been his alliance with the Goldman Sachs faction within the White House. They've won and that's not a bad story for the markets.
[Romans:] Not a bad story for the markets. Europe not a bad story for the markets. But what about the little guy, Greg? Is the little guy going to feel any better in four years when he goes back to the voting booth?
[Valliere:] I think the big story for the little gal, the little guy over the next couple years is how tight the labor market is. You and I have talked about this before. I think within a year the labor market will be so tight you're going to see wages going up. That's a good story as well.
[Romans:] Ellis, how does he what does he say about 100 days? I mean, is he going to pass he's going to have a rally in 100 days.
[Henican:] Right. And, in fact, he is' going to miss the correspondents dinner to have a rally in Pennsylvania, which apparently will be a much more happy audience, let's say. You know, I'm still in the incomplete category. He does make a legitimate point that many of the great accomplishments of our presidents have not occurred in the first 100 days, but he's kind of only got himself to blame on this because he set that standard for himself on the campaign and it's coming up a little short.
[Romans:] We will see if they can keep the lights on in Washington over the weekend.
[Henican:] Be careful what you say, by the way.
[Romans:] Yes. All right, guys, thanks so much. Come back in about a half an hour, get a cup of coffee. The State Department removing a post from its Share America site promoting President Trump's Mar-a-Lago resort. The article posted on U.S. embassy sites gave a visitors guide to the winter White House, saying it's become well-known a the president frequently travels there to work or host foreign leaders. Officials taking down this post, saying, "The intention of the article was to inform the public about where the president has been hosting world leaders. We regret any misperception and have removed the post." The post was new fodder for critics concerned about conflicts of interest between the presidency and the Trump businesses. Mar-a-Lago has already seemingly benefited from the Trump presidency. It club raising its initiation fee from $100,000 to $200,000 right after the election. President Trump with some harsh words for Kim Jong-un in Pyongyang, quick to respond with a military drill overnight. We're going to go live to Seoul, next.