Cabinet Room

11:56 A.M. EDT

THE PRESIDENT: Thank you very much. Yeah, we’ll start off with a prayer for our great Cabinet. And, Ben Carson, would you do the honors? Thank you very much.

(A prayer is given.)

Thank you very much, Ben. That was very nice. Thank you. It’s great to have everybody and have a little meeting. We’re going to go over deregulation and some other things. If you’d like to stay, you’re certainly entitled to.

Today’s Cabinet meeting will focus on my administration’s historic and unprecedented effort to remove job-killing regulations. They have been put on our country at a level over the last 15 and 20 years like nobody has ever seen before; more in the last 10 years than we had in every year put together.

We have eliminated more regulations than any administration ever — even though it’s substantially less than two years that we’re here.

We’re lifting the crushing federal burdens on farmers, ranchers, factory workers, energy producers, and businesses of all types.

Along with our massive tax cuts and powerful trade policies, which you’re seeing every day — the deals we’re making are unprecedented; great deals — this regulatory rollback has helped to unleash an economic miracle: Jobless claims are at their lowest level in more than 50 years. African American, Hispanic American, Asian American unemployment rates have all recently achieved their lowest levels ever recorded.

And the economic pictures all throughout the country — literally no matter what aspect of business, finance, economics you’re talking about — we’re setting records. I can’t think of any category of business where we’re not setting records, unless it’s negative, in which case we’re way, way far away from those records.

The World Economic Forum just announced that the United States has reclaimed its place after a long absence as the world’s most competitive economy and country. That’s a great thing to have.

We’ve also ended the war on American energy. We are now the largest producer of oil and natural gas in the world. And soon I’ll be able to say “by far.” We will be, by far, the largest.

We’re removing red tape so we can substantially lower the price of healthcare premiums and prescription drugs. We’ve come out with healthcare programs that are incredible, that people are just starting to learn about.

We got rid of the individual mandate in Obamacare, and we’re running Obamacare — the remnants of it — better than ever before. The premiums are going up at a much smaller rate. It will end up being over at some point. We had it done, but unfortunately, somebody decided to vote against that at the last moment, even though they campaigned for years saying they were going to do it. But these are the facts of life. But it’s of no import because it’s happening anyway. But getting rid of the individual mandate was a very, very powerful thing.

We oppose efforts from Democrats to destroy your healthcare and to raid your Medicare to pay for socialism. And that’s what’s happening. You’ll end up with Venezuela.

We totally support people with preexisting conditions. We have a tremendous level of talent, and we’re doing a lot of work on preexisting conditions. And Democrats will never be able to pull that off.

I will be asking every Cabinet Secretary to continue identifying and removing every needless, wasteful, and job-killing regulation that remains on the books.

And while we’ve set a record — even though it’s a short period of time, we’ve set a record no President or administration has cut nearly as much. There are many, many left to do. And it will not hurt safety, it will not hurt health, it will not hurt anything. It will get things moving faster.

We have tremendous potential. Our country has tremendous potential. And a lot of it was held up by exactly what we’re talking about.

To stop offshoring and outsourcing, we are also fixing America’s horrendous trade deals. You know all about that — the deal with Canada, with Mexico, with South Korea. We’re in a position where we’re in very good shape with China. China wants to make a deal. And we’re just — I’m just saying they’re not ready yet. I told them, “You’re not ready to make a deal yet.” And I don’t blame China. I blame the people that were in charge of running our country, for allowing that to happen. China was taking out $500 billion a year — and more. And that should never have been allowed to happen.

But likewise, other countries are — at a much smaller level are — everybody does well against the piggy bank. And we’re stopping that. We want fairness, and we’re going to have fairness.

So the USMCA has turned out to be a deal that’s been incredible for our farmers, for our manufacturers, for everybody. It’s going through the process now. It’s been approved by Mexico, been approved by Canada. And likewise, the deal, as you know, in South Korea was a deal made by the previous administration. It was unacceptable. It was so bad. It was unacceptable. It was a tremendous drag on this country, and we’ve changed it. And now it’s a very good deal for our country.

So that’s why we’re here. And I think what we’ll do is we’ll start on the regulation aspect by asking Director Mulvaney to give you an update as to exactly what’s been going on.

Where is Mick?

DIRECTOR MULVANEY: Thanks, Mr. President. I’m just going to give a real quick summary, because I know we’re going to hear from individual Cabinet members. I want to give you sort of the top line, where we are over the last two years.

As I mentioned in the Oval Office meeting we had with the various industry and community leaders just a couple minutes ago, it’s been a tremendous success.

You remember, when we first got here, you gave us some goals, which is that we wanted two old regs off the books for every new one reg that went on. Last year, we did 22 to 1. This year, we did 12 to 1. Don’t let that mislead you. We actually did better this year: 176 regs off the books this year. That’s dramatically more than last year.

You also gave us a goal of no new regulatory burden. So if you’re going to add a dollar of burden over here, you have to go to over and find a dollar’s worth of savings over there. Last year, I think we did about 9.5, 10 billion dollars’ worth of savings. This year, 23 [billion].

Where does that put us in comparison to where the Obama administration was in its last year? On the right hand side, you’ll see in the last year of the Obama administration, they sat on this economy with $216 billion worth of costs from new regulations. And that’s just in the last year, okay? We’ve reduced that burden by $33 billion in our first two years. So everything is pointed in the right direction.

You’re going to hear from a lot of folks here. You’re not going to hear — get a chance to hear from everybody, but HHS has done tremendous work on reducing paperwork. Commerce has done some really, really good work on fishing. The VA has done some work on technology that is saving veterans real money in terms of now they don’t have to drive someplace, they can get some of the benefits through technology. Real savings for America’s veterans.

Labor: One of the big things — I don’t think it’s nearly enough attention — is this Associated Health Plan works that Labor has been doing this year.

Across the board, Mr. President, it’s probably one of the biggest successes we’ve had as an administration. Doesn’t get the attention it deserves. That’s probably understandable. It’s just not as glamorous as things like taxes and energy. But getting rid of the small stuff over the course of time makes a big, big difference. I think it’s one of the reasons you see — Larry is going to talk later on today about the economic prosperity. This is a big reason for it.

THE PRESIDENT: That is true. Right.

DIRECTOR MULVANEY: So, it’s been a huge success.

THE PRESIDENT: That is a big factor. Thank you very much, Mick.

Secretary Zinke? Thank you.

SECRETARY ZINKE: Thank you, Mr. President. You issued an executive order in reducing regulation and controlling regulatory costs. The actions the Department of Interior has taken is we’ve withdrawn, since 2017, over 150 proposed rulemakings from our regulatory agenda.

We’ve also finalized no less than 19 deregulatory actions in 2018, to include eliminating the BLM hydraulic fracking rule, revising the 2016 BLM venting and flaring rule to allow beneficial use and collection. Also issued guidance on BLM entering in mitigation, which in some cases is tantamount to extortion.

The results have been that the deregulatory actions have resulted in roughly about $2.5 billion in net present-value savings. And those billions of dollars are without removing environmental safeties. But we have increased reliability. We’ve increased safety and environmental stewardship.

Your executive order on promoting energy independence and economic growth, actions the Department of Interior has taken: We’ve cut burdens on domestic energy. We’ve held 20 offshore leases, so far, in 2018, with more scheduled. The largest lease in the history of this country in the Gulf. We’ve reduced oil permitting times from over 4,500 oil and gas permits, bringing it down to 90 days or less.

The results have been unprecedented. Our oil production has increased on federal lands, and then we support a total U.S. oil production at an all-time high. We are well over 11 million barrels, and on our way to 14 million barrels a day.

Recently, we had an onshore lease sale in New Mexico that generated the most revenue in the history under your administration, sir, and leadership. Nearly $1 billion in lease in less than 48 hours.

We’ve also had the offshore energy safety record. This being done is the record for being the most safe on offshore, because we believe in best technology, best science, best practices, that increase safety, environmental stewardship, and reliability.

In short, Mr. President, unleashing the potential of American energy in all its forms is estimated to be $20 trillion in unrealized wealth and 2.7 million new jobs.

I’m proud to say, Mr. President, under your leadership, America will never be held hostage again by any foreign entity for our energy, Mr. President.

THE PRESIDENT: Very good. Thank you very much. That’s music to my ears. (Laughter.)

On transportation — thank you very much, Ryan — I’d like to ask Elaine Chao, who’s doing a terrific job. Secretary, please.

SECRETARY CHAO: Well, the Department of Transportation is hard at work to reduce red tape and overly burdensome regulations — regulations that are duplicative, that don’t contribute to safety, that inhibit economic growth and job creation, and also negatively impact the quality of life for all of us.

So the Department has exceeded the 2-to-1 mandate that you’ve just heard about for regulatory reform in fiscal year 2018. The Department of Transportation withdrew 23 regulations — regulations that didn’t make sense, that were nonsensical, that were overly burdensome, that were basically red tape. And we’ve added only one significant regulation that was needed, saving the taxpayers more than $1.2 billion in regulatory cost.

Compare this with prior to this administration: Out of the Department of Transportation alone, annually, the amount of regulatory cost enacted by the Department of Transportation in the previous administration was $3 billion annually.

In the first year of this administration, the Department achieved $1.2 billion in savings. And in this coming year, the Department expects to achieve an additional $2 billion in regulatory cost savings.

Now, all of this will be accomplished without compromising safety. And on the horizon, the Department will address unrealistic and overly burdensome fuel economy standards to help make newer, safer cars more affordable for working Americans; expand the U.S. lead in commercial space — which the Vice President, you have asked to take the leadership of — by streamlining procedures for commercial space launches.

Six years ago, America was third in commercial space launches. This year, America is number one, and we want to keep it that way.

On the horizon, the Department will also allow the safe operation of drones over the heads of people, out of the line of sight, and at night. And we are looking at pilot programs that will give us more information with which to allow this, rather than individual case-by-case waivers for a drone population that is now $1.2 million as of August 12th of this year.

We also want to streamline the permitting for the safe transport of LNGs, which is, again, vital to our country’s energy independence, which Secretary Zinke talked about.

So that is my report. Thank you.

THE PRESIDENT: That is great. And I think one thing — very important — roadways and highways were taking forever to get approved.

SECRETARY CHAO: Yes.

THE PRESIDENT: And we’ve cut them down many, many years. And ultimately, maybe we’ll get down to one, but we are getting very close to two.

And in some cases, you know many stories where they’re 21, 22 years — 18 years, 19 years to get just approvals. And in many cases, they don’t get approved. After spending tens of millions and hundreds of millions of dollars on the approval process, in many cases they don’t even get approved after so many years.

So we’re down to two years. We’ll very soon be down to two years, and maybe we’ll even do better than that. And they may not get approved, and that’s okay, too, but at least you’re going to know if it’s not going to happen.

Secretary Perdue, Agriculture, please.

SECRETARY PERDUE: Yes, sir, Mr. President. As a businessman, you instinctively knew that the regulations that we had imposed upon our American economy had just deflated them and created a lack of hope and spirit that just killed the American entrepreneurial spirit. And that’s what you did — you talked about tax policy, this deregulatory environment, and the trade policy that you’ve done.

And agriculture has benefitted from that as well. Our American citizens own millions and millions of forestland out here with the U.S. Forest Service. We’re making forests work again. Over the years, these communities have been depleted and decimated because we took away their jobs; we wouldn’t let them cut their trees. And you’ve seen what happened; you’ve talked about the forest fires. Now we are permitting and cleaning up these forests so we will reduce the threat of forest fire, as well as creating jobs in these communities.

We’re all —

THE PRESIDENT: And we have to do that in California, by the way.

SECRETARY PERDUE: Yes, sir.

THE PRESIDENT: California is a mess. We’re giving billions and billions of dollars for forest fires in California. There’s no reason for those fires to be like they are. They are leaving them dirty. It’s a disgraceful thing. Old trees are sitting there rotting and dry. And instead of cleaning it up, they don’t touch them; they leave them. And we end up with these massive fires that we’re paying hundreds of billions of dollars for — to fix. And the destruction is incredible.

So I think California ought to get their act together and clean up their forests and manage their forests, because it’s disgraceful. What’s happening should never happen. I go all over the country and I meet with governors. The first thing they say is, “There’s no reason for forest fires like that in California.”

So I say to the governor or whoever is going to be the governor of California: You better get your act together. Because California, we’re just not going to continue to pay the kind of money that we’re paying because of fires that should never be to the extent — they were telling me in a couple of states — I won’t even mention their name — it’s like a flash. Some grass will burn; it’ll be over in minutes. They’ll lose two acres, three acres at the most. They won’t even lose that. And here we are with thousands of acres and billions and billions of dollars. Every year, it’s the same thing. Every year.

And they don’t want to clean up their forests because they have environmental problems in cleaning it up. It should be the opposite because you’re going to lose your forests. You’re losing them. But it’s costing our country hundreds of billions of dollars because of incompetence in California.

So the people — I’m speaking now for the people of California. They don’t want to see this happen. They’re getting destroyed. And it’s hurting our budgets, it’s hurting our country, and they just better get their act together.

I’m sorry, go ahead.

SECRETARY PERDUE: Director Mulvaney hit on a good point earlier. It’s just a myriad of these kind of things that give the public the optimism for this economy that keeps fueling that.

I’ll tell you a cute story that you will appreciate. When you were elected, a childhood friend of mine was telling his granddaughter about that and the USDA, and what we did regarding school lunches. She said, “Good. I hope President Trump can make school lunches great again.” (Laughter.)

And so — and that’s exactly what we’re doing. We’re not feeding the trashcan any longer —

THE PRESIDENT: That’s right.

SECRETARY PERDUE: — but we’re trusting these professionals to make —

THE PRESIDENT: Big difference.

SECRETARY PERDUE: — nutritious meals for these kids out here that they want to eat.

THE PRESIDENT: I hear it’s a big difference.

SECRETARY PERDUE: It is a huge difference.

So — and then obviously, another on nutrition: We’re empowering able-bodied who can work, without small children, to remove these waivers that states are using to bypass the ability to work and provide for self-sufficiency for families in that regard, along with removing and creating entrepreneurial activities over new technology and agriculture.

Thank you, sir.

THE PRESIDENT: Great job. Thank you very much.

SBA, deregulation — a woman who has done a fantastic job, and I appreciate it. Linda, please.

ADMINISTRATOR MCMAHON: Thank you very much, Mr. President. I want to thank you for your leadership on the economy. You know, you have such a commonsense approach to job creation. The bold approach you’ve taken toward modernizing the regulatory system has been a priority in this administration from day one, and I’m absolutely convinced the sustained focus on eliminating outdated jobs and stifling regulations has been a major contributor to the economic growth that we’re experiencing.

You know, the regulatory environment for small businesses especially — you know, according to a report from the Council of Economic Advisers, small businesses pay more on a regulatory compliance basis per employee than large businesses do — $11,700 per employee, per year, for small businesses. That’s money they’ll never get back to invest in hiring more, raising wages, investing in their companies.

So as the chief advocate here — and I’m pleased to be that for the 30 million U.S. small businesses — it’s my job to listen to their concerns and to advocate on their behalf.

You know, I can so appreciate all of the Secretaries this morning who have talked about all of the deregulations that are happening in each of their departments because I get to go out and visit with these small businesses all over the country. I’ve visited with hundreds of businesses over the last year and a half, in 43 states, and I get to personally see that enthusiasm that businesses have and how appreciative they are with tax reform, regulatory reform. And so they’re hiring.

This morning, I brought Chip Kovach, from Youngstown, Ohio. And he has a family business. His father was supposed to come this morning, but couldn’t come for medical reasons. But 30 years ago, he started his business by putting a lien on his home. So today, he has a machine business that is benefitting from the deregulatory environment because he repairs rigs in the energy environment. So he can’t hire enough people fast enough now for his business — you know, with the deregulation that’s happened. So they are so grateful and appreciative.

Last year, the administration ended a rule pertaining to overtime pay that many businesses opposed. The overtime rule, had it stayed in effect, was affecting about 44 percent of small businesses. And now, rescinding that overtime rule, we have — for instance, a small hotel in Colorado Springs that said, “Had that rule stayed in place, I’d had to reduce work hours, fired people. Now I’ve got more people on and we’re running our business the way we should.” I’ve got entrepreneurs in Texas who are opening franchises in Texas and Oklahoma because the overtime rule is no longer there. So eliminating that kind of a rule has really spurred on our small businesses.

So I am grateful that the SBA also, in accordance with your executive order, we’ve reviewed all of our rules, and we will seek approval of eliminating about 7 percent of the regulations that SBA has.

So I know that what we’ve done here at SBA has occurred many times across many agencies represented in the room. And, Mr. President, I do want to thank you for presiding over an administration that is committed to listening to the men and women who run our small businesses, for giving them the opportunity to start and to grow and expand.

Thank you.

THE PRESIDENT: Thank you very much, Linda. Appreciate it.

USMCA — it’s new, it’s good. It takes the place of NAFTA, which was a total disaster. Thousands of factories and plants closed. The farmers were never treated properly by NAFTA. The USMCA is a whole different ballgame. It opens up Canada. It opens up Mexico for our farmers and for others.

And I’d like to have Bob Lighthizer, who’s really worked so hard — 24 hours, around the clock — for a long time, many months. Bob, maybe you could give a little briefing, please.

AMBASSADOR LIGHTHIZER: Great. Thank you, Mr. President. So after — as you say, after 14 months of tough negotiations and a lot of work, we now have an agreement that is much better than its predecessor and it’s great for America, but also great for Canada and Mexico.

I would thank you for your leadership, except leadership isn’t appropriate in this case, as the President was on the phone every day and involved in every detail of the agreement. So he was like a senior partner.

But I do want to thank the Vice President, who was very much involved and was very helpful. Jared Kushner, of course, who I spoke about in the past, but — and my tremendous team at USTR.

But I would be remiss if I didn’t mention how many Cabinet members and Cabinet offices were involved in this negotiation. Because it really is — you think of Agriculture, and Congress of course, and Labor, and Treasury, but also Transportation, and Energy, and State, and HHS. There were every — we had teams that had people from virtually every one of our Cabinet offices who worked tirelessly over the course of this time.

The first thing I should say is that this agreement needed to be renegotiated. NAFTA was not a good agreement. It started out bad, in my judgment, and grew worse over time. We saw huge trade deficits. It had no provisions at all for the modern economy. So it was a bad agreement that, in my judgment at least, was getting worse.

Just as one point, I would suggest that if you look at just where auto plants were built in the last several years — of the last 11 auto plants made in North America, 8 of them were in Mexico, 3 were the United States. And to give you a point of reference, almost all of these cars ended up going to be sold in the United States.

So we have redesigned the rules. It’s not going to punish anybody. It’s not going to make to it worse for any other country. But it is going to make it better for American manufacturing.

Now, I would give this a point: Our agriculture also was, in my judgement, not treated fairly. So I would say this is the first total renegotiation of a trade deal. It’s, by far, the biggest trade deal that we’ve ever done.

Just to hit on a few points, and then I want to make a couple of additional points with slides.

It has more provisions to help manufacturing than any other agreement we’ve ever done. Better rules of origin that are going to force more manufacturing in North America. Better access for U.S. farmers. Right across the board, it got rid of this dairy provision that Secretary Perdue and the Vice President harangued me about for a year and some months. (Laughter.) That’s been cured.

The most ambitious provisions on labor and the environment ever negotiated, and they’re enforceable. I repeat that: These are the strongest labor and environment provisions ever negotiated. They’re part of the agreement and they’re enforceable.

The most advanced language ever on digital trade, intellectual property, really paving the way for America to take advantage of its innate ability to innovate. Better disciplines on non-market economies. Really, we’ve never had those in agreements before. We now have them for the first time. And the best provisions, by far, on currency and currency manipulation that we’ve ever had in a trade agreement.

Now, there’s many other chapters on good regulatory practices and standards, biotechnology, telecommunications, financial services. So it goes across the entire economy.

And there’s one other chart that I want to see, because we really view this really as a model of what a Trump trade policy looks like. And we really analytically divide it into, sort of, three pieces. One is the American First parts, which is auto rules of origin and dispute resolutions. And, by the way, reviewing termination, so this is not a deal that’s never going to be looked at again. We’re not going to find ourselves in 24 years with a bad deal again.

We’re going to have labor provisions, great agriculture and dairy provisions. But then the 21st century, the new economy: digital trade, intellectual property rights, financial services. Better provisions on investment. I mentioned environment but also telecommunications.

And then finally, a new and innovative approach, and that is combatting non-market practices — practices that take advantage of the U.S. economy in ways that don’t promote market efficiencies. And then a whole variety of things in that area. I won’t go through them all, but currency, stopping localization requirements in data, anti-corruption, and the like.

The final chart, I guess, that I would show is just if you compare this agreement — and these are in your slides — if you compare this agreement, on the key points to both NAFTA and TPP, this is far and away the best agreement. There’s not a single provision of significance where this is not a plus up from TPP. And in some areas like labor and rules of origin, and several others, it’s just in a completely different world.

So this is a very important agreement. It’s the kind of agreement that we want to have be Trump trade policy going forward. I think it’s going to bring back jobs and manufacturing, and help our farmers. It’s going to help protect America’s advantages in the years and decades ahead. It’s had very good reviews. We’ve had a number of members of Congress, including 30 senators, 84 members who have made positive comments; 18 governors have singled it out. We have literally scores of comments from trade associations and labor unions, and businesses and the like.

So this has been very well received. I brought along a couple of versions of this. This is required reading for the members of the Cabinet. (Laughter.) And say what a good deal — no, I actually have a tabbed version for you, Mr. President, because I know you have more things on your mind.

The final thing I would say, in another day — which would be big news, but isn’t today because of all things that we’re doing — is that we sent the letter yesterday, as you know, to start the process under TPA to have new negotiations with the EU, Japan, and the UK. That’s a process that we started and we did it last year at approximately this time for what was then NAFTA. And we started now on these three. We’ll see where it turns out. We’re hopeful. We certainly have a very ambitious, pro-trade, fair-trade, reciprocal-trade agenda.

Thank you, Mr. President.

THE PRESIDENT: Thank you very much, Bob. And I have to say that these are countries, in every instance, which had no intention of ever negotiating with the United States. They were not going to. They were very happy with the deals the way they were. Speaking for Mexico, Canada, South Korea — every one of them.

You go to the European Union, they had no intention of renegotiating; now they’re renegotiating. We’ll see what happens with that one. They’ve treated us very harshly for many, many years, taking out tremendous amounts of money over $150 billion a year for many years. And frankly, it’s ridiculous. It’s hard to believe that we could’ve allowed ourselves to be put in that position. And that’s why we have debt, and that’s why we have tremendous deficits.

And on trade, as an example, almost $800 billion a year has been lost for many years in our (inaudible) — $800 billion. It’s not even a conceivable number.

So we’re negotiating. And again, they wouldn’t negotiate at the beginning. I said, “That’s okay. You don’t have to negotiate.” I said, “Why aren’t you going to negotiate?” “Because we’re very happy with our deal. We’re extremely happy with our deal.” And I said, “But I’m not happy with your deal.”

And I said, “That’s okay. We’re going to put tariffs on every product you sell to the United States.” And they said, “We would like to negotiate immediately.”

And President Obama was unable to get anybody even to go to the table. And that goes for previous administrations also, too. It’s incredible.

And again, China; you could look at Vietnam; you could look at every country — just about every country. Incredible that we allowed this as a country to happen. And it’s not going to happen any longer. And that just shows the tremendous potential we have. Because we had these horrible trade deals, we had these horrible military deals, where we paid for everybody’s military, or we certainly don’t get subsidized or paid back what we should be. And that includes NATO, where we’re paying for 90 percent of NATO to protect Europe. And I think it’s all fine, but they have to pay.

I got them to put up $44 billion last year. They’re going to put up at least that amount this year, maybe more. They should pay for the whole thing right away. But we’re paying for NATO. We are paying to protect Europe. And then on top of that, Europe treats us very badly on trade. So we lose on a double — it’s a double whammy, I call it.

So all of that is changing; it’s changing rapidly. We’re in a very strong negotiating position because we’re the piggybank that everybody wants to rob. And I don’t blame China, and I don’t blame Europe, and I don’t blame anybody. I blame our politicians, and I blame our leaders for allowing this to happen. There was no reason for it.

So we’re making up for lost time, and we’ll do it properly.

I’d like to have Larry Kudlow speak and maybe talk about where we are with the economy, how good it’s doing. It’s been setting records despite all of the above. And, Larry, I guess that’s why I say the potential is so enormous. Because you look at what happens to us on the military — the massive amounts of money. You look at — we have 716-billion-dollar budgets; Russia has a budget of $68 billion. China has a budget that’s just a small fraction of what we spend. It’s absolutely ridiculous. And that’s because we protect every country in the world practically. And some of these countries are massively wealthy and they don’t pay us for the protection. It’s crazy.

So, Larry, please.

DIRECTOR KUDLOW: Thank you, Mr. President. And thank you, Mr. Vice President.

So I love to tell stories, and I can tell you the story I told a month or so ago. The biggest story of 2018, in my judgment, is an economic boom — which is growing — where almost everybody said it would be impossible to produce. And the boom is growing.

Sir, this is the — pardon the phrase, a Kudlow word: This is the “growthiest” economy in over 20 years. And we’ll get “growthier” in the weeks and months ahead. Where’s Sarah? I just want to get that. Thank you. (Applause.)

Some new bullets. Some new important bullets.

Bullet: You mentioned this at your opening. The U.S. is now the world’s most competitive economy, number one. That comes from the Davos Group, the World Economic Forum — not necessarily our best friend — number one. U.S. hadn’t the number one in that survey since 2008, a long while ago.

Bullet two: More job openings than unemployed. Remarkable number. From the so-called JOLTS, 7.1 million job openings, a little over 6 million unemployed. The gap is 900,000. There’s a lot more we can do. Success breeds success. Good business will bring these people back in. Higher wages will bring them back in. I don’t think Ivanka is here, but her re-skilling program will help bring people back in. That is so important, in my judgment, right now.

Bullet three: NFI[B], small businesses, and the Conference Board Consumer sentiment continue strong, holding the high ground. Historic lines. Confidence. The day after the election, the confidence started, and it has not stopped. It just goes straight. Really, the day after the elections, the most remarkable thing I’ve ever seen — I’ve been covering this beat for a long time — it hasn’t stopped yet.

Bullet: Business equipment production from the industrial production number last — yesterday. Business equipment up 0.8 percent for the month, which is huge; 8.6 percent last three months. This is the capital spending business investment side of the equation, which is so important, which will lead to more capital formation, more productivity, higher real wages, and of course, higher unemployment. So, business equipment is strong.

Bullet: Core retail sales. Core retail sales defeated the GDP; 4.9 percent in the last 12 months. Big number.

Bullet: Inflation hovering around 2 percent, or even less, the last three months.

Bullet: Atlanta Fed and St. Louis Fed both predicting 4 percent or better GDP growth in the third quarter. We’ll get that number in about 10 days. We’d be thrilled with 3 percent plus. They’re predicting 4. We had 4.2, as you know, in the second quarter; 3.2 percent in the first half of the year. They said it couldn’t be done. It’s happening.

My story — I think the new Trump economy — and this is my view, sir. Blue-collar workers, small-business men and women owning and operating small business, as Linda has said. And of course, energy production. Extraordinary. We will be the world’s dominant energy player, sir. We may already be. But we are gaining on it, we’re passing the Saudis; we’re about to pass the Russians. We’ve talked a lot about oil and natural gas, and liquid natural gas and so forth. We are just about there, and we’ll be working on that.

So we’re in an economic boom, right? Naysayers said you couldn’t do better than 1 to 2 percent. We have done better. A lot of people have talked about the tax cuts. You lower marginal tax rates, you create new incentives. You have basically incentivized the economy, is what you’ve done. You’ve given it life, openings, oxygen, everything. This is just so important.

Deregulation, massively important, as everybody said. Started in 2017, continuing now. I think, Linda, that’s a big thing for the small businesses.

ADMINISTRATOR MCMAHON: Yeah.

DIRECTOR KUDLOW: No red tape; they’re not worried about that stuff anymore. And with the lower tax rates, which also helps small business, you keep more of what you earn. Tax something less, you get more of it. And I think that’s why people are going out. I think it was you, when we had the economic summit a couple of week ago — was it you that asked owners to raise their hands? Somebody did.

Anyway, 85 percent of people in that audience own small business, and I’m just sitting here and the light bulb went off: It’s due to the Trump economy. Along with the renaissance in blue-collar workers.

And I want to echo Bob Lighthizer. I think the trade reform is contributing to this growth. I think the USMCA was pro-growth. Tremendous opportunities: market openings, farmers, manufacturing, financial services, protecting intellectual property, financial services. Anyway, it was a good deal. I agree. And it’s going to be pro-growth. We’re already seeing some of the benefits of this.

Sir, I think you’ve basically ended the war on business. You’ve ended the war on success. And that’s where this confidence and optimism is coming from. That’s what I think you did.

We are increasing — just hang with me for a minute. This is no one shot, what people are saying, “a sugar high.” That’s nonsense. This is not about pouring money into the economy the way our predecessors did unsuccessfully. This is an incentive model across the board, which will increase the economy’s potential to grow. That’s what we’re doing. And that’s why we will be growthier than any year — (laughter) — I don’t know. I’m saying the last 20 years. It could be greater than that.

And I’m going to make a second point. If you increase the economy’s potential to grow and you’re putting out more goods and services, that can’t be inflationary. In fact, it’s counter -inflationary. And another related point — with a 3.7 percent unemployment rate, you’re going to have more people working and prospering. Cannot be inflationary. It’s a good thing, not a bad thing.

Various econometric models in various institutions notwithstanding — they are wrong. More people working and prospering is a good thing. We haven’t seen it in a while.

Wind-up: Just a couple more bullets to illustrate what I think are my points. We have seen the biggest rise — the biggest rise in blue-collar employment — biggest rise in blue-collar employment since 1984, when I was still a cub scout, working for President Reagan. Going back to 19 — blue collar, sir. Blue collars.

Second, low-skilled and blue-collar workers are getting faster wage increases than the white-collar at the top. This is something very new and different. Okay? The middle and low end is outpacing the top end. I’m not against the top end; I love success. I’m just saying, there’s a catch-up going on in this country, which we have not seen in a very long time.

Lowest paid Americans — 5 percent increase in weekly earnings in the second quarter. Five percent increase. All workers, 1.7. In the retail sector — retails services sector, okay? 3.8 percent increase. Professional services, only 3 percent. And of course, the unemployment rate is 3.7 percent.

So we are hitting all cylinders across the board. People are not getting left out this time around. Everybody is coming in, and we’re going to see more of that as we employ.

So, tremendous optimism. Tremendous confidence. Change in policies has a lot to do with it, you know. It has a confidence and an optimistic sense, and it has a real-world, practical sense. Paychecks are getting fatter, and folks know that.

And businesses are springing up — brand new businesses — and folks know that. And people are not — they’re unwilling to take new risks. I believe your message is, now that war on business is over, I think you’re telling folks to just take a rip at the ball. Take a risk. And you stand behind them with your new policies. And that’s exactly what you’re doing. It’s a total change from what we’ve had in the last 20 years. Okay?

Everybody thought it was impossible; it’s possible. Tremendous turnaround. My old boss, Ray, he used to say, “The best is yet to come.” I would say to you, sir, the best is yet to come. It will get even growthier over time.

THE PRESIDENT: Thank you, Larry. Thanks. Good job. (Applause.)

Larry, have you done that before? I just asked Larry, has he done that before? I think so. Ben, what do you think? (Laughter.)

SECRETARY CARSON: Absolutely.

THE PRESIDENT: That was great. But he’s never been this optimistic. I’ve watched Larry for many, many years. I hear that voice — that beautiful voice. I say, “That’s Larry.” I can tell Larry in my sleep. And I’ve never seen him more positive than you’ve been in the last couple of months. And you’ve done a great job, but I appreciate you doing that.

DIRECTOR KUDLOW: I am grateful for the opportunities.

THE PRESIDENT: Thank you very much, Larry. Appreciate it. And I think Larry is going to be very happy with what I’m going to say. I might as well leave the press to say it because it will put more pressure on all of the people gathered around our table.

I’m going to ask each of you to come back with a 5-percent budget cut from your various departments. Whether it’s a secretary, an administrator, whatever, I’m going to ask everybody with a 5-percent cut for our next meeting. I think you’ll all be able to do it. There may be a special exemption, perhaps. I don’t know who that exception would be. If you can do more than five — some of you will say, “Hey, I can do much more than five.”

You know, I’ve heard about the penny plan for 15 years. One penny every year per dollar — one penny every year — after four or five years, the country is in good shape. I’m saying, let’s not do the penny plan; let’s do the five-penny plan. I think you can do it.

So I’d like to have everyone sitting around the table — your incredible domains that you preside over so brilliantly, in some cases. In some cases very well; in some cases brilliantly. I would like you to come back with a 5-percent cut. Get rid of the fat. Get rid of the waste. And I’m sure you can do it. I’m sure everybody at this table can do it. It will have a huge impact.

Last budget we had to go — because of the military — we had to fix our military. Our military is in the process of being fixed. Planes are being made. Boats are being made. Ships are being made. Missiles, rockets, everything. Our nuclear is being brought to a level that nobody else could even imagine. Pray to God we don’t have to use it. But there will be nothing like what we have, and there is nothing like what we have.

And that’s why I did that. I made deals with the devil in order to get that done, because we had to improve our military. Our military was depleted. It was in bad shape. Our great people in the military hadn’t received a wage increase in more than 10 years. Now they’re getting an increase. First time in more than 10 years.

So I wanted to do that and — in order to get that done — because the Democrats won’t vote for the military. They don’t like the military. They don’t like law enforcement. They don’t like borders.

You see what’s happening with the border, where people are coming up in caravans and we have to stop them even though the laws are terrible. The laws are terrible. Our laws are terrible. They’re a laughingstock all over the world. And we’re supposed to stop people with laws that aren’t very good, but we’re doing better than anybody else could possibly even think about.

But I’d like you all to come back with a 5-percent cut. And I think if you can do more than that, we will be very happy. There are some people sitting at the table — I’m not going to point you out — but there are some people that can really do substantially more than that. Because now that we have our military taken care of, we have our law enforcement taken care of, we can do things that we really weren’t in a position to do when I first came.

So we’ll see you at the next meeting. I’ll see you many times before. I’m sure I’ll speak to all of you during this term. But that’s a very, very important request that I’m making of everybody sitting around this table. It’s tremendous amounts of money, and it’s something that we can do.

And I believe we could actually do it, easily. So rather than go by the penny plan, we’ll call it the nickel plan. At least it will be a one-year nickel plan. We may do another nickel plan next year too.

Thank you all very much. To the press, thank you very much.

Q Mr. President, does that include the Defense Department, sir? The 5-percent cut.

THE PRESIDENT: We know what the budget — the new budget is for the Defense Department. It will probably be $700 billion. So it’s 716; it was 700 — 716. And that’s a very substantial number but it’s defense. It’s very important. I mean, to us, without defense, maybe the rest of it doesn’t mean very much.

But if you know, it was a $520 [billion] a very short while ago. And the reason I brought it up to 700 and then 716 was to build new ships. We’re building new, incredible submarines, the finest in the world. The most powerful in the world, anywhere, ever.

We’re doing things that we have never done on this scale. So that included a lot of rebuilding of our military. So despite that, I’m going to keep that at $700 billion — defense. Okay?

Q The Saudis are investigating themselves, essentially. What do you think about calling for —

THE PRESIDENT: No, they’re just — they’re great, very talented people. They’re not investigating themselves. They’re going to cut costs. These all talented people. They have now been here long enough to be able to do this.

They are — it’s a great group around this table. It’s a great group. And they’ll be able to do it. And when you add this and couple this with what Larry Kudlow said about how well we’re doing, I wouldn’t — where is Larry?

DIRECTOR KUDLOW: Here he is.

THE PRESIDENT: I mean, Larry has to be very happy when he hears this. You didn’t even expect this, right? Did you expect this, Larry?

DIRECTOR KUDLOW: It’s actually happening bigger and faster than I thought.

THE PRESIDENT: Yeah. I mean, this is part of it. This is all part of it. I just couldn’t do it last year because of the fact that we had to do our military. Our military was in really bad shape.

Q I’m just talking about (inaudible) —

THE PRESIDENT: You had planes — you had planes that couldn’t fly. You had — you had military that was really in a ridiculous situation. So that’s what we had to do.

So what they’re doing is they’re doing it themselves. Okay, any other questions?

Steve, go ahead.

Q Sir, you said that the Chinese want to make a deal but you told them they’re not ready.

THE PRESIDENT: I told them they’re not ready yet.

Q (Inaudible.)

THE PRESIDENT: No, because they’ve had — they make too much —

Q (Inaudible.)

THE PRESIDENT: We have rebuilt China, just so you understand. Our country has rebuilt China — with their hardworking genius also. But how our country has allowed itself to lose $500 billion a year, and much more than that, is ridiculous — is ridiculous.

So it’s hard for them to do a deal because they’ve had it so good for so long. It’s a very hard thing for them to do. But we have a very good relationship with China. We have — I have a great relationship with President Xi. And I think you’ll see something happen that going to be good for both countries. Okay?

Thank you all very much. I appreciate it.

END

12:48 P.M. EDT