John Delaney’s Interview With CNBC [Full Transcript]

CNBC Digital Video: Representative John Delaney Sits Down With CNBC Editor At Large John Harwood

WHEN: Thursday, December 27th

WHERE: CNBC.com’s Speakeasy with John Harwood

John Delaney

Image source: CNBC Video Screenshot

John Delaney leaves Congress in a few days, but not in defeat like so many of his colleagues. The wealthy former financial executive is leaving to ramp up his campaign for president. Yes, you read that correctly. The outgoing representative from Maryland’s 6th House District seeks the 2020 Democratic presidential nomination. Indeed, Delaney has been the one and only declared Democratic candidate for the last 17 months. After just four years on Capitol Hill, Delaney launched his bid in July 2017 in hopes of overcoming his absence of any national base or profile whatsoever. It hasn’t worked yet; despite frequent visits, Delaney received his 1 percent support among Iowa Democrats in a recent Des Moines Register poll. Yet Delaney offers the brains and savvy that took him from a blue-collar upbringing to becoming the youngest CEO on the New York Stock Exchange in 1995. Now 55, he also brings a checkbook that permits him to finance his campaign at least through the earliest 2020 contests. He brands himself a practical problem-solver, capable of bringing both parties together to deliver on progressive goals such as universal health care and reductions in the carbon emissions that cause climate change. Delaney sat down with CNBC Editor-at-Large John Harwood in Chevy Chase, Maryland, at Mei-Wah, an Asian restaurant near the offices of the finance firm for midsize businesses he ran before first running for Congress in 2012. A partial transcript from Speakeasy with John Harwood featuring Rep. John Delaney follows.

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John Harwood: What is that makes you a Democrat?

John Delaney: I have a real social justice orientation. It probably comes from my roots and my faith. My wife and I are active Catholics. We identify very much with the social justice mission of the church and I think that has made me much more oriented to the Democratic Party. I also am somewhat, even though I’m a capitalist and I’ve spent most of my career in the private sector as an entrepreneur starting businesses, I believe strongly that there’s a role for government to prepare our citizens for the world and to create a safety net for those that are inevitably left behind.

Harwood: Now, when you say you’re a capitalist, do you get the feeling that the drift of your party is in a different direction, or not?

Delaney: Well, no. Not necessarily. I actually think the Democratic Party is pretty aligned on most things. Just like any political party though, it’s big and there are people who align more with the democratic socialist part of our party and while I share some of the goals that they’re trying to achieve like universal health care and making sure college is affordable and things like that, I happen to believe that private economy is an amazing innovation machine. And has really been one of the things that have absolutely distinguished our country from other countries around the world. I think it’s somewhat of a false choice to have to choose between capitalism and supporting the private economy, but also having government have a role in helping people’s lives.

Harwood: There’s a whole bunch of people thinking about running for President on your side, but you’re the only one who’s actually declared and done it. Why?

Delaney: Yes. Well, I think I’m the right person for the job and have the right vision for the country, but not enough people know who I am. That’s why I had to declare early. To make sure I could get out there and introduce myself to the key voters in Iowa and New Hampshire.

Harwood: How would you describe the shape of the field and your place in it?

Delaney: I don’t know. I don’t really think about it in those terms, in part because I’m a different kind of Democrat. If you look at the things I’ve worked on in the Congress, they’ve been progressive, they’ve been big ideas that kind of I think will really change this country and make the future better, but I’ve consistently worked on finding common ground to get them done.

Harwood: Was that a deliberate evocation of Bill Clinton when you said a “different kind of Democrat”? That’s the phrase he used in 1991 when he was trying to redefine the Democrat party as somewhat more moderate. Is that purposeful?

Delaney: No, it’s not purposeful. I didn’t actually realize he had said that. People try to often label me and because I worked with the other side I was ranked the third most bipartisan member of Congress and because of my business background they assume I’m a moderate and centrist. I am, to some extent, because I think the power in this country is really in the center.

Harwood: Do you want to be known as a pro-business Democrat?

Delaney: Listen, I’m a pro-jobs Democrat and if you want to be pro-jobs, you, to some extent, have to be pro-business. Because business creates all the jobs in this country. I think about kind of this notion of capitalism and trying to make it more just and inclusive over time.

Harwood: Do you think the current level of regulation of Wall Street and American business is adequate?

Delaney: I think in some ways it is and in some ways it isn’t. You know, it’s hard. Look, I don’t think we’ve done enough – we talked about climate. I think our efforts to put protections on our natural world in a classic sense, have been good and appropriate. But have we done enough to deal with what’s happening with carbon and what that is going to lead to with climate change? Absolutely not. Do I think we’ve done things to strengthen the financial system and make it so that we can withstand another significant downturn in the economy? Absolutely, the banks are much stronger than they were.

Harwood: What do you make of the big gyrations we’ve seen in financial markets over the last several weeks? Couple months actually.

Delaney: I don’t read too much into it. Markets go up and down because of how people think about the future, but also how they think about how things are priced. So I look more at what’s happening to people. What’s happening to our citizens. I mean last year the Federal Reserve said that half of our country, if presented with a $500 surprise expense - meaning they wake up, something happens to their car, their house, or their health, their health care, and they need $500 - they don’t have the savings or they don’t have the capacity on their credit card. That is half the country. That, to me, is a much more worrisome statistic than what’s happened with the stock market.

Harwood: And after 2020 when you hope to be President, what are the two or three most urgent things for Democrats to do?

Delaney: I think we should build infrastructure. I think we should raise the earned income tax credit to put more money in people’s pockets. I think we should fix our broken immigration and criminal justice reform systems.

Harwood: Now how do we pay for the first two things that you just mentioned?

Delaney: I had a proposal to build $1 trillion of infrastructure, fully paid for. 40 Democrats, 40 Republicans, Head of Freedom Caucus, Head of Progressive Caucus. And I paid it for it by tying it to international tax reform, which they did in the last tax bill, but they didn’t pair it to infrastructure. How much better would that tax reform, if within it –

Harwood: Ok. That’s water under the bridge.

Delaney: But you can re-reform it, and pay for infrastructure. So instead of cutting corporate tax rates from 35 percent to 21, if you were to cut it from 35 percent to 25, which is what the business community asked for, you could’ve had a $1 trillion infrastructure plan.

Harwood: So you’d like to take that corporate tax rate up a few points.

Delaney: As part of launching a trillion dollar infrastructure program? Absolutely. I’d like more earned income tax credit. And I would probably pay for that – what I’d like to do is reform the capital gain system. I think capital gains rates and ordinary income rates should be the same unless you own the asset for a very long time. So I’d like to create incentives for people to own assets for seven or 10 years, because that means they’ll invest in start-ups, they’ll invest in infrastructure, the kind of stuff we need that has a much longer payback.

Harwood: What should the top personal rate be?

Delaney: I think the top personal rate where it was before this last tax bill was fine.

Harwood: 39.6 percent.

Delaney: Yeah, that was fine.

Harwood: Where does strengthening the ability of workers to organize, and what workers can do once they are organized, where does that fit into your agenda?

Delaney: I’m pro-union. I think unions are the only people who wake up every day and actually fight for workers. They just don’t fight for the workers in the unions, they fight for all workers. So I want to create a dynamic where it’s a level playing field and unions have the right to organize. But I also realize a lot of the economy is not unionized right now and that’s fine. Neither of my companies –

Harwood: Should it be?

Delaney: No, I don’t think things should or shouldn’t be. I think people should have the right to organize, and if it make sense for them and the company, they should do it. But neither of my businesses were unionized.

Harwood: You’ve been at this a year and a half. You got a very nice column from George Will about your candidacy, but you’re at 1 percent. What conclusions do you draw right now about the viability of this enterprise since you know that people are going to watch this and say, ‘Come on, he doesn’t have a chance.’

Delaney: We think we have a great chance. I’ve been to all 99 counties. We’ve got 25 people on the ground in Iowa. I’ve got six offices open. I’ve got about 40 people on the team. We’re going to run a major campaign in 2019. I’m going to be all over Iowa and New Hampshire.

Harwood: You’re self-financing it, yes?

Delaney: I have the ability to finance my campaign through Iowa and New Hampshire.

Harwood: Is the only measure from your standpoint of the success of what you’re doing now is if you become President?

Delaney: So when my wife and I decided to do this, which is a leap of faith by definition, right?

Harwood: Absolutely.

John Delaney: Where you have to say, are we doing it for the right reason? Right? That is the first question we have to ask ourselves. And we answered that, yes. Do we think we have something to say? Do we see a path to viability? And the answers to all of those questions were yes. And as long as I stay true to what I believe, which is this message of unity, common purpose and actually looking at the facts, being honest with the American people about our problems, being honest about the solutions and bringing people together to get those things done – as long as I stay true to that, there’s no way this could be a bad experience.

DIGITAL EXTRAS:

Delaney On His Experience Running A Company

Link

Harwood: So, this restaurant is the place where you used to come when you ran your business across the street?

Delaney: Yep.

Harwood: Tell me about that business.

Delaney: It was my second company. It was a company called Capital Source, which focused on financing small and mid-size companies all over the country. Our niche was companies that were growing too fast for their local community bank, but weren’t big enough to be served by the big banks. I built a business to target just that part of the market. It became a good sized company. We ended up financing five thousand companies. I took it public. I ran it until I decided to run for Congress. I spent most of my career helping small businesses get the capital they need to grow.

Harwood: So, why politics?

Delaney: Well, I know this may sound a little corny, but my wife and I always thought of our life as kind of a third learning, a third earning, and a third serving. I always wanted to dedicate a meaningful amount of my time to public service. It probably grew out of some of the philanthropic stuff we were doing. I just felt like it was the way for me to make the most transformative difference was to take some of the core beliefs I had plus my experience in the private sector as an entrepreneur, starting businesses, and really bring that to public service and not only do things to improve our economy, but to just help as many people as I could.

Delaney On President Trump’s Business Skills

Link

Harwood: What have you learned in the six years that you’ve been in the Congress that makes you think that, individually, as a person you’re ready to be President, and professionally have the capacity to galvanize the kind of support you need to become President?

Delaney: I think I have the perfect background to have the privilege to be the President of the United States. Growing up in a blue collar family, I’ve lived the American Dream, which is so central to who we are as a nation and is what I think most parents want for their kids. I was an entrepreneur, started these businesses from scratch. My dad didn’t give me any money to start them. They didn’t have any. I think it’s incredibly important that we have a President who understands how the private economy really works and knows how to position the country to be successful. But I’ve also now –

Harwood: Do you think we have a President now who understands how the private economy works?

Delaney: No, I don’t. Listen, I don’t think President Trump is a business leader. I think he was a business promoter. I know what I did as a business leader. I created jobs, I paid all my bills, I innovated, I hired the best and the brightest. I made sure that every relationship I had was as good as possible and that people wanted to do business with me again. And I don’t think he did any of those things, right? But I do think we need a President who understands the economy, but I also rolled up my sleeves and went to the Congress. I’ve served six years in the House of Representatives, so I know how the government works. We shouldn’t be electing people to lead our country who have never done public service. And I think, again, that’s an issue with this President. I don’t think he had any idea what he was getting into.

Harwood: Let me go back to Trump for one second. Do you think that, as a brand matter, Trump’s presidency certainly among Democrats has discredited the idea of a business guy becoming President?

Delaney: No, because I think the things that he has done that has so offended Democrats have nothing to do with the fact that he was in business. Because again, I don’t think he’s really bringing a business person’s headset to the job. What business people do is –

Harwood: You think, just to state it more bluntly, you think the whole idea that he was a successful business executive is baloney?

Delaney: I think he was a very successful business promoter, and he was very good at licensing his name. Right? That was his skill in business –

Harwood: And that is a kind of business skill.

Delaney: And I give him credit for that. And he was successful in that. I don’t think that’s a set of business skills that is really needed to be the Chief Executive of the country. The kind of business skills that are needed to be the Chief Executive of the country is to have some vision about where things are going and to position our country to be as competitive and successful in that future as possible. And that is a different set of business skills. The other thing he doesn’t do is he doesn’t build coalitions of support. One of the things I always had to do as a business leader is get my team members and my clients and people’s support – you know, I ran two public companies – investors. I had to get broad buy in as to what we were doing and that is one of the things that I think is missing in this country.

Delaney On Health Care

Link

Harwood: Medicare-for-all - where are you on that issue?

Delaney: I think we should have universal health care. Absolutely. Every American should have healthcare as a right, I think it’s a human right. I also think it’s smart economics. I mean my dad, a union electrician, had one job for 60 years. So it made total sense –

Harwood: So, is that universal Medicare?

Delaney: No, I would do something different. What I would do is take – basically create a new system for everyone from when they’re born to when they’re 65. And I’d roll Medicaid into that. And then after 65, they’d go to Medicare. Maybe over time those things could merge together, but right now I think you leave Medicare alone. It works, people are happy with it. I don’t think our seniors want us to take their Medicare

Harwood: Would you phase out employer-provided health care?

Delaney: Yes. That’s how I’d pay for it. So basically, new system, everyone gets health care from when they’re born to they die. This new program from birth to 65, and Medicare above that.

Harwood: So basically one government program for health care pre-retirement, and then Medicare.

Delaney: Yes, but a key distinction. You know how Medicare has supplementals? You’d have the same thing for the other program. So you basically get a backbone system that everyone gets, and then they can buy supplementals or they can opt-out if they want to get a small tax credit and buy private insurance. You pay for that whole system by getting rid of the corporate deductibility of health care, which is a terrible system. Right? There’s no – it doesn’t make any economic sense to tie –

Harwood: So you would get rid of the deduction?

Delaney: Get rid of the deduction, right. I am one of those people who thinks you should say how you are going to pay for things. So my system, which I believe I could pay for with that and a few other things, gives everyone health care as a right, but allows them also to have lots of choices. And there’d be a private market that floats above the government market. If you change jobs, you have health care, right? If you want to go start a business, you have health care. If you’re a child and you age off your parents’ health insurance – you and I know what this is all about – there’s health care there for you. If you’re low income, there’s health care. But, if you also want choices, and you are in a position where you can make those choices, you can get supplementals, maybe you can opt-out, etc. That’s the kind of health care we should have in this country.

Delaney On Gerrymandering

Link

Harwood: The start of your political career, you got launched by gerrymandering.

Delaney: Yeah.

Harwood: How do you feel about that, given the fact that gerrymandering has become a dirty word in our politics?

Delaney: Well, it should be a dirty word. I had never focused on it that much. There’s no question that my district, which was created after the last redistricting that was done in the state, was gerrymandered to make it a more competitive district because it had been held by a Republican. I really became very sensitive to this when I ran for office the first time because both Democrats and Republicans were upset about it. Because the Democrats liked the Representative they had had and the Republicans felt like the Democrats kind of engineered this district away from them. It really struck me how the reaction to this, on a bipartisan basis, was negative. One of the things I said to my future constituents when I was running I said, ‘Listen, you’re right about this. We shouldn’t do this. Right? You should pick your reps, the reps shouldn’t pick you.’ I made a commitment to them that this would be one of the issues I take on. I’ve really taken it on. I’ve had legislation to end it nationally. It’s a huge problem. It’s really one of the things that has broken our democracy, in my opinion.



About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver