CNBC Transcript: CNBC’s John Harwood Speaks With Rep. Maxine Waters Today At CNBC’s Capital Exchange Event
WHEN: Today, Wednesday, July 25th
WHERE: CNBC’s Capital Exchange event in Washington D.C.
Following is the unofficial transcript of CNBC’s John Harwood’s sit down interview with Rep. Maxine Waters (D-CA), Ranking Member, House Financial Services Committee, today at CNBC’s Capital Exchange event in Washington D.C.
JOHN HARWOOD: Alright. First of all-- Congresswoman, do you agree with-- your chairman that the bipartisan legislation you guys have offered-- has dim prospects of enactment this year?
MAXINE WATERS: No. I am very optimistic. And one of the things that I said to Jeb was-- I would work with him to try and influence our friends on the op-- over in the Senate side-- to support this legislation. I know there's some hesitancy, but I'm optimistic that it is possible.
JOHN HARWOOD: Okay. One thing that the chairman said about your committee was that it is the capital of capitalism. Are you a capitalist?
MAXINE WATERS: Of course I am.
JOHN HARWOOD: Tell me what kind of capitalist, and what's the difference between the kind of capitalist you are and the kind that Jeb Hensarling is?
MAXINE WATERS: Well, first of all, I live in a capitalistic society. I am a representative of the average family-- that goes to work every day. That-- spends money-- to support the family by way of buying a house-- taking out credit-- purchasing an automobile-- looking for better opportunity-- to increase the income. All of that-- is what you do in a capitalistic society. We live in a society where-- we have-- basically, those who are at the higher end and those who at the lower end, and those who are at the higher end have the opportunity to drive the economy a lot more than those at the lower end. And so one of the things that I care about is-- protection-- for the consumers, and the least of these, and trying to regulate in this capitalistic society those who have a lot of power, a lot of resources, and-- basically-- would be abusive if you did not-- place them in check.
JOHN HARWOOD: I interviewed-- Elizabeth Warren over the weekend, and she said something similar-- but was harshly critical of the business community. What she said was, "I am a capitalist. I believe in free markets. I don't believe in theft. I don't believe in cheating. And there are a lot of people-- in-- corporate America, on Wall Street, who are taking advantage of average families, who are cheating them." Do you agree with that?
MAXINE WATERS: Well, absolutely. As a matter of fact-- I sincerely believe that-- consumers have not been protected enough in our society. And when we take a look at what happened-- that created-- the opportunities for the Dodd-Frank reforms-- to-- t-- to take place, we can see-- that consumers were taken advantage of, that-- especially those who were-- trying to live the American dream and purchase a home. And they were sucked into mortgages-- that they could not afford. We had all of these exotic products, and of course-- whether you are talking about-- a mortgage-- that basically you had no down payment or little down payment or one that we reset every six months, or a year, what have you, these exotic products caused us to go into a recession in this country, because when the Devil came due and people could not afford-- those mortgages where the interest rates had increased, they lost their homes. And we had devastation all over this country, where communities were literally-- devastated by the foreclosures, and the banks left the houses-- unattended, and did not-- you know, take time to keep them up in ways that-- would keep the community-- solid. Those houses created-- problems and caused the value of those homes to decrease in so many communities around the country.
JOHN HARWOOD: The reason I ask the question, as you know, is that the-- one of the arguments that you're hearing from the Republicans is that your party is moving so far left to flat out socialism that would-- damage America's economic engine. What do you say to that--
MAXINE WATERS: Well, I think that's an exaggeration. The Democratic party is not a socialist party. And because we have some very-- aggressive-- smart-- people who would like to create some changes-- who may represent the extreme end of-- of our party--
JOHN HARWOOD: Bernie Sanders calls himself a Democratic Socialist. The-- candidate who beat your colleague, Joe Crowley, I believe, also calls herself a Democratic Socialist--
MAXINE WATERS: Yeah, but he-- votes for Democrats. And-- I just don't think that our party should be identified because we have a few people who seem to be to the left of the left. Yes, Bernie Sanders does-- calls himself-- does call himself a Democratic Socialist, but he votes with the Democrats. He does not wanna get out of the Democratic-- lane. And so I think-- I consider him basically a Democrat who is focused on Wall Street and talks about Wall Street an awful lot and wants to make sure that Wall Street is not taking advantage of the average citizen.
JOHN HARWOOD: There's a decent chance-- pretty good chance that you'll be the chairman of this committee. Your party will take over the House. If you-- become chairman of the financial services committee-- describe for our audience your top and first priorities.
MAXINE WATERS: Well, let me just say this. I think that-- Chairman Hensarling just referred to the GSEs. And the question about what they're going to be and how they're going to operate has been lingering now for about-- almost 10 years. I think it's time for us to get the GSEs out from under FHFAs -- and to-- really determine what its mission is going to be, and to move forward-- with GSEs that can provide that secondary-- market for the average home owner and for working people. And so I'm gonna pay attention to the reform of GSEs. That's very important to me. I'm going to try and undo the harm-- that Mr. Mulvaney has done to the Consumer Financial Protection Bureau. I think that the Consumer Financial Protection Bureau is the centerpiece of the Dodd-Frank reforms. And so this business of firing all of the-- advisory committee, this business of doing away-- with-- that effort that we put forth in the CFPB-- to make sure that people had opportunities, and that people were protected in certain ways just has to be corrected. And so I'm gonna be making sure that I put time and attention on the Consumer Financial Protection Bureau. I'm worried about housing in this country. We have a housing crisis. We have working people who cannot afford the first and last month's rent in order to get into a rental unit. And I'm absolutely ashamed of the homelessness in this country. And I'm gonna put a lot of time and attention on seeing what we can do-- for the-- National Housing Trust Fund that was developed by Mr. Frank and myself when he was there so that we can provide opportunities for the creation of multiple units for people to be able to rent. And of course, I continue to believe-- that-- people who can't afford it deserve-- to own a home in America.
JOHN HARWOOD: We are 10 years removed, as we-- we've all discussed this morning, from the 2008 financial crisis. Do you-- and 10 year-- eight years removed from-- the passage of Dodd-Frank, which was-- rolled back slightly in legislation earlier this year. But stepping back and looking at where we are, do you think the US financial system is safe-- at the moment, or do you think-- and so are there things you could do to relax regulation, or do you think it needs to be taken up a notch?
MAXINE WATERS: I think that Dodd-Frank has helped an awful lot-- in dealing with some of the problems that I alluded to that caused us to go into a recession, almost a depression. I do believe that we have to pay attention-- to some of the biggest banks in America. If you take a look at Wells Fargo—
JOHN HARWOOD: Differently than we're doing right now?
MAXINE WATERS: Oh, well-- we need to do more. The Consumer Financial Protection Bureau and some of our other agencies, even the Feds-- understood and understand now that there're still some problems, and we could go back-- to where we were prior to the reforms. But I think we cannot escape the fact that institutions like Wells Fargo took advantage of our consumers. Whether we talk about creating accounts in-- their clients' names that didn't even know about those accounts--
JOHN HARWOOD: Big CFPB fine for that.
MAXINE WATERS: Yes, big fine for that. But fine that--
JOHN HARWOOD: So did that show that it worked, the system worked--
MAXINE WATERS: That's right. Absolutely. And we've got to do more of that. We've got to make the presidents and the CEOs of these banks accountable. And we should not allow-- the situation to occur again, where, you know, clients and-- people who are basically dependent on those banks can be taken advantage of. And in addition to that, you know, they created—insurance for people who didn't need it, who alre-- forced insurance. That's what it was. And when we take a look at the fines that have been levied on-- Wells Fargo and some of the other-- big banks, it's just a cost of doing business. And we've got to get away from that. I think we can do better.
JOHN HARWOOD: And do you think that the provisions-- you know, there's been discuss-- discussion about whether Dodd-Frank did or didn't end too big to fail. And Barney Frank says constantly, we created death panels for-- troubled institutions. Do you think those provisions are adequate? The-- the wind down provisions-- in Dodd-Frank? Do they need to be different?
MAXINE WATERS: Still need to be tested. I think-- stress testing is working. But I think when we take a look at what you have to go through to wind down-- some of our big institutions, I think it is gonna be very difficult to do. And you're-- in some cases, you're gonna need the help and the leadership of the Feds, and then of course-- I and some other legislators are creating-- the kind of-- public policy that I think can help with that.
JOHN HARWOOD: Do you-- let me go back to another Democratic priority. If Democrats are controlling the house-- do you intend-- would you support rolling back those corporate tax cuts that went from 35% down to 21%--
MAXINE WATERS: Absolutely. Absolutely. I think that-- the tax-- so-called tax reform bill is a tax scam. And I think that--
JOHN HARWOOD: Are you concerned that would harm American companies internationally? They-- one of the big arguments for that tax cut was American companies need a competitive tax rate internationally.
MAXINE WATERS: No-- I don't think that at all. As a matter of fact-- when you take a look at the so-called tax reform and what it has done, it has created more wealth-- for some of the richest companies and corporations in this country. And again, I don't wanna pick on Wells Fargo too much, but when I take a look at what they reaped from the tax reform, it's outrageous. And when I look at all of the big banks, we go from three, four, five, I think, of billion dollars-- that they have-- been able to reap from these tax reforms. No, I do not think it hurts us internationally, but-- what I do believe is this administration-- created debt-- based on the work that it did with the tax reforms. And there're so many contradictions in the way that this administration provides leadership. You and others have been talking about this bail out for the farmers. It just doesn't make good sense to-- to me-- that in all of the trade that the President is putting together-- that he is creating the kind of tariffs that creates a war, a trade war. And in doing that, he's going to harm some of our agricultural industries. Harley Davidson and some of the others are already fleeing. And then they turn around and bail out-- the very people that they have created the problem for. And so no, I think we're gonna be fine-- if we take a look at what has been done with the so-called tax reform and-- begin to change that.
JOHN HARWOOD: Couple things before I let you go. What do you think is an appropriate level for the corporate tax rate and the top individual tax rate?
MAXINE WATERS: Well, I'm not so sure exactly what the appropriate level is, but I do think it's closer-- to 35 than not. So if we're talking about somewhere between, you know, 32, 33, I think that's more appropriate-- for us to deal with.
JOHN HARWOOD: And what about on the personal side?
MAXINE WATERS: On the personal side, I am extremely worried about the middle class. And I really do believe that we need to work harder-- to reduce the tax burden on families, on middle class families.
JOHN HARWOOD: And would you raise it on people at the top to finance those reductions--
MAXINE WATERS: Yes. I think if we tax fairly-- that certainly-- it may not be at 35-- but it may be somewhere near 35. And of course, I think the middle class families should have their taxes reduced in some shape or form. I don't know what those numbers should be, but I think that we must pay attention to working families, middle class families, who are overtaxed now, I think. And did not benefit as it was promised from the tax reforms that have been done.
JOHN HARWOOD: You are one of the Democrats who have talked about abolishing ICE, and some-- Democrats have said, this is hurting us politically, that this is something that will be attacked by the other side, that it will hurt our chances of winning the House back. What do you say to that?
MAXINE WATERS: I've never said a word about ICE. That's a mistake. That's what people think, that Maxine Waters was talking about ICE. You can never find a word that I've said about ICE--
JOHN HARWOOD: You are not in favor of abolishing ICE?
MAXINE WATERS: No. But here's what I'll say. Those people who decided and took, you know, the position that it had to be -- abolished did not think it through in ways that said, "It has to be reformed.” That we need to have protection at the border. We need to have-- you know, an agency or, you know, a group that's responsible-- for taking care of what goes on at the border and our immigration policy. They didn't really think it through and talk about it in a way that made good sense to people. So no, I've never said a word about abolishing ICE. I've never engaged-- on that issue. What I've engaged on is the separation of the children from their families. That's very important to me. I will continue to do that. But I've not been involved in the ICE debate.
JOHN HARWOOD: President Trump has gone after you repeatedly by name. He did it again yesterday in a public speech-- derided you as a low-IQ individual. Why does he do that?
MAXINE WATERS: Why does he call--
JOHN HARWOOD: Why d-- why does he go-- why does he single out you--
MAXINE WATERS: Okay, let's-- let's just-- why does he call Elizabeth Warren Pocahontas? Or why does he call Hilary Crooked Hilary? Why does he call Rubio Little Rubio? It's a tactic that the President uses-- to take-- the opportunity to try and diminish-- intimidate and-- basically harm those who would criticize him. I don't care what he calls me. I know who I am. I know what I do. And if I manage to hold down my position as the ranking member of the Financial Services Committee, dealing with derivatives, dealing with everything from FSCA to all of the complicated issues that we have to deal with, I'm perfectly comfortable with me. He can call me whatever he wants do. He does not intimidate me, and I'm not gonna stop talking about him.
JOHN HARWOOD: Is it racism?
MAXINE WATERS: I don't know what it is. A lot of people call it racism. A lot of people call it-- tactics that he has employed that he's gotten from-- the Kremlin, and-- Putin, and the way that they handle things. And again, it doesn't bother me, and I'm not gonna spend my time defending it. I'm gonna stay on the issues. I think what has happened in our social is we have allowed this president to divert our attention to whatever he decides he wants to divert it to any given morning with his tweets. I don't follow that. I don't care what he says. He can do whatever he wants to. I know what I'm going to think about him. I think that this man does not deserve to be the President of the United States. He is one of the most deplorable people I've ever encountered in my life. I will continue to say that. He can say whatever he wants to.
JOHN HARWOOD: Will Democrats impeach him if they retake the house?
MAXINE WATERS: I don't know what they would do, but I certainly think that he is eligible for impeachment.
JOHN HARWOOD: I-- wh-- when I talked to Elizabeth Waters-- no--
MAXINE WATERS: Elizabeth Warren--
JOHN HARWOOD: Eli-- Elizabeth Warren over the weekend, she said-- "I-- I don't wanna say anything about impeachment until we get the Mueller-- results." You go further than that. You think-- you think it's r-- justified now?
MAXINE WATERS: Oh, sure. As a matter of fact, I think that-- the Congress of the United States has abdicated on its-- responsibility-- to allow this president to get as far as he has gone. And so he has not received the kind of resistance and the oversight and the control that I think Congress could employ, and that's why he's gonna bring Putin here and put him in our faces-- because he thinks he can get away with that. He thinks he can-- pardon himself. He says so. He thinks he can pardon Manafort, and on and on and on. I think it's ridiculous. I think he's dangerous, and this tariff war that he is creating-- the way that he's alienated our allies-- the way that he will not condemn-- Putin, I tell you, I don't know why people take it. I think Americans should be out in the streets screaming to the top of their voice. Do something. Make something happen. And so-- I am going to do my work on the Financial Services Committee, as I do every day. I'm going to engage. I'm going to create legislation. I'm going to continue to lead my caucus-- on these issues, and help them to understand why I think it is important to vote a certain way on particular public policy that comes out of that committee. I'm gonna work very hard-- to support the Dodd-Frank reforms. I'm gonna look at what we can do to create housing opportunities. I want the reform of the GSEs to take place. And so I-- I'm very comfortable with all of that. And your president can say or do whatever he wants to do. It-- it won't bother me.
JOHN HARWOOD: Maxine Waters, thanks so much--
MAXINE WATERS: Thank you. Thank you.