ROBERT SIEGEL, HOST:
Here are some highlights of the sweeping plan from Senate Republicans to change the U.S. tax code. Their bill leaves the mortgage interest deduction in place. That's different from the House version, which limits that deduction. And unlike the House proposal, the Senate's would not eliminate deductions for health care expenses or for student loans. But there's something else the Senate proposal would do that does not sit well with the leader of Senate Democrats, Chuck Schumer of New York. It gets rid of the deduction for state and local taxes. I spoke with Schumer today at the Capitol, where a fire was crackling in his office fireplace.
Senator Schumer, thanks for joining us.
CHUCK SCHUMER: My pleasure.
SIEGEL: For Republicans in Congress, passing a tax bill is very important. Let's begin with the basic question. Do you think it's important? Do you think it's necessary to pass a tax bill?
SCHUMER: I think it's a lose-lose for them, to be honest with you.
SIEGEL: How about for you, though?
SCHUMER: For us, well, I don't like to - I'll put it as a lose-lose for them, and you can draw your conclusions what it does for us. If they don't pass a tax bill, it does play into the theme large already that this Congress can't get anything done, that Donald Trump is not a competent president. What they don't see is if they pass this bill - and I hope they don't. We're working as strongly with every bit of strength in our bodies to stop it because it would be so bad for the country. But people don't like the bill. Their rollout has been very disappointing for them because immediately people started focusing on the fact that it raises middle class taxes. And they - all their promises were that it was going to cut taxes for all the middle class. Now, some get a cut, but some get an increase. And I think that's been the salient point.
SIEGEL: But if there's no tax bill passed, are we worse off as a country for that right now? Is there something that should be happening?
SCHUMER: We're better off if this tax bill fails. And the reason is simple, twofold. One, two of the greatest problems we face in this country - one is income distribution or maldistribution. This bill exacerbates it. If you're very wealthy, you do a lot better than if you're middle class or poorer. It also gives tax breaks, huge tax breaks, to the wealthiest of corporations. These corporations are flush with money already. They're not creating jobs. More money isn't going to have them create. But the other thing it does, as somebody who cares about a government functioning, and as we move into the 21st century and technological forces push the average person around so much, they need government to help them. And this will sort of really hurt the government because the deficit is going to be so deep for so long.
SIEGEL: Republicans want to do away with the deduction for state and local taxes. What's wrong with the argument that that deduction forces a taxpayer...
SCHUMER: Threefold, yeah, yeah, threefold.
SIEGEL: ...Say, in Texas or Oklahoma to subsidize a taxpayer in New York threefold?
SCHUMER: One - well, first, a taxpayer in Oklahoma or Texas is not subsidizing a taxpayer in New York. It's the opposite. New York, every year, even with state and local deductibility, sends $49 billion more to Washington than it gets back. Most states - I don't know about Texas, but most states that are the red states are donee states. They get more back than they send in. So that's bunk. Second, it's double taxation. Here you have an income, you're paying a state and local tax, and you're still paying a federal tax as if you had that money. You don't. And third, it affects the middle class and the upper middle class. You know, people who have their homes - that's middle class' piece of the rock - people who are working hard, this break unduly affects them more than the very wealthy.
SIEGEL: Of course, there are advocates of doing away with that break who would say that if you did away with it there would be pressure on state and local governments to tax less and to cut taxes.
SCHUMER: You've just given me a fourth argument. What is - why - we have states - all of a sudden our Republican friends who believe in states' rights for everything else are saying New York shouldn't have the option. We should pressure New York. If New Yorkers want to pay...
SIEGEL: I think they're saying you have the option. They just don't want to pay for the option.
SCHUMER: If New York - but as I said, they're not because we're spending far more money than they get. The high-income states tend to be the high-tax states, which tend to send more money to Washington than they get back because we have a graduated income tax. And the argument - I think that New York state, if they want to spend - if we want to spend more for schools or roads or parks or whatever we should not be penalized for doing it, which is what they do.
SIEGEL: Can you describe your - what confidence do you have at this point in dealing with Donald Trump? At one point you had an agreement...
SCHUMER: Not much.
SIEGEL: Not much.
SCHUMER: Not much. I mean, I...
SIEGEL: Can you trust his word?
SCHUMER: He calls me. We talk. The problem is he changes his mind the next day or says something completely different two days later. So to have the confidence that you can actually negotiate a deal with him and he's not going to just change the goalposts at whim without even giving warning, reason makes it hard to negotiate with him. That's what happened on DACA, on the DREAM Act.
SIEGEL: You had a deal one night, and the next you didn't.
SCHUMER: We had a deal. Mulvaney said the deal that's - leader Pelosi and I announced was exactly what we agreed to.
SIEGEL: That's the OMB director.
SCHUMER: He got heat from the right wing. I think Laura Ingraham said he should be impeached. Bannon in Breitbart News called him amnesty Trump. And he backed off. That's not leadership. My greatest problem with the president are one, his hard-right ideology. He ran as a populist against both the Democratic and Republican establishments. He's governing as a hard-right guy. But second is the fact that he doesn't lead. He tweets. He calls names. He's - everything seems a reaction to his ego. But he doesn't lead.
SIEGEL: Are you surprised by his comments today in China that Xi Jinping is a great leader, greatly appreciated by his people?
SCHUMER: It's unbelievably - flattery will get you everywhere if you're Xi, if you're the leader of China. Donald Trump campaigned that he was going to be tough on China, and his policy on China has been all talk, no action. I believe we have to be tougher on China A, 'cause they take away our jobs, B, they steal our intellectual property. They take advantage of us. And I also believe even when it comes to North Korea if we were tougher with China on trade and economics we'd get more out of Xi on North Korea than just making nice. Making nice has got us nowhere. And that's what Trump said in his campaign.
SIEGEL: After the recent terror attack in Lower Manhattan, the president promptly blamed you personally for the immigration provision that permitted the terror suspect to enter the country. What's the residue of something like that?
SCHUMER: I don't pay attention...
SIEGEL: You just couldn't...
SCHUMER: ...To his tweets. I tweeted back on it, you know? But he's at times used Twitter to flatter me, and he's at times used Twitter to call me names. It doesn't affect me. I go by my values. And that's Trump. You don't take him that seriously on these things 'cause he's not acting as a serious president.
SIEGEL: Sounds like we shouldn't expect much in the way of bipartisan talks with leaders of Congress.
SCHUMER: Look. I - here's what I have said from the get-go, and it remains my lodestar. We will not obstruct for its own sake as Mitch McConnell did, nor will we come to compromise for its own sake. We'll stick by our values. And if we can get something done by sticking by our values and meeting people when it doesn't conflict with our values, we'll do it.
SIEGEL: Senate Minority Leader Chuck Schumer of New York, thanks for talking with us.
SCHUMER: Pleasure. Transcript provided by NPR, Copyright NPR.