CNN's Costello Worries About 'Cost' of Carrier Deal; 'Slippery Slope'

On Thursday's CNN Newsroom, Carol Costello hyped the possible impact to taxpayers for President-Elect Donald Trump's role in getting Carrier to stay in Indiana: "Donald Trump delivering on his vow to save Carrier jobs, and his economic team says it will deliver a lot more — but at what cost?" Costello brought on two Trump critics from both sides of the aisle, but didn't bring on any supporters. She also touted Senator Bernie Sanders blasting the deal, and later played up a possible "slippery slope" impacting Indiana residents.

The anchor teased her panel discussion segment with correspondent Christine Romans; former Obama administration official Austan Goolsbee; and economist Douglas Holtz-Eakin, who advised Senator John McCain on his 2008 presidential campaign, with her "at what cost" line. Romans first outlined, in part, that "United Technologies [owner of Carrier] says it was state incentives that were a very big factor here. But many are presuming that Donald Trump had said, look, this is going to be a business-friendly environment for big companies....It's going to be good for you — do this for me. We'll find out more details, I hope, today."

Costello then asked Goolsee, "So Austan, what if Mr. Trump did threaten United/Carrier? Who cares if it saves jobs?" The former Obama advisor contended that "with the announcement of this Carrier deal, you kind of are seeing...the same dynamic play out — which is, Donald Trump promising a certain thing in the campaign...I'm going to go to Carrier, and I'm going to tell them they have to stay — and then, now that he's actually going to be in office, instead of threatening them, he just paid them to stay."

The CNN journalist followed up with her quote from Senator Sanders:

CAROL COSTELLO: ...[Y]ou sound a lot like Bernie Sanders because, as I mentioned in the first block of this show, Bernie Sanders wrote an op-ed in the Washington Post — and this is part of what he wrote — quote, 'Trump has endangered the jobs of workers who were previously safe in the United States. Why? Because he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives.'

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She asked Holtz-Eakin, "Do you think that's what happened, Douglas?" The conservative-leaning guest replied, in part, "Well, I think any president should be nervous about engaging in one-on-one contract negotiations, or bully-pulpiting with a corporation....I'm not a big fan of this kind of a negotiation; and I think the more limited it is, the better."

Later in the segment, Costello wondered, "Here's the other thing, Austan: state lawmakers in the State of Indiana — they had nothing to do with this. So, if — if Carrier was offered these big-time tax incentives; and then, state lawmakers have no say in the matter and they represent the taxpayers in the State of Indiana, isn't that a slippery slope?" Goolsbee answered by underlining that the announcement "raises the question: if Hillary Clinton had done exactly what Donald Trump and Mike Pence did here...do you not think Donald Trump would be condemning the action and saying, this was corruption — she paid this company to stay there? I just think this is a...weird way to do it."

The CNN anchor also highlighted that "a thousand jobs is a lot of jobs — right? But in the grand scheme of the number of jobs moving to other countries — which is somewhere around 250,000 — it's a drop in the bucket."

The transcript of the relevant portion of the panel discussion segment from CNN Newsroom on December 1, 2016:

CAROL COSTELLO: It will be a big day for Carrier employees. In just a few hours, Donald Trump and Mike Pence will celebrate a win for workers in Indianapolis. But not everyone is ready for a ticker-tape parade. State lawmakers don't know exactly what Mr. Trump promised Carrier to make it stay, or exactly how it might affect taxpayers.

So let's talk about all this. I'm joined by chief business correspondent Christine Romans; former Obama White House chief economic adviser Austan Goolsbee; and former — former director of the non-partisan Congressional Budget Office, Douglas Holtz-Eakin. Welcome to all of you.

[CNN Graphic: "Transition Of Power: Today: Trump To Meet With Carrier Employees"]

CHRISTINE ROMANS: Hi, Carol.

COSTELLO: Okay. I'm going to start with you, Christine. Carrier is owned by United Technologies. United Technologies makes aircraft parts. The unknown here is this: did Donald Trump threaten to pull federal defense contracts from United if it didn't save those Carrier jobs?

ROMANS: And it did it even have to? I mean, think of this: you have the President-Elect of the United Sates calling the CEO of United Technologies. United Technologies had — had some almost $6 billion of contracts with the federal government. And on the campaign trail, Donald Trump has said, I'm going to put a tax on that company. I'm going to tax them for sending jobs overseas; and then, bringing the products back into the United States. So, if you're the CEO of United Technologies, what do you do? You play ball with Donald Trump at this point. And that's what's so remarkable about this. We haven't had a CEO who has — you know — or a president, rather, who — who's been able to make a company keep jobs in the U.S. What were the sweeteners here? Why did they do it?

The company says — United Technologies says it was state incentives that were a very big factor here. But many are presuming that Donald Trump had said, look, this is going to be a business-friendly environment for big companies. I'm going to be cutting taxes. You should see what kind of policies I'm going to have. It's going to be good for you — do this for me. We'll find out more details, I hope, today, Carol.

[CNN Graphic: "Carrier: State 'Incentives' Were Key To Staying"]

COSTELLO: I hope so, too. So Austan, what if Mr. Trump did threaten United/Carrier? Who cares if it saves jobs?

AUSTAN GOOLSBEE, PROFESSOR OF ECONOMICS, UNIVERSITY OF CHICAGO: Look, my view is, nobody hides numbers that are favorable to them. So the fact that they will not release publicly what was offered to Carrier to get them to keep the jobs in Indiana probably suggests that it was more generous to the company that threatened to leave than the American people would be comfortable with. But, you know, we're — we're going to have to see.

I think, with the announcement of the economic team; and with the announcement of this Carrier deal, you kind of are seeing the same thing — the same dynamic play out — which is, Donald Trump promising a certain thing in the campaign — I'm going to be tough; I'm going to bust down on Wall Street; I'm going to go to Carrier, and I'm going to tell them they have to stay — and then, now that he's actually going to be in office, instead of threatening them, he just paid them to stay. And instead of trying to drain the swamp — you know, the joke is, yes, he's draining the swamp right into the West Wing. He's hiring people straight from Wall Street that he said he was going to crack down on—

COSTELLO: Okay, so — so, you sound a lot like Bernie Sanders because, as I mentioned in the first block of this show, Bernie Sanders wrote an op-ed in the Washington Post — and this is part of what he wrote — quote, 'Trump has endangered the jobs of workers who were previously safe in the United States. Why? Because he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives.' Do you think that's what happened, Douglas?

[CNN Graphic: "Sanders: Trump Deal Endangers U.S. Jobs"]

DOUGLAS HOLTZ-EAKIN, PRESIDENT, AMERICAN ACTION FORUM: Well, I think any president should be nervous about engaging in one-on-one contract negotiations, or bully-pulpiting with a corporation. It makes sense for a president and his team to change the tax code; change the regulatory environment; improve the capacity of the business community to do what it does. But if you do this, two things happen: number one, you put in place incentives for other companies to see what they can get. That's a real phenomenon. Number two: at some level, he now has ownership of the success of the Indiana operations of Carrier — and that's nothing that he should have any particular incentive in; and it leads to, further down the line, the possibility he might try something more to make sure it works out. So, I'm not a big fan of this kind of a negotiation; and I think the more limited it is, the better.

ROMANS: Carol, you know, I'll point out that the company said, in a press release, that it still believes in free trade; and it still believes in the effects of globalization and the forces of globalization. You know, in Mexico — $3, $5 an hour for some of these jobs; in Indiana, you're talking about $20 for some of these longer-term people/employees that have been there for 10, 15, 20 years.  So, that is a big pay differential. What are the big policies that Donald Trump and his team are going to enact that are going to level that playing field? That is the bigger policy prescription — not an one-off, one by one companies.

COSTELLO: Here's the other thing, Austan: state lawmakers in the State of Indiana — they had nothing to do with this. So, if — if Carrier was offered these big-time tax incentives; and then, state lawmakers have no say in the matter and they represent the taxpayers in the State of Indiana, isn't that a slippery slope? Austan? That's the—

GOOLSBEE: Oh, yeah. Look, I think it is a slippery slope. My point is, there's one thing to say I'm going to be a tough negotiator, and I'm going to get them to agree to my position. And if what had happened was it was all of that threat of the federal government and the contracts, that would be one thing. That was, in a way, what he campaigned on. But to just turn around and pay them to stay, I think, raises a bunch of questions. And I think it also raises the question: if Hillary Clinton had done exactly what Donald Trump and Mike Pence did here; if she did exactly the same thing, do you not think Donald Trump would be condemning the action and saying, this was corruption — she paid this company to stay there? I just think this is a weird — it's a weird way to do it. I'm happy those people got to keep their jobs, but this is a very weird way to do it.

COSTELLO: Well — well, the other thing, Douglas, too: a thousand jobs is a lot of jobs — right? But in the grand scheme of the number of jobs moving to other countries — which is somewhere around 250,000 — it's a drop in the bucket. So, what do you do for other companies who have many more employees — right? — that Donald Trump would like to remain in the United States?

HOLTZ-EAKIN: So, yeah — look, I think it's a mistake to focus in on one company. It's — it's not the President's job. It's not a big number in the — in the U.S. labor market. It's a different thing, I think, as Austan and Christine said, to have the State of Indiana say, it's worth it for us, as taxpayers and as the elected officials in Indiana, to keep these operations here; and we are willing to make up the difference, so that Carrier is willing to do it. That makes perfect sense, and that could have happened without the involvement of the President-Elect.

So, I think going forward, the real issue is, will this president and his team — who are businessmen by background — take a different tack — which is, to look at the overall performance of the labor market and of the economy, and leave the date-to-day decision making in individual companies to the CEOs and the people who are running it?

COSTELLO: Well, hopefully, we'll find out more information around two o'clock Eastern. We'll see.

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