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What’s Actually In The Senate Relief Bill · The Ben Ferguson Podcast

0:00
Speaker 1: It's all the people out of job the Democrats are
0:02
Speaker 1: using to push What are they pushing for changing the
0:05
Speaker 1: emission standards on airplanes? Mister President, What the hell do
0:12
Speaker 1: the emission standards on airplanes have to do with thousands
0:17
Speaker 1: of people dying and millions of people out of work
0:19
Speaker 1: in the Corona coronavirus epidemic. Welcome back to Verdict with
0:28
Speaker 1: Ted Cruz. I am Michael Knowles. We have a lot
0:31
Speaker 1: to get to. We have to answer that question, what
0:34
Speaker 1: the hell do emission standards have to do with coronavirus?
0:37
Speaker 1: The Senate has just voted on the coronavirus stimulus package,
0:42
Speaker 1: a two trillion dollar package, the largest stimulus in American history.
0:47
Speaker 1: It is after midnight on the East Coast and I
0:49
Speaker 1: am joined, as ever in the middle of the night
0:51
Speaker 1: by one of the Senators who voted on that, Senator Cruz.
0:55
Speaker 1: Senator Cruz, what did we just see? Well, Michael, good morning.
1:00
Speaker 1: It is twelve twenty seven in the morning, and once again,
1:03
Speaker 1: you know, it feels like deja vu all over again.
1:05
Speaker 1: It's you know, when we got got got started on
1:08
Speaker 1: the Verdict podcast, it was during impeachment, and it seemed
1:12
Speaker 1: every night we would be there till midnight one two
1:15
Speaker 1: in the morning and then head straight to the studio.
1:17
Speaker 1: So I just came from voting on the Senate floor.
1:20
Speaker 1: As you noted, the vote was unanimous. It was ninety
1:22
Speaker 1: six to nothing. Every single Republican voted yes, every single
1:26
Speaker 1: Democrat voted yes. And we just passed out a two
1:30
Speaker 1: trillion dollar emergency relief package, which which hopefully will have
1:36
Speaker 1: significant effects relieving the economic devastation being caused by this
1:42
Speaker 1: Corona crisis. Well, I want to get into exactly what
1:45
Speaker 1: is in this package, because obviously there's a lot and
1:48
Speaker 1: some of it is controversial. But before we get to
1:51
Speaker 1: what is in it, I want to get to why
1:53
Speaker 1: we were sitting here in the middle of the night.
1:55
Speaker 1: You know, this bill was supposed to be voted on,
1:57
Speaker 1: I think over the weekend. Then it was supposed to
2:00
Speaker 1: maybe be voted on yesterday, then earlier today, and here
2:04
Speaker 1: we are it's after midnight. So I want to know
2:06
Speaker 1: why this was so delayed, And I guess more specifically,
2:09
Speaker 1: I want to know who delayed the vote. Well, that's
2:13
Speaker 1: an easy answer. It's it's two people. It's Nancy Pelosi
2:16
Speaker 1: and it's Chuck Schumer. Everybody thought we were going to
2:19
Speaker 1: vote on this Sunday night. The bill had been negotiated
2:23
Speaker 1: with about a dozen Democrats were part of the negotiating teams.
2:26
Speaker 1: They had all been active and engaged, and we thought
2:29
Speaker 1: we were going to take it up Sunday night and
2:30
Speaker 1: get it past. Nancy Pelosi came in at the last minute,
2:34
Speaker 1: and she threw a hand grenade in. She began making
2:36
Speaker 1: all of these completely unrelated partisan demands, and we showed
2:41
Speaker 1: up Sunday night and every single Democrat voted to block,
2:46
Speaker 1: are getting on the bill, are even starting to consider it,
2:48
Speaker 1: And so they blocked it on Sunday night. They blocked
2:50
Speaker 1: it Monday, all day Tuesday, all day to day until
2:54
Speaker 1: just about eleven o'clock last night when we finally got
2:57
Speaker 1: it past. So, as you noted in that clip we
3:00
Speaker 1: played at the beginning, which by the way, I thought
3:02
Speaker 1: was terrific. I was a big fan of you really
3:06
Speaker 1: calling calling it like it is here and saying what
3:09
Speaker 1: do emission standards? What does the Green New Deal have
3:12
Speaker 1: to do with coronavirus? So it looks as though the
3:15
Speaker 1: Democrats totally back down. I mean, I don't know, though
3:19
Speaker 1: you were there all day. Did the Democrats achieve anything
3:22
Speaker 1: by stalling the vote. What's the good stuff in the bill?
3:25
Speaker 1: What's the bad stuff in the bill? Well, look, it's complicated.
3:28
Speaker 1: Most of the extraneous partisan issues that that that Pelosi
3:32
Speaker 1: was fighting for, almost all of them are dropped out
3:35
Speaker 1: of the bill. So that's good that what she held
3:38
Speaker 1: everything hostage for Sunday and Monday and Tuesday is mostly gone.
3:42
Speaker 1: So so so what's past looks two trillion dollars. It's
3:47
Speaker 1: a a lot of moneyn of money. I mean, I
3:49
Speaker 1: mean that's that's ten percent of our national debt, not
3:52
Speaker 1: our deficit, ten percent of our national debt in over
3:55
Speaker 1: two centuries. We just spent ten percent of it tonight.
4:00
Speaker 1: And it's worth pausing to think that was unanimous. That
4:04
Speaker 1: means Bernie Sanders voted for it. I voted for it,
4:08
Speaker 1: and everybody in between voted for it. And what I
4:11
Speaker 1: would say is the reason is these are not normal times.
4:15
Speaker 1: This crisis is extraordinary. The health crisis is extraordinary. People
4:19
Speaker 1: are scared. We've got a global pandemic. But not only
4:24
Speaker 1: the health crisis, but the response to the health crisis
4:27
Speaker 1: has created an economic disaster that is unfolding. There are
4:32
Speaker 1: millions of people losing their jobs, and in response to
4:36
Speaker 1: that devastation, everyone feels an urgency to provide relief. Now,
4:41
Speaker 1: you mentioned at the outset, and this is something a
4:42
Speaker 1: lot of people are saying. They're referring it to it
4:44
Speaker 1: as stimulus. I don't call this a stimulus bill. This
4:48
Speaker 1: is a relief bill. It's quite different. It is designed
4:51
Speaker 1: to provide relief to people who are hurting badly and
4:55
Speaker 1: are hurting through no fault to their own. They didn't
4:58
Speaker 1: do anything to cause this. So what are the different
5:00
Speaker 1: pieces what's in this monstrous bill? Yeah, so one big
5:05
Speaker 1: piece of it is individual relief. And for every American
5:09
Speaker 1: in the country who makes under one hundred thousand dollars
5:12
Speaker 1: a year, you're getting a check. You're getting a check
5:15
Speaker 1: in the next couple of weeks. Individual adults are getting
5:19
Speaker 1: twelve hundred each, a couple's getting twenty four hundred each,
5:23
Speaker 1: and if you have kids, you get five hundred each
5:25
Speaker 1: for those kids. And those checks are expected to go
5:27
Speaker 1: out according to the Treasury Department. They're they're going to
5:30
Speaker 1: get them out in two to three weeks, So sometime
5:33
Speaker 1: probably early to mid April is when those checks are
5:35
Speaker 1: going to arrive. And allot of me if I'm wrong,
5:38
Speaker 1: this is unprecedented, right, I mean, we've never seen the
5:40
Speaker 1: federal government mailing checks to this large number of Americans
5:45
Speaker 1: for direct relief. The only thing comparable to that to
5:50
Speaker 1: this was during the two eight crisis. There was a
5:54
Speaker 1: smaller set of rebate checks that were sent out under
5:57
Speaker 1: the Bush administration, but it wasn't nearly a sign if
6:00
Speaker 1: again is this This is much more broad based and
6:02
Speaker 1: these are bigger checks. Look, if you're you look at
6:06
Speaker 1: restaurants that have been shut down all across the country.
6:08
Speaker 1: You look at bars, you look at at at hardware
6:11
Speaker 1: stores or nail salons. There are a lot of people
6:14
Speaker 1: who are hourly workers who suddenly finding themselves at home
6:17
Speaker 1: and are scared. How am I going to make the
6:19
Speaker 1: rent check next month? You know? How am I going
6:21
Speaker 1: to pay the basic expenses? How we're going to pay
6:23
Speaker 1: for food? And so these checks are providing relief on
6:27
Speaker 1: a broad based manner. It's not picking winners and losers,
6:30
Speaker 1: it's providing it across the board. Most economists degree that's
6:34
Speaker 1: not going to be a major stimulus effect, but it
6:37
Speaker 1: is going to help people who are worried and being
6:40
Speaker 1: hurt by this right now, right, I mean people you know,
6:43
Speaker 1: they can't afford to not work for a month or
6:46
Speaker 1: however long this is going to go on. So the
6:48
Speaker 1: idea is that's going to fill the gap and hopefully
6:50
Speaker 1: you can take twelve hundred bucks and put it toward
6:52
Speaker 1: your rent or whatever bill is do. What else is
6:55
Speaker 1: in the bill? You know, especially in terms of I
6:58
Speaker 1: know it was controversial that there's a loan program for
7:01
Speaker 1: businesses to stay afloat. The Democrats were vary against that.
7:04
Speaker 1: What does that program look like? Well, let me get
7:06
Speaker 1: to the Another major part of the bill that I
7:10
Speaker 1: think is really important is there's three hundred and seventy
7:13
Speaker 1: seven billion dollars for small businesses. And this is an
7:17
Speaker 1: emergency loan program that is going to go to small businesses,
7:21
Speaker 1: essentially businesses with five hundred employees or less. So the
7:24
Speaker 1: hardware stores and barber shops and restaurants that we talked about,
7:27
Speaker 1: all these folks that are are shuttered right now and
7:32
Speaker 1: are on the verge of bankruptcy, they can now you
7:35
Speaker 1: can now go if you're a small business owner, you
7:37
Speaker 1: can go and apply for a loan and you can
7:40
Speaker 1: get it. It's a small business Administration loan, but you
7:42
Speaker 1: can get it from your local bank. It's from all
7:44
Speaker 1: of the local banks in the community that you can
7:47
Speaker 1: go and apply for it, and it's up to ten
7:49
Speaker 1: million dollars. So it's small loans relatively speaking. But they're
7:53
Speaker 1: designed in particular to meet costs like payroll, to meet
7:57
Speaker 1: costs like rent, the basic costs that you have that
8:00
Speaker 1: you don't want to lose your business. And the way
8:02
Speaker 1: it's designed, if you spend the money on payroll, if
8:05
Speaker 1: you if you say to your employees, we're gonna keep
8:07
Speaker 1: paying you, we'na keep your paycheck coming, then those loans
8:10
Speaker 1: are forgivable. So for the small business owner, you can
8:13
Speaker 1: take the loan and if you actually pay it out
8:16
Speaker 1: to your employees, the loan obligation goes away. And so
8:21
Speaker 1: that's a direct lifeline not to these small businesses that
8:26
Speaker 1: are profoundly hurting, and a lot of them are making
8:28
Speaker 1: the decision right now do I stay open or do
8:31
Speaker 1: I shutter the door? Well, I'm sorry to interrupted. I
8:35
Speaker 1: mean this is a very important point here because you know,
8:39
Speaker 1: as we see the unemployment rate ticking up, you had
8:41
Speaker 1: claims last week for unemployment that we're comparable if not
8:44
Speaker 1: higher than you saw at the peak of the two
8:47
Speaker 1: thousand and nine crisis. I mean, you could have massive unemployment,
8:50
Speaker 1: you could have businesses falling apart. So this would allow
8:54
Speaker 1: the businesses to continue to employ their workers, right, and
8:58
Speaker 1: that means people keep a connection into their job. It
9:00
Speaker 1: needs they keep their health insurance, which is a big
9:03
Speaker 1: challenge for everyone. If you lose your job, you may
9:05
Speaker 1: be losing your health insurance. So we'd rather as many
9:08
Speaker 1: people as possible to stay employed, to stay in a
9:11
Speaker 1: position that when we get past this crisis, hope hopefully
9:14
Speaker 1: sooner rather than later, did everyone come back to work.
9:17
Speaker 1: That we want to get the economy moving again. And
9:19
Speaker 1: so these small business loans again are unprecedented. I mean
9:22
Speaker 1: to give you a sense. The Small Business Administration's budget,
9:25
Speaker 1: I think last year was twenty three billion dollars. This
9:30
Speaker 1: is three hundred and seventy seven billion dollars. So this
9:32
Speaker 1: is more than ten times the size of the Small
9:35
Speaker 1: Business Administration's entire budget. But all of that money is
9:38
Speaker 1: designed to flow out through the community banks to small
9:42
Speaker 1: businesses and to be used for payroll predominantly and other
9:46
Speaker 1: essential costs like rent and utilities, just to keep the
9:49
Speaker 1: businesses open. So I know that this brings up another
9:53
Speaker 1: question on employment that was really central to the debate today,
9:57
Speaker 1: and you played a central role in this, which is
10:00
Speaker 1: some Republican senators, I think Lindsay Graham mentioned it, and
10:04
Speaker 1: you spoke out very forcefully against it. Identified in the
10:07
Speaker 1: bill a provision that would actually incentivize people not to
10:12
Speaker 1: go back to work. What was that provision and where
10:15
Speaker 1: does that stand right now? So part of this bill,
10:18
Speaker 1: and one of the things in particular the Democrats demanded
10:21
Speaker 1: as a price of supporting this bill, was increasing unemployment
10:26
Speaker 1: insurance compensation. So when you're when you file for unemployment
10:29
Speaker 1: in your states, the federal government is plussing up those
10:35
Speaker 1: weekly compensation and plussing it up dramatically. Is basically adding
10:39
Speaker 1: six hundred dollars a week to what you can earn
10:42
Speaker 1: from unemployment. So so what does that mean? And listen,
10:46
Speaker 1: most Republicans, I think that is a good thing. We
10:49
Speaker 1: are going to see this week when the job numbers
10:50
Speaker 1: comes out. We're going to see millions of Americans who
10:54
Speaker 1: have lost their jobs in the last two weeks. I mean,
10:57
Speaker 1: it has been I've spoken to at least a dozen
11:00
Speaker 1: CEOs in the last week, who've laid off thousands or
11:03
Speaker 1: tens of thousands of employees. I mean, it's just one
11:06
Speaker 1: after the other after the other. And and and if
11:09
Speaker 1: you're suddenly laid off, having unemployment and enough to support
11:15
Speaker 1: your family is important. So I think plussing it up
11:17
Speaker 1: made sense. Here's the problem. The way it is designed,
11:22
Speaker 1: the six hundred dollars is irrespective of what you were
11:25
Speaker 1: making before, which means, like I'll give you an example
11:28
Speaker 1: in Texas. So right now, in Texas, the maximum someone
11:31
Speaker 1: can make on unemployment is five hundred and twenty one
11:35
Speaker 1: dollars a week. That's that, that's what the state unemployment
11:38
Speaker 1: will and and that's that's based on your income. We're
11:42
Speaker 1: now adding six hundred bucks a week to that. So
11:43
Speaker 1: instead of five hundred and twenty one dollars a week
11:46
Speaker 1: in Texas, it's now eleven hundred and twenty one dollars
11:49
Speaker 1: a week. It's a nice raise, that is a very
11:51
Speaker 1: nice race. But here's the problem. There's no constraint on
11:55
Speaker 1: whether it is more than you were making in your job,
11:58
Speaker 1: and and and so I and a number of other
12:00
Speaker 1: senators we introduced an amendment today, just a common sense
12:03
Speaker 1: amendment that said, look, you should not make more on
12:06
Speaker 1: unemployment than you were making working. It's common sense, right,
12:11
Speaker 1: and we had so we debated it on the Senate floor.
12:14
Speaker 1: It was interesting, actually, an astonishing thing broke out on
12:17
Speaker 1: the Senate floor, real debate. Dick Durbin, Democrat from Illinois,
12:21
Speaker 1: was arguing back and forth, and our amendment just was
12:24
Speaker 1: a simple proposition that you shouldn't be paid more in
12:27
Speaker 1: unemployment than you were making in your job. And the
12:29
Speaker 1: reason is you don't want to disincentivize work. I'll use
12:33
Speaker 1: the Texas example. Eleven hundred and twenty one dollars a week.
12:38
Speaker 1: That's a little bit over fifty eight thousand dollars a year. Now,
12:40
Speaker 1: that's four months worth, but annualize that's fifty eight grand
12:43
Speaker 1: a year. That works out to over twenty eight dollars
12:46
Speaker 1: an hour. The problem is, if we're paying people that
12:50
Speaker 1: much not to work, it incentivizes people not to work.
12:55
Speaker 1: And it was very much ever, go back to your job, well,
12:57
Speaker 1: and the back and forth. So Durban did what a
12:59
Speaker 1: lot of Democrats did, which is he demagogued. He said, oh,
13:02
Speaker 1: these Republicans are saying anyone unemployed is lazy and rotten.
13:06
Speaker 1: And I said, Hold on a second. We're saying exactly
13:08
Speaker 1: the opposite, which is this policy will hurt workers and
13:13
Speaker 1: it'll hurt small businesses. Why let's say you're a waitress
13:16
Speaker 1: and you've been been laid off from your job. You're
13:19
Speaker 1: getting unemployment, but suddenly you're making twenty five, twenty six,
13:22
Speaker 1: twenty eight dollars an hour at home not working, and
13:27
Speaker 1: you face the decision do I go back to work
13:29
Speaker 1: for ten, twelve, fifteen dollars an hour. We're creating incentives
13:36
Speaker 1: where it would be perfectly rational to say I'm not
13:39
Speaker 1: going to go back to work because I make a
13:41
Speaker 1: lot more money on unemployments. That hurts the workers. It
13:44
Speaker 1: also hurts small businesses. Let's say you're trying to reopen
13:47
Speaker 1: your restaurant. The shutdown has stopped in your city. You
13:50
Speaker 1: want people to come back. You call up your old
13:52
Speaker 1: employees and they say, look, I'd love to come back
13:54
Speaker 1: to work, but I can't afford the pay cut. Yeah,
13:58
Speaker 1: you know, you gotta match my unemployment salary. So that
14:03
Speaker 1: I think was an unfortunate mistake, and we ended up
14:06
Speaker 1: the amendment loss. It was basically a party line vote.
14:08
Speaker 1: I think every Democrat voted against accept Joe Manchin. He
14:11
Speaker 1: was the one yes. But I think that was unfortunate.
14:16
Speaker 1: But it nonetheless, there will be significant benefits from the
14:20
Speaker 1: additional unemployment insurance in this time of crisis. Right, Okay,
14:24
Speaker 1: that makes sense. It's too bad unfortunately that that seems
14:28
Speaker 1: to have been left in the bill. But I guess
14:30
Speaker 1: obviously there's a lot of debate here, and you did
14:33
Speaker 1: come to a unanimous vote. However, I have to pick
14:37
Speaker 1: up on what you said. You said the vote was
14:39
Speaker 1: ninety six to zero. There's more than ninety six senators.
14:43
Speaker 1: Some people were missing. Yeah, Now we've got got several
14:46
Speaker 1: senators who are out on quarantine. And where that started
14:51
Speaker 1: from was a few days ago Rand Paul tested positive
14:56
Speaker 1: for the coronavirus and and he had been in in
15:01
Speaker 1: DC the whole week. And actually the way we found
15:04
Speaker 1: out about it, so we were meeting every day for lunch,
15:07
Speaker 1: the Republican senators, and it was interesting. We shifted. We
15:10
Speaker 1: normally meet in a room in the capital called the
15:12
Speaker 1: Mansfield Room, and and it's um and actually, by the way,
15:17
Speaker 1: the Minority meets in the LBJ Room, which is a
15:20
Speaker 1: smaller room, but the Mansfield Room is bigger. So it's
15:22
Speaker 1: one of the things. It was nice. In twenty fourteen,
15:24
Speaker 1: we became the majority, we switched our lunch rooms and
15:26
Speaker 1: got to a bigger room. That's a nice perk. But
15:30
Speaker 1: when coronavirus hit um, we all wanted a social distance,
15:35
Speaker 1: and so the Mansfield room we decided was too small,
15:37
Speaker 1: so we were meeting instead in a conference room, and
15:40
Speaker 1: we moved actually to a couple of different conference rooms
15:42
Speaker 1: that were sort of almost like big auditoriums in one
15:45
Speaker 1: of the Senate office buildings, And so we were in
15:47
Speaker 1: one of those big, big auditoriums where the acoustics were terrible.
15:50
Speaker 1: It's hard for everyone to hear because they're not they're
15:52
Speaker 1: just it's not good acoustics. But but Mitch, every every
15:57
Speaker 1: day we were meeting for lunch, and we'd have often
15:59
Speaker 1: a two to three hour lunch because it would be
16:02
Speaker 1: a progress report on the negotiations of the bill. And
16:05
Speaker 1: there were different committees that we're working on different portions
16:08
Speaker 1: of the bill. So the people would stand up and say,
16:10
Speaker 1: all right, here's what's going on with this, and we'd
16:12
Speaker 1: ask questions. We debate back and forth, and so a
16:15
Speaker 1: few days ago, we're there and Mitch's talking and he
16:17
Speaker 1: just kind of matter of facts says, and so Rand,
16:21
Speaker 1: Paul just tested positive for coronavirus, and we're all sitting
16:26
Speaker 1: there going, what the what like like like, I mean,
16:29
Speaker 1: it's and Mitch just very matter of fact mentions it
16:33
Speaker 1: and keeps going on and a whole bunch of a second,
16:36
Speaker 1: Hold on a second, can can you rewind that tape
16:39
Speaker 1: and play it again? And so it was well, and
16:45
Speaker 1: Rand had been at the Senate. He had been that
16:48
Speaker 1: morning at the Senate. Jim, he'd been swimming in the pool. Wow,
16:53
Speaker 1: I gotta say, I don't think I've ever seen my
16:55
Speaker 1: colleagues as pissed off as they were, like he had
17:00
Speaker 1: just gotten the positive test results, and then they were
17:02
Speaker 1: pretty angry that he hadn't self quarantine. Now, Rand said
17:07
Speaker 1: he wasn't sick, he had no symptoms, he hadn't come
17:10
Speaker 1: in direct contact with the He was at a gathering
17:14
Speaker 1: with people who were sick, but he didn't come in
17:16
Speaker 1: direct contact with them. I understand his reason. I can
17:19
Speaker 1: tell you people were freaked out. And so I remember
17:21
Speaker 1: we're sitting there going, Okay, well, what do we do?
17:23
Speaker 1: I mean, they're fifty three Republicans. The immediate question all right,
17:28
Speaker 1: are we all quarantine? Like, as you know, I spent
17:31
Speaker 1: eleven days in self quarantine in Houston, and I'm like, well,
17:35
Speaker 1: all of us have been here with Rand. What does
17:37
Speaker 1: this mean now? And what ended up happening is within
17:45
Speaker 1: an hour or two, two people self quarantined as a result,
17:48
Speaker 1: Mike Lee and Met Romney. Yeah. And the reason is
17:51
Speaker 1: at lunch they had sat on either side of Rand.
17:53
Speaker 1: They had been at lunch with him, they sat next
17:56
Speaker 1: to him, They'd been there for a couple hours, and
17:57
Speaker 1: so they decided neither of them are feeling sick. Talk
18:00
Speaker 1: to both both Mike and Mit this week after they quarantine.
18:04
Speaker 1: They both said they were feeling great, but they self
18:08
Speaker 1: quarantine because they sat next to Rand and spent a
18:10
Speaker 1: couple of hours. You know, I thought about it, but
18:13
Speaker 1: as it so happened this past week, I just didn't
18:16
Speaker 1: run into Rand. In fact, I didn't even I didn't
18:17
Speaker 1: know he's around. I'll often sit next to him at lunch.
18:20
Speaker 1: I just didn't happen to this week. So it was
18:23
Speaker 1: a good, good week not to sit next to Rand, Paul.
18:25
Speaker 1: But it puts you in a tough position because as
18:28
Speaker 1: you're all sitting there and leader McConnell tells you all,
18:32
Speaker 1: by the way, one of your colleagues has coronavirus. You know,
18:35
Speaker 1: it's a pretty small club there in the US Senate.
18:37
Speaker 1: You're all voting on this very important legislation. If all
18:40
Speaker 1: of the Republicans self quarantined, what happens to the bill?
18:45
Speaker 1: That is was a real issue, And I think that's
18:47
Speaker 1: one of the reasons why all of us said, let's
18:49
Speaker 1: move forward and get this done quickly and get the
18:51
Speaker 1: hell out of here. Everyone's flying home tomorrow morning, and
18:54
Speaker 1: the Senate is not expected to be in session for
18:57
Speaker 1: several weeks. But you know, look, if you look at
19:00
Speaker 1: the Senate, there are a lot of people in their
19:01
Speaker 1: seventies and eighties. I mean, you want to talk about
19:03
Speaker 1: a potentially vulnerable population. We're trying to stay away from
19:07
Speaker 1: each other. We're trying to like social distance. People are
19:10
Speaker 1: pouring hand sanitizers like crazy. But you know, Rand and
19:15
Speaker 1: and and Rand and I traded text. He said he's
19:18
Speaker 1: feeling good and feeling healthy. But you remember Rand, what
19:22
Speaker 1: was it a year or two? Right? His neighbor tackled him,
19:26
Speaker 1: broke six ribs. The ribs punctured his lungs. He got pneumonia,
19:31
Speaker 1: and they did surgery and remove part of his lung.
19:33
Speaker 1: And and so what's scary about this is Rand, with
19:37
Speaker 1: with part of his lung removed, is in a vulnerable
19:41
Speaker 1: position where he's more vulnerable if he gets COVID nineteen,
19:46
Speaker 1: if he gets sick, he's potentially more vulnerable. And so
19:48
Speaker 1: that's he's obviously taking it seriously. But all of us
19:51
Speaker 1: are are are worried and praying for Rand. Of course, Yeah,
19:56
Speaker 1: that that really does bring it home because some people
19:59
Speaker 1: have even kind of and joking about how the median
20:01
Speaker 1: age of the US Senate is about one hundred and fifty,
20:04
Speaker 1: and so you know that's an at risk population. But
20:06
Speaker 1: of course Senator Paul in particular is especially at risk here.
20:10
Speaker 1: So I suppose everybody should pray for his speedy recovery.
20:14
Speaker 1: And it's one other actual coincidence I suppose with Rand
20:19
Speaker 1: Paul being out for this vote, is he's been so
20:23
Speaker 1: outspokenly say libertarian, you know, during his political career, and
20:28
Speaker 1: conservatives now are struggling with what to think about this
20:32
Speaker 1: bill because it's so much money. You know, it's the
20:35
Speaker 1: biggest package like this ever in American history. But this
20:38
Speaker 1: is a totally novel circumstance. How should conservatives be looking
20:43
Speaker 1: at this? Look, I've struggled with it. Every conservative is
20:47
Speaker 1: struggled with it. Two trillion dollars is a ton of money.
20:50
Speaker 1: I think the magnitude of the challenge we're facing justifies it.
20:55
Speaker 1: And I also think it's very different. I mean, some
20:57
Speaker 1: people are trying to draw the analogy to tarp to
21:00
Speaker 1: to what happened with the two thousand and eight financial crisis.
21:03
Speaker 1: I think they're dramatically different. And the biggest reason their
21:06
Speaker 1: difference is the financial meltdown was caused in very significant
21:11
Speaker 1: part by misconduct by the financial services firms who were
21:15
Speaker 1: taking undue risks, who got all the upside if they
21:19
Speaker 1: made money, they got rich and and got to enjoy
21:21
Speaker 1: the blessings. But then when it all cratered, the government
21:24
Speaker 1: had to step in and help them, and so it
21:26
Speaker 1: it felt very much like a rigged gain. This is
21:30
Speaker 1: a very different circumstance because the people that are getting
21:33
Speaker 1: relief here, they didn't do anything to cause the coronavirus.
21:37
Speaker 1: It wasn't their conduct. You know, the individual waiter who's
21:41
Speaker 1: been laid off, it's not his fault that this started
21:45
Speaker 1: in Wuhan and spread across the world. It's it's not
21:47
Speaker 1: the fault of the guy who owns the local movie theater,
21:51
Speaker 1: and and so I think that's different. I think it's
21:55
Speaker 1: also important that if you look at how this is structured,
22:00
Speaker 1: You've got the individual grants, which which are very important relief.
22:03
Speaker 1: You've got the small business piece, which is very important
22:06
Speaker 1: if you look at other elements of it. So there
22:08
Speaker 1: is one hundred billion dollars in this directed to hospitals
22:12
Speaker 1: and healthcare providers. Now look in the coronavirus circumstance. Hospitals
22:16
Speaker 1: are panicking. They need to spend their capacity. One hundred
22:19
Speaker 1: billion dollars for hospitals. You know, God forbid, you have
22:22
Speaker 1: circumstances where we need to ramp up quickly. That is
22:27
Speaker 1: almost the very definition of emergency relief for this crisis.
22:31
Speaker 1: You've got sixteen billion dollars for protective gear, for ventilators
22:36
Speaker 1: and medical supplies. That again is crisis appropriation. You've got
22:41
Speaker 1: one hundred and fifty billion dollars for state and local
22:44
Speaker 1: governments to meet the coronavirus and it's limited so that
22:47
Speaker 1: it goes to coronavirus spending on the state and local level.
22:52
Speaker 1: So you're saying that the states and the cities they
22:54
Speaker 1: can't just spend it on whatever pet project they want.
22:57
Speaker 1: There actually will be some checks on how they can
23:00
Speaker 1: use the federal money. I hope, so maybe not. But look,
23:03
Speaker 1: let me throw in the caveat this bill is massive.
23:06
Speaker 1: It was drafted really quickly. We're going to find all
23:11
Speaker 1: sorts of ugly things there as it rolls forward. So
23:14
Speaker 1: when it comes to the constraints on the states, at
23:17
Speaker 1: least as it was relayed to us, as we understood
23:19
Speaker 1: it, it it was intended to be just coronavirus spending. Can
23:22
Speaker 1: I promise that there won't be states frittering the money away? No,
23:26
Speaker 1: but they are facing a massive and unprecedented health crisis.
23:29
Speaker 1: So the intention was give them the funds. And that
23:33
Speaker 1: was one of the big Democratic holdouts and demands also
23:37
Speaker 1: as they wanted money for the state and local governments.
23:40
Speaker 1: And that's one of the big things that was added
23:43
Speaker 1: that was expanded in the last couple of weeks. The
23:46
Speaker 1: part that is deemed the most controversial is there's five
23:51
Speaker 1: hundred billion dollars for what's called the Stabilization Fund. Now
23:55
Speaker 1: that's what the Democrats have been characterizing as the big
23:58
Speaker 1: corporation bailout. Right, listen of all the parts of the bill,
24:03
Speaker 1: that's the part I have the most concerns about. But
24:08
Speaker 1: I do think they're differences even in that part from
24:13
Speaker 1: from a bailout. Almost all of that is structured as loans.
24:17
Speaker 1: So what are the components of it? The components of it?
24:23
Speaker 1: You've got four hundred and fifty billion dollars that basically
24:26
Speaker 1: goes to the FED to make loans across the economy,
24:31
Speaker 1: and it's designed for the FED to leverage it up
24:35
Speaker 1: so that four hundred and fifty billion is expected to
24:38
Speaker 1: result in about four trillion dollars in additional capital. So
24:43
Speaker 1: I'm sorry, pardon my economic ignorance. How does that work?
24:47
Speaker 1: So the FED will make loans, will make loans that
24:51
Speaker 1: will go out to businesses, to companies all through the country,
24:55
Speaker 1: and you know, look in thinking about how to respond
24:58
Speaker 1: to this crisis, I try to talk to a lot
25:00
Speaker 1: of experts, to conservatives who I know in respect and trust.
25:03
Speaker 1: So one person I called his Art Laugher. Art Laugher
25:06
Speaker 1: is a good friend, was Reagan's chief economist, helped design
25:09
Speaker 1: the Reagan tax cut, the Laugher curve. You you may
25:12
Speaker 1: recall he drew on a napkin that laid out the
25:14
Speaker 1: principle that if you raise taxes too high, tax revenue
25:18
Speaker 1: will go down. And in that circumstance, if you lower
25:20
Speaker 1: the tax rate, you can actually the federal grammer collects
25:22
Speaker 1: more taxes because of incentives. Art is a strong conservative,
25:26
Speaker 1: A great friend. I called Art said, all right, what
25:29
Speaker 1: should we be doing this? This is an economic catastrophe.
25:32
Speaker 1: What what should a conservative be doing it? Art focused
25:36
Speaker 1: on two things. He said, Number one, we should do
25:39
Speaker 1: a payroll tax holiday from now to the end of
25:42
Speaker 1: the year. Payroll tax is about seven and a half
25:44
Speaker 1: percent paid by the employee, about seven and a half
25:46
Speaker 1: percent paid by the employer. We should just say nobody
25:50
Speaker 1: has to pay it from now to the end of
25:51
Speaker 1: the year. That would create enormous incentives for work. Look
25:55
Speaker 1: at Harkins, back to the fight we had over the
25:57
Speaker 1: unemployment compensation, the disincentive for work. I'm very focused on
26:01
Speaker 1: incentives for work. Right. That makes sense. By the way,
26:05
Speaker 1: half of that proposal is in this bill. One of
26:07
Speaker 1: the things that is included in this bill is from
26:10
Speaker 1: now to the end of the year, employers don't have
26:13
Speaker 1: to pay their half of the payroll taxes. They have
26:16
Speaker 1: to repay it in twenty twenty one and twenty twenty two.
26:18
Speaker 1: But it defers those tax payments, which means for an
26:22
Speaker 1: employer lowers the cost of employment. It makes jobs less expensive.
26:26
Speaker 1: That is a good supply side step in terms of
26:31
Speaker 1: tax really. But the other thing Art said, and this
26:34
Speaker 1: was important, He said, Listen, the most dangerous thing in
26:38
Speaker 1: an liquidity crisis is you don't want it to become
26:41
Speaker 1: a solvency crisis. Now what does that mean. That means
26:45
Speaker 1: your customers have dried up because the government is making
26:48
Speaker 1: people stay home, and suddenly your revenue is plummeting and
26:52
Speaker 1: you can't meet your basic bills. You can't meet your payroll,
26:54
Speaker 1: you can't meet your mortgage, you can't meet your rent.
26:57
Speaker 1: And so when you face a solvency crisis, you've got
26:59
Speaker 1: a suddenly sell stuff on the cheap. We don't want
27:03
Speaker 1: to see the airlines suddenly have to auction off all
27:05
Speaker 1: their planes for ten cents on the dollar. That would
27:08
Speaker 1: take a temporary crisis and turn it into catastrophe and
27:12
Speaker 1: the and so what Art said is you want to
27:15
Speaker 1: have liquidity in the system. You want to have people
27:19
Speaker 1: being able to get a line of credit. Companies able
27:21
Speaker 1: to get a line of credit, so they survived the catastrophe.
27:25
Speaker 1: And so that was his principal recommendation, which has been
27:29
Speaker 1: echoed by a lot of conservative economists I've talked to
27:32
Speaker 1: that four hundred and fifty billion is designed to do
27:35
Speaker 1: exactly that, to make want to take this acute problem
27:38
Speaker 1: and have it lead to very long term economic catastrophe
27:43
Speaker 1: because we were too cheap to do what we had
27:45
Speaker 1: to do in the moment. That's exactly right. Now. All
27:50
Speaker 1: of that is our loans. Those are not grants. So
27:52
Speaker 1: nobody's getting a special payment that they get to keep.
27:55
Speaker 1: No one's getting bailed out in that sense. All it
27:57
Speaker 1: means is they're able to go and get a loan
28:01
Speaker 1: and they're able to get alan. Think about it, if you,
28:03
Speaker 1: let's say you run a hotel. Yeah, I talked to
28:07
Speaker 1: several hotel owners who described, like one said their occupancy
28:11
Speaker 1: rate was now six percent. Look six percent, you couldn't
28:15
Speaker 1: go get a loan. I mean, a hotel is not
28:18
Speaker 1: a going concern it with six percent occupancy rate. Now
28:20
Speaker 1: it won't always be. It didn't used to be. And
28:22
Speaker 1: when the crisis is over, presumably it won't. But who
28:26
Speaker 1: would want to see every hotel auctioned off at a
28:29
Speaker 1: foreclosure sale? And all that would mean is whoever happened
28:34
Speaker 1: to have capital would suddenly have a windfall be able
28:38
Speaker 1: to acquire you know, let's go buy the Waldorf Astoria
28:41
Speaker 1: for ten cents on the dollar. That actually doesn't help
28:45
Speaker 1: the economy or anything to force every business owner to
28:48
Speaker 1: sell their assets. And so the liquidity is basically giving
28:54
Speaker 1: someone the capacity to get out of it. Now, look,
28:57
Speaker 1: there may be some failures, there's some taxpayer exposures. Quidity
29:00
Speaker 1: is not cost free, yeah, but but it is not.
29:04
Speaker 1: It's designed to be broad based enough that hopefully it
29:09
Speaker 1: won't be the government picking winners and losers. Now, well,
29:12
Speaker 1: it does sound very different in that way from the
29:15
Speaker 1: two thousand and nine federal spending that we saw. Yes,
29:19
Speaker 1: now there are two exceptions to that, one of which
29:24
Speaker 1: is more problematic than the others. So there's seventeen billion
29:28
Speaker 1: that is carved out they say for nationally security important
29:33
Speaker 1: companies that basically everyone knows means Boeing and maybe ge
29:39
Speaker 1: and and they were pretty candid about we're just writing
29:41
Speaker 1: it to help and listen, Boeing has all sorts of
29:43
Speaker 1: problems that had nothing to do with the coronavirus, and
29:46
Speaker 1: and and and I fought hard against that, the Boeing
29:51
Speaker 1: and G money. I argued against it. I stood up
29:54
Speaker 1: in conference and I mean blasted my colleagues, and you
29:58
Speaker 1: know what, we couldn't get get it out of the bill.
30:01
Speaker 1: And the sad thing is the Republicans wanted it in,
30:03
Speaker 1: and so did the Democrats. The second industry specific component
30:10
Speaker 1: is airlines and airlines. It's interesting, you know, the Democrats
30:14
Speaker 1: talking point, which all of them are saying, is this
30:17
Speaker 1: is all corporate welfare for Republicans. They want the big corporations.
30:21
Speaker 1: Here's the irony, Mike. The corporate welfare increased because of
30:28
Speaker 1: the Democrats demands. So the Democrats are entirely posturing. So
30:32
Speaker 1: let's take, for example, the airline portion of it. So
30:35
Speaker 1: there was fifty eight billion, and the Republican bill that
30:37
Speaker 1: we had, actually the bipartisan bill that we had that
30:39
Speaker 1: we're going to vote on on Sunday, there was fifty
30:42
Speaker 1: eight billion for airlines, but it was all in loans.
30:44
Speaker 1: It was one hundred percent loans that they would have
30:46
Speaker 1: to pay back. The Democrats in the last three days
30:50
Speaker 1: of their negotiations, they insisted that fifty percent of it
30:52
Speaker 1: be grants, that it be direct grants rather than loans.
30:56
Speaker 1: So the next time you see if you listen to
30:58
Speaker 1: any of the Democrats rattling on about they're the ones
31:01
Speaker 1: that fought for the grants instead of the loans. You know,
31:04
Speaker 1: you don't see that reported and much of the mainstream press,
31:08
Speaker 1: actually you don't see much of any of this that
31:10
Speaker 1: we're talking about right now reported in the mainstream press. Senator,
31:13
Speaker 1: we're already over time, but just before we go, do
31:17
Speaker 1: you have a sort of thirty second takeaway beyond everything
31:21
Speaker 1: we've talked about for the American people while they're looking
31:23
Speaker 1: at this crisis and while they're looking at this relief package. Listen,
31:27
Speaker 1: this crisis is extraordinary. But we're going to make it
31:30
Speaker 1: through this. We're gonna make it through the public health side.
31:32
Speaker 1: And people are scared. I get it. People are frustrated
31:34
Speaker 1: about being at home. We will make it through this,
31:37
Speaker 1: but we'll also make it through the economic challenges. I mean,
31:40
Speaker 1: people are worried. Now. You and I have never lived
31:42
Speaker 1: through a great depression. We've never seen twenty percent, thirty
31:45
Speaker 1: percent unemployment. I don't know if we will see that
31:48
Speaker 1: or not. I certainly don't want to. I hope that
31:50
Speaker 1: this emergency relief package helps. But the way we stop
31:55
Speaker 1: the economic devastation as we solve the pandemic is that
31:59
Speaker 1: we contain it. Is that we develop effective vaccines and treatments.
32:04
Speaker 1: We need to do that, and my focus and priority
32:06
Speaker 1: is stopping this pandemic but also ensuring that we have
32:09
Speaker 1: an economy that can keep going going forward. We don't
32:13
Speaker 1: want to see every small business in America destroyed in
32:16
Speaker 1: the process of keeping us safe. So we got to
32:18
Speaker 1: do both and that they're going to be challenging days ahead.
32:23
Speaker 1: But but it's worth remembering. Listen, America is a great country,
32:27
Speaker 1: and we're great because of the character the people. We
32:30
Speaker 1: have overcome challenges before. We've overcome world wars, We've overcome
32:35
Speaker 1: nine to eleven, and we will overcome this and that
32:39
Speaker 1: I'm inspired every day by the heroism of the American people,
32:43
Speaker 1: and that's what's going to take us beyond this challenge
32:46
Speaker 1: as well. I agree, And part of the way that
32:49
Speaker 1: we will recover is by staying healthy. And Senator, part
32:51
Speaker 1: of the way you stay healthy is by getting enough sleep.
32:54
Speaker 1: So we've got to let you get out of here
32:56
Speaker 1: and go back home and get at least a few
32:57
Speaker 1: hours of sleep. There's so much more cover. I guess
33:00
Speaker 1: we'll just have to get to it next time. I'm
33:02
Speaker 1: Michael Knowles. This is verdict with Ted Cruz.