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Biden-McCarthy Debt Deal: the Good, the Bad, & the Ugly · The Ben Ferguson Podcast

0:01
Speaker 1: Welcome its verdict with Senator Ted Cruz Ben Ferguson with
0:04
Speaker 1: you as always, and Senator the number one question that
0:08
Speaker 1: everybody wants to know right now on this Memorial Day
0:12
Speaker 1: is the Biden debt deal, the Biden debt ceiling. Is
0:16
Speaker 1: there a deal with the Republicans, and if there is,
0:20
Speaker 1: what does that look like for the American people.
0:23
Speaker 2: Well, and it was announced on Sunday that there was
0:26
Speaker 2: a quote agreement in principle between Joe Biden and Kevin McCarthy.
0:31
Speaker 2: And the agreement in principle included some cuts and spending
0:36
Speaker 2: from what Biden wanted. It also included an extension in
0:39
Speaker 2: the debt ceiling. And I would say, as we sit
0:42
Speaker 2: here you and I are recording this Sunday night, at
0:45
Speaker 2: this point, we don't have the text of the bill.
0:47
Speaker 2: We have not seen exactly what's in the bill, so
0:50
Speaker 2: it is not entirely clear all of the details. But
0:54
Speaker 2: based on what we know now, there are some good elements,
0:59
Speaker 2: but there are a lot of things that are disappointing.
1:01
Speaker 2: As I'm sitting here right now, I'm disappointed that this
1:05
Speaker 2: agreement does not cut more. And I'm also disappointed that
1:09
Speaker 2: this agreement adds a lot of debt in exchange for
1:14
Speaker 2: relatively little cuts. Now we can break that down piece
1:17
Speaker 2: by piece and walk through what's in it and what's not.
1:21
Speaker 2: With the caveat that the bill text at this point
1:25
Speaker 2: we still haven't seen, and presumably we will see sometime soon.
1:29
Speaker 1: Let's start with is there something in this bill that
1:32
Speaker 1: we could probably get excited about as conservatives? Because I
1:35
Speaker 1: know this is a fight, but there are many concerns saying, Okay,
1:38
Speaker 1: we won back the House, surely we're going to get
1:41
Speaker 1: something that's positive for us from winning back to house.
1:45
Speaker 1: Is there a light at the end of the tunnel
1:47
Speaker 1: saying hey, at least from what we've been told. Obviously
1:50
Speaker 1: we don't have the text yet, but there are going
1:51
Speaker 1: to be some victories for us.
1:54
Speaker 2: Well, I can tell you what House leadership is emphasizing.
1:58
Speaker 2: So on Sunday afternoon, I sent out a tweet critical
2:03
Speaker 2: of this deal, and in particular that that House leadership
2:07
Speaker 2: had been saying that there's not that the Democrats don't
2:10
Speaker 2: get a single thing from this deal. And I sent
2:12
Speaker 2: out a tweet and said, well, actually they get four
2:15
Speaker 2: trillion things, which is the four trillion in new debt
2:18
Speaker 2: that this deal adds and that they also get I said,
2:21
Speaker 2: eighty seven thousand new things with the eighty seven thousand
2:24
Speaker 2: IRS agents. And I'll tell you, within minutes of sending
2:28
Speaker 2: that tweet, I was on the phone with Kevin McCarthy
2:31
Speaker 2: and Kevin called me. Kevin and I are friends, and
2:33
Speaker 2: he was unhappy with what I had expressed. And look,
2:36
Speaker 2: I respect that. Kevin picked up the phone and called
2:38
Speaker 2: me and he pitched what he saw as the benefits
2:43
Speaker 2: of this agreement. And I listened to him and gave him,
2:46
Speaker 2: gave him respectful hearing. And actually later in the afternoon,
2:50
Speaker 2: I was on a call with Kevin McCarthy and with
2:52
Speaker 2: all the Republican senators where he walked through the benefits.
2:56
Speaker 2: I'll tell you, according to House leadership, the biggest benefits
3:01
Speaker 2: in the deal are as follows.
3:02
Speaker 3: Number one.
3:04
Speaker 2: They're leaning in aggressively on the permitting reforms. They say
3:08
Speaker 2: that there were significant permitting reforms that will speed up
3:13
Speaker 2: the development of energy, that will speed up the development
3:16
Speaker 2: of construction projects, that will reduce the time spent on NEPA,
3:21
Speaker 2: which is very costly and slow environmental regulations. And if
3:25
Speaker 2: those reforms are real, that's good. We haven't seen the
3:29
Speaker 2: details yet, but that's at least House leadership is pitching
3:32
Speaker 2: that as a significant victory. Secondly, what they're pitching is
3:36
Speaker 2: a significant victory is work requirements for SNAP and tan
3:43
Speaker 2: ifs now SNAP our food stamps and TANIF is what
3:48
Speaker 2: used to be aids to families with defending children with
3:52
Speaker 2: dependant children, and from what we understand, it expands work
3:58
Speaker 2: requirements from individuals from age forty nine. It expands it
4:03
Speaker 2: up to age fifty four, so it adds five more
4:06
Speaker 2: years rather of work requirements. They're pitching that as a positive.
4:12
Speaker 2: The third positive they're pitching is they say that there's
4:16
Speaker 2: a provision in the bill that if Congress does not
4:20
Speaker 2: pass the appropriation bills this year, that a budget cap
4:26
Speaker 2: kicks in automatically that is current spending minus one percent,
4:31
Speaker 2: and so they're pitching that as another fiscal benefit. Those
4:35
Speaker 2: are the main arguments they're laying out, all three of them.
4:39
Speaker 2: The details matter if they are as leaderships describing them,
4:44
Speaker 2: those are positive, those are not nothing.
4:47
Speaker 1: There's obviously the big question that many have heard about.
4:50
Speaker 1: There's been a lot of attention on this center on
4:53
Speaker 1: social media, and that's about IRS agents. There is a
4:57
Speaker 1: concern that the IRS cannot be trusted. They're targeting people.
5:01
Speaker 1: We saw what happened with Matt tb when he was
5:04
Speaker 1: testifying before Congress and the RS is knocking on his door.
5:07
Speaker 1: And many people believe that these new IRS agents would
5:10
Speaker 1: in fact be nothing more than harassment agents for those
5:15
Speaker 1: that are Christian, those are conservative in general. Look at
5:18
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5:21
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5:23
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Speaker 1: IRS agents center are something that so many are concerned about.
6:41
Speaker 1: You mentioned that as well in your tweet today. Where
6:44
Speaker 1: are we on those this army of IRS agents? Is
6:48
Speaker 1: that in this deal? Are we going to be able
6:50
Speaker 1: to stop that?
6:52
Speaker 2: Well, it's it's not entirely clear. So the original bill,
6:55
Speaker 2: the House pass what was called the Limit, Save and
6:57
Speaker 2: Grow Bill that zero rode out the eighty billion in
7:01
Speaker 2: new funding that Democrats ram through in the prior Congress
7:04
Speaker 2: for the IRS. That eighty billion was going to be
7:07
Speaker 2: directed to eighty seven thousand new IRS agents and employees
7:11
Speaker 2: to be hired to harass the American people, and the
7:15
Speaker 2: first bill the House passed zero that out. We don't
7:18
Speaker 2: know exactly what's in the Biden McCarthy deal. The New
7:21
Speaker 2: York Times reported that the IRS new spending was reduced
7:25
Speaker 2: by ten billion, in other words, from eighty billion to
7:29
Speaker 2: seventy billion. So that's pretty disappointing. And one House Republican
7:34
Speaker 2: tweeted out that the cuts are only one point eighty
7:38
Speaker 2: eight billion, so one point nine billion instead of ten billion.
7:41
Speaker 2: We don't know for sure, I will say when I
7:45
Speaker 2: tweeted out based on the public reporting that the eighty
7:48
Speaker 2: seven thousand new IRS agents were still there, and Kevin
7:52
Speaker 2: called me. What he argued is he says, in this
7:56
Speaker 2: bill they zero out the new spending for the IRS
8:00
Speaker 2: for next year so that they cannot hire the new
8:04
Speaker 2: IRS agents next year. And the pitch he made is
8:08
Speaker 2: we zero it out next year and will fight over
8:11
Speaker 2: subsequent years and appropriations to stop Biden from hiring them
8:15
Speaker 2: in those years. Until I see the text, I can't
8:20
Speaker 2: assess that, but that's at least his response. If it's
8:23
Speaker 2: right that they zero it out next year. That's good
8:26
Speaker 2: on its face. I'm glad they zero it out next year.
8:29
Speaker 2: If that's in there, I'd rather see the whole eighty
8:31
Speaker 2: billion zeroed out, But zeroing it next year is a
8:35
Speaker 2: significant step in the right direction. But again, the devil's
8:39
Speaker 2: in the details.
8:40
Speaker 1: A lot of Conservatives that were just recently elected to
8:44
Speaker 1: the House, they have pledged and they've been doing this
8:48
Speaker 1: a lot on social media that they are going to
8:50
Speaker 1: try to do everything they can to stop this from
8:52
Speaker 1: passing the House of Representatives. There have been a lot
8:55
Speaker 1: of hardline members of the House Freedom Caucus. Chip Roy
8:59
Speaker 1: is one of those who said on Twitter exactly that
9:00
Speaker 1: we're going to try to stop it this from happening.
9:05
Speaker 1: After you talk to House leadership, do you feel pretty
9:09
Speaker 1: confident that Democrats and Republican negotiators are in fact able
9:14
Speaker 1: to iron this out the final details this agreement, and
9:17
Speaker 1: to be clear, what this is, suspend to suspend the
9:20
Speaker 1: federal government's thirty one point four trillion dollar debt ceiling
9:25
Speaker 1: in the coming days. And they're acting like this victory.
9:28
Speaker 1: I worry that, yes, this is a short term victory.
9:30
Speaker 1: Center and many Americans, I think, worry that, yeah, this
9:34
Speaker 1: is short term, but how much damage are we doing
9:36
Speaker 1: this country when we're going this much into debt without
9:38
Speaker 1: real cuts to spending.
9:41
Speaker 2: Yeah, and look that that is my principal concern. So
9:44
Speaker 2: in the original bill, the Limit, Save and Grow Bill,
9:47
Speaker 2: what it did is it rolled back discretionary spending. So
9:51
Speaker 2: what does discretionary spending mean the federal budget? There two components.
9:55
Speaker 2: There's what's called mandatory spending and there's what's called discretionary spending.
9:59
Speaker 2: So man spending are things like Social Security and Medicare
10:04
Speaker 2: and medicaid. They're things that are on autopilot in the
10:07
Speaker 2: federal budget and they grow automatically. Congress doesn't appropriate every year.
10:11
Speaker 2: They're set to be automatically appropriated. Discretionary spending is essentially
10:16
Speaker 2: everything else, and so that is what Congress takes up
10:20
Speaker 2: and appropriates each year. The Limit Save and Growth Grow
10:24
Speaker 2: Bill cut discretionary spending from one point seven trillion in
10:31
Speaker 2: fiscal year twenty three to one point four to seven
10:35
Speaker 2: trillion in fiscal year twenty four. So that was two
10:40
Speaker 2: hundred and thirty billion cutting the actual spending levels. And
10:44
Speaker 2: then it caps spending at one percent per year, and
10:47
Speaker 2: that was calculated just that reduction in spending was calculated
10:51
Speaker 2: to save a total of three point two trillion dollars. Now,
10:55
Speaker 2: we don't know for sure, but what has been reported publicly,
10:59
Speaker 2: according to The New York Times, is that this deal
11:03
Speaker 2: leaves discretionary spending at the exact same level one point
11:07
Speaker 2: seven trillion that it was in fiscal year twenty three.
11:11
Speaker 2: In other words, that it we lose the entirety of
11:13
Speaker 2: that cut, and it then grows from one percent from
11:18
Speaker 2: there on. Now it's a big difference if you're growing
11:21
Speaker 2: one percent from one point seven trillion or growing one
11:24
Speaker 2: percent from one point four to seven trillion, Because it
11:27
Speaker 2: makes a three point two trillion dollar difference over time.
11:33
Speaker 2: What does that mean in total? The New York Times
11:35
Speaker 2: is reporting that the total savings of the deal are
11:39
Speaker 2: about six hundred and fifty billion. That is a massive
11:42
Speaker 2: reduction from the four point eight trillion total savings in
11:46
Speaker 2: the limit Save and Grow bill. Now, I can tell
11:48
Speaker 2: you when I asked Kevin about that this afternoon, he
11:52
Speaker 2: pressed back pretty hard and he said, why are you
11:54
Speaker 2: believing the New York Times? And I said, look, I
11:57
Speaker 2: don't have biltecks. What else do you want me to believe?
11:59
Speaker 2: All all I have are the public reports. If the
12:02
Speaker 2: bill tech shows something different, then we'll discuss it on
12:05
Speaker 2: the pod. But what the New York Times is saying
12:08
Speaker 2: right now at least, is that this agreement is giving
12:13
Speaker 2: four trillion in new debt in exchange for much, much
12:16
Speaker 2: smaller spending cuts. If that is true, that's pretty deeply disappointing.
12:22
Speaker 1: There's always people centered that are saying the sky is
12:24
Speaker 1: falling when they don't get what they want. And I'll
12:27
Speaker 1: just give you examples of the spectrum here. Representative Norman
12:32
Speaker 1: on the debt deal today said what I'm hearing is quote,
12:35
Speaker 1: anything but fiscal sanity. Then you move over to Lindsey Graham.
12:39
Speaker 1: He's raging against this debt deal, warning that the cuts
12:42
Speaker 1: could quote cripple the military. And then Kevin McCarthy says,
12:46
Speaker 1: the debt ceiling deal is quote worthy of the American people.
12:51
Speaker 1: That's a pretty big spectrum swing there, which one is it?
12:55
Speaker 2: Well, there may be some truth to all of those. Look,
13:00
Speaker 2: leadership in both the House and Senate are going to
13:02
Speaker 2: pitch that this is the greatest deal since Slice spread.
13:05
Speaker 2: The White House is pitching this is a terrific deal.
13:09
Speaker 2: A lot of Democrats are pitching this is a terrific deal.
13:12
Speaker 2: The number of Democrats who are happy with this should
13:15
Speaker 2: give you real pause in terms of the military hawks.
13:21
Speaker 2: And part of the way we got into thirty two
13:24
Speaker 2: trillion dollars in debt is there's a dynamic that that
13:27
Speaker 2: that the Democrats play against Republicans, which is, we have
13:31
Speaker 2: a big chunk of the Republican caucus that consider themselves
13:34
Speaker 2: military hawks and that always want to spend massive amounts
13:38
Speaker 2: of the military. Now I consider myself a military hawk.
13:42
Speaker 2: I put myself in that camp, but I'm also a
13:44
Speaker 2: fiscal hawk, so I don't want to bankrupt the country
13:47
Speaker 2: while we are investing what we need to invest in
13:49
Speaker 2: our military. And Lindsey is one who who focuses very
13:54
Speaker 2: much on the military side and far less on the
13:56
Speaker 2: fiscal side. And the trade off the Democrats always do
14:01
Speaker 2: is well, if you know, if you want your guns,
14:04
Speaker 2: we get our butter and and so they they typically
14:08
Speaker 2: leverage the military hawks and the Republican Party to get
14:12
Speaker 2: the trillions in spending they want on the social side.
14:18
Speaker 2: This trade off, I think on the military side, much
14:24
Speaker 2: of the gnashing of teeth may be overstated, but again
14:28
Speaker 2: we haven't seen the bill, so we will see the details.
14:32
Speaker 2: I will tell you something that leadership is pitching is positive.
14:36
Speaker 2: So the first version of Limitsave and Growth rescinded the
14:41
Speaker 2: unspent COVID spending that Congress had appropriated. That saved about
14:45
Speaker 2: thirty billion dollars. This agreement is likewise expected to rescind unspaced,
14:52
Speaker 2: unspent COVID relief funds and also vaccine research and disaster relief.
14:56
Speaker 2: We don't know that know the details of that, but
14:58
Speaker 2: we're being told that could be saving fifty to seventy
15:02
Speaker 2: billion dollars. So depending on what that is, that could
15:06
Speaker 2: be a positive element. Now let me give you a
15:08
Speaker 2: negative element. The Limit Saving Grow bill repealed almost all
15:14
Speaker 2: of the ridiculously named inflation reduction Acts, energy and climate
15:18
Speaker 2: tax credit expansions, which saved five hundred and sixty nine
15:21
Speaker 2: billion dollars according to the public reporting. No changes are
15:26
Speaker 2: made in this, So this is something that the Biden
15:28
Speaker 2: White House won and that House Republicans were not able
15:32
Speaker 2: to prevail on.
15:32
Speaker 3: So that's disappointing.
15:37
Speaker 2: Focusing on the work requirements, the House included work requirements
15:43
Speaker 2: not just on food stamps and welfare, but also on
15:46
Speaker 2: medicaid which is a huge component. Based on the public reporting,
15:52
Speaker 2: there are work requirements, so that we'll see how stringent
15:55
Speaker 2: there are. But there at least some work requirements for
15:58
Speaker 2: food stamps and welfare, but not for Medicaid, and Medicaid
16:02
Speaker 2: is a massive program. So back and forth. What's reported
16:08
Speaker 2: at least is that House Republicans got some of what
16:12
Speaker 2: was included in the first bill, but it's not clear
16:15
Speaker 2: how much.
16:17
Speaker 1: I want to play part of what Joe Biden said,
16:20
Speaker 1: and rarely does he take questions from the media. Rarely
16:23
Speaker 1: does he have press conferences. He did have a kind
16:27
Speaker 1: of a press conference day live from the White House.
16:29
Speaker 1: I want to play for you what he said about
16:31
Speaker 1: reaching this byparts and agreement, and then he was asked
16:34
Speaker 1: about from a reporter about hey, why did you compromise?
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18:19
Speaker 1: I want you to hear how Biden described it. Some
18:22
Speaker 1: thought he was, you know, not that excited, and I'm like, well,
18:24
Speaker 1: it is Biden. It's kind of hard to read him
18:26
Speaker 1: on most days. Let's be honest. Here's what he had
18:29
Speaker 1: to say.
18:30
Speaker 3: Sorry to keep you waiting, but we've got good news.
18:33
Speaker 4: We've got to spocus Speaker McCarthy, and we've reached the
18:38
Speaker 4: bipart of some budget agreement that we're ready to move
18:42
Speaker 4: to the full Congress. And I think it's a really
18:45
Speaker 4: important step forward, excuse me. And it takes a thread
18:48
Speaker 4: of catastrophic to fall off the table, protects our hardware
18:52
Speaker 4: and in historic economic recovery. And the agreement also represents
18:56
Speaker 4: the compromises. Me A's known got everything they want. That's
19:00
Speaker 4: the responsibility of governing. And this is the deal is
19:04
Speaker 4: good news. I believe you'll see for the American people,
19:08
Speaker 4: the agreement prevents the worst possible crisis on the fault.
19:12
Speaker 4: For the first time in a nation's history, an economic recession.
19:16
Speaker 4: Retirement accounts devastated millions of jobs lost. It also protects
19:21
Speaker 4: key priorities and accomplishments and values that Congressional Democrats and
19:25
Speaker 4: I have fought long, for long and hard for investing
19:28
Speaker 4: in America's agenda. That's creating good jobs and communities throughout
19:32
Speaker 4: the country. It protects Social Security, Medicare, and veterans, and
19:36
Speaker 4: so much more. The Speaker and I made clear from
19:39
Speaker 4: the start that the only way forward was a bipartisan agreement.
19:43
Speaker 4: That agreement now goes to the United States House and
19:47
Speaker 4: to the Senate. I strongly urge both both chambers to
19:50
Speaker 4: pass that agreement. Let's keep moving forward on meeting our
19:54
Speaker 4: obligations and building the strongest economy in the history of
19:57
Speaker 4: the world. I'll take a few questions.
20:00
Speaker 1: Before we get to the Q and A part. There
20:03
Speaker 1: is a large portion of the American people, and a
20:06
Speaker 1: large portion of people especially that listen to this podcast,
20:09
Speaker 1: and they sit there, they go, let me get this straight.
20:11
Speaker 1: He wants now credit for creating a crisis and then
20:16
Speaker 1: now saying we've averted said crisis, which was a massive default,
20:20
Speaker 1: so therefore you should be happy. And the red flag
20:24
Speaker 1: goes up, which is okay, So you drive us down
20:26
Speaker 1: this road so that there's this deadline in our face
20:30
Speaker 1: with a gun to our head, and then you can
20:32
Speaker 1: throw in a bunch of pork and a bunch of
20:34
Speaker 1: stuff we don't like because the guns to our head
20:36
Speaker 1: on default, and then you want us to clap for
20:40
Speaker 1: you doing a great job.
20:41
Speaker 3: And I'm not just referring to him, I'm referring to Congress.
20:44
Speaker 1: Are we ever going to find a way to get
20:47
Speaker 1: us off this merry go round?
20:49
Speaker 2: Well, look, I think Joe Biden is going to continue
20:52
Speaker 2: to try to create crises and continue to go hard
20:54
Speaker 2: left and try to ram through his hard left agenda.
20:59
Speaker 2: It's going to be much harder with the Republican House,
21:01
Speaker 2: so I expect more and more of it to be
21:03
Speaker 2: on the executive side and regulatory side. But in this instance, look,
21:07
Speaker 2: if you want to know how to assess this deal,
21:10
Speaker 2: one of the ways to do so is listen to
21:11
Speaker 2: what the Democrats are saying.
21:13
Speaker 3: There.
21:14
Speaker 2: Joe Biden is urging every Democrat to support it. Here's
21:17
Speaker 2: Ron Klain as former chief of staff. He tweeted today,
21:20
Speaker 2: quote every dem should support this deal and then rally
21:25
Speaker 2: behind Joe Biden and help him win the White House,
21:27
Speaker 2: the Senate, in the House in twenty twenty four, so
21:30
Speaker 2: we can save our economy now and get better policy
21:33
Speaker 2: in twenty twenty five. That was Ron Klaine's reaction. Let
21:37
Speaker 2: me give you another reaction to it, and this was
21:39
Speaker 2: Bill Crystal.
21:39
Speaker 3: Now.
21:39
Speaker 2: Bill Crystal used to be somewhat conservative. When Trump became president,
21:44
Speaker 2: Crystal lost his mind and has been a hard left
21:47
Speaker 2: Democrat cheerleader ever since. Here's Crystal's reactions quote first reactions
21:52
Speaker 2: to the deal. One good for the US through the
21:56
Speaker 2: need to get rid of the death ceiling in twenty
21:58
Speaker 2: twenty five, and two good for Biden EEP policy. Domestic
22:05
Speaker 2: spending freezes no worse than the CRS that a GOP
22:10
Speaker 2: house would have produced, and over the four years, spending
22:13
Speaker 2: on liberal priorities up. So that's Bill Crystal's assessment and
22:18
Speaker 2: Bill's Crystal's assessment. Beyond that, he also quote tweets a
22:23
Speaker 2: tweet from a reporter guy named Max Cohen, who tweeted
22:28
Speaker 2: the follow following He said, quote, I asked McCarthy about
22:34
Speaker 2: how he would describe his interactions with Biden during negotiations.
22:38
Speaker 2: Quote very professional, very smart, very tough. At the same time,
22:44
Speaker 2: McCarthy replied, and here was Bill Crystal's reaction to that. Wow,
22:49
Speaker 2: McCarthy seems to be all in for now on undercutting
22:53
Speaker 2: the MAGA narrative about President Biden being out of it,
22:56
Speaker 2: which is good for Biden and for the country. And
22:59
Speaker 2: then he said, and for the future, wouldn't MacCarthy prefer
23:02
Speaker 2: being speaker with a President Biden than having to deal
23:05
Speaker 2: with a President Trump? Asked to that last question, Hell no, Bill,
23:09
Speaker 2: and you have Trump derangement syndrome, which makes you think
23:12
Speaker 2: the country is better off handing the nation over to
23:16
Speaker 2: out of control Marxists than actually winning policy victories in
23:20
Speaker 2: the White House. But that does tell you something about
23:24
Speaker 2: how people are reacting this deal, that folks on the
23:27
Speaker 2: far left are cheerleading it right now.
23:30
Speaker 1: Yeah, And there's one other question, and that is this
23:33
Speaker 1: from a reporter, and I want to get your reaction
23:36
Speaker 1: to it. A reporter asked the president about him quote compromising,
23:43
Speaker 1: And as you mentioned it there, it seems the Democrats
23:46
Speaker 1: in many ways got a pretty good deal here, and
23:49
Speaker 1: Biden was trying to act like he was some sort
23:51
Speaker 1: of you know, well, it was really hard for me
23:54
Speaker 1: to do this, really tough, but you know what was
23:56
Speaker 1: my alternative?
23:57
Speaker 3: Listen at the beginning that the death.
24:01
Speaker 1: Cent was not negotiable.
24:02
Speaker 3: Doesn't that being just done here?
24:04
Speaker 4: Or does that? And you guys said, look, we're not negotiating.
24:07
Speaker 4: Here's the deal they passed. They said they're going to
24:10
Speaker 4: They passed the debt ceiling, and they said they'd only
24:12
Speaker 4: do it on condition that it had all these cuts
24:15
Speaker 4: in it. I said, I'm not going to do that.
24:17
Speaker 4: You passed the debt ceiling. Period, I'll negotiate with you
24:21
Speaker 4: on the cuts. What you say, what's going to happen,
24:24
Speaker 4: What the budget's going to look like. That's what we
24:28
Speaker 4: are negotiating in order to get to them deciding that
24:32
Speaker 4: they're going to go along with a new debt ceiling,
24:36
Speaker 4: meaning that it's not attached, so something totally different attached
24:39
Speaker 4: was attached before. But you want to try to make
24:42
Speaker 4: it look like I made some compromise in the debt ceiling.
24:45
Speaker 3: I didn't.
24:46
Speaker 4: I made a compromise on the budget. That's what they
24:49
Speaker 4: wanted to do, to make a compromise on the budget,
24:50
Speaker 4: and that's what you've done, even though you haven't gone
24:52
Speaker 4: as far as they wanted, isn't that sure? Yeah? Well,
24:56
Speaker 4: can you think of an alternative?
25:00
Speaker 3: Can you think of an alternative? And then there's the chuckle.
25:03
Speaker 1: I mean, really, that's what you've got from the President
25:05
Speaker 1: in the White House tonight.
25:07
Speaker 3: Oh look what he just said.
25:09
Speaker 2: There was complete gobbledygook.
25:10
Speaker 3: And it is absolutely right.
25:13
Speaker 2: That Biden suffered a major defeat. Initially, he staked out
25:16
Speaker 2: a position that was patently unreasonable. He said he wasn't
25:19
Speaker 2: going to talk, he wasn't going to negotiate. The only
25:21
Speaker 2: thing he would take was a clean debt ceiling. That
25:24
Speaker 2: was objectively unreasonable. But frankly, it's been the position of
25:28
Speaker 2: a lot of Democrat presidents in the past, and sometimes
25:31
Speaker 2: they've held that line, sometimes they haven't. Unfortunately, sometimes Republican
25:35
Speaker 2: leadership in the Senator House has echoed the line of
25:38
Speaker 2: Democrat presidents that it must be a clean debt ceiling
25:41
Speaker 2: with nothing attached, which is beginning with unilateral surrender. I
25:45
Speaker 2: will credit the House, the House Republicans, and I think
25:49
Speaker 2: it is House conservatives that drove this that the clean
25:52
Speaker 2: debt ceiling was off the table and Biden was forced
25:56
Speaker 2: to completely surrender on that demand, and his whole convoluted
26:01
Speaker 2: explanation there made no sense. He ended up abandoning his claim.
26:05
Speaker 2: He wasn't it going to negotiate, and he came to
26:07
Speaker 2: the Oshing table, and look, it was always obvious that
26:12
Speaker 2: what was going to pass was going to be somewhere
26:14
Speaker 2: between what the House initially passed and nothing. And so
26:19
Speaker 2: I did not stake out the position that every word
26:22
Speaker 2: of what the House passed initially has to pass or
26:24
Speaker 2: else it's unacceptable. My criticism is it's closer to nothing
26:29
Speaker 2: than it should have been. So for example, in what
26:32
Speaker 2: the House originally passed, it blocked the illegal and unconstitutional
26:37
Speaker 2: Biden's student debt cancelation that would have saved at least
26:42
Speaker 2: four hundred and sixty billion dollars. What's been reported publicly
26:45
Speaker 2: is nope, all of that's still in there now, allegedly.
26:49
Speaker 2: And what Kevin said is is there is something in
26:52
Speaker 2: there saying that if the court strikes it down, people
26:56
Speaker 2: have to resume paying their debts. I didn't quite understand
27:00
Speaker 2: and what he was saying when he described that, But
27:03
Speaker 2: we'll see what the text is at the end of
27:05
Speaker 2: the day. The old version eliminated altogether, and this one
27:09
Speaker 2: at best punts it to the court. It's worth comparing
27:13
Speaker 2: the overall numbers. What the House did initially was increase
27:18
Speaker 2: the debt limit by one point five trillion, or until
27:21
Speaker 2: March of twenty twenty four, so it was a partial
27:24
Speaker 2: debt increase, but not a blank check. What this is
27:31
Speaker 2: does is it suspends the debt limit altogether until January
27:36
Speaker 2: twenty twenty five on. So on the face of it,
27:38
Speaker 2: instead of one point five trillion, it's about four trillion
27:42
Speaker 2: in debt. Now, that's more than twice as much debt.
27:45
Speaker 2: That is a lot of debt. And if you're giving
27:47
Speaker 2: the Democrats that much debt, I think you should be
27:50
Speaker 2: getting real and material spending increases. And the big thing
27:55
Speaker 2: to understand is what happened for the federal government. In
27:59
Speaker 2: twenty seventeen, the total federal budget was about four trillion dollars.
28:03
Speaker 2: It's now six and a half trillion dollars. That's happened
28:07
Speaker 2: in just five years.
28:09
Speaker 3: Why.
28:09
Speaker 2: The biggest reason is because of COVID and the massive
28:12
Speaker 2: spending on COVID, and then because the Democrat majorities the
28:16
Speaker 2: last two years rammed through massive spending and Unfortunately, this
28:23
Speaker 2: deal may slightly slow down the rate of growth going forward,
28:28
Speaker 2: but it does very little to turn the clock back
28:32
Speaker 2: on the explosion of spending that was given with COVID
28:37
Speaker 2: as the excuse, and that is driving inflation. If you
28:40
Speaker 2: don't like paying more for every bill you've got, having
28:44
Speaker 2: the federal government spend like drunken sailors is one of
28:47
Speaker 2: the big causes of it. And so if you just
28:51
Speaker 2: think in terms of big picture comparison, increasing the debt
28:56
Speaker 2: limit from one point five trillion to four trillion is
28:59
Speaker 2: a big increase and the spending reductions are much much smaller.
29:05
Speaker 2: That's the biggest reason I'm disappointed by what we're looking at.
29:09
Speaker 1: I got to ask you a hypothetical here, will we ever?
29:14
Speaker 3: And there's a lot of people that are listening.
29:16
Speaker 1: I'm one of them that thinks this, every time we
29:18
Speaker 1: go down this road, Are we ever going to get
29:22
Speaker 1: a balanced budget?
29:23
Speaker 3: Amendment center?
29:24
Speaker 1: Is that now just the biggest load of crap ever
29:26
Speaker 1: Promised by a lot of politicians to get people to
29:29
Speaker 1: go to the polls and vote for them, that I'll
29:31
Speaker 1: do this, and I'm going to do this.
29:33
Speaker 3: There's been opportunities to do it. Never gets done.
29:36
Speaker 1: People love the drunken sailor spending when they get into office.
29:39
Speaker 1: You're one of those that criticize it every single time.
29:42
Speaker 1: But when you see where we're going with our debt,
29:45
Speaker 1: is there any chance that we will ever get a
29:48
Speaker 1: balanced budget amendment, even if the Republicans got back the House,
29:51
Speaker 1: sent in the White House all at the same time.
29:54
Speaker 2: Well, look, if we're counting on current members of Congress,
29:57
Speaker 2: there's no chance whatsoever. All of the Democrats oppose a
30:01
Speaker 2: balanced budget amendment. All of them like spending like drunken sailors.
30:05
Speaker 2: And the unfortunate thing is about half the Republicans do.
30:09
Speaker 2: And Republican leadership loves the spending. Anytime we have a
30:13
Speaker 2: big spending fight in the Senate, they are about twenty
30:17
Speaker 2: Republicans who are willing to vote no, And you usually
30:22
Speaker 2: get all the Democrats and twenty to thirty Republicans who
30:25
Speaker 2: will vote for damn near any spending bill they see.
30:28
Speaker 2: I did last week. I was on Squakbox on CNBC,
30:31
Speaker 2: which I really like. Doing squakboxes, you actually get into
30:34
Speaker 2: substantive conversations in greater depth than the five or six
30:38
Speaker 2: minute SoundBite you get on most other shows. But in
30:42
Speaker 2: the course of being on Squawkbox, at one point we
30:45
Speaker 2: were talking about the out of control spending and they said, well, gosh,
30:49
Speaker 2: you know, you had the Inflation Reduction Act, you get
30:51
Speaker 2: the infrastructure bill, and you had this other bill. And
30:54
Speaker 2: I'm like, yeah, and I voted against all of those,
30:56
Speaker 2: and the hosts were a little surprised on that. But look,
31:00
Speaker 2: I don't think we ought to be bankrupting our country.
31:02
Speaker 2: And the simple math of it, five years ago, the
31:06
Speaker 2: national debt was just over twenty trillion dollars. Today it's
31:11
Speaker 2: thirty two trillion dollars. That is a massive, massive increase,
31:16
Speaker 2: and I think we should be using this leverage now
31:20
Speaker 2: to make a greater step to stopping that spending and
31:24
Speaker 2: that out of control debt.
31:26
Speaker 1: Last question for you, Senator, how close are we to
31:29
Speaker 1: just being in total chaos? And I'm talking about as
31:32
Speaker 1: a country with debt. You look at a national debt
31:36
Speaker 1: clock and those numbers if we want to pay it
31:39
Speaker 1: all off of the US national debt debt per citizens
31:42
Speaker 1: over ninety five thousand now for the first time ever.
31:44
Speaker 1: But not every citizen pays taxes, So if you had
31:47
Speaker 1: debts debt per taxpayer, you'd be two hundred and forty
31:51
Speaker 1: eight thousand, and that would just pay off the debt
31:53
Speaker 1: for one one thousand of a second, and we'd still
31:55
Speaker 1: immediately go back in the red. You look at the
31:58
Speaker 1: US federal debt ratio, for example, in two thousand, it
32:03
Speaker 1: was fifty seven point seven eight percent the US federal
32:06
Speaker 1: debt to GDP ratio. Now it's the worst that's ever
32:09
Speaker 1: been in history, one hundred and twenty point forty seven percent.
32:13
Speaker 1: That is something that every economist in the world would
32:15
Speaker 1: say is impossible to sustain. And when you see this
32:21
Speaker 1: now and you look at the debt and you look
32:23
Speaker 1: at our kids.
32:25
Speaker 3: I look at my kids.
32:26
Speaker 1: I know you look at your kids, and you see this,
32:28
Speaker 1: and you think, at some point this debt time bomb
32:32
Speaker 1: is going to explode. Is there anyone really that cares,
32:37
Speaker 1: that's in a high leadership role in DC over this?
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34:20
Speaker 1: Com center that ask me that question for you. I
34:23
Speaker 1: see a US debt taking time bomb. I think every
34:26
Speaker 1: economist says it. Uh, this is not just about our
34:29
Speaker 1: kids and our grandkids having debt. This is about losing
34:33
Speaker 1: control of a country in essence when that's explodes. If
34:36
Speaker 1: we don't write this ship, how concerned are you on
34:39
Speaker 1: that level?
34:40
Speaker 2: So I'm very concerned. But let's wrap this podcast up
34:44
Speaker 2: with a note of optimism. Yes, absolutely, yes we can
34:48
Speaker 2: solve this. I don't believe this is unsolvable. I don't
34:50
Speaker 2: believe we're in a hole that is too deep. If
34:54
Speaker 2: you look at the federal budget, and if you're a
34:56
Speaker 2: numbers person, and look, I'm someone who cares about numbers,
35:00
Speaker 2: cares cares about the budget, there is only one first
35:05
Speaker 2: order variable when it comes to the budget, and that
35:09
Speaker 2: is economic growth. Everything else is a second order or
35:12
Speaker 2: third order variable. In other words, we cannot cut spending
35:16
Speaker 2: enough doing nothing else to solve this problem. The only
35:20
Speaker 2: way to get out of it is to increase GDP growth.
35:25
Speaker 2: And if you look at when growth is booming. Since
35:30
Speaker 2: World War Two, GDP growth has averaged about three point
35:34
Speaker 2: three percent a year. That number is critically critically important.
35:41
Speaker 2: During the second half of the Obama years, GDP growth
35:46
Speaker 2: averaged less than one percent a year, zero point nine
35:49
Speaker 2: percent a year. The preceding time GDP growth had averaged
35:53
Speaker 2: less than one percent a year was nineteen seventy eight
35:56
Speaker 2: to nineteen eighty two, coming out of Jimmy Carter. If
35:59
Speaker 2: you have anemic GDP growth, you can't solve the budget problem.
36:05
Speaker 2: It's impossible. On the other hand, if you have booming
36:09
Speaker 2: economic growth, it's a double whammy on the budget because
36:13
Speaker 2: when you have booming growth, number one, tax revenue surge
36:16
Speaker 2: and so the federal government takes in more revenue. But
36:19
Speaker 2: number two, when you have booming economic growth, a lot
36:22
Speaker 2: of federal spending drops. Welfare spending drops, so people who
36:26
Speaker 2: were getting welfare get jobs, and when they get jobs,
36:29
Speaker 2: they stop getting welfare and they start paying taxes. So
36:33
Speaker 2: you get a double whammy. And to give you a
36:35
Speaker 2: sense of how potent it can be. Look, if you
36:38
Speaker 2: ask can we ever solve it? The natural question is
36:40
Speaker 2: to ask, well, when's the last time we solved it
36:44
Speaker 2: and didn't have a deficit. And the answer to that
36:48
Speaker 2: would be after twelve years of Reagan, Bush coming in,
36:52
Speaker 2: cutting taxes, simplifying the tax code, reducing job killing regulations.
36:57
Speaker 2: And Reagan came in and did that, came in, inherited
37:02
Speaker 2: Jimmy Carter's anemic growth. He slashed the tax code, he
37:05
Speaker 2: simplified the tax code, and he cut job killing regulations.
37:10
Speaker 2: And Ben, do you know what GDP growth was in
37:12
Speaker 2: nineteen eighty four?
37:14
Speaker 3: I would love to know, and I know you know
37:15
Speaker 3: that number, So tell.
37:16
Speaker 2: Me seven point two percent. Wow, that's Those are developing
37:26
Speaker 2: country numbers. Those are numbers you see in countries like
37:28
Speaker 2: India and Singapore. Those are not what you see in
37:32
Speaker 2: major industrialized countries like the United States. Typically. That's the
37:37
Speaker 2: power of growth. And what happened after we saw the
37:41
Speaker 2: growth unleashed through eight years of Reagan and four more
37:44
Speaker 2: years of Bush is Bill Clinton inherited an economy that
37:50
Speaker 2: was booming so strong that we had a four trillion
37:55
Speaker 2: dollar budget surplus. That's how you do it. That's how
37:59
Speaker 2: you fix it. And if you want to fix it again,
38:01
Speaker 2: we got to do the same thing. By the way,
38:04
Speaker 2: rewind to JFK. JFK, if he were running today, the
38:09
Speaker 2: Democrat Party would chase him out of the party. They
38:12
Speaker 2: tar and feather him. JFK ran for the presidency on
38:15
Speaker 2: tax cuts and defeating communists. Neither one of those are
38:18
Speaker 2: welcome in today's Democrat Party. But you look at JFK
38:22
Speaker 2: cut taxes, JFK reduced regulations, and JFK campaigned on five
38:27
Speaker 2: percent annual GDP growth and we produce that during his
38:32
Speaker 2: presidency and it was an economic boom. We can do
38:35
Speaker 2: that again, but Ben, we're not going to do it
38:37
Speaker 2: again until we have a president who is thoroughly committed
38:40
Speaker 2: to doing so. And that means raining and the spending.
38:43
Speaker 2: But that also means the aggressive pro growth tax cutting,
38:48
Speaker 2: tax simplification, and repealing of job killing regulations that let
38:53
Speaker 2: small businesses prosper and flourish. Until that happens. If we
38:58
Speaker 2: don't have the growth, you can't all of the problem.
39:00
Speaker 2: But with the growth, I believe we can solve it.
39:03
Speaker 2: You also asked a minute ago if we'll ever get
39:05
Speaker 2: a budget Ballace Budget Amendment, not through the current members
39:08
Speaker 2: of Congress, but I do think the States are very
39:12
Speaker 2: close to calling for a constitutional convention to pass one,
39:16
Speaker 2: which is the only way it will ever happen with
39:18
Speaker 2: pressure from the States.
39:20
Speaker 1: Yeah, a lot of support and a lot of growth
39:22
Speaker 1: and a lot of people finding out about that movement
39:24
Speaker 1: as well, which is a great thing, Senator. Always a
39:28
Speaker 1: pleasure for everyone listening. Don't forget to hit that subscribe,
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