January 8, 2025 • 22 mins
Newt talks with Larry Kudlow about President-elect Trump’s “One Big, Beautiful Bill” also known as the proposed, “Tax Cuts, Jobs and Affordability Act,” which is seen as a crucial legislative priority for the incoming Trump administration and Congressional Republicans. The act would aim to extend the 2017 tax cuts, introduce a lower corporate tax rate, and provide tax-free cash tips for service workers, among other measures. Their conversation highlights the importance of passing this bill promptly to stimulate economic growth, reduce inflation, and secure a Republican victory in the 2026 elections. Kudlow emphasizes the need for a comprehensive legislative package that includes tax cuts, energy production, and regulatory minimization to create a blue-collar boom and improve affordability for Americans.
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Speaker 1 (00:00):
I'm Newt Gingrich. Please watch Journey to America, my new
documentary on PBS about nine remarkable individuals who strengthen our
country through their pursue the American Dream. Tune on Tuesday,
January fourteenth at ten pm Eastern, nine pm Central on
PBS and the PBS app. On this episode of Newts World.
(00:22):
The number one goal for the Trump administration and Congressional
Republicans must be to pass what I would call the
tax cuts, Jobs and Affordability app. President elect Donald J.
Trump has described it as quote one big, beautiful bill.
A powerful economic bill must be the Republican's top priority
because it is the key to the twenty twenty six election.
(00:45):
We know the economy, inflation, and affordability are by far
the American people's biggest concerns. Here to talk about the legislation,
I'm really pleased to welcome my guests. A great long
term friend both to me and Callista, and somebody who
I have worked with now for virtually a generation. He
(01:05):
served as Assistant to the President for Economic Policy and
Director of the National Economic Council under President Trump from
nineteen eighty one to nineteen eighty five. He was an
Associate Director for Economics and Planning at the Office of
Management Budget during the Reagan administration. He is now the
host of the wildly popular Cudlow on Fox Business Network
(01:28):
weekdays at four pm. He's a Fox News contributor probably
knows as much about economics as anybody currently alive. Larry,
welcome and thank you for joining me on Newts World.
Speaker 2 (01:51):
Dagness, great, great, great pleasure.
Speaker 1 (01:53):
So let me just start with what Trump called one big,
beautiful bill. Do you believe we can see this, this
kind of comprehensive legislative package in twenty twenty five?
Speaker 3 (02:03):
I do.
Speaker 2 (02:04):
I think you get an early start on it. I
think that's what Jason Smith from the Ways the Means
Committee wants, and so does Speaker Mike Johnson. I think
you could have it done by Memorial Day. I mean, basically,
what are you doing. You're extending the tax cuts from
twenty seventeen, and there'll be a few add ons lower
(02:28):
fifteen percent corporate tax and tax free cash tips for
service workers and over time, and probably some kind of
tax break for seniors. But frankly, those are simple, relatively
minor adjustments. They're all pro growth. But the whole point
here is to get the blue collar boom working this year,
(02:53):
not next year or the year after. Get it working
this year. And I'll say another economic point. We'll get
to the legislative strategy, and.
Speaker 3 (03:02):
The payper is later.
Speaker 2 (03:03):
But another economic point is, unfortunately President Trump's going to
inherit Biden inflation, which is still running at a year
on year rate of two and a half to three percent,
and of course it's been up over twenty percent during
Biden's term. It's still there now. I make that point
(03:24):
because if you lower tax rates and you produce more energy,
and you minimize regulations, particularly on businesses and smaller business,
that supply side package will create more goods, more goods
(03:45):
and services chasing the same amount of money. In other words,
it will lower inflation from the supply side. This is
one of the things that people give Paul Boker. When
you and I were in Washington in the early eighties,
Paul Boker got a lot of credit for slaying inflation,
and he deserves But Ronald Reagan deserves credit for his
(04:10):
tax cuts, even though they were delayed a couple of years.
Speaker 3 (04:13):
His tax cuts produced a boom.
Speaker 2 (04:15):
In the economy, and that supply side growth helped to
vanquish inflation. So bringing it up to here, in mister
Trump's second term, I want to see a blue collar boom,
and I wanted to start in twenty twenty five.
Speaker 1 (04:31):
There's a significant energy component that alone is going to
start bringing down costs. If you add to that the
incentives to start businesses, the incentives to expand businesses, there's
no reason that this economy can't take off, and that
you couldn't have four or five percent growth in the
Reagan recovery. He was astonishing, as you know, because you
(04:51):
were right there, how fast the growth rate changed, and
how many new jobs, how much greater opportunity who's created
literally almost overnight.
Speaker 2 (05:01):
When the tax rates finally kicked in, the lower tax rates,
which wasn't until January of nineteen eighty three, I mean
some of them. There were small impacts in eighty two
but not much, and eighty one but not much. People
waited for the tax cuts to kick in. They waited,
(05:23):
and then yes, as you say, the economy started booming.
I mean, I don't know that you'll get twelve percent growth,
but as you say, you know you could have a
period of maybe six or eight quarters where economic growth
jumps to four or five percent before it might settle
down to say, three to three and a half percent.
Speaker 3 (05:42):
There's no reason why you can.
Speaker 1 (05:43):
The Reagan recovery lasted a very long time.
Speaker 3 (05:48):
We just kept growing eight years worth. They're absolutely right.
Speaker 1 (05:51):
There's been two fascinating studies of the gap that has
grown up between Canada and the US in terms of
gross domestic product and the gap that's going up between
the US and Germany. And we're simply despite Biden, in
the last four years, we have generally been moving towards
being better and better economically. And I think the breakthroughs
(06:13):
in computing and the breakthroughs and going into space and
expensively and materials technologies, you're just going to see a
continuing deflationary effective technology, which if you encourage people to
invest in it, is going to lead to really dramatic
increase in what's available and a dramatic decline on what
it's going to cost.
Speaker 2 (06:32):
Yeah, you know, it would be very healthy deflation. It
would come down because of economic growth and product improvements, innovation,
jumpyteri and gales of creative destruction.
Speaker 3 (06:50):
It's a productivity led deflation.
Speaker 2 (06:54):
We saw that by the way in the nineties, after
you and your Congress persuaded Clinton on a capital gains
tax and welfare reform, you had what I call good
deflation and you had a massive productivity boom. It was
really the information revolution, which spanned a long time. Well,
(07:16):
we're probably in the throes of an ai revolution right now,
and the applications for that probably just in the early stages.
But the key is we have to incentivize people a
to work, but b to invest in it. And that
comes back to this tax cut package, which is so important.
Speaker 1 (07:38):
And I think one of the most powerful offsets they
could include would be to go back and reinstate the
nineteen ninety six welfare reform bill which turned employment offices,
which had been dependency officers, turned them in basically to
employment officers, and getting people out to work to get
a job led to the largest reduction of children and
(08:00):
poverty and history. Because their parents, who are going to work,
their income was going up. It saved enormous amounts of money,
and of course it's a double win. You don't have
to pay for food stamps, you don't have to pay
for Medicaid, and by the way, that person's now got
a job and they're paying taxes, So it was a
huge part of what was going on. And I think
if they do this wisely, they can produce a package
(08:22):
that will be among the most revolutionary in American history.
And I think Trump certainly has the daring personality to
go out and try something on this scale, and frankly
with people like you who've already been through it, and
your point about when the deal went into effect, I
remember vividly. I was a junior congressman and because they
didn't have the tax cuts in eighty two, as you
(08:45):
pointed out, people waited to invest because they wanted the
tax break. Starting in January eighty three, the economy did
not have enormous growth. We lost twenty six seats. Well,
Trump had the same experience because the Republican leaders in
the Congress, we're determined to do Obamacare, repeal Obamacare before
they would get to the tax bill. They failed to
(09:06):
repeal Obamacare. It cost so much time. They didn't actually
get the tax bill through till December of seventeen, and
that meant that eighteen did not have a boom, and
we lost forty seats and we got Nancy Pelosi. And
so I'm really concerned as I look ahead to making
sure we keep the House in twenty six, because the
last thing we want is to have the Democrats in
(09:27):
charge of the House recreating the Pelosi anti Trump model.
And I think that the difference in Trump's ability to
get things done will be enormous, depending on whether or
not we're in a position to actually make sure that
we are able to continue to grow, continue to make
people happy, keep our word, and in the process, we
(09:47):
have to grow the majority. We can't just defend it.
It's too narrow, it's too small. We have to grow
the majority. And fascinatingly, there are thirteen seats currently held
by Democrats that Trump carried, and there's another Batche's eats
that are available that he got within five percent of.
So my hope is that when the bill's written, Iy've
sort of taken the artist's luxury here as a writer
(10:10):
suggesting that it ought to be I would say Tax Cuts,
Jobs and Affordability Act, because I think that captures everything
people were worried about economically.
Speaker 2 (10:18):
But it is one big, beautiful bill, one big beautiful
you gotta admit it.
Speaker 3 (10:22):
It has a good marketing ring to it.
Speaker 1 (10:25):
That's right, you know, and if you do that, and
then you put into the border stuff you need and
other things, so it does be on a pretty big bill.
You will remember that President Reagan gave a Oval Office address,
shifted the dynamic in the House. People thought Tip O'Neil,
the Democratic Speaker, was going to beat us by about
twenty five votes. Reagan gave that speech, the American people
(10:48):
got awake, they got on the telephone, and we carried
forty six Democrats, So it was a swing of seventy
something votes because Reagan got through to them that this
was about their pocketbook, it was about their family budget,
and they were excited. And when Tip said after he
was defeated that it was all this one speech and
that created a title wave, Well, that's not the Trump style.
(11:09):
And furthermore, we don't have three networks. Back then, if
Reagan gave an Oval Office address, it was on all
three networks simultaneously. He could blank at the country. But
what Trump does brilliantly is rallies and town hall meetings.
And my hope is that he will do about two
and a half months visit all of the districts. I
just described the thirteen that actually voted for him, in
(11:32):
the next twenty or twenty five that he got close to.
And if he's out there saying to people, do you
want more money in your pocket? Do you want life
to be more affordable? Do you want better jobs? Get
your congressman to vote with me. I think that he
will blow this thing straight through.
Speaker 3 (11:48):
Well.
Speaker 2 (11:48):
I think the basic principle here is if you delay
the tax cuts, you're going to delay the boom, and
you're going to delay the kind of Republican victory in
the mid term, very very important. Delay is the enemy
if you move now, and it's not that hard. You know,
the House is put together Energy Bill HR one, Border
(12:12):
Bill HR two. Jason Smith's got a tax bill up
his sleeve. They've been working on it for a year. Again,
it's just extending the tax cuts with some add ons.
They can get it done by a Memorial Day, by
late May some such and that will work. These things
take a few months to kick in and withholding raids
have to change and you have to adjust business and
(12:35):
corporate tax schedules. But you know, by the summer you'll
see the results of this. And I think you have
to have a coalition here. You're the legislative genius. But
just on this thought, you want to pull together your
tax cutting supply siders, your border closing people, who is very,
(12:56):
very terribly important, but also you're going to have your
limited government spending cutters. The PAGO has got to offsets
the spending's got to be part of this coalition. And
I think you can do that. I think Trump can
orchestrate that. I think the leadership in the House and
(13:17):
Senate can do that. There's a coalition there that can
work together. But I don't see any other obstacles to this,
and I think it would be an enormous mistake.
Speaker 3 (13:27):
To delay the tax cuts, as you had pointed out,
But it would be an enormous mistake.
Speaker 1 (13:42):
I'm nuw Gingdrich. Please watch Journey to America, my new
documentary on PBS about nine remarkable individuals who strengthen our
country through their pursuit of the American dream. From Albert
Einstein to Hetty Lamar Dozell make Kalilazad, we explore how
individual stories help shape our national identity. Watch Journey to America,
premier on Tuesday, January fourteenth, to ten pm Eastern, nine
(14:06):
pm Central on PBS and the PBS app can you
put your finger on what I think is going to
be the most complicated part of this bill, and that's
the offsets, which, legitimately, I can say this with some
(14:26):
pride because, as you know, while I was Speaker, we
passed the only four balanced budgets in the last century.
I'm pretty happy to be a fiscal hawk, but I
think there are ways we can get offsets in here
that every fiscal conservative will be very happy with. Why
are some Republicans so determined to have two bills? What
do they say to you about this whole idea of
(14:48):
doing the tax bill later and doing a simple bill
on the border initially. What do you think is driving then?
Speaker 2 (14:55):
The biggest argument I've heard to two bills is, I
guess i'd call it the complexity argument, that it's too
complex and would take too long to patch together the
tax cut piece.
Speaker 3 (15:12):
And it's again an argument that I.
Speaker 2 (15:15):
Didn't understand because eighty percent of what should be doing
is merely extending the twenty seventeen legislation. You're not reinventing
the wheel.
Speaker 3 (15:28):
Now.
Speaker 2 (15:29):
You'll also have some add ons on tips and overtime,
and that's good in the corporate tax cut, but the
bulk of it is just an extension, and in fact,
Mike Crapo is going to run the Senate Finance Committee.
I mean he argues that you have to use a
(15:49):
current policy baseline, which is what Obama used back in
twenty twelve, and you don't have to rescore the existing
tax cuts. Popular legislation need not be rescored. I mean,
they have the current services spending baseline that's never scored,
and so why should you have to score tax cuts
as a revenue loser when, in fact, I might add,
(16:13):
those tax cuts have probably brought in almost fifty percent
higher revenues than were estimated a bunch of years ago.
So the argument is this idea of complexity, and I
think it's a straw horse. I think it's a red herring.
Speaker 1 (16:28):
They've had people in the Senate side working on this
for a year in the Senate Finance Committee. The ability
that those guys in the same room and have a
genuine bicameral House Senate Republican package, I would think could
be a matter of a month or two if they
worked at it. These are smart people. Crapo used to
serve in the House. He understands the rhythm and I
(16:49):
must say that Jason Smith has become a really articulate,
effective shair of ways and means. So I think I'm
with you on that part. And I think you raise
an important point, which the fact I'm going to go
back and work on, which is normally CBO would start
with the current services budget, which would mean they would
assume the extension that it shouldn't cost anything because it's
(17:12):
built in the current law.
Speaker 3 (17:14):
Right. See, that's the thing.
Speaker 2 (17:15):
This current law becomes current policy, and that's what the
baseline should reflect. This is Mike Crapo's argument new and
it's a brilliant argument made, I might add by a
Harvard lawyer. Okay, don't forget that he's a very smart fella.
He's out there someplace in the Dakota's or Idaho or
(17:37):
I don't know where those places are, but he is
one smart guy. He ran the Banking Committee and now
he's going to be running the Finance Committee. And it's
a brilliant argument. We should treat tax policy the way
we treat spending policy. Current law's current law policies don't change.
You don't have to rescore everything. It's not necessary. But
(17:58):
what they do is they never rescore the spending. All
they want to do is rescore the tax revenues. But
even that's phony because CBO and Joint Tax always wrong,
as you know, NWT. I mean, go back and look
at their estimates before the bill in.
Speaker 4 (18:16):
Twenty sixteen, at the bill in twenty seventeen. They look
at their updated estimates in twenty eighteen, twenty two, twenty four,
they're like, they've missed by fifty percent on revenue.
Speaker 3 (18:28):
They miss carpet revenues. I don't know.
Speaker 2 (18:31):
I think it's close to one hundred percent. They missed
the repatriation revenue. We made over a trillion dollars of
repatriation money coming back to the US because we stopped
double taxing it and we put a reasonable.
Speaker 3 (18:45):
Rate on it. They're all wrong, They're always wrong. Jd.
Vance had it right in the debate.
Speaker 2 (18:51):
He said the experts get it wrong, and that's exactly right.
Speaker 1 (18:55):
I think this will be one of the Trump revolutions,
will be turning around those two institute or even potentially
replacing them. We have to farm out congressional estimates to
three private sector firms and have all three there in
public because, as you correctly point out, these two institutions
are consistently wrong.
Speaker 3 (19:14):
They're just wrong. They're just wrong.
Speaker 2 (19:16):
I mean, it's like the governing philosophy in Washington amongst
the bureaucracy civil servants. If government spends your money, it's okay.
But if you spend your money, it's not okay. So
government takes a little more of your money, it's just fine.
We call that economic growth stimulus. But if you get
(19:38):
to keep more of what you earn, it causes huge
deficits which drive down in the economy and drive up
interst rates.
Speaker 3 (19:45):
It's just utter nonsense. But I think people see through that. Miss.
Speaker 2 (19:48):
Trump is a transformational figure, and he is going way
back to twenty fifteen when a bunch of his.
Speaker 3 (19:55):
First work on his tax cuts.
Speaker 2 (19:57):
He has always been on the supply side, and he
will remain on the supply side.
Speaker 3 (20:02):
He likes me, but he loves our laffer. He loves
our laffer.
Speaker 1 (20:06):
But I think part of this is because he was
a real businessman. He understands incentives.
Speaker 3 (20:11):
You know.
Speaker 1 (20:11):
Jack Camp used to say, how long does it take
for this policy to have an impact? He said, well,
drop a twenty dollars bill on the pavement and see
how long it takes somebody.
Speaker 3 (20:20):
To pick it up right exactly.
Speaker 1 (20:22):
You know. And I think you're going to see people
leaning forward once the bill is clear, and once it's
out in the open, even before it passes, you will
see businesses begin to move towards investment and move towards
expansion because they'll see the kind of environment where it's
going to pay them to be aggressively pro American and
(20:44):
to produce in the United States.
Speaker 2 (20:45):
Yes, so I appreciate you plugging my show.
Speaker 1 (20:50):
Well, first of I want to thank you, but I
also want to say I love going on your show.
People can watch Cudlow on Fox Business Network weekdays at
four pm. They can also visit FoxBusiness dot com. And
you do an amazing job. I'm so grateful that you
would take the time to be with us today.
Speaker 2 (21:08):
No, thanks, dud, I can spend another hour with you.
Speaker 3 (21:10):
You're terrific.
Speaker 1 (21:15):
Thank you to my guest Larrycudlow. You can learn more
about President at Trump's plan to work with Congress on
our show page at neut world dot com. Newtrald is
produced by Ganglish three sixty and iHeartMedia. Our executive producer
is Guarnsey Sloan. Our researcher is Rachel Peterson. The artwork
for the show was created by Steve Penley. Special thanks
(21:37):
to the team at Gingish three sixty. If you've been
enjoying Newtsworld, I hope you'll go to Apple Podcast and
both rate us with five stars and give us a
review so others can learn what it's all about. Right now,
listeners of news World can sign up for my three
free weekly columns at gingishtree sixty dot com slash newsletter.
(21:57):
I'm new Gingrich. This is newts World.
I'm Newt Gingrich. Please watch Journey to America, my new
documentary on PBS about nine remarkable individuals who strengthen our
country through their pursue the American Dream. Tune on Tuesday,
January fourteenth at ten pm Eastern, nine pm Central on
PBS and the PBS app. On this episode of Newts World.
(00:22):
The number one goal for the Trump administration and Congressional
Republicans must be to pass what I would call the
tax cuts, Jobs and Affordability app. President elect Donald J.
Trump has described it as quote one big, beautiful bill.
A powerful economic bill must be the Republican's top priority
because it is the key to the twenty twenty six election.
(00:45):
We know the economy, inflation, and affordability are by far
the American people's biggest concerns. Here to talk about the legislation,
I'm really pleased to welcome my guests. A great long
term friend both to me and Callista, and somebody who
I have worked with now for virtually a generation. He
(01:05):
served as Assistant to the President for Economic Policy and
Director of the National Economic Council under President Trump from
nineteen eighty one to nineteen eighty five. He was an
Associate Director for Economics and Planning at the Office of
Management Budget during the Reagan administration. He is now the
host of the wildly popular Cudlow on Fox Business Network
(01:28):
weekdays at four pm. He's a Fox News contributor probably
knows as much about economics as anybody currently alive. Larry,
welcome and thank you for joining me on Newts World.
Speaker 2 (01:51):
Dagness, great, great, great pleasure.
Speaker 1 (01:53):
So let me just start with what Trump called one big,
beautiful bill. Do you believe we can see this, this
kind of comprehensive legislative package in twenty twenty five?
Speaker 3 (02:03):
I do.
Speaker 2 (02:04):
I think you get an early start on it. I
think that's what Jason Smith from the Ways the Means
Committee wants, and so does Speaker Mike Johnson. I think
you could have it done by Memorial Day. I mean, basically,
what are you doing. You're extending the tax cuts from
twenty seventeen, and there'll be a few add ons lower
(02:28):
fifteen percent corporate tax and tax free cash tips for
service workers and over time, and probably some kind of
tax break for seniors. But frankly, those are simple, relatively
minor adjustments. They're all pro growth. But the whole point
here is to get the blue collar boom working this year,
(02:53):
not next year or the year after. Get it working
this year. And I'll say another economic point. We'll get
to the legislative strategy, and.
Speaker 3 (03:02):
The payper is later.
Speaker 2 (03:03):
But another economic point is, unfortunately President Trump's going to
inherit Biden inflation, which is still running at a year
on year rate of two and a half to three percent,
and of course it's been up over twenty percent during
Biden's term. It's still there now. I make that point
(03:24):
because if you lower tax rates and you produce more energy,
and you minimize regulations, particularly on businesses and smaller business,
that supply side package will create more goods, more goods
(03:45):
and services chasing the same amount of money. In other words,
it will lower inflation from the supply side. This is
one of the things that people give Paul Boker. When
you and I were in Washington in the early eighties,
Paul Boker got a lot of credit for slaying inflation,
and he deserves But Ronald Reagan deserves credit for his
(04:10):
tax cuts, even though they were delayed a couple of years.
Speaker 3 (04:13):
His tax cuts produced a boom.
Speaker 2 (04:15):
In the economy, and that supply side growth helped to
vanquish inflation. So bringing it up to here, in mister
Trump's second term, I want to see a blue collar boom,
and I wanted to start in twenty twenty five.
Speaker 1 (04:31):
There's a significant energy component that alone is going to
start bringing down costs. If you add to that the
incentives to start businesses, the incentives to expand businesses, there's
no reason that this economy can't take off, and that
you couldn't have four or five percent growth in the
Reagan recovery. He was astonishing, as you know, because you
(04:51):
were right there, how fast the growth rate changed, and
how many new jobs, how much greater opportunity who's created
literally almost overnight.
Speaker 2 (05:01):
When the tax rates finally kicked in, the lower tax rates,
which wasn't until January of nineteen eighty three, I mean
some of them. There were small impacts in eighty two
but not much, and eighty one but not much. People
waited for the tax cuts to kick in. They waited,
(05:23):
and then yes, as you say, the economy started booming.
I mean, I don't know that you'll get twelve percent growth,
but as you say, you know you could have a
period of maybe six or eight quarters where economic growth
jumps to four or five percent before it might settle
down to say, three to three and a half percent.
Speaker 3 (05:42):
There's no reason why you can.
Speaker 1 (05:43):
The Reagan recovery lasted a very long time.
Speaker 3 (05:48):
We just kept growing eight years worth. They're absolutely right.
Speaker 1 (05:51):
There's been two fascinating studies of the gap that has
grown up between Canada and the US in terms of
gross domestic product and the gap that's going up between
the US and Germany. And we're simply despite Biden, in
the last four years, we have generally been moving towards
being better and better economically. And I think the breakthroughs
(06:13):
in computing and the breakthroughs and going into space and
expensively and materials technologies, you're just going to see a
continuing deflationary effective technology, which if you encourage people to
invest in it, is going to lead to really dramatic
increase in what's available and a dramatic decline on what
it's going to cost.
Speaker 2 (06:32):
Yeah, you know, it would be very healthy deflation. It
would come down because of economic growth and product improvements, innovation,
jumpyteri and gales of creative destruction.
Speaker 3 (06:50):
It's a productivity led deflation.
Speaker 2 (06:54):
We saw that by the way in the nineties, after
you and your Congress persuaded Clinton on a capital gains
tax and welfare reform, you had what I call good
deflation and you had a massive productivity boom. It was
really the information revolution, which spanned a long time. Well,
(07:16):
we're probably in the throes of an ai revolution right now,
and the applications for that probably just in the early stages.
But the key is we have to incentivize people a
to work, but b to invest in it. And that
comes back to this tax cut package, which is so important.
Speaker 1 (07:38):
And I think one of the most powerful offsets they
could include would be to go back and reinstate the
nineteen ninety six welfare reform bill which turned employment offices,
which had been dependency officers, turned them in basically to
employment officers, and getting people out to work to get
a job led to the largest reduction of children and
(08:00):
poverty and history. Because their parents, who are going to work,
their income was going up. It saved enormous amounts of money,
and of course it's a double win. You don't have
to pay for food stamps, you don't have to pay
for Medicaid, and by the way, that person's now got
a job and they're paying taxes, So it was a
huge part of what was going on. And I think
if they do this wisely, they can produce a package
(08:22):
that will be among the most revolutionary in American history.
And I think Trump certainly has the daring personality to
go out and try something on this scale, and frankly
with people like you who've already been through it, and
your point about when the deal went into effect, I
remember vividly. I was a junior congressman and because they
didn't have the tax cuts in eighty two, as you
(08:45):
pointed out, people waited to invest because they wanted the
tax break. Starting in January eighty three, the economy did
not have enormous growth. We lost twenty six seats. Well,
Trump had the same experience because the Republican leaders in
the Congress, we're determined to do Obamacare, repeal Obamacare before
they would get to the tax bill. They failed to
(09:06):
repeal Obamacare. It cost so much time. They didn't actually
get the tax bill through till December of seventeen, and
that meant that eighteen did not have a boom, and
we lost forty seats and we got Nancy Pelosi. And
so I'm really concerned as I look ahead to making
sure we keep the House in twenty six, because the
last thing we want is to have the Democrats in
(09:27):
charge of the House recreating the Pelosi anti Trump model.
And I think that the difference in Trump's ability to
get things done will be enormous, depending on whether or
not we're in a position to actually make sure that
we are able to continue to grow, continue to make
people happy, keep our word, and in the process, we
(09:47):
have to grow the majority. We can't just defend it.
It's too narrow, it's too small. We have to grow
the majority. And fascinatingly, there are thirteen seats currently held
by Democrats that Trump carried, and there's another Batche's eats
that are available that he got within five percent of.
So my hope is that when the bill's written, Iy've
sort of taken the artist's luxury here as a writer
(10:10):
suggesting that it ought to be I would say Tax Cuts,
Jobs and Affordability Act, because I think that captures everything
people were worried about economically.
Speaker 2 (10:18):
But it is one big, beautiful bill, one big beautiful
you gotta admit it.
Speaker 3 (10:22):
It has a good marketing ring to it.
Speaker 1 (10:25):
That's right, you know, and if you do that, and
then you put into the border stuff you need and
other things, so it does be on a pretty big bill.
You will remember that President Reagan gave a Oval Office address,
shifted the dynamic in the House. People thought Tip O'Neil,
the Democratic Speaker, was going to beat us by about
twenty five votes. Reagan gave that speech, the American people
(10:48):
got awake, they got on the telephone, and we carried
forty six Democrats, So it was a swing of seventy
something votes because Reagan got through to them that this
was about their pocketbook, it was about their family budget,
and they were excited. And when Tip said after he
was defeated that it was all this one speech and
that created a title wave, Well, that's not the Trump style.
(11:09):
And furthermore, we don't have three networks. Back then, if
Reagan gave an Oval Office address, it was on all
three networks simultaneously. He could blank at the country. But
what Trump does brilliantly is rallies and town hall meetings.
And my hope is that he will do about two
and a half months visit all of the districts. I
just described the thirteen that actually voted for him, in
(11:32):
the next twenty or twenty five that he got close to.
And if he's out there saying to people, do you
want more money in your pocket? Do you want life
to be more affordable? Do you want better jobs? Get
your congressman to vote with me. I think that he
will blow this thing straight through.
Speaker 3 (11:48):
Well.
Speaker 2 (11:48):
I think the basic principle here is if you delay
the tax cuts, you're going to delay the boom, and
you're going to delay the kind of Republican victory in
the mid term, very very important. Delay is the enemy
if you move now, and it's not that hard. You know,
the House is put together Energy Bill HR one, Border
(12:12):
Bill HR two. Jason Smith's got a tax bill up
his sleeve. They've been working on it for a year. Again,
it's just extending the tax cuts with some add ons.
They can get it done by a Memorial Day, by
late May some such and that will work. These things
take a few months to kick in and withholding raids
have to change and you have to adjust business and
(12:35):
corporate tax schedules. But you know, by the summer you'll
see the results of this. And I think you have
to have a coalition here. You're the legislative genius. But
just on this thought, you want to pull together your
tax cutting supply siders, your border closing people, who is very,
(12:56):
very terribly important, but also you're going to have your
limited government spending cutters. The PAGO has got to offsets
the spending's got to be part of this coalition. And
I think you can do that. I think Trump can
orchestrate that. I think the leadership in the House and
(13:17):
Senate can do that. There's a coalition there that can
work together. But I don't see any other obstacles to this,
and I think it would be an enormous mistake.
Speaker 3 (13:27):
To delay the tax cuts, as you had pointed out,
But it would be an enormous mistake.
Speaker 1 (13:42):
I'm nuw Gingdrich. Please watch Journey to America, my new
documentary on PBS about nine remarkable individuals who strengthen our
country through their pursuit of the American dream. From Albert
Einstein to Hetty Lamar Dozell make Kalilazad, we explore how
individual stories help shape our national identity. Watch Journey to America,
premier on Tuesday, January fourteenth, to ten pm Eastern, nine
(14:06):
pm Central on PBS and the PBS app can you
put your finger on what I think is going to
be the most complicated part of this bill, and that's
the offsets, which, legitimately, I can say this with some
(14:26):
pride because, as you know, while I was Speaker, we
passed the only four balanced budgets in the last century.
I'm pretty happy to be a fiscal hawk, but I
think there are ways we can get offsets in here
that every fiscal conservative will be very happy with. Why
are some Republicans so determined to have two bills? What
do they say to you about this whole idea of
(14:48):
doing the tax bill later and doing a simple bill
on the border initially. What do you think is driving then?
Speaker 2 (14:55):
The biggest argument I've heard to two bills is, I
guess i'd call it the complexity argument, that it's too
complex and would take too long to patch together the
tax cut piece.
Speaker 3 (15:12):
And it's again an argument that I.
Speaker 2 (15:15):
Didn't understand because eighty percent of what should be doing
is merely extending the twenty seventeen legislation. You're not reinventing
the wheel.
Speaker 3 (15:28):
Now.
Speaker 2 (15:29):
You'll also have some add ons on tips and overtime,
and that's good in the corporate tax cut, but the
bulk of it is just an extension, and in fact,
Mike Crapo is going to run the Senate Finance Committee.
I mean he argues that you have to use a
(15:49):
current policy baseline, which is what Obama used back in
twenty twelve, and you don't have to rescore the existing
tax cuts. Popular legislation need not be rescored. I mean,
they have the current services spending baseline that's never scored,
and so why should you have to score tax cuts
as a revenue loser when, in fact, I might add,
(16:13):
those tax cuts have probably brought in almost fifty percent
higher revenues than were estimated a bunch of years ago.
So the argument is this idea of complexity, and I
think it's a straw horse. I think it's a red herring.
Speaker 1 (16:28):
They've had people in the Senate side working on this
for a year in the Senate Finance Committee. The ability
that those guys in the same room and have a
genuine bicameral House Senate Republican package, I would think could
be a matter of a month or two if they
worked at it. These are smart people. Crapo used to
serve in the House. He understands the rhythm and I
(16:49):
must say that Jason Smith has become a really articulate,
effective shair of ways and means. So I think I'm
with you on that part. And I think you raise
an important point, which the fact I'm going to go
back and work on, which is normally CBO would start
with the current services budget, which would mean they would
assume the extension that it shouldn't cost anything because it's
(17:12):
built in the current law.
Speaker 3 (17:14):
Right. See, that's the thing.
Speaker 2 (17:15):
This current law becomes current policy, and that's what the
baseline should reflect. This is Mike Crapo's argument new and
it's a brilliant argument made, I might add by a
Harvard lawyer. Okay, don't forget that he's a very smart fella.
He's out there someplace in the Dakota's or Idaho or
(17:37):
I don't know where those places are, but he is
one smart guy. He ran the Banking Committee and now
he's going to be running the Finance Committee. And it's
a brilliant argument. We should treat tax policy the way
we treat spending policy. Current law's current law policies don't change.
You don't have to rescore everything. It's not necessary. But
(17:58):
what they do is they never rescore the spending. All
they want to do is rescore the tax revenues. But
even that's phony because CBO and Joint Tax always wrong,
as you know, NWT. I mean, go back and look
at their estimates before the bill in.
Speaker 4 (18:16):
Twenty sixteen, at the bill in twenty seventeen. They look
at their updated estimates in twenty eighteen, twenty two, twenty four,
they're like, they've missed by fifty percent on revenue.
Speaker 3 (18:28):
They miss carpet revenues. I don't know.
Speaker 2 (18:31):
I think it's close to one hundred percent. They missed
the repatriation revenue. We made over a trillion dollars of
repatriation money coming back to the US because we stopped
double taxing it and we put a reasonable.
Speaker 3 (18:45):
Rate on it. They're all wrong, They're always wrong. Jd.
Vance had it right in the debate.
Speaker 2 (18:51):
He said the experts get it wrong, and that's exactly right.
Speaker 1 (18:55):
I think this will be one of the Trump revolutions,
will be turning around those two institute or even potentially
replacing them. We have to farm out congressional estimates to
three private sector firms and have all three there in
public because, as you correctly point out, these two institutions
are consistently wrong.
Speaker 3 (19:14):
They're just wrong. They're just wrong.
Speaker 2 (19:16):
I mean, it's like the governing philosophy in Washington amongst
the bureaucracy civil servants. If government spends your money, it's okay.
But if you spend your money, it's not okay. So
government takes a little more of your money, it's just fine.
We call that economic growth stimulus. But if you get
(19:38):
to keep more of what you earn, it causes huge
deficits which drive down in the economy and drive up
interst rates.
Speaker 3 (19:45):
It's just utter nonsense. But I think people see through that. Miss.
Speaker 2 (19:48):
Trump is a transformational figure, and he is going way
back to twenty fifteen when a bunch of his.
Speaker 3 (19:55):
First work on his tax cuts.
Speaker 2 (19:57):
He has always been on the supply side, and he
will remain on the supply side.
Speaker 3 (20:02):
He likes me, but he loves our laffer. He loves
our laffer.
Speaker 1 (20:06):
But I think part of this is because he was
a real businessman. He understands incentives.
Speaker 3 (20:11):
You know.
Speaker 1 (20:11):
Jack Camp used to say, how long does it take
for this policy to have an impact? He said, well,
drop a twenty dollars bill on the pavement and see
how long it takes somebody.
Speaker 3 (20:20):
To pick it up right exactly.
Speaker 1 (20:22):
You know. And I think you're going to see people
leaning forward once the bill is clear, and once it's
out in the open, even before it passes, you will
see businesses begin to move towards investment and move towards
expansion because they'll see the kind of environment where it's
going to pay them to be aggressively pro American and
(20:44):
to produce in the United States.
Speaker 2 (20:45):
Yes, so I appreciate you plugging my show.
Speaker 1 (20:50):
Well, first of I want to thank you, but I
also want to say I love going on your show.
People can watch Cudlow on Fox Business Network weekdays at
four pm. They can also visit FoxBusiness dot com. And
you do an amazing job. I'm so grateful that you
would take the time to be with us today.
Speaker 2 (21:08):
No, thanks, dud, I can spend another hour with you.
Speaker 3 (21:10):
You're terrific.
Speaker 1 (21:15):
Thank you to my guest Larrycudlow. You can learn more
about President at Trump's plan to work with Congress on
our show page at neut world dot com. Newtrald is
produced by Ganglish three sixty and iHeartMedia. Our executive producer
is Guarnsey Sloan. Our researcher is Rachel Peterson. The artwork
for the show was created by Steve Penley. Special thanks
(21:37):
to the team at Gingish three sixty. If you've been
enjoying Newtsworld, I hope you'll go to Apple Podcast and
both rate us with five stars and give us a
review so others can learn what it's all about. Right now,
listeners of news World can sign up for my three
free weekly columns at gingishtree sixty dot com slash newsletter.
(21:57):
I'm new Gingrich. This is newts World.
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