October 15, 2025 • 30 mins
Newt talks with Vance Ginn, former associate director for economic policy at Office of Management and Budget (OMB) about the economic impact of the government shutdown. They discuss the intricacies of government spending, the role of the Office of Management and Budget (OMB), and the challenges of achieving a balanced budget. Ginn emphasizes the need for fiscal responsibility, highlighting the importance of reducing waste and inefficiencies within government operations. Their conversation also covers the impact of the Dodd-Frank Act and the Consumer Financial Protection Bureau, with Ginn arguing for a reduction in government intervention in consumer markets. Additionally, they address healthcare reform, advocating for a system that prioritizes patient care over bureaucracy.
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Speaker 1 (00:04):
On this episode of news World, the government shut down
looms over Washington and people wonder if Congress will ever
come to an agreement to reopen the government. Here to
talk about the government shutdown in the current economic forecast,
I'm really pleased to welcome my guest, doctor Vance Gibb.
He is the former chief economist for the Office of
Management Budget, the founder and president of Gain Economic Consulting,
(00:27):
and the host of Let People prosper a podcast. Vance,
Welcome and thank you for joining me again on newts World.
Speaker 2 (00:47):
Speaker Gingrich, It's always a pleasure to be with you
and all the.
Speaker 3 (00:50):
Work that you've done.
Speaker 2 (00:51):
Thank you for joining the guiding light of where we
should be heading instead of the fiasco we have in
DC today.
Speaker 1 (00:57):
You just know so much. I was only looking forward
to this because there's so many different things going on,
and given that you served as the first President Trump's
White House Director of the Office of Management Budget from
June twenty nineteen to May twenty twenty, you really have
an overview which I think for most people that really
understand omb. Can you talk a little bit about what
it was life and what it was like to be
(01:18):
the director.
Speaker 3 (01:19):
So I was actually the chief economist. Russ Vote was
my boss.
Speaker 2 (01:22):
He was the acting director at the time, so I
was a chief economist directly under him, but I was
one of seven in leadership of a five hundred and
thirty five person agency at that time. I think there's
been some furloughs since then. But OMB is fascinating. I mean,
it really controls a lot of where the money is flowing.
Congress passes it, as you know from the budgets you
passed back in the day, and then the OMB gets
(01:44):
that money and then they distributed out to all the
executive agencies where things happen. There's associate directors for healthcare,
for education, for different ones that really oversee that money.
And so OMB really has a step right there at
the White House and the Eisenhower Executive Office Building. I
remember where I would go into the Navy mess anytime
I wanted to and see all these people that talk
(02:06):
to people and really gain knowledge and insight from them
along the way. But you're right, O, and B has
a huge influence on the budget process, and right now.
Speaker 3 (02:14):
With Russ Vote there again, he's a big fiscal hawk.
Speaker 2 (02:17):
I think he's doing a lot of the right things
that are there we need to understand not only what
OMB does, but how much that Congress also needs to
start doing their job as well.
Speaker 1 (02:26):
You've known Russ, the fact is he's in a central
role right now in this shutdown and then trying to
get back to a balanced budget. What was your sense
of him as a boss?
Speaker 2 (02:37):
Well, I mean, look, his key thing was at that
time was let's find savings wherever we can, Let's dig
out the ways fraud and abuse. There was a big
focus on discretionary spending, which you know is maybe a.
Speaker 3 (02:49):
Quarter of the budget.
Speaker 2 (02:50):
But his point was if we can't get our own
fiscal house in order on discretionary things, how can we
go ask the elderly or the older age or they
who are on Social Security to have reform for social
Security or Medicare.
Speaker 3 (03:01):
And so I think there were some good points there
that was made.
Speaker 2 (03:03):
And so he had a steadfast vision of reducing the
size and scope of government, and that was something that
I totally agreed with and something that we kept pushing
for each day while I was there from June twenty
nineteen to May of twenty twenty.
Speaker 1 (03:16):
Dylan, know you have an insider's vio from your perspective.
How effective has the Department of Government Efficiency, so called
DOZE been so far, and do you think is achieving
the goal of cutting waste?
Speaker 2 (03:27):
It's a great question, Speaker, and I think whenever I'm
looking back at it, we got to think about Okay,
whenever they went in Elon Musk and others, they said
we're going to find two trillion dollars in savings. I
think that was kind of a pipe dream. But it's
nice to have a north star of where you want
to be at some point. I think at the end
of the day Congress they were sended about ten billion
dollars worth of money.
Speaker 3 (03:49):
So that's good, that's a good start.
Speaker 2 (03:51):
But there was also a lot of contracts that were
cut and saying, look, why are we spending money on
all this ridiculous stuff, and those.
Speaker 3 (03:57):
Contracts, as you know, we're out in the future.
Speaker 2 (04:00):
So I think we're not only seeing maybe some smaller
amount of savings today, but the savings will also go
out in the future. And I'm not sure exactly what
those amounts are now, but at least we're starting to
look at the fraud, waste and abuse that's within government
because it's large.
Speaker 3 (04:14):
I mean I've done some work on healthcare.
Speaker 2 (04:16):
For example, I have a new book called Empower Patients
with doctor Dean Waldman, where we go through health care
and everything else. And we spend across the country five
trillion dollars on healthcare every year, and from our estimates
and looking at other research, about half of that goes
to bureaucracy and regulation and paperwork.
Speaker 3 (04:33):
It doesn't go to patient care.
Speaker 2 (04:35):
And so if that's half in healthcare, just imagine what
it is across many other areas of our economy.
Speaker 1 (04:40):
When you think about it. My dad was a career soldier,
and I remember in the late fifties under Eisenhower, they
had a reduction in force, and we had actually some
officers who were reduced to being sergeants, but stayed in
because they wanted their pension. So when I see about
reduction force, I don't see that as a gigantic thing.
(05:01):
But it seems to have shocked the Washington establishment that
the Trump administration is actually reducing people permanently as part
of the shutdown. What's your reaction to that strategy.
Speaker 3 (05:12):
I think it's important.
Speaker 2 (05:13):
I mean, if you think about one of the main
cost drivers of just the federal government itself of the operations,
the labor the workers, that's a huge cost, and of
course they get pretty large pension funds and everything else
that are tied to that, and so that increases the cost.
So one way to reduce the cost is reduced in
the number of workers at the same time.
Speaker 3 (05:32):
Going back to Elon Musk, I.
Speaker 2 (05:33):
Mean, look, whatever he took over Twitter, and I know
Twitter is X now and it's not the federal government
or anything like that, but he cut the workforce substantially,
I think by eighty percent, and they still found ways
to improve. I mean, X is probably better than it
ever was today. What if we could do something similar
to the federal government. You're always going to have some
cogs in the wheel, if you will, of moving paperwork
(05:53):
around and making sure the regulations are checked and stuff
like that. But in a period of time when we
have a lot more technology and AI and other things
that are going on, I think there's a great way
to improve.
Speaker 3 (06:04):
Some efficiencies if we can.
Speaker 2 (06:06):
It's difficult in the federal government to get efficiencies, but
I think this is one way to do it. I'm
glad that they're looking at how many employees are in
certain areas of government and looking at those contracts and
figuring out how can we get more money.
Speaker 3 (06:18):
Back into the private sector.
Speaker 2 (06:19):
Because with US running two trillion dollars a year in
deficits last year was one point eight trillion dollars and
thirty seven trillion dollars in national debt one trillion dollars
plus and just net interest payments on the debt, we've
got to start cutting somewhere. And so whether it be
from what DOGE is doing on contracts and other cuts
versus during the shutdown, permanent layoffs at the federal government.
(06:40):
I don't know how many of these at the end
of the day, Speaker will be permanent compared to furloughs
that they'll pay them back, But it does look like
russ Vote and others that are there are really trying
to find ways to cut the government permanently.
Speaker 1 (06:52):
Eisenhower was very tough on spending. He would have agreed
with Treasure Sectory Best on recent comment that the problem
is not revenue, the problem is spending. And I know
you've said something very similar that we must be clear
that the shutdown is just a symptom. The disease is
runaway government spending. How do we get across to the
average American the time bomb that is building in the
(07:15):
scale of the federal debt and the amount we're not
paying an interest on that debt. I mean, how can
we communicate that?
Speaker 2 (07:21):
Well, I think in some sense, the federal government's doing
it for us.
Speaker 3 (07:25):
Speaker.
Speaker 2 (07:25):
I mean, if you look at the inflation that we
had during the Biden years, people saw that measurably in
their own life and saw that they couldn't put food
on the table, they couldn't make ends meet every month,
and they had to get multiple jobs and all the
things that that created. And while in my view, government
spending doesn't create inflation, what it does do is when
you run deficits, the Federal reserve, well, interest rates would
(07:48):
go up. Well, the Federal Reserve doesn't want interest rates
to go up, so they come in and buy the debt.
They print money, and that money printing creates the inflation
that's around us, which is a direct result of the
overspending of Congress. What I've been trying to do talking
to college students and others across the country is to say, look,
we saw the direct effects from this inflation that was
out there. Yes, interest rates are up higher than they
(08:08):
were back then as well. But if you just look
at the cost of everything that's going around you, this
is the direct result of the overspending by Congress and
the FED printing too much money. And I think if
we could start getting those things tied together, which they
should be, then we have a better presentation of the
cost of overspending by government.
Speaker 1 (08:26):
One of the areas I've been fascinated by is the
degree to which the Doud Frank Act was in fact
a bad idea and that some of the things that
created are I think disastrous. And when Obama signed the
Consumer Protection Act under law and created this totally independent agency,
I think one of the very few places in the
government where they generate their own money, and they've gon
(08:49):
to be huge in terms of number of people that employ.
Talk a little bit about why the CFPB, the Consumer
Finance Protection Bureau, Why is it a bad idea and
what do we need to do about it?
Speaker 3 (09:01):
I think you don't have to look too far speaker.
Speaker 2 (09:03):
I mean, we had Elizabeth Warren, she was the first
director of the CFBB back in the day, and we
know how socialist she is. Why do we need the
government protecting consumers consumers are best predicted by the marketplace
of whether or not they want to buy something or not,
and that allows for volunteer exchange to happen. We don't
need a whole government agency. And the way that they're
(09:25):
finance right is through the Federal Reserve. So the Federal
Reserve is running net operating losses of over two hundred
billion dollars a year right now, and yet they're still
funding the CFP at the same time. What I've been
trying to get across to my former boss Russ Vote
that we were just talking about, is he's right now
the acting director of the CFPB and the director of OMB.
Why don't we find ways to continue to cut what
(09:47):
they're doing? And they're doing all these bad rules as well,
related to the Dodd Frank Act back in was it
two thousand and nine during the Obama administration, is this
section ten thirty three rule, which is they're calling to
open banking rule, but really it's just forcing information from
bigger banks to give to a lot of other banks.
And I don't know about you, speaker, but the first
thing I learned in economics is nothing is free. Nothing
(10:09):
is free out there. The government shouldn't be mandating these
sort of things. And so this is just one area
of the CFPB, the Section ten thirty three rule and
other things they're trying to do. We're just overstepping the
bounds of a limited government form of the roles of
limited government.
Speaker 1 (10:25):
If you could, would you just abolish it? I would.
Speaker 3 (10:29):
I think there's no reason for it. I mean, there's
no constitutional direction.
Speaker 2 (10:32):
And so you know, Speaker, I don't understand why we
would create something that's funded by another independent agency.
Speaker 3 (10:38):
And they did that.
Speaker 2 (10:39):
They did it because they didn't want Congress to have
to fund it, because they knew that there was a problem.
I think that's another reason why I should go away.
Speaker 1 (11:04):
Well, it strikes men. I think this is where Republicans
maybe aren't quite intellectual enough. There's a whole wave of
Obama Biden laws and Obama Biden rules through that twelve
year period between the eight years of Obama and the
four years of Biden, and the Biden administration was essentially
just Obama carried forward in terms of staffing and attitude.
(11:27):
But those twelve years were disastrous. I think, whether it's
in healthcare or as you point out, in the Consumer
Financial Protection Bureau or in a host of other places,
we ought to be much clearer about how wrong these
approaches are. I mean, the country instinctively opposes big government
socialism and understands that it doesn't work. And I think
(11:49):
that we can really profoundly change the system and have
the country with us if they understand that it's principled
and it's based on the failures of Obama and Biden.
Speaker 3 (12:00):
Yeah, great points there.
Speaker 2 (12:02):
And just to add to that to kind of make
it relevant to what's going on today with this federal
government shutdown, and as we're recording this, I mean it's
been shut down now for a couple of weeks, and
I think when you look at this, what is the
real reason. Well, it's because Democrats want to add one
point five trillion more dollars in spending. I mean, the
Republicans came in and we could argue whether or not
this was a good idea speaker, that they had a
(12:22):
clean cr that was basically extending all of Biden's sort
of spending to try to get a couple more months
or some more time to talk about healthcare reforms and
other things. And the Democrats wouldn't even agree to that,
and this was Biden's spending. What the Democrats are trying
to do is to extend the emergency declarations during COVID
of more people were not able to age out or
(12:44):
income out off of Medicaid. They made it all these
suspensions of these rules and everything else, and they want
to keep those people on that are now making way
more than what you should be eligible for to get
on Medicaid. We're up to almost twenty percent of people
on Medicaid, when initially when Medicaid was created, there was
only about five percent. So it's unfathomable to me that
(13:05):
the Democrats would want to continue to push this. Well,
I know why they want to do it, right, Speaker,
is that they want universal healthcare. If the more people
they get on the program, the more difficult it is
to get them off.
Speaker 3 (13:14):
And that's why this kind of fight is going on.
Speaker 2 (13:16):
And I don't know when the Democrats, or I guess
they're going to give in at some point to get
the government open again, because at the same time, we've
got to look at the overall spending, and I think
that's where healthcare is a great way to do it, and.
Speaker 3 (13:28):
We don't need money going to illegal aliens.
Speaker 2 (13:31):
Just like we don't need it to go to Americans
who have higher incomes and have aged out of the program.
Speaker 1 (13:36):
You wrote, I thought it was very powerful that the
US healthcare system is failing Americans because awards, bureaucracy not care.
What do you mean by that and how did the
system become so misaligned?
Speaker 2 (13:50):
In our latest book on Empowered Patients, doctor Dean Waldman,
and then I have a paper also at Americans for
Tax Reform where I'm a staff economist there Empower Patients Initiative.
We talk a lot about how the root cause of
the healthcare crisis in America is government. It's a third
party payer system, right, whether it be Medicare, Medicaid or
(14:10):
other sort of government programs. Also, private health insurance is
a third party payer and I don't have necessarily anything
wrong with them, but we've been forced into private health
insurance because of government decree back in the World War
two wage and price controls whenever there was no way
to give out additional wages, so employers started providing employer
(14:30):
sponsored health insurance and then there was a tax break
for it, and so that's crept into the system at
us not paying the amount of money that we ordinarily
would for health care, and I think we would actually
pay much less if government wasn't forcing us into the situation.
So all their regulation, red tape unnecessary rules of pushing
us more and more into healthcare through our employer and
(14:52):
on all these government spending programs. Because about sixty cents
of every dollar from our research and health care is
spent by government, meaning us the taxpayer. It's a redistribution
sort of project they have going on, and so when
you look at all those costs, you get about fifty
percent of the five trillion dollars we spend, so let's
say two and a half trillion is going to something
that's not patient care. And I think you could increase
(15:16):
patient care, or you could cut taxes and give more
money back to people so they could take care of themselves.
But I think this also is a big problem here.
Another issue that I've been talking a lot about is
a dependency crisis. I think we're in independency crisis, whether
it be Medicaid and Democrats wanting to put more and
more people on it, or other types of health care
expenditures as well. There's this a lot of the pendency
(15:38):
on government, meaning someone else the taxpayer to pay for
these things.
Speaker 1 (15:41):
Yeah. For some reason, I think because they are big
government socialists. Democrats prefer anything which takes away your individual
strength and forces you to rely on government. It's amazing
that their model is essentially a totally government centric America,
which would of course be radically different.
Speaker 2 (16:00):
On that point if I could is I think oftentimes
I'm a Christian and God is above government. But I
think too often we get people like in the Democrats
who want to believe that government is God the lower
case G, and they wanted government to do everything.
Speaker 1 (16:13):
I think that's right. You know. One of the things
I'm working on now is that we have, with new
technology and new science, we have an opportunity to help
Americans who are challenged and to literally move from a
focus on disabilities to a focus on capabilities and in
a sense to liberate millions of people to have a
much fuller life and a much more self reliant life
(16:37):
than we currently think about when we put them into
sort of a disabilities category. And that's an example of
the transition. We did this, as you know, when I
was speaker with moving from welfare to workfare, and the
effect was enormous and the number of children who left
poverty was the largest number in American history, and it
was because their parents were going to work, which not
only increased their revenue, but it had the good virtue
(17:00):
that children were learning. But on Monday, it's okay to
go to work and not just sit around and wait
for somebody to send you a check. So we were
changing the whole culture. The Democrats, to a surprising degree,
just hated They hated the idea of people being independent,
which I thought was truly bizarre, but plent. They go
to a totally different topic for seconds. You've written something
(17:20):
I believe in strongly and would like to see the
Trump administration pick up, and that is that we should
index capital gains. Could you describe why you think that's important.
Speaker 2 (17:30):
It's substantial right now when you think about your stocks
or your housing value, other things that you may be
taxed on whenever you get those realized gains that's based
on capital gains, taxes, things of that nature.
Speaker 3 (17:44):
But that's when you realize it, when you.
Speaker 2 (17:45):
Actually have the amount of money coming into your pocket
and then you can pay those taxes. That's one thing,
because that's a source of income. However, what we've seen
within the capital gains and within the stock market and
things that nature. Just use that as an example, is
that over time, part of the gains are due to
inflationary pressures across the economy, meaning the Federal Reserve printing
(18:07):
money and things of that nature that are not real returns.
In fact, it's taxing unrealized capital gains over time because
of that aminum inflation that's happening. In other words, we
are being taxed too much and therefore disincentivizing the amount
of savings and capital that can go into businesses. Because remember,
more than half of Americans now have some form of
(18:28):
money and stocks and savings through four.
Speaker 3 (18:30):
One K and other things that are out there.
Speaker 2 (18:32):
I think it's closer to sixty percent nowadays actually, And
so it's not just the quote unquote rich, it's a
broad swath of Americans across the country. And so indexing
for capital gains is important to make it measured on inflation.
That way, you can adjust for the nominal gains to
real gains in economic terms or in other words, on
the things that you actually have money out for and
(18:54):
have real gains over time. And so I think this
is also huge for the economy. If there was not
the emplaytion tax, if you will, on capital gains, there
would be more money put into the stock market, more
returns for those who were savers, and more returns for
businesses that are receiving those funds, and so the economic
gains are substantial, and.
Speaker 3 (19:12):
So I think this is something that needs to be done.
Speaker 2 (19:14):
When I was at OMB in the first Trump administration,
we looked at this quite a lot.
Speaker 3 (19:18):
We found at OMB that this was a step in
the right direction.
Speaker 2 (19:22):
Unfortunately, someone in the administration, mainly the Treasury, didn't agree
with us, and so they pushed back and ultimately Minuchin
and others won that debate.
Speaker 3 (19:30):
But I think it is something that needs to be
looked at.
Speaker 2 (19:33):
I would like to see Congress do it, Speaker, I
think that would be the best way to do it,
but I think there's also a path for Trade Secretary
Vessett and the Treasury to do this in the meantime
until Congress can get something past.
Speaker 1 (19:45):
If you were looking at negotiating once the government shutdown
is over, and I've been pretty clear that they have
to reopen the government before we negotiate, and I think
Trump's pretty clear on that, and certainly, Mike Johnson and
John Thun have been clear on it. So one they
get around on negotiating, do you have a sort of
scorecard for how you would approach what's a good Republican
(20:07):
solution on where we are with particularly this whole COVID
insurance subsidy, but also just in general, if you were
going into that negotiation, what would you want to have
as the things Republicans should insist on.
Speaker 2 (20:21):
Starting off with the COVID era tax credits for Obamacare,
I mean, all those should go away.
Speaker 3 (20:26):
To me, there's no need for it.
Speaker 2 (20:27):
Even the Body Administration ended the emergency declaration, and so
we should go back to some sense of normal, going
back to before the covid Era. I mean, I would
love to see the budget go back to the twenty
nineteen levels. The last budget that I helped write for
the President, for fiscal year twenty twenty one, the budget
was four point six trillion dollars, and at the time.
Speaker 3 (20:45):
We still were like, this is too much, this is
too much.
Speaker 2 (20:48):
And the latest numbers for fiscal year twenty twenty five
just came out and it was seven trillion dollars.
Speaker 3 (20:53):
We're up to seven trillion dollars.
Speaker 2 (20:54):
Now, I know it's a herculean effort, if you will,
to go back to the twenty nineteen levels, but we've
got to think about cutting that at some point. And
also at America's for tax reform with Grover Norquist and
all of them who are doing some great work, we've
been working on sustainable budgeting, which means that if once
we get back to a better level of government, which
should be cut.
Speaker 3 (21:13):
But let's say we start where we're at today.
Speaker 2 (21:15):
We need to have some sort of growth limit, a
spending limit, and we've argued that the maximum should be
population growth plus inflation. And if you limited to population
growth plus inflation and we had one percentage point more
in economic growth, we could balance the budget in five years.
So just limiting the growth of spending and having more
economic growth for more revenue would allow for us to
(21:36):
balance the budget in five years.
Speaker 3 (21:38):
And so if I was in that room, I.
Speaker 2 (21:39):
Would be making the case that, look, we've got to
get our fiscal house in order.
Speaker 3 (21:43):
Let's get rid of the COVID era tax credits.
Speaker 2 (21:45):
The emergency is over, let's get out of that business,
and then let's limit the growth of spending on population
inflation as a maximum, and then also let's have more growth,
let's find ways to deregulate the economy, as the Trump
administration is starting to do.
Speaker 3 (21:58):
I would like to see us on the one big
beautiful bill.
Speaker 2 (22:01):
They extended the Trump era tax cuts of the Tax
Cuts and Jobs Act.
Speaker 3 (22:04):
And there were some other things in there.
Speaker 2 (22:06):
But then there's still some key reforms that we could
have that would allow for more economic growth. In getting
government out of the way, whether it's an energy, healthcare,
and other places, would allow more money in people's pockets,
and that way we could see more economic growth and
we can balance the budget in a faster time period.
Speaker 1 (22:40):
How strongly would you oppose ideal coming out of this
shutdown when they sit down and negotiate, How strongly would
you oppose anything which increase the deficit?
Speaker 2 (22:51):
I would be opposed to it, and just in general
and principle, but I have to look at what the
details are right, what are we giving.
Speaker 3 (22:57):
Up in order to get And you know there's always
trade offs.
Speaker 2 (23:00):
Even in economics, thomasol said, there're no solutions, only trade offs.
And you know this speaker from going in those back
rooms that there's always trade offs that are going on
and so I would try to be a hardliner. I
believe myself is a fiscal hawk, and so I would
try to keep pushing us not to get to a
place where weere we're increasing deficits, but if there is
some sense of pro growth policies that are in there
(23:20):
that on a static basis would increase the deficit a
little bit, but on a pro growth policy or a
dynamic scoring would balance the budget or bring down the deficits.
That's something that I think we should look at on these negotiations.
Speaker 1 (23:32):
How big a challenge in that sense is the way
Congressional Budget Office scores things.
Speaker 3 (23:37):
It's a big challenge.
Speaker 2 (23:38):
I mean, it's something that whenever I was at OMB,
we looked at it, but we would always come up
with our own projections. I was the associate director for
Economic Policy, had a team of about ten PhD economists
and some others who were looking at efficiencies within government,
and we had some different types of models we could
look at and everything. We would do it from a
dynamic perspective every time, because we live in a dynamic
(23:59):
world and we don't live in a static world. Behaviors
changed and centers change, things of that nature. And so
the CBO, I think provides a good service in the
sense that it gives us some numbers, but I wish
they would be more realistic. In fact, I would argue
if I was CBA director, which I don't know if
i'll ever be one day, but if I was, why
don't we look at a range, maybe more of a
spectrum of here's the static results and here's the dynamic.
(24:22):
Don't publish just one and then that way you let
the public decide, you let congressmen and women decide what
they want to look at.
Speaker 3 (24:28):
I think that would be a better way.
Speaker 1 (24:30):
Isn't it a fact that historically some of their estamates
have been off by like trillions of dollars?
Speaker 3 (24:36):
Yeah?
Speaker 1 (24:36):
I mean, how can you have a yardstick which is
that elastic?
Speaker 3 (24:40):
Exactly? Yeah, you can't. You can't if.
Speaker 1 (24:44):
I've been trying to get the House and Centate budget
committees just to hold hearings, and insists that the Congressional
Budget Office actually show us the algorithms and the formulas,
all of which are right now a hidden secret black
bucks mm hmmm, totally unaccountable for the process they use.
Speaker 2 (25:02):
And I had the former CBO director Douglas holatez Iken
on my podcast Lepio prosper Show, and we talked about
all this stuff, and he was trying to move us
more in that direction of dynamic forecasting and everything else.
But it's difficult when you have the belly of the
beast within government and those bureaucrats who have been there
for a long time. It's very difficult to change up
some of those dynamics. But I hope that we can
(25:23):
get to that point at some point, because if CBO
is to provide any service at all, it's the Congressional
Budget Office, meaning that they should be making as accurate
a forecast as possible. And whenever we're looking at this
from a budget or senateive finance perspective looking at appropriations,
it's already difficult enough to write a budget, much less.
Speaker 3 (25:42):
When you have bad numbers going into it.
Speaker 1 (25:44):
Tell us all just for a minute, because it's such
an important long term issue. About your book on health reform.
Speaker 2 (25:51):
Yes, so, Power Patients, Two Doctors, Cure for Healthcare is
the name of the book. You can find a Durrance
Publishing dr Nce. We had the soft launch here recently.
We're going to get more of that come out, but
we really go into and break down the healthcare system,
where the money is going, how it's tied up to
so many rules and regulations, paperwork and all these other
(26:14):
things versus money going to actual care that's out there.
Speaker 3 (26:18):
I mean.
Speaker 2 (26:18):
Also the paper is that Americans for Tax Reform and
Power Patients Initiative, we not only take on these huge
costs of healthcare and how it's not helping people where
many people are really you know, speaker waiting in line,
they're dying in line. Dying in que is what we've
called because if you're on Medicaid. For example, I live
in Texas near Austin, Texas, only a third of doctors
(26:40):
across Texas take new Medicaid patients, and so there is
becoming more and more of a longer line of people
who are on Medicaid. At the same time that they're
putting more people on Medicaid, we're seeing that they can't
even get access to quality care. And so the big
points here are that covers is not equal care, and
so we need to separate those two. We also argue
that instead of having an employer sponsored health insurance direct
(27:03):
tax credit, it should go to the employee. The employee
should have this account and a no limit health stavings
account to where you could put as much money you
want in there, to use it for health care, to
use it for health insurance, whatever you want.
Speaker 3 (27:14):
But don't force people to do that.
Speaker 2 (27:16):
We also think that block grants to states for Medicaid
and SNAP and everything else, that should be a fixed amount.
Maybe you increase it by inflation or some metric over time.
But let's get away from this pay as you go
sort of system where the state manipulates things to spend
more and then brings down more money from the federal government,
meaning socializing those costs across the country. We should get
(27:38):
back to a system of federalism where states can put
in place their.
Speaker 3 (27:42):
Own Medicaid reforms.
Speaker 2 (27:44):
And the other big thing here too that we look
at is finding more ways for the doctor patient relationship
is getting rid of that third party. Because in most
volunteer exchanges, when you go buy gas, or you go
buy a stickers bar at a convenience store or whatever
else it is, you pay for that voluntarily and make
the transaction.
Speaker 3 (28:03):
In healthcare, we don't do that.
Speaker 2 (28:04):
That's one reason that it's jacked up the prices so
much and it's led us to have a lot of issues.
I also just published a paper continuing with this on
biotechnology and are we going to hand biotech to Beijing?
And this is what the Americans for tax reform, because
what we're doing is we're trying to say we need
a lower drug prices. And the TRUP administration's been out
there advocating for this in a lot of ways, but
(28:25):
we got to be careful speaker, where when we look
at this, if we have the most favorite nations sort
of pricing and bring everybody down to the level of
other countries, it also will likely dry.
Speaker 3 (28:36):
Up a lot of the R and D and innovation.
Speaker 2 (28:38):
Each new drug costs about two billion dollars on average,
it takes about ten years to come to the market.
I think there's bigger reforms like FDA streamlining. A lot
of this is because of the intellectual property and I
think that there's contract law on things that nature need
to take care of this. But we are waiting on
these life saving drugs and making it more expensive in
the process. And so between bringing the doctor patients back
(29:01):
together and empowering patients, I really believe that we can
have a better healthcare system that's more affordable and better
quality in the process.
Speaker 1 (29:09):
I think you're exactly in the right direction, and I
encourage people to get your book and to realize that
there's a lot of thought and a lot of ideas
and we have to dramatically improve the current system. It's
too expensive, it slows down the rate of innovation, and
it focuses on paying for sickness rather than paying for health.
So I think you're onto a lot of big ideas, Dance.
(29:31):
I want to thank you for joining me. I think
this has been really informative, and I want to mention
you do have a podcast called Let People Prosper, which
our listeners can find advanced in dot com or on
Apple Podcasts, and we will have that link on our
show page. So thank you very much for being with me.
Speaker 3 (29:48):
Hey, thank you so much, speaker. It's always a pleasure.
Speaker 1 (29:53):
Thank you to my guest, doctor Van Skin. You can
get a link to his podcast, Let People Prosper on
our show age at Newtsworld dot com. Newtsworld is produced
by ginglishtreet sixty and iHeartMedia. Our executive producers Guernsey Sloan.
Our researcher is Rachel Peterson. The artwork for the show
was created by Steve Penley. Special thanks to team at
(30:14):
Gingishtree sixty. If you've been enjoying Newtsworld, I hope you'll
go to Apple Podcasts 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
gingrishtree sixty dot com slash newsletter. I'm Nute Gingrich. This
is Newtsworld.
On this episode of news World, the government shut down
looms over Washington and people wonder if Congress will ever
come to an agreement to reopen the government. Here to
talk about the government shutdown in the current economic forecast,
I'm really pleased to welcome my guest, doctor Vance Gibb.
He is the former chief economist for the Office of
Management Budget, the founder and president of Gain Economic Consulting,
(00:27):
and the host of Let People prosper a podcast. Vance,
Welcome and thank you for joining me again on newts World.
Speaker 2 (00:47):
Speaker Gingrich, It's always a pleasure to be with you
and all the.
Speaker 3 (00:50):
Work that you've done.
Speaker 2 (00:51):
Thank you for joining the guiding light of where we
should be heading instead of the fiasco we have in
DC today.
Speaker 1 (00:57):
You just know so much. I was only looking forward
to this because there's so many different things going on,
and given that you served as the first President Trump's
White House Director of the Office of Management Budget from
June twenty nineteen to May twenty twenty, you really have
an overview which I think for most people that really
understand omb. Can you talk a little bit about what
it was life and what it was like to be
(01:18):
the director.
Speaker 3 (01:19):
So I was actually the chief economist. Russ Vote was
my boss.
Speaker 2 (01:22):
He was the acting director at the time, so I
was a chief economist directly under him, but I was
one of seven in leadership of a five hundred and
thirty five person agency at that time. I think there's
been some furloughs since then. But OMB is fascinating. I mean,
it really controls a lot of where the money is flowing.
Congress passes it, as you know from the budgets you
passed back in the day, and then the OMB gets
(01:44):
that money and then they distributed out to all the
executive agencies where things happen. There's associate directors for healthcare,
for education, for different ones that really oversee that money.
And so OMB really has a step right there at
the White House and the Eisenhower Executive Office Building. I
remember where I would go into the Navy mess anytime
I wanted to and see all these people that talk
(02:06):
to people and really gain knowledge and insight from them
along the way. But you're right, O, and B has
a huge influence on the budget process, and right now.
Speaker 3 (02:14):
With Russ Vote there again, he's a big fiscal hawk.
Speaker 2 (02:17):
I think he's doing a lot of the right things
that are there we need to understand not only what
OMB does, but how much that Congress also needs to
start doing their job as well.
Speaker 1 (02:26):
You've known Russ, the fact is he's in a central
role right now in this shutdown and then trying to
get back to a balanced budget. What was your sense
of him as a boss?
Speaker 2 (02:37):
Well, I mean, look, his key thing was at that
time was let's find savings wherever we can, Let's dig
out the ways fraud and abuse. There was a big
focus on discretionary spending, which you know is maybe a.
Speaker 3 (02:49):
Quarter of the budget.
Speaker 2 (02:50):
But his point was if we can't get our own
fiscal house in order on discretionary things, how can we
go ask the elderly or the older age or they
who are on Social Security to have reform for social
Security or Medicare.
Speaker 3 (03:01):
And so I think there were some good points there
that was made.
Speaker 2 (03:03):
And so he had a steadfast vision of reducing the
size and scope of government, and that was something that
I totally agreed with and something that we kept pushing
for each day while I was there from June twenty
nineteen to May of twenty twenty.
Speaker 1 (03:16):
Dylan, know you have an insider's vio from your perspective.
How effective has the Department of Government Efficiency, so called
DOZE been so far, and do you think is achieving
the goal of cutting waste?
Speaker 2 (03:27):
It's a great question, Speaker, and I think whenever I'm
looking back at it, we got to think about Okay,
whenever they went in Elon Musk and others, they said
we're going to find two trillion dollars in savings. I
think that was kind of a pipe dream. But it's
nice to have a north star of where you want
to be at some point. I think at the end
of the day Congress they were sended about ten billion
dollars worth of money.
Speaker 3 (03:49):
So that's good, that's a good start.
Speaker 2 (03:51):
But there was also a lot of contracts that were
cut and saying, look, why are we spending money on
all this ridiculous stuff, and those.
Speaker 3 (03:57):
Contracts, as you know, we're out in the future.
Speaker 2 (04:00):
So I think we're not only seeing maybe some smaller
amount of savings today, but the savings will also go
out in the future. And I'm not sure exactly what
those amounts are now, but at least we're starting to
look at the fraud, waste and abuse that's within government
because it's large.
Speaker 3 (04:14):
I mean I've done some work on healthcare.
Speaker 2 (04:16):
For example, I have a new book called Empower Patients
with doctor Dean Waldman, where we go through health care
and everything else. And we spend across the country five
trillion dollars on healthcare every year, and from our estimates
and looking at other research, about half of that goes
to bureaucracy and regulation and paperwork.
Speaker 3 (04:33):
It doesn't go to patient care.
Speaker 2 (04:35):
And so if that's half in healthcare, just imagine what
it is across many other areas of our economy.
Speaker 1 (04:40):
When you think about it. My dad was a career soldier,
and I remember in the late fifties under Eisenhower, they
had a reduction in force, and we had actually some
officers who were reduced to being sergeants, but stayed in
because they wanted their pension. So when I see about
reduction force, I don't see that as a gigantic thing.
(05:01):
But it seems to have shocked the Washington establishment that
the Trump administration is actually reducing people permanently as part
of the shutdown. What's your reaction to that strategy.
Speaker 3 (05:12):
I think it's important.
Speaker 2 (05:13):
I mean, if you think about one of the main
cost drivers of just the federal government itself of the operations,
the labor the workers, that's a huge cost, and of
course they get pretty large pension funds and everything else
that are tied to that, and so that increases the cost.
So one way to reduce the cost is reduced in
the number of workers at the same time.
Speaker 3 (05:32):
Going back to Elon Musk, I.
Speaker 2 (05:33):
Mean, look, whatever he took over Twitter, and I know
Twitter is X now and it's not the federal government
or anything like that, but he cut the workforce substantially,
I think by eighty percent, and they still found ways
to improve. I mean, X is probably better than it
ever was today. What if we could do something similar
to the federal government. You're always going to have some
cogs in the wheel, if you will, of moving paperwork
(05:53):
around and making sure the regulations are checked and stuff
like that. But in a period of time when we
have a lot more technology and AI and other things
that are going on, I think there's a great way
to improve.
Speaker 3 (06:04):
Some efficiencies if we can.
Speaker 2 (06:06):
It's difficult in the federal government to get efficiencies, but
I think this is one way to do it. I'm
glad that they're looking at how many employees are in
certain areas of government and looking at those contracts and
figuring out how can we get more money.
Speaker 3 (06:18):
Back into the private sector.
Speaker 2 (06:19):
Because with US running two trillion dollars a year in
deficits last year was one point eight trillion dollars and
thirty seven trillion dollars in national debt one trillion dollars
plus and just net interest payments on the debt, we've
got to start cutting somewhere. And so whether it be
from what DOGE is doing on contracts and other cuts
versus during the shutdown, permanent layoffs at the federal government.
(06:40):
I don't know how many of these at the end
of the day, Speaker will be permanent compared to furloughs
that they'll pay them back, But it does look like
russ Vote and others that are there are really trying
to find ways to cut the government permanently.
Speaker 1 (06:52):
Eisenhower was very tough on spending. He would have agreed
with Treasure Sectory Best on recent comment that the problem
is not revenue, the problem is spending. And I know
you've said something very similar that we must be clear
that the shutdown is just a symptom. The disease is
runaway government spending. How do we get across to the
average American the time bomb that is building in the
(07:15):
scale of the federal debt and the amount we're not
paying an interest on that debt. I mean, how can
we communicate that?
Speaker 2 (07:21):
Well, I think in some sense, the federal government's doing
it for us.
Speaker 3 (07:25):
Speaker.
Speaker 2 (07:25):
I mean, if you look at the inflation that we
had during the Biden years, people saw that measurably in
their own life and saw that they couldn't put food
on the table, they couldn't make ends meet every month,
and they had to get multiple jobs and all the
things that that created. And while in my view, government
spending doesn't create inflation, what it does do is when
you run deficits, the Federal reserve, well, interest rates would
(07:48):
go up. Well, the Federal Reserve doesn't want interest rates
to go up, so they come in and buy the debt.
They print money, and that money printing creates the inflation
that's around us, which is a direct result of the
overspending of Congress. What I've been trying to do talking
to college students and others across the country is to say, look,
we saw the direct effects from this inflation that was
out there. Yes, interest rates are up higher than they
(08:08):
were back then as well. But if you just look
at the cost of everything that's going around you, this
is the direct result of the overspending by Congress and
the FED printing too much money. And I think if
we could start getting those things tied together, which they
should be, then we have a better presentation of the
cost of overspending by government.
Speaker 1 (08:26):
One of the areas I've been fascinated by is the
degree to which the Doud Frank Act was in fact
a bad idea and that some of the things that
created are I think disastrous. And when Obama signed the
Consumer Protection Act under law and created this totally independent agency,
I think one of the very few places in the
government where they generate their own money, and they've gon
(08:49):
to be huge in terms of number of people that employ.
Talk a little bit about why the CFPB, the Consumer
Finance Protection Bureau, Why is it a bad idea and
what do we need to do about it?
Speaker 3 (09:01):
I think you don't have to look too far speaker.
Speaker 2 (09:03):
I mean, we had Elizabeth Warren, she was the first
director of the CFBB back in the day, and we
know how socialist she is. Why do we need the
government protecting consumers consumers are best predicted by the marketplace
of whether or not they want to buy something or not,
and that allows for volunteer exchange to happen. We don't
need a whole government agency. And the way that they're
(09:25):
finance right is through the Federal Reserve. So the Federal
Reserve is running net operating losses of over two hundred
billion dollars a year right now, and yet they're still
funding the CFP at the same time. What I've been
trying to get across to my former boss Russ Vote
that we were just talking about, is he's right now
the acting director of the CFPB and the director of OMB.
Why don't we find ways to continue to cut what
(09:47):
they're doing? And they're doing all these bad rules as well,
related to the Dodd Frank Act back in was it
two thousand and nine during the Obama administration, is this
section ten thirty three rule, which is they're calling to
open banking rule, but really it's just forcing information from
bigger banks to give to a lot of other banks.
And I don't know about you, speaker, but the first
thing I learned in economics is nothing is free. Nothing
(10:09):
is free out there. The government shouldn't be mandating these
sort of things. And so this is just one area
of the CFPB, the Section ten thirty three rule and
other things they're trying to do. We're just overstepping the
bounds of a limited government form of the roles of
limited government.
Speaker 1 (10:25):
If you could, would you just abolish it? I would.
Speaker 3 (10:29):
I think there's no reason for it. I mean, there's
no constitutional direction.
Speaker 2 (10:32):
And so you know, Speaker, I don't understand why we
would create something that's funded by another independent agency.
Speaker 3 (10:38):
And they did that.
Speaker 2 (10:39):
They did it because they didn't want Congress to have
to fund it, because they knew that there was a problem.
I think that's another reason why I should go away.
Speaker 1 (11:04):
Well, it strikes men. I think this is where Republicans
maybe aren't quite intellectual enough. There's a whole wave of
Obama Biden laws and Obama Biden rules through that twelve
year period between the eight years of Obama and the
four years of Biden, and the Biden administration was essentially
just Obama carried forward in terms of staffing and attitude.
(11:27):
But those twelve years were disastrous. I think, whether it's
in healthcare or as you point out, in the Consumer
Financial Protection Bureau or in a host of other places,
we ought to be much clearer about how wrong these
approaches are. I mean, the country instinctively opposes big government
socialism and understands that it doesn't work. And I think
(11:49):
that we can really profoundly change the system and have
the country with us if they understand that it's principled
and it's based on the failures of Obama and Biden.
Speaker 3 (12:00):
Yeah, great points there.
Speaker 2 (12:02):
And just to add to that to kind of make
it relevant to what's going on today with this federal
government shutdown, and as we're recording this, I mean it's
been shut down now for a couple of weeks, and
I think when you look at this, what is the
real reason. Well, it's because Democrats want to add one
point five trillion more dollars in spending. I mean, the
Republicans came in and we could argue whether or not
this was a good idea speaker, that they had a
(12:22):
clean cr that was basically extending all of Biden's sort
of spending to try to get a couple more months
or some more time to talk about healthcare reforms and
other things. And the Democrats wouldn't even agree to that,
and this was Biden's spending. What the Democrats are trying
to do is to extend the emergency declarations during COVID
of more people were not able to age out or
(12:44):
income out off of Medicaid. They made it all these
suspensions of these rules and everything else, and they want
to keep those people on that are now making way
more than what you should be eligible for to get
on Medicaid. We're up to almost twenty percent of people
on Medicaid, when initially when Medicaid was created, there was
only about five percent. So it's unfathomable to me that
(13:05):
the Democrats would want to continue to push this. Well,
I know why they want to do it, right, Speaker,
is that they want universal healthcare. If the more people
they get on the program, the more difficult it is
to get them off.
Speaker 3 (13:14):
And that's why this kind of fight is going on.
Speaker 2 (13:16):
And I don't know when the Democrats, or I guess
they're going to give in at some point to get
the government open again, because at the same time, we've
got to look at the overall spending, and I think
that's where healthcare is a great way to do it, and.
Speaker 3 (13:28):
We don't need money going to illegal aliens.
Speaker 2 (13:31):
Just like we don't need it to go to Americans
who have higher incomes and have aged out of the program.
Speaker 1 (13:36):
You wrote, I thought it was very powerful that the
US healthcare system is failing Americans because awards, bureaucracy not care.
What do you mean by that and how did the
system become so misaligned?
Speaker 2 (13:50):
In our latest book on Empowered Patients, doctor Dean Waldman,
and then I have a paper also at Americans for
Tax Reform where I'm a staff economist there Empower Patients Initiative.
We talk a lot about how the root cause of
the healthcare crisis in America is government. It's a third
party payer system, right, whether it be Medicare, Medicaid or
(14:10):
other sort of government programs. Also, private health insurance is
a third party payer and I don't have necessarily anything
wrong with them, but we've been forced into private health
insurance because of government decree back in the World War
two wage and price controls whenever there was no way
to give out additional wages, so employers started providing employer
(14:30):
sponsored health insurance and then there was a tax break
for it, and so that's crept into the system at
us not paying the amount of money that we ordinarily
would for health care, and I think we would actually
pay much less if government wasn't forcing us into the situation.
So all their regulation, red tape unnecessary rules of pushing
us more and more into healthcare through our employer and
(14:52):
on all these government spending programs. Because about sixty cents
of every dollar from our research and health care is
spent by government, meaning us the taxpayer. It's a redistribution
sort of project they have going on, and so when
you look at all those costs, you get about fifty
percent of the five trillion dollars we spend, so let's
say two and a half trillion is going to something
that's not patient care. And I think you could increase
(15:16):
patient care, or you could cut taxes and give more
money back to people so they could take care of themselves.
But I think this also is a big problem here.
Another issue that I've been talking a lot about is
a dependency crisis. I think we're in independency crisis, whether
it be Medicaid and Democrats wanting to put more and
more people on it, or other types of health care
expenditures as well. There's this a lot of the pendency
(15:38):
on government, meaning someone else the taxpayer to pay for
these things.
Speaker 1 (15:41):
Yeah. For some reason, I think because they are big
government socialists. Democrats prefer anything which takes away your individual
strength and forces you to rely on government. It's amazing
that their model is essentially a totally government centric America,
which would of course be radically different.
Speaker 2 (16:00):
On that point if I could is I think oftentimes
I'm a Christian and God is above government. But I
think too often we get people like in the Democrats
who want to believe that government is God the lower
case G, and they wanted government to do everything.
Speaker 1 (16:13):
I think that's right. You know. One of the things
I'm working on now is that we have, with new
technology and new science, we have an opportunity to help
Americans who are challenged and to literally move from a
focus on disabilities to a focus on capabilities and in
a sense to liberate millions of people to have a
much fuller life and a much more self reliant life
(16:37):
than we currently think about when we put them into
sort of a disabilities category. And that's an example of
the transition. We did this, as you know, when I
was speaker with moving from welfare to workfare, and the
effect was enormous and the number of children who left
poverty was the largest number in American history, and it
was because their parents were going to work, which not
only increased their revenue, but it had the good virtue
(17:00):
that children were learning. But on Monday, it's okay to
go to work and not just sit around and wait
for somebody to send you a check. So we were
changing the whole culture. The Democrats, to a surprising degree,
just hated They hated the idea of people being independent,
which I thought was truly bizarre, but plent. They go
to a totally different topic for seconds. You've written something
(17:20):
I believe in strongly and would like to see the
Trump administration pick up, and that is that we should
index capital gains. Could you describe why you think that's important.
Speaker 2 (17:30):
It's substantial right now when you think about your stocks
or your housing value, other things that you may be
taxed on whenever you get those realized gains that's based
on capital gains, taxes, things of that nature.
Speaker 3 (17:44):
But that's when you realize it, when you.
Speaker 2 (17:45):
Actually have the amount of money coming into your pocket
and then you can pay those taxes. That's one thing,
because that's a source of income. However, what we've seen
within the capital gains and within the stock market and
things that nature. Just use that as an example, is
that over time, part of the gains are due to
inflationary pressures across the economy, meaning the Federal Reserve printing
(18:07):
money and things of that nature that are not real returns.
In fact, it's taxing unrealized capital gains over time because
of that aminum inflation that's happening. In other words, we
are being taxed too much and therefore disincentivizing the amount
of savings and capital that can go into businesses. Because remember,
more than half of Americans now have some form of
(18:28):
money and stocks and savings through four.
Speaker 3 (18:30):
One K and other things that are out there.
Speaker 2 (18:32):
I think it's closer to sixty percent nowadays actually, And
so it's not just the quote unquote rich, it's a
broad swath of Americans across the country. And so indexing
for capital gains is important to make it measured on inflation.
That way, you can adjust for the nominal gains to
real gains in economic terms or in other words, on
the things that you actually have money out for and
(18:54):
have real gains over time. And so I think this
is also huge for the economy. If there was not
the emplaytion tax, if you will, on capital gains, there
would be more money put into the stock market, more
returns for those who were savers, and more returns for
businesses that are receiving those funds, and so the economic
gains are substantial, and.
Speaker 3 (19:12):
So I think this is something that needs to be done.
Speaker 2 (19:14):
When I was at OMB in the first Trump administration,
we looked at this quite a lot.
Speaker 3 (19:18):
We found at OMB that this was a step in
the right direction.
Speaker 2 (19:22):
Unfortunately, someone in the administration, mainly the Treasury, didn't agree
with us, and so they pushed back and ultimately Minuchin
and others won that debate.
Speaker 3 (19:30):
But I think it is something that needs to be
looked at.
Speaker 2 (19:33):
I would like to see Congress do it, Speaker, I
think that would be the best way to do it,
but I think there's also a path for Trade Secretary
Vessett and the Treasury to do this in the meantime
until Congress can get something past.
Speaker 1 (19:45):
If you were looking at negotiating once the government shutdown
is over, and I've been pretty clear that they have
to reopen the government before we negotiate, and I think
Trump's pretty clear on that, and certainly, Mike Johnson and
John Thun have been clear on it. So one they
get around on negotiating, do you have a sort of
scorecard for how you would approach what's a good Republican
(20:07):
solution on where we are with particularly this whole COVID
insurance subsidy, but also just in general, if you were
going into that negotiation, what would you want to have
as the things Republicans should insist on.
Speaker 2 (20:21):
Starting off with the COVID era tax credits for Obamacare,
I mean, all those should go away.
Speaker 3 (20:26):
To me, there's no need for it.
Speaker 2 (20:27):
Even the Body Administration ended the emergency declaration, and so
we should go back to some sense of normal, going
back to before the covid Era. I mean, I would
love to see the budget go back to the twenty
nineteen levels. The last budget that I helped write for
the President, for fiscal year twenty twenty one, the budget
was four point six trillion dollars, and at the time.
Speaker 3 (20:45):
We still were like, this is too much, this is
too much.
Speaker 2 (20:48):
And the latest numbers for fiscal year twenty twenty five
just came out and it was seven trillion dollars.
Speaker 3 (20:53):
We're up to seven trillion dollars.
Speaker 2 (20:54):
Now, I know it's a herculean effort, if you will,
to go back to the twenty nineteen levels, but we've
got to think about cutting that at some point. And
also at America's for tax reform with Grover Norquist and
all of them who are doing some great work, we've
been working on sustainable budgeting, which means that if once
we get back to a better level of government, which
should be cut.
Speaker 3 (21:13):
But let's say we start where we're at today.
Speaker 2 (21:15):
We need to have some sort of growth limit, a
spending limit, and we've argued that the maximum should be
population growth plus inflation. And if you limited to population
growth plus inflation and we had one percentage point more
in economic growth, we could balance the budget in five years.
So just limiting the growth of spending and having more
economic growth for more revenue would allow for us to
(21:36):
balance the budget in five years.
Speaker 3 (21:38):
And so if I was in that room, I.
Speaker 2 (21:39):
Would be making the case that, look, we've got to
get our fiscal house in order.
Speaker 3 (21:43):
Let's get rid of the COVID era tax credits.
Speaker 2 (21:45):
The emergency is over, let's get out of that business,
and then let's limit the growth of spending on population
inflation as a maximum, and then also let's have more growth,
let's find ways to deregulate the economy, as the Trump
administration is starting to do.
Speaker 3 (21:58):
I would like to see us on the one big
beautiful bill.
Speaker 2 (22:01):
They extended the Trump era tax cuts of the Tax
Cuts and Jobs Act.
Speaker 3 (22:04):
And there were some other things in there.
Speaker 2 (22:06):
But then there's still some key reforms that we could
have that would allow for more economic growth. In getting
government out of the way, whether it's an energy, healthcare,
and other places, would allow more money in people's pockets,
and that way we could see more economic growth and
we can balance the budget in a faster time period.
Speaker 1 (22:40):
How strongly would you oppose ideal coming out of this
shutdown when they sit down and negotiate, How strongly would
you oppose anything which increase the deficit?
Speaker 2 (22:51):
I would be opposed to it, and just in general
and principle, but I have to look at what the
details are right, what are we giving.
Speaker 3 (22:57):
Up in order to get And you know there's always
trade offs.
Speaker 2 (23:00):
Even in economics, thomasol said, there're no solutions, only trade offs.
And you know this speaker from going in those back
rooms that there's always trade offs that are going on
and so I would try to be a hardliner. I
believe myself is a fiscal hawk, and so I would
try to keep pushing us not to get to a
place where weere we're increasing deficits, but if there is
some sense of pro growth policies that are in there
(23:20):
that on a static basis would increase the deficit a
little bit, but on a pro growth policy or a
dynamic scoring would balance the budget or bring down the deficits.
That's something that I think we should look at on these negotiations.
Speaker 1 (23:32):
How big a challenge in that sense is the way
Congressional Budget Office scores things.
Speaker 3 (23:37):
It's a big challenge.
Speaker 2 (23:38):
I mean, it's something that whenever I was at OMB,
we looked at it, but we would always come up
with our own projections. I was the associate director for
Economic Policy, had a team of about ten PhD economists
and some others who were looking at efficiencies within government,
and we had some different types of models we could
look at and everything. We would do it from a
dynamic perspective every time, because we live in a dynamic
(23:59):
world and we don't live in a static world. Behaviors
changed and centers change, things of that nature. And so
the CBO, I think provides a good service in the
sense that it gives us some numbers, but I wish
they would be more realistic. In fact, I would argue
if I was CBA director, which I don't know if
i'll ever be one day, but if I was, why
don't we look at a range, maybe more of a
spectrum of here's the static results and here's the dynamic.
(24:22):
Don't publish just one and then that way you let
the public decide, you let congressmen and women decide what
they want to look at.
Speaker 3 (24:28):
I think that would be a better way.
Speaker 1 (24:30):
Isn't it a fact that historically some of their estamates
have been off by like trillions of dollars?
Speaker 3 (24:36):
Yeah?
Speaker 1 (24:36):
I mean, how can you have a yardstick which is
that elastic?
Speaker 3 (24:40):
Exactly? Yeah, you can't. You can't if.
Speaker 1 (24:44):
I've been trying to get the House and Centate budget
committees just to hold hearings, and insists that the Congressional
Budget Office actually show us the algorithms and the formulas,
all of which are right now a hidden secret black
bucks mm hmmm, totally unaccountable for the process they use.
Speaker 2 (25:02):
And I had the former CBO director Douglas holatez Iken
on my podcast Lepio prosper Show, and we talked about
all this stuff, and he was trying to move us
more in that direction of dynamic forecasting and everything else.
But it's difficult when you have the belly of the
beast within government and those bureaucrats who have been there
for a long time. It's very difficult to change up
some of those dynamics. But I hope that we can
(25:23):
get to that point at some point, because if CBO
is to provide any service at all, it's the Congressional
Budget Office, meaning that they should be making as accurate
a forecast as possible. And whenever we're looking at this
from a budget or senateive finance perspective looking at appropriations,
it's already difficult enough to write a budget, much less.
Speaker 3 (25:42):
When you have bad numbers going into it.
Speaker 1 (25:44):
Tell us all just for a minute, because it's such
an important long term issue. About your book on health reform.
Speaker 2 (25:51):
Yes, so, Power Patients, Two Doctors, Cure for Healthcare is
the name of the book. You can find a Durrance
Publishing dr Nce. We had the soft launch here recently.
We're going to get more of that come out, but
we really go into and break down the healthcare system,
where the money is going, how it's tied up to
so many rules and regulations, paperwork and all these other
(26:14):
things versus money going to actual care that's out there.
Speaker 3 (26:18):
I mean.
Speaker 2 (26:18):
Also the paper is that Americans for Tax Reform and
Power Patients Initiative, we not only take on these huge
costs of healthcare and how it's not helping people where
many people are really you know, speaker waiting in line,
they're dying in line. Dying in que is what we've
called because if you're on Medicaid. For example, I live
in Texas near Austin, Texas, only a third of doctors
(26:40):
across Texas take new Medicaid patients, and so there is
becoming more and more of a longer line of people
who are on Medicaid. At the same time that they're
putting more people on Medicaid, we're seeing that they can't
even get access to quality care. And so the big
points here are that covers is not equal care, and
so we need to separate those two. We also argue
that instead of having an employer sponsored health insurance direct
(27:03):
tax credit, it should go to the employee. The employee
should have this account and a no limit health stavings
account to where you could put as much money you
want in there, to use it for health care, to
use it for health insurance, whatever you want.
Speaker 3 (27:14):
But don't force people to do that.
Speaker 2 (27:16):
We also think that block grants to states for Medicaid
and SNAP and everything else, that should be a fixed amount.
Maybe you increase it by inflation or some metric over time.
But let's get away from this pay as you go
sort of system where the state manipulates things to spend
more and then brings down more money from the federal government,
meaning socializing those costs across the country. We should get
(27:38):
back to a system of federalism where states can put
in place their.
Speaker 3 (27:42):
Own Medicaid reforms.
Speaker 2 (27:44):
And the other big thing here too that we look
at is finding more ways for the doctor patient relationship
is getting rid of that third party. Because in most
volunteer exchanges, when you go buy gas, or you go
buy a stickers bar at a convenience store or whatever
else it is, you pay for that voluntarily and make
the transaction.
Speaker 3 (28:03):
In healthcare, we don't do that.
Speaker 2 (28:04):
That's one reason that it's jacked up the prices so
much and it's led us to have a lot of issues.
I also just published a paper continuing with this on
biotechnology and are we going to hand biotech to Beijing?
And this is what the Americans for tax reform, because
what we're doing is we're trying to say we need
a lower drug prices. And the TRUP administration's been out
there advocating for this in a lot of ways, but
(28:25):
we got to be careful speaker, where when we look
at this, if we have the most favorite nations sort
of pricing and bring everybody down to the level of
other countries, it also will likely dry.
Speaker 3 (28:36):
Up a lot of the R and D and innovation.
Speaker 2 (28:38):
Each new drug costs about two billion dollars on average,
it takes about ten years to come to the market.
I think there's bigger reforms like FDA streamlining. A lot
of this is because of the intellectual property and I
think that there's contract law on things that nature need
to take care of this. But we are waiting on
these life saving drugs and making it more expensive in
the process. And so between bringing the doctor patients back
(29:01):
together and empowering patients, I really believe that we can
have a better healthcare system that's more affordable and better
quality in the process.
Speaker 1 (29:09):
I think you're exactly in the right direction, and I
encourage people to get your book and to realize that
there's a lot of thought and a lot of ideas
and we have to dramatically improve the current system. It's
too expensive, it slows down the rate of innovation, and
it focuses on paying for sickness rather than paying for health.
So I think you're onto a lot of big ideas, Dance.
(29:31):
I want to thank you for joining me. I think
this has been really informative, and I want to mention
you do have a podcast called Let People Prosper, which
our listeners can find advanced in dot com or on
Apple Podcasts, and we will have that link on our
show page. So thank you very much for being with me.
Speaker 3 (29:48):
Hey, thank you so much, speaker. It's always a pleasure.
Speaker 1 (29:53):
Thank you to my guest, doctor Van Skin. You can
get a link to his podcast, Let People Prosper on
our show age at Newtsworld dot com. Newtsworld is produced
by ginglishtreet sixty and iHeartMedia. Our executive producers Guernsey Sloan.
Our researcher is Rachel Peterson. The artwork for the show
was created by Steve Penley. Special thanks to team at
(30:14):
Gingishtree sixty. If you've been enjoying Newtsworld, I hope you'll
go to Apple Podcasts 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
gingrishtree sixty dot com slash newsletter. I'm Nute Gingrich. This
is Newtsworld.
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