May 29, 2023 • 40 mins
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Speaker 1 (00:01):
Welcome its verdict with Senator Ted Cruz Ben Ferguson with
you as always, and Senator the number one question that
everybody wants to know right now on this Memorial Day
is the Biden debt deal, the Biden debt ceiling. Is
there a deal with the Republicans, and if there is,
what does that look like for the American people.
Speaker 2 (00:23):
Well, and it was announced on Sunday that there was
a quote agreement in principle between Joe Biden and Kevin McCarthy.
And the agreement in principle included some cuts and spending
from what Biden wanted. It also included an extension in
the debt ceiling. And I would say, as we sit
here you and I are recording this Sunday night, at
(00:45):
this point, we don't have the text of the bill.
We have not seen exactly what's in the bill, so
it is not entirely clear all of the details. But
based on what we know now, there are some good elements,
but there are a lot of things that are disappointing.
As I'm sitting here right now, I'm disappointed that this
(01:05):
agreement does not cut more. And I'm also disappointed that
this agreement adds a lot of debt in exchange for
relatively little cuts. Now we can break that down piece
by piece and walk through what's in it and what's not.
With the caveat that the bill text at this point
we still haven't seen, and presumably we will see sometime soon.
Speaker 1 (01:29):
Let's start with is there something in this bill that
we could probably get excited about as conservatives? Because I
know this is a fight, but there are many concerns saying, Okay,
we won back the House, surely we're going to get
something that's positive for us from winning back to house.
Is there a light at the end of the tunnel
saying hey, at least from what we've been told. Obviously
(01:50):
we don't have the text yet, but there are going
to be some victories for us.
Speaker 2 (01:54):
Well, I can tell you what House leadership is emphasizing.
So on Sunday afternoon, I sent out a tweet critical
of this deal, and in particular that that House leadership
had been saying that there's not that the Democrats don't
get a single thing from this deal. And I sent
out a tweet and said, well, actually they get four
(02:15):
trillion things, which is the four trillion in new debt
that this deal adds and that they also get I said,
eighty seven thousand new things with the eighty seven thousand
IRS agents. And I'll tell you, within minutes of sending
that tweet, I was on the phone with Kevin McCarthy
and Kevin called me. Kevin and I are friends, and
he was unhappy with what I had expressed. And look,
(02:36):
I respect that. Kevin picked up the phone and called
me and he pitched what he saw as the benefits
of this agreement. And I listened to him and gave him,
gave him respectful hearing. And actually later in the afternoon,
I was on a call with Kevin McCarthy and with
all the Republican senators where he walked through the benefits.
(02:56):
I'll tell you, according to House leadership, the biggest benefits
in the deal are as follows.
Speaker 3 (03:02):
Number one.
Speaker 2 (03:04):
They're leaning in aggressively on the permitting reforms. They say
that there were significant permitting reforms that will speed up
the development of energy, that will speed up the development
of construction projects, that will reduce the time spent on NEPA,
which is very costly and slow environmental regulations. And if
(03:25):
those reforms are real, that's good. We haven't seen the
details yet, but that's at least House leadership is pitching
that as a significant victory. Secondly, what they're pitching is
a significant victory is work requirements for SNAP and tan
ifs now SNAP our food stamps and TANIF is what
(03:48):
used to be aids to families with defending children with
dependant children, and from what we understand, it expands work
requirements from individuals from age forty nine. It expands it
up to age fifty four, so it adds five more
years rather of work requirements. They're pitching that as a positive.
(04:12):
The third positive they're pitching is they say that there's
a provision in the bill that if Congress does not
pass the appropriation bills this year, that a budget cap
kicks in automatically that is current spending minus one percent,
and so they're pitching that as another fiscal benefit. Those
(04:35):
are the main arguments they're laying out, all three of them.
The details matter if they are as leaderships describing them,
those are positive, those are not nothing.
Speaker 1 (04:47):
There's obviously the big question that many have heard about.
There's been a lot of attention on this center on
social media, and that's about IRS agents. There is a
concern that the IRS cannot be trusted. They're targeting people.
We saw what happened with Matt tb when he was
testifying before Congress and the RS is knocking on his door.
And many people believe that these new IRS agents would
(05:10):
in fact be nothing more than harassment agents for those
that are Christian, those are conservative in general. Look at
Matt Tebe is a perfect example of this. We know
what happened in the past with Tea Party and conservative groups,
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IRS agents center are something that so many are concerned about.
(06:41):
You mentioned that as well in your tweet today. Where
are we on those this army of IRS agents? Is
that in this deal? Are we going to be able
to stop that?
Speaker 2 (06:52):
Well, it's it's not entirely clear. So the original bill,
the House pass what was called the Limit, Save and
Grow Bill that zero rode out the eighty billion in
new funding that Democrats ram through in the prior Congress
for the IRS. That eighty billion was going to be
directed to eighty seven thousand new IRS agents and employees
to be hired to harass the American people, and the
(07:15):
first bill the House passed zero that out. We don't
know exactly what's in the Biden McCarthy deal. The New
York Times reported that the IRS new spending was reduced
by ten billion, in other words, from eighty billion to
seventy billion. So that's pretty disappointing. And one House Republican
tweeted out that the cuts are only one point eighty
(07:38):
eight billion, so one point nine billion instead of ten billion.
We don't know for sure, I will say when I
tweeted out based on the public reporting that the eighty
seven thousand new IRS agents were still there, and Kevin
called me. What he argued is he says, in this
bill they zero out the new spending for the IRS
(08:00):
for next year so that they cannot hire the new
IRS agents next year. And the pitch he made is
we zero it out next year and will fight over
subsequent years and appropriations to stop Biden from hiring them
in those years. Until I see the text, I can't
assess that, but that's at least his response. If it's
(08:23):
right that they zero it out next year. That's good
on its face. I'm glad they zero it out next year.
If that's in there, I'd rather see the whole eighty
billion zeroed out, But zeroing it next year is a
significant step in the right direction. But again, the devil's
in the details.
Speaker 1 (08:40):
A lot of Conservatives that were just recently elected to
the House, they have pledged and they've been doing this
a lot on social media that they are going to
try to do everything they can to stop this from
passing the House of Representatives. There have been a lot
of hardline members of the House Freedom Caucus. Chip Roy
is one of those who said on Twitter exactly that
(09:00):
we're going to try to stop it this from happening.
After you talk to House leadership, do you feel pretty
confident that Democrats and Republican negotiators are in fact able
to iron this out the final details this agreement, and
to be clear, what this is, suspend to suspend the
federal government's thirty one point four trillion dollar debt ceiling
(09:25):
in the coming days. And they're acting like this victory.
I worry that, yes, this is a short term victory.
Center and many Americans, I think, worry that, yeah, this
is short term, but how much damage are we doing
this country when we're going this much into debt without
real cuts to spending.
Speaker 2 (09:41):
Yeah, and look that that is my principal concern. So
in the original bill, the Limit, Save and Grow Bill,
what it did is it rolled back discretionary spending. So
what does discretionary spending mean the federal budget? There two components.
There's what's called mandatory spending and there's what's called discretionary spending.
So man spending are things like Social Security and Medicare
(10:04):
and medicaid. They're things that are on autopilot in the
federal budget and they grow automatically. Congress doesn't appropriate every year.
They're set to be automatically appropriated. Discretionary spending is essentially
everything else, and so that is what Congress takes up
and appropriates each year. The Limit Save and Growth Grow
(10:24):
Bill cut discretionary spending from one point seven trillion in
fiscal year twenty three to one point four to seven
trillion in fiscal year twenty four. So that was two
hundred and thirty billion cutting the actual spending levels. And
then it caps spending at one percent per year, and
(10:47):
that was calculated just that reduction in spending was calculated
to save a total of three point two trillion dollars. Now,
we don't know for sure, but what has been reported publicly,
according to The New York Times, is that this deal
leaves discretionary spending at the exact same level one point
(11:07):
seven trillion that it was in fiscal year twenty three.
In other words, that it we lose the entirety of
that cut, and it then grows from one percent from
there on. Now it's a big difference if you're growing
one percent from one point seven trillion or growing one
percent from one point four to seven trillion, Because it
(11:27):
makes a three point two trillion dollar difference over time.
What does that mean in total? The New York Times
is reporting that the total savings of the deal are
about six hundred and fifty billion. That is a massive
reduction from the four point eight trillion total savings in
the limit Save and Grow bill. Now, I can tell
(11:48):
you when I asked Kevin about that this afternoon, he
pressed back pretty hard and he said, why are you
believing the New York Times? And I said, look, I
don't have biltecks. What else do you want me to believe?
All all I have are the public reports. If the
bill tech shows something different, then we'll discuss it on
the pod. But what the New York Times is saying
right now at least, is that this agreement is giving
(12:13):
four trillion in new debt in exchange for much, much
smaller spending cuts. If that is true, that's pretty deeply disappointing.
Speaker 1 (12:22):
There's always people centered that are saying the sky is
falling when they don't get what they want. And I'll
just give you examples of the spectrum here. Representative Norman
on the debt deal today said what I'm hearing is quote,
anything but fiscal sanity. Then you move over to Lindsey Graham.
He's raging against this debt deal, warning that the cuts
could quote cripple the military. And then Kevin McCarthy says,
(12:46):
the debt ceiling deal is quote worthy of the American people.
That's a pretty big spectrum swing there, which one is it?
Speaker 2 (12:55):
Well, there may be some truth to all of those. Look,
leadership in both the House and Senate are going to
pitch that this is the greatest deal since Slice spread.
The White House is pitching this is a terrific deal.
A lot of Democrats are pitching this is a terrific deal.
The number of Democrats who are happy with this should
give you real pause in terms of the military hawks.
(13:21):
And part of the way we got into thirty two
trillion dollars in debt is there's a dynamic that that
that the Democrats play against Republicans, which is, we have
a big chunk of the Republican caucus that consider themselves
military hawks and that always want to spend massive amounts
of the military. Now I consider myself a military hawk.
(13:42):
I put myself in that camp, but I'm also a
fiscal hawk, so I don't want to bankrupt the country
while we are investing what we need to invest in
our military. And Lindsey is one who who focuses very
much on the military side and far less on the
fiscal side. And the trade off the Democrats always do
is well, if you know, if you want your guns,
(14:04):
we get our butter and and so they they typically
leverage the military hawks and the Republican Party to get
the trillions in spending they want on the social side.
This trade off, I think on the military side, much
of the gnashing of teeth may be overstated, but again
(14:28):
we haven't seen the bill, so we will see the details.
I will tell you something that leadership is pitching is positive.
So the first version of Limitsave and Growth rescinded the
unspent COVID spending that Congress had appropriated. That saved about
thirty billion dollars. This agreement is likewise expected to rescind unspaced,
(14:52):
unspent COVID relief funds and also vaccine research and disaster relief.
We don't know that know the details of that, but
we're being told that could be saving fifty to seventy
billion dollars. So depending on what that is, that could
be a positive element. Now let me give you a
negative element. The Limit Saving Grow bill repealed almost all
(15:14):
of the ridiculously named inflation reduction Acts, energy and climate
tax credit expansions, which saved five hundred and sixty nine
billion dollars according to the public reporting. No changes are
made in this, So this is something that the Biden
White House won and that House Republicans were not able
to prevail on.
Speaker 3 (15:32):
So that's disappointing.
Speaker 2 (15:37):
Focusing on the work requirements, the House included work requirements
not just on food stamps and welfare, but also on
medicaid which is a huge component. Based on the public reporting,
there are work requirements, so that we'll see how stringent
there are. But there at least some work requirements for
(15:58):
food stamps and welfare, but not for Medicaid, and Medicaid
is a massive program. So back and forth. What's reported
at least is that House Republicans got some of what
was included in the first bill, but it's not clear
how much.
Speaker 1 (16:17):
I want to play part of what Joe Biden said,
and rarely does he take questions from the media. Rarely
does he have press conferences. He did have a kind
of a press conference day live from the White House.
I want to play for you what he said about
reaching this byparts and agreement, and then he was asked
about from a reporter about hey, why did you compromise?
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I want you to hear how Biden described it. Some
thought he was, you know, not that excited, and I'm like, well,
(18:24):
it is Biden. It's kind of hard to read him
on most days. Let's be honest. Here's what he had
to say.
Speaker 3 (18:30):
Sorry to keep you waiting, but we've got good news.
Speaker 4 (18:33):
We've got to spocus Speaker McCarthy, and we've reached the
bipart of some budget agreement that we're ready to move
to the full Congress. And I think it's a really
important step forward, excuse me. And it takes a thread
of catastrophic to fall off the table, protects our hardware
and in historic economic recovery. And the agreement also represents
(18:56):
the compromises. Me A's known got everything they want. That's
the responsibility of governing. And this is the deal is
good news. I believe you'll see for the American people,
the agreement prevents the worst possible crisis on the fault.
For the first time in a nation's history, an economic recession.
(19:16):
Retirement accounts devastated millions of jobs lost. It also protects
key priorities and accomplishments and values that Congressional Democrats and
I have fought long, for long and hard for investing
in America's agenda. That's creating good jobs and communities throughout
the country. It protects Social Security, Medicare, and veterans, and
so much more. The Speaker and I made clear from
(19:39):
the start that the only way forward was a bipartisan agreement.
That agreement now goes to the United States House and
to the Senate. I strongly urge both both chambers to
pass that agreement. Let's keep moving forward on meeting our
obligations and building the strongest economy in the history of
the world. I'll take a few questions.
Speaker 1 (20:00):
Before we get to the Q and A part. There
is a large portion of the American people, and a
large portion of people especially that listen to this podcast,
and they sit there, they go, let me get this straight.
He wants now credit for creating a crisis and then
now saying we've averted said crisis, which was a massive default,
(20:20):
so therefore you should be happy. And the red flag
goes up, which is okay, So you drive us down
this road so that there's this deadline in our face
with a gun to our head, and then you can
throw in a bunch of pork and a bunch of
stuff we don't like because the guns to our head
on default, and then you want us to clap for
you doing a great job.
Speaker 3 (20:41):
And I'm not just referring to him, I'm referring to Congress.
Speaker 1 (20:44):
Are we ever going to find a way to get
us off this merry go round?
Speaker 2 (20:49):
Well, look, I think Joe Biden is going to continue
to try to create crises and continue to go hard
left and try to ram through his hard left agenda.
It's going to be much harder with the Republican House,
so I expect more and more of it to be
on the executive side and regulatory side. But in this instance, look,
if you want to know how to assess this deal,
(21:10):
one of the ways to do so is listen to
what the Democrats are saying.
Speaker 3 (21:13):
There.
Speaker 2 (21:14):
Joe Biden is urging every Democrat to support it. Here's
Ron Klain as former chief of staff. He tweeted today,
quote every dem should support this deal and then rally
behind Joe Biden and help him win the White House,
the Senate, in the House in twenty twenty four, so
we can save our economy now and get better policy
in twenty twenty five. That was Ron Klaine's reaction. Let
(21:37):
me give you another reaction to it, and this was
Bill Crystal.
Speaker 3 (21:39):
Now.
Speaker 2 (21:39):
Bill Crystal used to be somewhat conservative. When Trump became president,
Crystal lost his mind and has been a hard left
Democrat cheerleader ever since. Here's Crystal's reactions quote first reactions
to the deal. One good for the US through the
need to get rid of the death ceiling in twenty
twenty five, and two good for Biden EEP policy. Domestic
(22:05):
spending freezes no worse than the CRS that a GOP
house would have produced, and over the four years, spending
on liberal priorities up. So that's Bill Crystal's assessment and
Bill's Crystal's assessment. Beyond that, he also quote tweets a
tweet from a reporter guy named Max Cohen, who tweeted
(22:28):
the follow following He said, quote, I asked McCarthy about
how he would describe his interactions with Biden during negotiations.
Quote very professional, very smart, very tough. At the same time,
McCarthy replied, and here was Bill Crystal's reaction to that. Wow,
(22:49):
McCarthy seems to be all in for now on undercutting
the MAGA narrative about President Biden being out of it,
which is good for Biden and for the country. And
then he said, and for the future, wouldn't MacCarthy prefer
being speaker with a President Biden than having to deal
with a President Trump? Asked to that last question, Hell no, Bill,
and you have Trump derangement syndrome, which makes you think
(23:12):
the country is better off handing the nation over to
out of control Marxists than actually winning policy victories in
the White House. But that does tell you something about
how people are reacting this deal, that folks on the
far left are cheerleading it right now.
Speaker 1 (23:30):
Yeah, And there's one other question, and that is this
from a reporter, and I want to get your reaction
to it. A reporter asked the president about him quote compromising,
And as you mentioned it there, it seems the Democrats
in many ways got a pretty good deal here, and
Biden was trying to act like he was some sort
(23:51):
of you know, well, it was really hard for me
to do this, really tough, but you know what was
my alternative?
Speaker 3 (23:57):
Listen at the beginning that the death.
Speaker 1 (24:01):
Cent was not negotiable.
Speaker 3 (24:02):
Doesn't that being just done here?
Speaker 4 (24:04):
Or does that? And you guys said, look, we're not negotiating.
Here's the deal they passed. They said they're going to
They passed the debt ceiling, and they said they'd only
do it on condition that it had all these cuts
in it. I said, I'm not going to do that.
You passed the debt ceiling. Period, I'll negotiate with you
on the cuts. What you say, what's going to happen,
(24:24):
What the budget's going to look like. That's what we
are negotiating in order to get to them deciding that
they're going to go along with a new debt ceiling,
meaning that it's not attached, so something totally different attached
was attached before. But you want to try to make
it look like I made some compromise in the debt ceiling.
Speaker 3 (24:45):
I didn't.
Speaker 4 (24:46):
I made a compromise on the budget. That's what they
wanted to do, to make a compromise on the budget,
and that's what you've done, even though you haven't gone
as far as they wanted, isn't that sure? Yeah? Well,
can you think of an alternative?
Speaker 3 (25:00):
Can you think of an alternative? And then there's the chuckle.
Speaker 1 (25:03):
I mean, really, that's what you've got from the President
in the White House tonight.
Speaker 3 (25:07):
Oh look what he just said.
Speaker 2 (25:09):
There was complete gobbledygook.
Speaker 3 (25:10):
And it is absolutely right.
Speaker 2 (25:13):
That Biden suffered a major defeat. Initially, he staked out
a position that was patently unreasonable. He said he wasn't
going to talk, he wasn't going to negotiate. The only
thing he would take was a clean debt ceiling. That
was objectively unreasonable. But frankly, it's been the position of
a lot of Democrat presidents in the past, and sometimes
they've held that line, sometimes they haven't. Unfortunately, sometimes Republican
(25:35):
leadership in the Senator House has echoed the line of
Democrat presidents that it must be a clean debt ceiling
with nothing attached, which is beginning with unilateral surrender. I
will credit the House, the House Republicans, and I think
it is House conservatives that drove this that the clean
debt ceiling was off the table and Biden was forced
(25:56):
to completely surrender on that demand, and his whole convoluted
explanation there made no sense. He ended up abandoning his claim.
He wasn't it going to negotiate, and he came to
the Oshing table, and look, it was always obvious that
what was going to pass was going to be somewhere
between what the House initially passed and nothing. And so
(26:19):
I did not stake out the position that every word
of what the House passed initially has to pass or
else it's unacceptable. My criticism is it's closer to nothing
than it should have been. So for example, in what
the House originally passed, it blocked the illegal and unconstitutional
Biden's student debt cancelation that would have saved at least
(26:42):
four hundred and sixty billion dollars. What's been reported publicly
is nope, all of that's still in there now, allegedly.
And what Kevin said is is there is something in
there saying that if the court strikes it down, people
have to resume paying their debts. I didn't quite understand
and what he was saying when he described that, But
(27:03):
we'll see what the text is at the end of
the day. The old version eliminated altogether, and this one
at best punts it to the court. It's worth comparing
the overall numbers. What the House did initially was increase
the debt limit by one point five trillion, or until
March of twenty twenty four, so it was a partial
(27:24):
debt increase, but not a blank check. What this is
does is it suspends the debt limit altogether until January
twenty twenty five on. So on the face of it,
instead of one point five trillion, it's about four trillion
in debt. Now, that's more than twice as much debt.
(27:45):
That is a lot of debt. And if you're giving
the Democrats that much debt, I think you should be
getting real and material spending increases. And the big thing
to understand is what happened for the federal government. In
twenty seventeen, the total federal budget was about four trillion dollars.
It's now six and a half trillion dollars. That's happened
(28:07):
in just five years.
Speaker 3 (28:09):
Why.
Speaker 2 (28:09):
The biggest reason is because of COVID and the massive
spending on COVID, and then because the Democrat majorities the
last two years rammed through massive spending and Unfortunately, this
deal may slightly slow down the rate of growth going forward,
but it does very little to turn the clock back
(28:32):
on the explosion of spending that was given with COVID
as the excuse, and that is driving inflation. If you
don't like paying more for every bill you've got, having
the federal government spend like drunken sailors is one of
the big causes of it. And so if you just
think in terms of big picture comparison, increasing the debt
(28:56):
limit from one point five trillion to four trillion is
a big increase and the spending reductions are much much smaller.
That's the biggest reason I'm disappointed by what we're looking at.
Speaker 1 (29:09):
I got to ask you a hypothetical here, will we ever?
Speaker 3 (29:14):
And there's a lot of people that are listening.
Speaker 1 (29:16):
I'm one of them that thinks this, every time we
go down this road, Are we ever going to get
a balanced budget?
Speaker 3 (29:23):
Amendment center?
Speaker 1 (29:24):
Is that now just the biggest load of crap ever
Promised by a lot of politicians to get people to
go to the polls and vote for them, that I'll
do this, and I'm going to do this.
Speaker 3 (29:33):
There's been opportunities to do it. Never gets done.
Speaker 1 (29:36):
People love the drunken sailor spending when they get into office.
You're one of those that criticize it every single time.
But when you see where we're going with our debt,
is there any chance that we will ever get a
balanced budget amendment, even if the Republicans got back the House,
sent in the White House all at the same time.
Speaker 2 (29:54):
Well, look, if we're counting on current members of Congress,
there's no chance whatsoever. All of the Democrats oppose a
balanced budget amendment. All of them like spending like drunken sailors.
And the unfortunate thing is about half the Republicans do.
And Republican leadership loves the spending. Anytime we have a
big spending fight in the Senate, they are about twenty
(30:17):
Republicans who are willing to vote no, And you usually
get all the Democrats and twenty to thirty Republicans who
will vote for damn near any spending bill they see.
I did last week. I was on Squakbox on CNBC,
which I really like. Doing squakboxes, you actually get into
substantive conversations in greater depth than the five or six
(30:38):
minute SoundBite you get on most other shows. But in
the course of being on Squawkbox, at one point we
were talking about the out of control spending and they said, well, gosh,
you know, you had the Inflation Reduction Act, you get
the infrastructure bill, and you had this other bill. And
I'm like, yeah, and I voted against all of those,
and the hosts were a little surprised on that. But look,
(31:00):
I don't think we ought to be bankrupting our country.
And the simple math of it, five years ago, the
national debt was just over twenty trillion dollars. Today it's
thirty two trillion dollars. That is a massive, massive increase,
and I think we should be using this leverage now
to make a greater step to stopping that spending and
(31:24):
that out of control debt.
Speaker 1 (31:26):
Last question for you, Senator, how close are we to
just being in total chaos? And I'm talking about as
a country with debt. You look at a national debt
clock and those numbers if we want to pay it
all off of the US national debt debt per citizens
over ninety five thousand now for the first time ever.
But not every citizen pays taxes, So if you had
(31:47):
debts debt per taxpayer, you'd be two hundred and forty
eight thousand, and that would just pay off the debt
for one one thousand of a second, and we'd still
immediately go back in the red. You look at the
US federal debt ratio, for example, in two thousand, it
was fifty seven point seven eight percent the US federal
debt to GDP ratio. Now it's the worst that's ever
(32:09):
been in history, one hundred and twenty point forty seven percent.
That is something that every economist in the world would
say is impossible to sustain. And when you see this
now and you look at the debt and you look
at our kids.
Speaker 3 (32:25):
I look at my kids.
Speaker 1 (32:26):
I know you look at your kids, and you see this,
and you think, at some point this debt time bomb
is going to explode. Is there anyone really that cares,
that's in a high leadership role in DC over this?
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Com center that ask me that question for you. I
see a US debt taking time bomb. I think every
economist says it. Uh, this is not just about our
kids and our grandkids having debt. This is about losing
control of a country in essence when that's explodes. If
(34:36):
we don't write this ship, how concerned are you on
that level?
Speaker 2 (34:40):
So I'm very concerned. But let's wrap this podcast up
with a note of optimism. Yes, absolutely, yes we can
solve this. I don't believe this is unsolvable. I don't
believe we're in a hole that is too deep. If
you look at the federal budget, and if you're a
numbers person, and look, I'm someone who cares about numbers,
cares cares about the budget, there is only one first
(35:05):
order variable when it comes to the budget, and that
is economic growth. Everything else is a second order or
third order variable. In other words, we cannot cut spending
enough doing nothing else to solve this problem. The only
way to get out of it is to increase GDP growth.
And if you look at when growth is booming. Since
(35:30):
World War Two, GDP growth has averaged about three point
three percent a year. That number is critically critically important.
During the second half of the Obama years, GDP growth
averaged less than one percent a year, zero point nine
percent a year. The preceding time GDP growth had averaged
(35:53):
less than one percent a year was nineteen seventy eight
to nineteen eighty two, coming out of Jimmy Carter. If
you have anemic GDP growth, you can't solve the budget problem.
It's impossible. On the other hand, if you have booming
economic growth, it's a double whammy on the budget because
when you have booming growth, number one, tax revenue surge
(36:16):
and so the federal government takes in more revenue. But
number two, when you have booming economic growth, a lot
of federal spending drops. Welfare spending drops, so people who
were getting welfare get jobs, and when they get jobs,
they stop getting welfare and they start paying taxes. So
you get a double whammy. And to give you a
sense of how potent it can be. Look, if you
(36:38):
ask can we ever solve it? The natural question is
to ask, well, when's the last time we solved it
and didn't have a deficit. And the answer to that
would be after twelve years of Reagan, Bush coming in,
cutting taxes, simplifying the tax code, reducing job killing regulations.
And Reagan came in and did that, came in, inherited
(37:02):
Jimmy Carter's anemic growth. He slashed the tax code, he
simplified the tax code, and he cut job killing regulations.
And Ben, do you know what GDP growth was in
nineteen eighty four?
Speaker 3 (37:14):
I would love to know, and I know you know
that number, So tell.
Speaker 2 (37:16):
Me seven point two percent. Wow, that's Those are developing
country numbers. Those are numbers you see in countries like
India and Singapore. Those are not what you see in
major industrialized countries like the United States. Typically. That's the
(37:37):
power of growth. And what happened after we saw the
growth unleashed through eight years of Reagan and four more
years of Bush is Bill Clinton inherited an economy that
was booming so strong that we had a four trillion
dollar budget surplus. That's how you do it. That's how
(37:59):
you fix it. And if you want to fix it again,
we got to do the same thing. By the way,
rewind to JFK. JFK, if he were running today, the
Democrat Party would chase him out of the party. They
tar and feather him. JFK ran for the presidency on
tax cuts and defeating communists. Neither one of those are
welcome in today's Democrat Party. But you look at JFK
(38:22):
cut taxes, JFK reduced regulations, and JFK campaigned on five
percent annual GDP growth and we produce that during his
presidency and it was an economic boom. We can do
that again, but Ben, we're not going to do it
again until we have a president who is thoroughly committed
to doing so. And that means raining and the spending.
(38:43):
But that also means the aggressive pro growth tax cutting,
tax simplification, and repealing of job killing regulations that let
small businesses prosper and flourish. Until that happens. If we
don't have the growth, you can't all of the problem.
But with the growth, I believe we can solve it.
(39:03):
You also asked a minute ago if we'll ever get
a budget Ballace Budget Amendment, not through the current members
of Congress, but I do think the States are very
close to calling for a constitutional convention to pass one,
which is the only way it will ever happen with
pressure from the States.
Speaker 1 (39:20):
Yeah, a lot of support and a lot of growth
and a lot of people finding out about that movement
as well, which is a great thing, Senator. Always a
pleasure for everyone listening. Don't forget to hit that subscribe,
that auto download button or the follow tab. If you're
listening on Apple Podcast. At the top, there's a follow button.
You can click it and you'll make sure you get
(39:42):
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We're ever you're listening to show. As always center a
(40:02):
pleasure being with you. We'll see it back here in
a couple of days.
Welcome its verdict with Senator Ted Cruz Ben Ferguson with
you as always, and Senator the number one question that
everybody wants to know right now on this Memorial Day
is the Biden debt deal, the Biden debt ceiling. Is
there a deal with the Republicans, and if there is,
what does that look like for the American people.
Speaker 2 (00:23):
Well, and it was announced on Sunday that there was
a quote agreement in principle between Joe Biden and Kevin McCarthy.
And the agreement in principle included some cuts and spending
from what Biden wanted. It also included an extension in
the debt ceiling. And I would say, as we sit
here you and I are recording this Sunday night, at
(00:45):
this point, we don't have the text of the bill.
We have not seen exactly what's in the bill, so
it is not entirely clear all of the details. But
based on what we know now, there are some good elements,
but there are a lot of things that are disappointing.
As I'm sitting here right now, I'm disappointed that this
(01:05):
agreement does not cut more. And I'm also disappointed that
this agreement adds a lot of debt in exchange for
relatively little cuts. Now we can break that down piece
by piece and walk through what's in it and what's not.
With the caveat that the bill text at this point
we still haven't seen, and presumably we will see sometime soon.
Speaker 1 (01:29):
Let's start with is there something in this bill that
we could probably get excited about as conservatives? Because I
know this is a fight, but there are many concerns saying, Okay,
we won back the House, surely we're going to get
something that's positive for us from winning back to house.
Is there a light at the end of the tunnel
saying hey, at least from what we've been told. Obviously
(01:50):
we don't have the text yet, but there are going
to be some victories for us.
Speaker 2 (01:54):
Well, I can tell you what House leadership is emphasizing.
So on Sunday afternoon, I sent out a tweet critical
of this deal, and in particular that that House leadership
had been saying that there's not that the Democrats don't
get a single thing from this deal. And I sent
out a tweet and said, well, actually they get four
(02:15):
trillion things, which is the four trillion in new debt
that this deal adds and that they also get I said,
eighty seven thousand new things with the eighty seven thousand
IRS agents. And I'll tell you, within minutes of sending
that tweet, I was on the phone with Kevin McCarthy
and Kevin called me. Kevin and I are friends, and
he was unhappy with what I had expressed. And look,
(02:36):
I respect that. Kevin picked up the phone and called
me and he pitched what he saw as the benefits
of this agreement. And I listened to him and gave him,
gave him respectful hearing. And actually later in the afternoon,
I was on a call with Kevin McCarthy and with
all the Republican senators where he walked through the benefits.
(02:56):
I'll tell you, according to House leadership, the biggest benefits
in the deal are as follows.
Speaker 3 (03:02):
Number one.
Speaker 2 (03:04):
They're leaning in aggressively on the permitting reforms. They say
that there were significant permitting reforms that will speed up
the development of energy, that will speed up the development
of construction projects, that will reduce the time spent on NEPA,
which is very costly and slow environmental regulations. And if
(03:25):
those reforms are real, that's good. We haven't seen the
details yet, but that's at least House leadership is pitching
that as a significant victory. Secondly, what they're pitching is
a significant victory is work requirements for SNAP and tan
ifs now SNAP our food stamps and TANIF is what
(03:48):
used to be aids to families with defending children with
dependant children, and from what we understand, it expands work
requirements from individuals from age forty nine. It expands it
up to age fifty four, so it adds five more
years rather of work requirements. They're pitching that as a positive.
(04:12):
The third positive they're pitching is they say that there's
a provision in the bill that if Congress does not
pass the appropriation bills this year, that a budget cap
kicks in automatically that is current spending minus one percent,
and so they're pitching that as another fiscal benefit. Those
(04:35):
are the main arguments they're laying out, all three of them.
The details matter if they are as leaderships describing them,
those are positive, those are not nothing.
Speaker 1 (04:47):
There's obviously the big question that many have heard about.
There's been a lot of attention on this center on
social media, and that's about IRS agents. There is a
concern that the IRS cannot be trusted. They're targeting people.
We saw what happened with Matt tb when he was
testifying before Congress and the RS is knocking on his door.
And many people believe that these new IRS agents would
(05:10):
in fact be nothing more than harassment agents for those
that are Christian, those are conservative in general. Look at
Matt Tebe is a perfect example of this. We know
what happened in the past with Tea Party and conservative groups,
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IRS agents center are something that so many are concerned about.
(06:41):
You mentioned that as well in your tweet today. Where
are we on those this army of IRS agents? Is
that in this deal? Are we going to be able
to stop that?
Speaker 2 (06:52):
Well, it's it's not entirely clear. So the original bill,
the House pass what was called the Limit, Save and
Grow Bill that zero rode out the eighty billion in
new funding that Democrats ram through in the prior Congress
for the IRS. That eighty billion was going to be
directed to eighty seven thousand new IRS agents and employees
to be hired to harass the American people, and the
(07:15):
first bill the House passed zero that out. We don't
know exactly what's in the Biden McCarthy deal. The New
York Times reported that the IRS new spending was reduced
by ten billion, in other words, from eighty billion to
seventy billion. So that's pretty disappointing. And one House Republican
tweeted out that the cuts are only one point eighty
(07:38):
eight billion, so one point nine billion instead of ten billion.
We don't know for sure, I will say when I
tweeted out based on the public reporting that the eighty
seven thousand new IRS agents were still there, and Kevin
called me. What he argued is he says, in this
bill they zero out the new spending for the IRS
(08:00):
for next year so that they cannot hire the new
IRS agents next year. And the pitch he made is
we zero it out next year and will fight over
subsequent years and appropriations to stop Biden from hiring them
in those years. Until I see the text, I can't
assess that, but that's at least his response. If it's
(08:23):
right that they zero it out next year. That's good
on its face. I'm glad they zero it out next year.
If that's in there, I'd rather see the whole eighty
billion zeroed out, But zeroing it next year is a
significant step in the right direction. But again, the devil's
in the details.
Speaker 1 (08:40):
A lot of Conservatives that were just recently elected to
the House, they have pledged and they've been doing this
a lot on social media that they are going to
try to do everything they can to stop this from
passing the House of Representatives. There have been a lot
of hardline members of the House Freedom Caucus. Chip Roy
is one of those who said on Twitter exactly that
(09:00):
we're going to try to stop it this from happening.
After you talk to House leadership, do you feel pretty
confident that Democrats and Republican negotiators are in fact able
to iron this out the final details this agreement, and
to be clear, what this is, suspend to suspend the
federal government's thirty one point four trillion dollar debt ceiling
(09:25):
in the coming days. And they're acting like this victory.
I worry that, yes, this is a short term victory.
Center and many Americans, I think, worry that, yeah, this
is short term, but how much damage are we doing
this country when we're going this much into debt without
real cuts to spending.
Speaker 2 (09:41):
Yeah, and look that that is my principal concern. So
in the original bill, the Limit, Save and Grow Bill,
what it did is it rolled back discretionary spending. So
what does discretionary spending mean the federal budget? There two components.
There's what's called mandatory spending and there's what's called discretionary spending.
So man spending are things like Social Security and Medicare
(10:04):
and medicaid. They're things that are on autopilot in the
federal budget and they grow automatically. Congress doesn't appropriate every year.
They're set to be automatically appropriated. Discretionary spending is essentially
everything else, and so that is what Congress takes up
and appropriates each year. The Limit Save and Growth Grow
(10:24):
Bill cut discretionary spending from one point seven trillion in
fiscal year twenty three to one point four to seven
trillion in fiscal year twenty four. So that was two
hundred and thirty billion cutting the actual spending levels. And
then it caps spending at one percent per year, and
(10:47):
that was calculated just that reduction in spending was calculated
to save a total of three point two trillion dollars. Now,
we don't know for sure, but what has been reported publicly,
according to The New York Times, is that this deal
leaves discretionary spending at the exact same level one point
(11:07):
seven trillion that it was in fiscal year twenty three.
In other words, that it we lose the entirety of
that cut, and it then grows from one percent from
there on. Now it's a big difference if you're growing
one percent from one point seven trillion or growing one
percent from one point four to seven trillion, Because it
(11:27):
makes a three point two trillion dollar difference over time.
What does that mean in total? The New York Times
is reporting that the total savings of the deal are
about six hundred and fifty billion. That is a massive
reduction from the four point eight trillion total savings in
the limit Save and Grow bill. Now, I can tell
(11:48):
you when I asked Kevin about that this afternoon, he
pressed back pretty hard and he said, why are you
believing the New York Times? And I said, look, I
don't have biltecks. What else do you want me to believe?
All all I have are the public reports. If the
bill tech shows something different, then we'll discuss it on
the pod. But what the New York Times is saying
right now at least, is that this agreement is giving
(12:13):
four trillion in new debt in exchange for much, much
smaller spending cuts. If that is true, that's pretty deeply disappointing.
Speaker 1 (12:22):
There's always people centered that are saying the sky is
falling when they don't get what they want. And I'll
just give you examples of the spectrum here. Representative Norman
on the debt deal today said what I'm hearing is quote,
anything but fiscal sanity. Then you move over to Lindsey Graham.
He's raging against this debt deal, warning that the cuts
could quote cripple the military. And then Kevin McCarthy says,
(12:46):
the debt ceiling deal is quote worthy of the American people.
That's a pretty big spectrum swing there, which one is it?
Speaker 2 (12:55):
Well, there may be some truth to all of those. Look,
leadership in both the House and Senate are going to
pitch that this is the greatest deal since Slice spread.
The White House is pitching this is a terrific deal.
A lot of Democrats are pitching this is a terrific deal.
The number of Democrats who are happy with this should
give you real pause in terms of the military hawks.
(13:21):
And part of the way we got into thirty two
trillion dollars in debt is there's a dynamic that that
that the Democrats play against Republicans, which is, we have
a big chunk of the Republican caucus that consider themselves
military hawks and that always want to spend massive amounts
of the military. Now I consider myself a military hawk.
(13:42):
I put myself in that camp, but I'm also a
fiscal hawk, so I don't want to bankrupt the country
while we are investing what we need to invest in
our military. And Lindsey is one who who focuses very
much on the military side and far less on the
fiscal side. And the trade off the Democrats always do
is well, if you know, if you want your guns,
(14:04):
we get our butter and and so they they typically
leverage the military hawks and the Republican Party to get
the trillions in spending they want on the social side.
This trade off, I think on the military side, much
of the gnashing of teeth may be overstated, but again
(14:28):
we haven't seen the bill, so we will see the details.
I will tell you something that leadership is pitching is positive.
So the first version of Limitsave and Growth rescinded the
unspent COVID spending that Congress had appropriated. That saved about
thirty billion dollars. This agreement is likewise expected to rescind unspaced,
(14:52):
unspent COVID relief funds and also vaccine research and disaster relief.
We don't know that know the details of that, but
we're being told that could be saving fifty to seventy
billion dollars. So depending on what that is, that could
be a positive element. Now let me give you a
negative element. The Limit Saving Grow bill repealed almost all
(15:14):
of the ridiculously named inflation reduction Acts, energy and climate
tax credit expansions, which saved five hundred and sixty nine
billion dollars according to the public reporting. No changes are
made in this, So this is something that the Biden
White House won and that House Republicans were not able
to prevail on.
Speaker 3 (15:32):
So that's disappointing.
Speaker 2 (15:37):
Focusing on the work requirements, the House included work requirements
not just on food stamps and welfare, but also on
medicaid which is a huge component. Based on the public reporting,
there are work requirements, so that we'll see how stringent
there are. But there at least some work requirements for
(15:58):
food stamps and welfare, but not for Medicaid, and Medicaid
is a massive program. So back and forth. What's reported
at least is that House Republicans got some of what
was included in the first bill, but it's not clear
how much.
Speaker 1 (16:17):
I want to play part of what Joe Biden said,
and rarely does he take questions from the media. Rarely
does he have press conferences. He did have a kind
of a press conference day live from the White House.
I want to play for you what he said about
reaching this byparts and agreement, and then he was asked
about from a reporter about hey, why did you compromise?
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I want you to hear how Biden described it. Some
thought he was, you know, not that excited, and I'm like, well,
(18:24):
it is Biden. It's kind of hard to read him
on most days. Let's be honest. Here's what he had
to say.
Speaker 3 (18:30):
Sorry to keep you waiting, but we've got good news.
Speaker 4 (18:33):
We've got to spocus Speaker McCarthy, and we've reached the
bipart of some budget agreement that we're ready to move
to the full Congress. And I think it's a really
important step forward, excuse me. And it takes a thread
of catastrophic to fall off the table, protects our hardware
and in historic economic recovery. And the agreement also represents
(18:56):
the compromises. Me A's known got everything they want. That's
the responsibility of governing. And this is the deal is
good news. I believe you'll see for the American people,
the agreement prevents the worst possible crisis on the fault.
For the first time in a nation's history, an economic recession.
(19:16):
Retirement accounts devastated millions of jobs lost. It also protects
key priorities and accomplishments and values that Congressional Democrats and
I have fought long, for long and hard for investing
in America's agenda. That's creating good jobs and communities throughout
the country. It protects Social Security, Medicare, and veterans, and
so much more. The Speaker and I made clear from
(19:39):
the start that the only way forward was a bipartisan agreement.
That agreement now goes to the United States House and
to the Senate. I strongly urge both both chambers to
pass that agreement. Let's keep moving forward on meeting our
obligations and building the strongest economy in the history of
the world. I'll take a few questions.
Speaker 1 (20:00):
Before we get to the Q and A part. There
is a large portion of the American people, and a
large portion of people especially that listen to this podcast,
and they sit there, they go, let me get this straight.
He wants now credit for creating a crisis and then
now saying we've averted said crisis, which was a massive default,
(20:20):
so therefore you should be happy. And the red flag
goes up, which is okay, So you drive us down
this road so that there's this deadline in our face
with a gun to our head, and then you can
throw in a bunch of pork and a bunch of
stuff we don't like because the guns to our head
on default, and then you want us to clap for
you doing a great job.
Speaker 3 (20:41):
And I'm not just referring to him, I'm referring to Congress.
Speaker 1 (20:44):
Are we ever going to find a way to get
us off this merry go round?
Speaker 2 (20:49):
Well, look, I think Joe Biden is going to continue
to try to create crises and continue to go hard
left and try to ram through his hard left agenda.
It's going to be much harder with the Republican House,
so I expect more and more of it to be
on the executive side and regulatory side. But in this instance, look,
if you want to know how to assess this deal,
(21:10):
one of the ways to do so is listen to
what the Democrats are saying.
Speaker 3 (21:13):
There.
Speaker 2 (21:14):
Joe Biden is urging every Democrat to support it. Here's
Ron Klain as former chief of staff. He tweeted today,
quote every dem should support this deal and then rally
behind Joe Biden and help him win the White House,
the Senate, in the House in twenty twenty four, so
we can save our economy now and get better policy
in twenty twenty five. That was Ron Klaine's reaction. Let
(21:37):
me give you another reaction to it, and this was
Bill Crystal.
Speaker 3 (21:39):
Now.
Speaker 2 (21:39):
Bill Crystal used to be somewhat conservative. When Trump became president,
Crystal lost his mind and has been a hard left
Democrat cheerleader ever since. Here's Crystal's reactions quote first reactions
to the deal. One good for the US through the
need to get rid of the death ceiling in twenty
twenty five, and two good for Biden EEP policy. Domestic
(22:05):
spending freezes no worse than the CRS that a GOP
house would have produced, and over the four years, spending
on liberal priorities up. So that's Bill Crystal's assessment and
Bill's Crystal's assessment. Beyond that, he also quote tweets a
tweet from a reporter guy named Max Cohen, who tweeted
(22:28):
the follow following He said, quote, I asked McCarthy about
how he would describe his interactions with Biden during negotiations.
Quote very professional, very smart, very tough. At the same time,
McCarthy replied, and here was Bill Crystal's reaction to that. Wow,
(22:49):
McCarthy seems to be all in for now on undercutting
the MAGA narrative about President Biden being out of it,
which is good for Biden and for the country. And
then he said, and for the future, wouldn't MacCarthy prefer
being speaker with a President Biden than having to deal
with a President Trump? Asked to that last question, Hell no, Bill,
and you have Trump derangement syndrome, which makes you think
(23:12):
the country is better off handing the nation over to
out of control Marxists than actually winning policy victories in
the White House. But that does tell you something about
how people are reacting this deal, that folks on the
far left are cheerleading it right now.
Speaker 1 (23:30):
Yeah, And there's one other question, and that is this
from a reporter, and I want to get your reaction
to it. A reporter asked the president about him quote compromising,
And as you mentioned it there, it seems the Democrats
in many ways got a pretty good deal here, and
Biden was trying to act like he was some sort
(23:51):
of you know, well, it was really hard for me
to do this, really tough, but you know what was
my alternative?
Speaker 3 (23:57):
Listen at the beginning that the death.
Speaker 1 (24:01):
Cent was not negotiable.
Speaker 3 (24:02):
Doesn't that being just done here?
Speaker 4 (24:04):
Or does that? And you guys said, look, we're not negotiating.
Here's the deal they passed. They said they're going to
They passed the debt ceiling, and they said they'd only
do it on condition that it had all these cuts
in it. I said, I'm not going to do that.
You passed the debt ceiling. Period, I'll negotiate with you
on the cuts. What you say, what's going to happen,
(24:24):
What the budget's going to look like. That's what we
are negotiating in order to get to them deciding that
they're going to go along with a new debt ceiling,
meaning that it's not attached, so something totally different attached
was attached before. But you want to try to make
it look like I made some compromise in the debt ceiling.
Speaker 3 (24:45):
I didn't.
Speaker 4 (24:46):
I made a compromise on the budget. That's what they
wanted to do, to make a compromise on the budget,
and that's what you've done, even though you haven't gone
as far as they wanted, isn't that sure? Yeah? Well,
can you think of an alternative?
Speaker 3 (25:00):
Can you think of an alternative? And then there's the chuckle.
Speaker 1 (25:03):
I mean, really, that's what you've got from the President
in the White House tonight.
Speaker 3 (25:07):
Oh look what he just said.
Speaker 2 (25:09):
There was complete gobbledygook.
Speaker 3 (25:10):
And it is absolutely right.
Speaker 2 (25:13):
That Biden suffered a major defeat. Initially, he staked out
a position that was patently unreasonable. He said he wasn't
going to talk, he wasn't going to negotiate. The only
thing he would take was a clean debt ceiling. That
was objectively unreasonable. But frankly, it's been the position of
a lot of Democrat presidents in the past, and sometimes
they've held that line, sometimes they haven't. Unfortunately, sometimes Republican
(25:35):
leadership in the Senator House has echoed the line of
Democrat presidents that it must be a clean debt ceiling
with nothing attached, which is beginning with unilateral surrender. I
will credit the House, the House Republicans, and I think
it is House conservatives that drove this that the clean
debt ceiling was off the table and Biden was forced
(25:56):
to completely surrender on that demand, and his whole convoluted
explanation there made no sense. He ended up abandoning his claim.
He wasn't it going to negotiate, and he came to
the Oshing table, and look, it was always obvious that
what was going to pass was going to be somewhere
between what the House initially passed and nothing. And so
(26:19):
I did not stake out the position that every word
of what the House passed initially has to pass or
else it's unacceptable. My criticism is it's closer to nothing
than it should have been. So for example, in what
the House originally passed, it blocked the illegal and unconstitutional
Biden's student debt cancelation that would have saved at least
(26:42):
four hundred and sixty billion dollars. What's been reported publicly
is nope, all of that's still in there now, allegedly.
And what Kevin said is is there is something in
there saying that if the court strikes it down, people
have to resume paying their debts. I didn't quite understand
and what he was saying when he described that, But
(27:03):
we'll see what the text is at the end of
the day. The old version eliminated altogether, and this one
at best punts it to the court. It's worth comparing
the overall numbers. What the House did initially was increase
the debt limit by one point five trillion, or until
March of twenty twenty four, so it was a partial
(27:24):
debt increase, but not a blank check. What this is
does is it suspends the debt limit altogether until January
twenty twenty five on. So on the face of it,
instead of one point five trillion, it's about four trillion
in debt. Now, that's more than twice as much debt.
(27:45):
That is a lot of debt. And if you're giving
the Democrats that much debt, I think you should be
getting real and material spending increases. And the big thing
to understand is what happened for the federal government. In
twenty seventeen, the total federal budget was about four trillion dollars.
It's now six and a half trillion dollars. That's happened
(28:07):
in just five years.
Speaker 3 (28:09):
Why.
Speaker 2 (28:09):
The biggest reason is because of COVID and the massive
spending on COVID, and then because the Democrat majorities the
last two years rammed through massive spending and Unfortunately, this
deal may slightly slow down the rate of growth going forward,
but it does very little to turn the clock back
(28:32):
on the explosion of spending that was given with COVID
as the excuse, and that is driving inflation. If you
don't like paying more for every bill you've got, having
the federal government spend like drunken sailors is one of
the big causes of it. And so if you just
think in terms of big picture comparison, increasing the debt
(28:56):
limit from one point five trillion to four trillion is
a big increase and the spending reductions are much much smaller.
That's the biggest reason I'm disappointed by what we're looking at.
Speaker 1 (29:09):
I got to ask you a hypothetical here, will we ever?
Speaker 3 (29:14):
And there's a lot of people that are listening.
Speaker 1 (29:16):
I'm one of them that thinks this, every time we
go down this road, Are we ever going to get
a balanced budget?
Speaker 3 (29:23):
Amendment center?
Speaker 1 (29:24):
Is that now just the biggest load of crap ever
Promised by a lot of politicians to get people to
go to the polls and vote for them, that I'll
do this, and I'm going to do this.
Speaker 3 (29:33):
There's been opportunities to do it. Never gets done.
Speaker 1 (29:36):
People love the drunken sailor spending when they get into office.
You're one of those that criticize it every single time.
But when you see where we're going with our debt,
is there any chance that we will ever get a
balanced budget amendment, even if the Republicans got back the House,
sent in the White House all at the same time.
Speaker 2 (29:54):
Well, look, if we're counting on current members of Congress,
there's no chance whatsoever. All of the Democrats oppose a
balanced budget amendment. All of them like spending like drunken sailors.
And the unfortunate thing is about half the Republicans do.
And Republican leadership loves the spending. Anytime we have a
big spending fight in the Senate, they are about twenty
(30:17):
Republicans who are willing to vote no, And you usually
get all the Democrats and twenty to thirty Republicans who
will vote for damn near any spending bill they see.
I did last week. I was on Squakbox on CNBC,
which I really like. Doing squakboxes, you actually get into
substantive conversations in greater depth than the five or six
(30:38):
minute SoundBite you get on most other shows. But in
the course of being on Squawkbox, at one point we
were talking about the out of control spending and they said, well, gosh,
you know, you had the Inflation Reduction Act, you get
the infrastructure bill, and you had this other bill. And
I'm like, yeah, and I voted against all of those,
and the hosts were a little surprised on that. But look,
(31:00):
I don't think we ought to be bankrupting our country.
And the simple math of it, five years ago, the
national debt was just over twenty trillion dollars. Today it's
thirty two trillion dollars. That is a massive, massive increase,
and I think we should be using this leverage now
to make a greater step to stopping that spending and
(31:24):
that out of control debt.
Speaker 1 (31:26):
Last question for you, Senator, how close are we to
just being in total chaos? And I'm talking about as
a country with debt. You look at a national debt
clock and those numbers if we want to pay it
all off of the US national debt debt per citizens
over ninety five thousand now for the first time ever.
But not every citizen pays taxes, So if you had
(31:47):
debts debt per taxpayer, you'd be two hundred and forty
eight thousand, and that would just pay off the debt
for one one thousand of a second, and we'd still
immediately go back in the red. You look at the
US federal debt ratio, for example, in two thousand, it
was fifty seven point seven eight percent the US federal
debt to GDP ratio. Now it's the worst that's ever
(32:09):
been in history, one hundred and twenty point forty seven percent.
That is something that every economist in the world would
say is impossible to sustain. And when you see this
now and you look at the debt and you look
at our kids.
Speaker 3 (32:25):
I look at my kids.
Speaker 1 (32:26):
I know you look at your kids, and you see this,
and you think, at some point this debt time bomb
is going to explode. Is there anyone really that cares,
that's in a high leadership role in DC over this?
And before you answer that, let me tell you about
our friends of Patriot Mobile. I don't know about you,
but I'm sick and tired of giving my money to
(32:47):
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Speaker 3 (32:54):
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Speaker 1 (32:56):
And if you are sick and tired of giving your
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Speaker 3 (34:11):
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Speaker 1 (34:13):
Free activation, Patriotmobile dot com or call them eight seven
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Com center that ask me that question for you. I
see a US debt taking time bomb. I think every
economist says it. Uh, this is not just about our
kids and our grandkids having debt. This is about losing
control of a country in essence when that's explodes. If
(34:36):
we don't write this ship, how concerned are you on
that level?
Speaker 2 (34:40):
So I'm very concerned. But let's wrap this podcast up
with a note of optimism. Yes, absolutely, yes we can
solve this. I don't believe this is unsolvable. I don't
believe we're in a hole that is too deep. If
you look at the federal budget, and if you're a
numbers person, and look, I'm someone who cares about numbers,
cares cares about the budget, there is only one first
(35:05):
order variable when it comes to the budget, and that
is economic growth. Everything else is a second order or
third order variable. In other words, we cannot cut spending
enough doing nothing else to solve this problem. The only
way to get out of it is to increase GDP growth.
And if you look at when growth is booming. Since
(35:30):
World War Two, GDP growth has averaged about three point
three percent a year. That number is critically critically important.
During the second half of the Obama years, GDP growth
averaged less than one percent a year, zero point nine
percent a year. The preceding time GDP growth had averaged
(35:53):
less than one percent a year was nineteen seventy eight
to nineteen eighty two, coming out of Jimmy Carter. If
you have anemic GDP growth, you can't solve the budget problem.
It's impossible. On the other hand, if you have booming
economic growth, it's a double whammy on the budget because
when you have booming growth, number one, tax revenue surge
(36:16):
and so the federal government takes in more revenue. But
number two, when you have booming economic growth, a lot
of federal spending drops. Welfare spending drops, so people who
were getting welfare get jobs, and when they get jobs,
they stop getting welfare and they start paying taxes. So
you get a double whammy. And to give you a
sense of how potent it can be. Look, if you
(36:38):
ask can we ever solve it? The natural question is
to ask, well, when's the last time we solved it
and didn't have a deficit. And the answer to that
would be after twelve years of Reagan, Bush coming in,
cutting taxes, simplifying the tax code, reducing job killing regulations.
And Reagan came in and did that, came in, inherited
(37:02):
Jimmy Carter's anemic growth. He slashed the tax code, he
simplified the tax code, and he cut job killing regulations.
And Ben, do you know what GDP growth was in
nineteen eighty four?
Speaker 3 (37:14):
I would love to know, and I know you know
that number, So tell.
Speaker 2 (37:16):
Me seven point two percent. Wow, that's Those are developing
country numbers. Those are numbers you see in countries like
India and Singapore. Those are not what you see in
major industrialized countries like the United States. Typically. That's the
(37:37):
power of growth. And what happened after we saw the
growth unleashed through eight years of Reagan and four more
years of Bush is Bill Clinton inherited an economy that
was booming so strong that we had a four trillion
dollar budget surplus. That's how you do it. That's how
(37:59):
you fix it. And if you want to fix it again,
we got to do the same thing. By the way,
rewind to JFK. JFK, if he were running today, the
Democrat Party would chase him out of the party. They
tar and feather him. JFK ran for the presidency on
tax cuts and defeating communists. Neither one of those are
welcome in today's Democrat Party. But you look at JFK
(38:22):
cut taxes, JFK reduced regulations, and JFK campaigned on five
percent annual GDP growth and we produce that during his
presidency and it was an economic boom. We can do
that again, but Ben, we're not going to do it
again until we have a president who is thoroughly committed
to doing so. And that means raining and the spending.
(38:43):
But that also means the aggressive pro growth tax cutting,
tax simplification, and repealing of job killing regulations that let
small businesses prosper and flourish. Until that happens. If we
don't have the growth, you can't all of the problem.
But with the growth, I believe we can solve it.
(39:03):
You also asked a minute ago if we'll ever get
a budget Ballace Budget Amendment, not through the current members
of Congress, but I do think the States are very
close to calling for a constitutional convention to pass one,
which is the only way it will ever happen with
pressure from the States.
Speaker 1 (39:20):
Yeah, a lot of support and a lot of growth
and a lot of people finding out about that movement
as well, which is a great thing, Senator. Always a
pleasure for everyone listening. Don't forget to hit that subscribe,
that auto download button or the follow tab. If you're
listening on Apple Podcast. At the top, there's a follow button.
You can click it and you'll make sure you get
(39:42):
every episode we publish on Monday, Wednesdays and Fridays. When
you listen our show, please share it on social media.
You can hit that little Ford arrow and share it
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other people listen to this show and find it and
most importantly write it's a five star review if you can.
We're ever you're listening to show. As always center a
(40:02):
pleasure being with you. We'll see it back here in
a couple of days.
Host
Ben Ferguson
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