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.
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 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 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.
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 we don't have the text yet, but there are going to be some victories for us.
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 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, 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. I'll tell you, according to House leadership, the biggest benefits in the deal are as follows.
Number one.
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 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 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.
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 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.
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 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, Patriot groups, Second Amendment groups. And before you answer that, I want to tell you about our friends over at Chalk. If you're a guy and you are feeling like you've lost a little bit of your strength and vitality, you feel like you've got a little bit older, you have
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that in this deal? Are we going to be able to stop that?
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 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 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 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 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.
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 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 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.
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 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 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 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 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 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 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 four trillion in new debt in exchange for much, much smaller spending cuts. If that is true, that's pretty deeply disappointing.
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, the debt ceiling deal is quote worthy of the American people.
That's a pretty big spectrum swing there, which one is it?
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.
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. 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, 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 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, 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 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.
So that's disappointing.
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 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.
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? But before I do that, I want to tell you
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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, 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.
Sorry to keep you waiting, but we've got good news.
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 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. 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 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.
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,
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.
And I'm not just referring to him, I'm referring to Congress.
Are we ever going to find a way to get us off this merry go round?
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, one of the ways to do so is listen to what the Democrats are saying.
There.
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 me give you another reaction to it, and this was Bill Crystal.
Now.
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 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 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, 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 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.
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 of you know, well, it was really hard for me to do this, really tough, but you know what was my alternative?
Listen at the beginning that the death.
Cent was not negotiable.
Doesn't that being just done here?
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,
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.
I didn't.
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?
Can you think of an alternative? And then there's the chuckle.
I mean, really, that's what you've got from the President in the White House tonight.
Oh look what he just said.
There was complete gobbledygook.
And it is absolutely right.
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 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 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 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 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 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
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. 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 in just five years.
Why.
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 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 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.
I got to ask you a hypothetical here, will we ever?
And there's a lot of people that are listening.
I'm one of them that thinks this, every time we go down this road, Are we ever going to get a balanced budget?
Amendment center?
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.
There's been opportunities to do it. Never gets done.
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.
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 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
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, 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 that out of control debt.
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 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 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.
I look at my kids.
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 woke companies. We've seen what's been happening with bud Light and Target, with Patagonia, the list goes on and on.
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Free activation, Patriotmobile dot com or call them eight seven eight Patriot that's eight seven eight Patriot Patriot Mobile dot 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 we don't write this ship, how concerned are you on that level?
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 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 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 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
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 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 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?
I would love to know, and I know you know that number, So tell.
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 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 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 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.
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.
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.
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 every episode we publish on Monday, Wednesdays and Fridays. When you listen our show, please share it on social media.
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