← Breaking Points with Krystal and Saagar
Breaking Points with Krystal and Saagar
2/11/25: Trump Standoff With Courts Over Spending Freeze, Republicans Panic Over NIH Cuts
00:46:39
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Krystal Ball
Easy.
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Sagar Enjeti
Hey guys, Sagar and Krystal here.
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Krystal Ball
Independent media just played a truly massive role in this election and we are so excited about what that means for the future of this show.
- [02:09]
Sagar Enjeti
This is the only place where you can find honest perspectives from the left and the right that simply does not exist anywhere else.
- [02:15]
Krystal Ball
So if that is something that's important to you Please go to BreakingPoints.com, become a member today and you'll get access to our full shows unedited ad free and all put together for you every morning in your inbox.
- [02:26]
Sagar Enjeti
We need your help to build the future of independent news media and we hope to see you@breakingpoints.com Good morning everybody. Happy Tuesday. We have an amazing show for everybody today. What do we have? Crystal?
- [02:38]
Krystal Ball
Indeed we do. We got a bunch of updates for you coming out of the court system in the sort of battle against Doge, including a court ruling that the Trump administration is defying one of the previous court orders. So things are getting very interesting. We also have some comments, new comments from Trump with regard to Gaza saying that all hell will break loose and the ceasefire deal will be over if Hamas doesn't comply with what he wants. So we'll break all of that down for you. Also have a number of developments coming out of the AI world, the biggest one of which though is that Elon Musk has put in kind of, I guess, a trolley bid to buy OpenAI out from under Sam Altman. The details are a little complicated, but it is an interesting development.
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Sagar Enjeti
It's an important story.
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Krystal Ball
It is a very future of AI. Absolutely, absolutely important story for the future of AI. We also want to take a look at. So Google, wasn't their original motto like don't be evil.
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Sagar Enjeti
Yes.
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Krystal Ball
Wasn't that Google?
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Sagar Enjeti
They took that away many years.
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Krystal Ball
That's been gone for a while now. But they had a list of AI principles, one of which was like we're not going to use AI to murder people. That one has been taken down.
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Sagar Enjeti
To be fair, it's been fake forever. They have always lied about that. They just helped the Chinese weapons system program back in 2017. So now they've just decided to say.
- [03:51]
Krystal Ball
We'Re actually going to have coming out of the cold, that one. Yeah.
- [03:53]
Sagar Enjeti
So.
- [03:54]
Krystal Ball
So we'll update you there as well. Interesting story coming out of China. That major automaker from China, byd, is now out with a fully self driving electric vehicle for less than $10,000. We'll show you what the car looks like. Also some of the other vehicles that they put out, I mean they have become quite a juggernaut in the entire automobile space. When you think about just not that long ago you would have sort of scoffed at the idea of a Chinese car. Now they are a major, major global player. We're going to try to get to the Stephen A segment that we tried to do yesterday, but then Sagar and I talked Too much. As per usual, he is floating around for president. Kind of interesting. At least he's charismatic. So we'll take a look at some of his positions and then Sourab Amari is going to stop by. He is talking about sort of a warning for maga, a little bit similar to the topic I broached yesterday. But he's coming from the right, saying basically you're trading your ideology for a really bad deal and you're falling prey to this sort of culture war division and accepting that over some of the more substantive changes that were supposed to be at the heart originally of the MAGA movement. So really interested to hear from him. He's always a thoughtful guy.
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Sagar Enjeti
Saurabh is a very smart dude and I encourage people to sign up for his newsletter and others. We're gonna have that in the description of that video.
- [05:12]
Krystal Ball
Yes. Saurabh and Emily are doing a newsletter together. They're both over at Unherd now. So excited for both of them.
- [05:18]
Sagar Enjeti
He's a very thoughtful dude and he's always an interesting person to talk to. So why don't we. Oh, before we get to that, thank you to everybody who's been subscribing to the show. We really appreciate you breakingpoints.com if you can, but why don't we go off with the courts?
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Krystal Ball
Yeah. So Trump was asked recently about whether or not he should abide by court orders and his reaction to some of the court decisions that are coming down against him and against Doge. Let's take a listen to what he had to say.
- [05:42]
Sagar Enjeti
He suffered a couple of court laws, Mr. President, and J.D. vance said judges aren't allowed to control the executive power. What's your take on that?
- [05:48]
Donald Trump
Well, we're going to see what happens. We have a long way to go and we're talking about fraud, waste, abuse. And when a president can't look for fraud and waste and abuse, we don't have a country anymore. So we're very disappointed with the judges that would make such a ruling. But we have a long way to go. We have to look, we have to find all of the fraud that's going on. We have tremendous fraud, tremendous waste and tremendous abuse and theft, by the way. And the day you're not allowed to look for theft and fraud, etcetera, Then we don't have much of a country. So no judge should be. No judge should frankly be allowed to make that kind of a decision.
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Krystal Ball
No judge should be allowed to make that kind of decision. Those comments coming a couple days ago, but very important in light of the messaging coming from JD Vance and Elon and others suggesting that they could just potentially ignore court decisions that go against them that they don't like. Here is one of the latest developments, quite significant here in terms of the court battles. We could put this up on the screen. So a judge has ruled that they are in defiance right now the Trump administration is in defiance of one of the previous court orders telling them to unfreeze federal funding. So a judge directs Trump administration to comply with order on frozen funds. That judge ordered them to restore federal funding they had tried to freeze, saying the White House was not fully complying with an earlier ruling against it. After the judge issued that decision, the states asked him to issue a follow up order enforcing the earlier restraining order, saying the states continue to be denied access to federal funds. The state said in a court filing still frozen funds included about $7 billion in grant money for solar panels, 5 billion that supports greenhouse gas reduction measures. In a court filing Sunday, Justice Department lawyers said the administration had made good faith, diligent efforts to comply. They said the funds at issue were frozen because of a Trump executive order signed hours after he was sworn in that paused tens of billions of dollars in federal. Okay, so what seems to be going on here is this one goes back to you guys will remember all the chaos around like the executive order that's issued comes or it actually wasn't an executive order. It was a memo that was issued by the OMB saying we have to freeze all federal grant spending. And there was a caveat in there that said nothing that goes to individuals. Okay, but that means Medicaid would be frozen. That means that Head Start is frozen. That means Meals on Wheels is frozen. That means all sorts of things across society that are important to people would be frozen. There was an almost immediate injunction issued against that. And the administration also tried to walk it back, rescinding that order, but saying you still have to comply and make sure that none of these federal grant funds are going to programs that violate the president's other executive orders with regard to DEI or quote, unquote, Green New Deal and those sorts of things. So right now there's sort of a scattershot approach where certain things, including a bunch of funds that are supposed to go to farmers as part of the inflation Reduction act, including just some random things across society. So like I think rural health clinics in some areas have continued to see their funds frozen. There have been hot meal programs that continue to see their funds frozen. Just sort of like a scattershot of programs. Across society that have not seen those funds released. And so now this judge is coming in and saying, you have to. Even the things that you were saying are under the Inflation Reduction act, and it's subject to these other executive orders whatever. No, my order applies to everything. And it's not an excuse that you're trying your best. You need to do what you need to do to make sure that all of these funds are unfrozen.
- [09:34]
Sagar Enjeti
Yeah. It gets to the heart of the executive authority and to the court challenges that they're trying to invite there to the Supreme Court around on the executive's ability to determine which is under their own scrutiny and which is not. I'm looking here. Just late last night, the Trump administration filed a reply. I sent it to our group in support of their request to vacate their injunction. And they are claiming a constitutional violation. They say, quote, a court order commanding that a segment of an executive agency be cordoned off from properly named political appointees while giving access to select civil servants. The government is aware of no example of a court over ever trying to micromanage an agency. Agency.
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Krystal Ball
Is this about the treasury one?
- [10:15]
Sagar Enjeti
This is about Treasury. But it gets also in response to apparently is USAID and says this court should not be the first. The existing TRO cannot stand. So this gets to what you're talking about, not just in terms of the farmers and the ira, but to the overarching theme that they're trying to, as I understand I talked to a lawyer friend of mine yesterday, is that they're trying to get one of these cases up to the Supreme Court to get an answer for judicial review on their ab. Because it actually gets previously back to the repeal of the Chevron doctrine around the administrative state and the bureaucracy's ability to make rule changes. It's actually interesting case because again, as they were explaining it to me, was that they might have actually been better off if they had more of the administrative review and rule process that they had previously under Chevron, as opposed to now, where it's much more about the letter of the law that's coming out of Congress. I genuinely have no idea how they'll rule because what we talked about yesterday with the CFPB is, remember Clarence Thomas writing for the majority that CFPB is not unconstitutional because it was created by Congress and it was that funding mechanism set up by the Fed. They may in fact actually defer to Congress's ability and shut down all of this executive review that the Trump administration is claiming right now.
- [11:34]
Krystal Ball
Yeah, that's certainly possible. And I mean, the other big development here is right now, while this judge is saying you are in open defiance of a court order, there's still a story around like, oh, we're trying to figure it out in good faith. And we interpret it different. And it's hard to. The federal government's not just a switch you can flick on and off. And so we fully intend for rural health clinics to get their funding, et cetera, et cetera. We're doing our best with this order. You're starting to move closer to things coming to a head where if they say continue to not release funds to farmers who sign contracts with the federal government, to not release those funds to various clinics and things that have been affected across the country, there's no longer a story about how this is just like a good faith misreading of the ruling. Then it becomes brazen defiance of a lawfully issued order from the judiciary. And that's when you get into the things that JD Vance has been saying, the things that Elon Musk has been saying, the things now that Trump has been saying, the things that frankly, were floated even in Project 2025 and are, of course, part of the Curtis Yarvin butterfly revolution plan of when the courts stand in your way, you just ignore them and just do what you want to do. And so what I found significant about this ruling is it seems to be inching us closer to that place where there will be decision point to see whether or not the Trump administration is actually going to comply when the courts say you can't do that. So we may be finding that out very soon. Let me go ahead and put this next update on the screen, too, because this is relevant as well. USAID employees are also complaining that the administration is not complying with the previous order, saying that you can't dismantle this agency. So that was a temporary injunction that was also issued that says, you know, we're evaluating this case and in the meantime, you can't just destroy this agency. The court process has to play out. And, you know, they present as evidence here, first of all, thousands of USAID employees have been furloughed and sent home. They also point out things like they went and took down the USAID sign from the building and brought up statements, I believe, from Trump and Elon and others that are like, usaid is dead. It's being fed into the wood chipper, et cetera, et cetera. So they are also claiming in this suit that the administration is not complying with that order. So another place where things could be kind of coming to a head in terms of this battle between the Trump administration, executive branch, Elon Musk, Doge, et cetera, and the judiciary, which is effectively the only real obstacle in their path at this point.
- [14:24]
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- [16:54]
Sagar Enjeti
What I'm actually interested in is what we're about to get to with the farmers, because this is one of those areas where this could be the first political flashpoint. We've talked previously and I know many people are very concerned about USAID and others, but, you know, we've debated here, I think many times. A lot of that is about process arguments and how it could impact major impact for millions in the future. But the farmer's case that I was reading about and you're beginning to see some organic pushback on is one that I'm very curious to see how that will affect Trump's support. And not only that, but invite some pushback from inside of the Senate. This was what happened with the tariff program that was on soybeans and other agricultural products last time around, where people like Chuck Grassley and others, Tom Cotton and a few other very agricultural states really were dissenting from some of the tariff program or at least asking for tariff related assistance. So I actually think that this one that we're about to get to with the USDA funding the IRA and farming contracts could be the first sign of some actual intra GOP conflict around the issue. And look, everybody likes in principle to say, oh well, the government's gonna cut spending and I'm talking with Republicans in particular, but it's like, well, when it's your own funding, it's a different story.
- [18:12]
Krystal Ball
Yeah, well, USAID runs up against that as well because there's, you know, hundreds of millions of they buy a lot of food from farmers. The usaid, you know, buys a lot of food from American farmers, ships it around the world to places that are, you know, having hunger and food insecurity, famine, et cetera. And so that is also an issue that perhaps you know, may come to a head as well. But let's put a 4 up on the screen to what Sager is referencing here. So you've got farmers who are now reporting missing millions of dollars in funding that they were promised by the usda. This was money that was brought about by the Inflation Reduction act, which of course passed through Congress in a bipartisan fashion. So effectively, what happened here with a lot of these individuals is they signed contracts with the federal government to upgrade, they might do a solar installation to make their farms more energy efficienc. There are various upgrades to their farms that they pledged to commit to. And the US Government was going to be on the hook for maybe half of the cost of that. And now with the Trump administration saying, we're just not going to send that grant money out, a bunch of these farmers have already spent $80,000, $100,000 or more expecting that they were going to be reimbursed. And if you know anything about the family farm world at this point, the margins are nonexistent. I mean, these folks are really up against. Everything has to fall into place. The money has to come in when it's anticipated, or else they're screwed. I mean, or else they are really in danger of losing those farms. And so the Washington Post talked to a number of farmers who were facing this situation. A flower grower in Maryland they talked to. They also talked to this guy, Skyler Holden. He's a cattle farmer in eastern Missouri. He says he signed a $240,000 contract in December under the Environmental Quality Incentives Program to share costs on investments for his farm. With the funding, he erected new fencing, installed a well, had planned further improvements to his water system, spent 80k on materials and labor contracts that he expected were going to be partly paid back by the government. This month, the USDA representative told him the funding was paused because of Trump's executive order. He says, quote, I asked her, is there any word on when they're going to be unfrozen? Is it going to be frozen indefinitely? She did not have any answers for me. And again, this is funding that was appropriated by Congress, passed through bipartisan legislation that the Trump administration is now claiming the right to just unilaterally say, we're not doing that anymore. Yeah, it's after. And there's also just like, basic contract law at play, tier 2. Like, just because you're the federal government doesn't mean that you're not also subject to contract law, where, like, if you tell this farmer and you, you sign a contract saying, we are going to reimburse you for part of this adk, you are still legally obligated to that, even outside of the questions around congressional appropriations, power of the purse, et cetera. So, again, seems like a pretty brazen violation of the law. And obviously, Skyler, I was about to show you video in a minute after I get Sager's response. Skyler voted for Trump. Most of these farmers voted for Trump and thought that he would benefit them economically. And the reality so far for these individuals, quite different.
- [21:33]
Sagar Enjeti
Well, let's play it, because that's what I'm curious to see, if this actually takes off and becomes a thing. Let's take a listen.
- [21:38]
Skyler Holden
I Might lose my farm because of the government. I got in bed with the government. I was promoting getting in bed with the government because I thought it was a good idea. So nrcs, Conservation Planning. So they had a program out there called the EQIP program. And what the EQIP program is, is it's cost sharing on stuff like fencing different seedings, water lines, waters, wells and stuff like that to better conserve farmland for agriculture use. They called me today and said, hey, I know we have this signed contract. We're reneging on it. We're not going to pay out on it. What do you mean you're not going to pay out on it? So I've got all this stuff bought and whenever I install it, you're not going to pay out. We had this contract. I made business decisions based on this contract. So Now I have $80,000 out of my pocket that I didn't have to spend. So the $80,000 that we have is supposed to go to our farm loan in the fall. If we don't have that money, that's our hay money, that's our farm money, our farm payment money. If we don't have that money, we will lose this farm.
- [22:40]
Krystal Ball
So amazing. There's another TikTok where he says, I voted for Trump. And it's just. It is amazing the way he frames it. It's the problem is the government, not the president you voted for. Who is the explicit reason who signed this executive order and is the explicit reason that the funds are not going out?
- [22:59]
Sagar Enjeti
That is what's the matter with Kansas in a nutshell is you have a person here who voted for Trump. And, I mean, maybe he couldn't have predicted that they were gonna cut farming benefits or all of that, but what do you notice in his rhetoric and in his language? What is he saying? He's saying it's the government. The government is, don't get in bed with the government. Don't get in bed with. If the government, it's like, well, okay, you didn't think about that. Whenever, you know, look, it's hard. I don't like to dunk on regular people, but, I mean, guess he put it out there for himself. It is emblematic of a big problem that we have in this country, which is that when you are in the cult, like, you are unable to really either grapple with your own decisions or a total lack of, like, wanting to save face whenever it's a problem that really is one. It's not on you per se, but the way that you're Communicating it is just fundamentally different than if it would have been the Biden administration. And that's kind of what. You know, we were talking yesterday about the rural health in Virginia, and I was looking at all these counties yesterday. Cause I was curious for all the places that are most effective and where they voted for Trump. I'm talking, like, 85, 15 regions in many of these places. I hate to say it, but, you know, as we all know, if we go down there, who are they gonna blame? They'll be like, oh, it's those idiots up in Washington. I'm like, oh, well, what about Trump? No, no, he would never do that. And it's like, well, can you really change their mind? I mean, my framework is just so profoundly. I'm sad, really, to see the country as it is right now, because I've seen a lot of this. We talked yesterday about the cfpb, and we're gonna talk to that about Sohra. But there is just so much, like cultish behavior and thinking right now that I genuinely. I think it'll be like Obama, where Obama presided over, what was it, the loss of the House and the Senate and the thousand state houses. I'm not predicting that necessarily for the gop, but he personally did not ever incur a lot of those political consequences because people really felt they could trust him. Even though objectively, you lose your house under Obama, your wages continue to go down. He ultimately is the man, but for some reason, nobody was ever willing to really blame him, even to this day. He's got some 58, some percent approval rating. And so Trump, I mean, these politicians, they just have a halo effect around them where people like that will never criticize them. But, I mean, where is the guy from? Do we know? Do you know what state? Missouri. Okay, so Missouri. I guarantee you he'd be willing to call out Josh Hawley or the other senator from Missouri. Like, that same halo effect doesn't exist for mere mortal politicians, but Trump somehow is able to escape that. And I just. I don't know if there's a world where people who are affected by like, this and others will ever actually connect the dots, even if you explicitly tell them that you're like, no, this was cut by so and so. I could be wrong. You know, I totally could be wrong that it could be like, oh, it's Trump and Elon. Like, okay, I'm voting for Kamala or whoever, Pete Buttigieg the next time around, but I don't see any data to back that up.
- [26:07]
Krystal Ball
Yeah, well, I mean, certainly for like probably 30% of the country. I think that's true. I mean, this has always been the Trump. I could choose someone on Fifth Avenue. Fucking true. He's right, absolutely right about that. And I think Obama is the best analog on the Democrat side. But I actually think it goes further with Trump because with Obama, you at least had, I don't know if you, I'm sure you do remember during the Tea Party era, Democrats were perfectly happy to criticize Obama, throw him under the bus, you know, and Pelosi, absolutely, they were totally willing to do that. And, and the grip that Trump has on the Republican Party now is really, it's quite unique. It is outside of anything I've seen certainly in my lifetime. Maybe there's some examples going back through history, but certainly unique in terms of modern history. And yeah, you see it in real time, the way people think that they, if it was Biden, they would be, I mean, just, even if you just think about the inauguration image of Trump with the richest people on the planet standing there behind him, like if it was a Democrat, like that would be a hair on fire kind of a moment. But because it's their guy and they're like, oh, I like these, these billionaires are saying the things I want to hear right now. Cuz they're using you, cuz they're playing you, then it's fine. I mean, on the Gaza stuff too, the level of cope with regard to Trump floating the US occupying Gaza, finishing the ethnic cleansing or potentially genocide on behalf of Israel, getting entangled, getting our men and women entangled in yet another insane Middle Eastern war. And the level of spin and cope is just incredible. Like some of them outright buy, like, oh well, it'll be great for America, we'll get something out of it and it'll be beautiful waterfront prop, like they actually buy that bullshit. Or the other cope is. Well, this is just his opening negotiating position. And I don't know why you're taking, you take him too seriously. It's like he's the President of the United States, he's a big boy. He floated this quite like he read from a prepared statement. It's not like he was just freewheeling here. He's now said it multiple times. I don't know why we wouldn't take him seriously, especially when Kushner suggested something very similar earlier. And what makes you think that this is out of character for him whatsoever? So yes, with a certain core part of the base, they may never leave him no matter what. But that's 30% of the country. There are a lot of people who voted for him, who were on the fence, who voted for Biden last time, who don't love him but thought he'd be better for them economically or whatever. Those are the ones that you could see shift away and shift away pretty quickly if things go south or if they see direct impacts, which they're likely to direct impacts in their communities on things that they care about. I mean, I just saw this morning, I sent you this. Elon, who's changed his Twitter name to something weird by the way way.
- [29:09]
Sagar Enjeti
It's Harry Balls.
- [29:10]
Krystal Ball
Harry Balls, yeah. Yeah. This is the man that's running our country right now. That's awesome. Anyway, posting about how there's more fraud in entitlements than anything that we've seen ever before and we're supposed to believe that he's not gonna go after Social Security, Medicare and Medicaid. Trump yesterday says the defense spending is gonna go up and meanwhile we're supposed to be cheering like them canceling the Politico Pro subscriptions, like that's some real cost saving, like cost cutting measure. Like give me a break.
- [29:39]
Sagar Enjeti
It's the difference.
- [29:39]
Krystal Ball
It's all preposterous.
- [29:40]
Sagar Enjeti
This is what I'm saying is, you know, in the media environment and maybe people have noticed, I feel particularly black pilled lately, but in the media environment that I swim in this Politico thing, you would think it's the greatest scandal in American history. You genuinely would think that this is like an insane. And you know, it's funny obviously I agree it's bad in terms of government subsidizing these media companies and that is a story in and of itself. But the blinders stop right there. Right? And it doesn't get to anything bigger. And I really try to keep like a calm head and look even on this Social Security thing. I think he's probably correct in terms of Medicare fraud in particular because the estimate I've seen is 50 billion. If anything, fraud is likely to be the biggest fraud in history only because these are the biggest programs in history. Now is he saying that to the end of like cleaning it up or is it something that's paired with a cutting entitlement? I think that we know at least at where Elon is. Trump has said he doesn't wanna cut that at all. But yeah, explaining the magnitude and difficulty of this is very different in this Vibes information system where again where I've tried to communicate this in terms of USAID, it's 0.7% of the federal budget. And yet people are saying that this is like the greatest American revolution. It's like, okay, so even if you cut half of USAID, that's 0.35% of the federal budget. Now they're talking about auditing the Pentagon. I support it 100%, but. But again, like you just said, they're talking about increasing defense spending. It's like, to what end? For what? Because the current system is completely screwed up. If you really, you could spend two thirds of the Defense Department and if you redid our procurement systems, you could have more equipment and more lethal and a better military and spend way less money. Because probably one third of that entire budget is just outright total corruption and stealing from these defense contractors. But also, but that's the issue, is that they don't necessarily wanna do that. So it's like, now what. What are we.
- [31:32]
Krystal Ball
If you're going to do that in a serious way, you're gonna use Elon Musk, who is one of the Pentagon's top contractors. Like, who are we kidding? Who are we kidding about this being some sort of, like, free and fair. Yeah. Elon might cut the contracts to his competitors. You know, we're gonna talk.
- [31:51]
Sagar Enjeti
AI sucks, too. We're talking competitors genuinely are also criminals. So it's like, sure, there's no good.
- [31:57]
Krystal Ball
People in this, but like, yeah. And then funnel that money to his buddies at Palantir. Right. As we're about to discuss later. I mean, Palantir stock is through the roof. That's why. Because everyone assumes Elon is going to go in there and funnel the money to his friends and partners. So that's. I mean, that's the reality of what we're dealing with here.
- [32:18]
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- [34:50]
Krystal Ball
Move on to the next piece about NIH funding because this is also really significant and another area where there's some, you know, red state like, right? Not sure, not sure about this one. So let's go ahead and put this up on the screen. We've had a federal judge now has stepped in to halt the Trump administration cuts to NIH research payments in 22 states. So attorneys general across the country, Democratic attorneys general sued the Trump administration, asking them to temporarily block that major policy change. So basically what the Trump administration said is we're just going to come in and whatever the administrative facility costs, the overhead costs that we subsidize through the nih, whatever that is, we're going to just cut it down to 15%. And again, this is, is pretty clearly illegal based on the fact that Congress actually specifically in legislation specified that these contracts cannot be changed and shifted. Obviously this gets back to the separation of powers, power of the purse, et cetera, et cetera. And so Judge is now stepping in saying, whoa, whoa, whoa, you cannot do this until we have this all go through the court system and figure out what is going on. I think also this is part of the ideological project of they know this is going to be very hard on all kinds of universities. They love to name check Harvard, the UC system, they'll certainly be in Johns Hopkins, they'll certainly be impacted. But it's not just these Ivy League liberal institutions that will be hurt. Any sort of university that does this type of research is definitely going to be harmed by this. And I also would say that is not to say that there isn't waste in there. There are reforms that could be made, et cetera, et cetera. But if you squeeze funding out on the public side and you're no longer doing nearly as much public research, guess who fills in the gap? I mean, then you become really reliant on industry funding, which means certain research is just not going to get done. Things that they don't see there's going to be an immediate profit on, like they'll fund your innovations in Viagra research all day long. But if you're talking about some sort of illness, let's say a rare cancer that may not be that profitable because there aren't that many people that have it that is not going to get funded, if you're talking about something where there's a higher risk that it may not actually pan out and it's a bit of a longer shot that probably won't get funded. Not to mention all of the obvious problems with conflicts of interest when you have industry directly funding research. So you know, of all the new drug molecules that have been discovered over the past two plus decades, all of them have come from public research dollars. They've all been linked in some way to public research dollars. So this is really, you know, it really is important and could very much in the immediate term impact things like, you know, developing cancer cures and all kinds of research, that is very important. But like I said, I think it's pretty clearly and Sagar, I suspect you would back me up on that as part of an ideological project to undercut universities that the Curtis Jarvans and J.D. vance's and Elon Musk's of the world, think sort of like indoctrinate people and make them liberal and need to be effectively destroyed. In Yarvin's words. I think he said it needs to be blown up down to the atoms or something like that.
- [38:19]
Sagar Enjeti
This is very Curtis. Yeah, I mean, I don't think it'll shock people. I actually agree with this one. And I'll tell you why is that. This was specifically about those budget cuts to the quote unquote indirect administrative cost. It capped it at 15. My parents are in academia, love them. But I mean my experience in academia is extremely bureaucratic, bloated that there are tons of make work jobs that are just everywhere where people try to justify their existence. I mean, this is part of what we talked about with the RFK thing. I mean, one of the reasons that I am so both repulsed with the National Institute of Health is not just Dr. Fauci and I'm blanking on his name. The previous director the that was at the head of that was that it was clear that it became this slush fund of billions of federal dollars for whatever the pet projects of these top epidemiologists and infectious disease specialists wanted it to be. And they would cut these checks to all of these different labs and then when the time came to cover up lab leak, they're the ones who came out and said, no, it's not possible specifically to protect their own cartel of funding. Now this is bigger than that because this is the entire National Institute of Health. But it does get to the basic question of like, okay, well what have they been doing the federal government? Now this is apparently a 79 year old project. Well, in the last 79 years, you know, America has become more diabetic, more cancerous, fatter, more sick. I mean, what is actually happening? The healthcare costs have skyrocketed. To what end are these public dollars being used? I don't disagree with what you said per se, in terms of, of how federal dollars and all that should be spent. Much of this is a legacy of the post World War II system where we would cut checks to these different science departments in the theory that that would eventually roll up into benefit for the American people. But I see it, but yes and no.
- [40:07]
Krystal Ball
I mean the return on investment here, for every dollar invested, you get multiple dollars back in terms of innovation. And I mean, personally I think a lot of this should be instead of spun off to the pharmaceutical companies, I actually think it should be. The production distribution should also be handled by the federal government. I mean, what you're pointing to is a real problem. But I would say the issue isn't because we're funding cancer research. The issue is because we have a for profit healthcare system that profits off of people being sick. And so guess what? We have a lot of people being sick. This does nothing. I mean this actually pushes things more in the direction of the for profit industry funded system where the only thing that gets developed, the only thing that gets researched is things that have an immediate profit generating possibility. And so like I said before are the things that could, I'm sure there are things that could be cut, but research. Doing research properly is also really expensive.
- [40:59]
Sagar Enjeti
Why are there like to have these so high? Right.
- [41:01]
Krystal Ball
Because they're all. Because it costs a lot of money to have these facilities, to have the specialized equipment to be able to run the multiple trials that you need, to have the trained professionals that you can, that you need to be able to do this properly. Like these things all cost a lot of money. And so, you know, we do in a certain sense, like we subsidize this area because look, you know, maybe it's an unpopular opinion, but I personally think like research into cancer is a good thing that we should be investing more money in. And again, if we look at the big picture, it's a fricking drop in the bucket. They're saying even with this, which is a draconian cut, I think you would agree across the board, you know, with.
- [41:41]
Sagar Enjeti
A hatchet, not a scalpel at 15%.
- [41:43]
Krystal Ball
Right.
- [41:44]
Sagar Enjeti
Budget, administrative cost.
- [41:45]
Krystal Ball
I mean, how many HR directors do the federal government. It's not HR directors.
- [41:50]
Sagar Enjeti
We don't know.
- [41:51]
Krystal Ball
We're talking about specialized equipment, we're talking about the facilities that you need. You're talking about nurses, you're talking about doctors, you're talking about phlebotomists. Like so again, are there cuts that could be. Sure. Is this the source of federal government deficits? No.
- [42:04]
Sagar Enjeti
Yes. Fair.
- [42:05]
Krystal Ball
Even with this, they're talking about a grand total of $4 billion being saved. That is like an ant on the ass of the United States federal budget deficit. It, it's preposterous. And so that, you know, again, things that are investigating more rare diseases, things that have a longer timeline to development, all of this will fall by the wayside. And so, yeah, I think, I mean, I think it's a bad idea. I also think the way they did it is illegal. And if they went, there's a reason that they don't go through Congress for this. And it's because it would never pass. Because if Republicans actually had to vote on stripping funds from cancer from researching cancer cures. They would never go along with it. And I think we see some indications of that. Katie Britt down in Alabama, one of the major recipients of this type of funds is the University of Alabama at Birmingham. Put a seven up on the screen. She expressed some very mild concern here. You know, very, very tepid, but an indication that she was not really comfortable with it. She said she was going to work with RFK Jr. To try to deal with these cuts. Cuts and try to mitigate the damage that's being done here. The University of Alabama Birmingham has received more than a billion dollars in NIH funding in recent years. Like I said before, it really is one of the top recipients. She said, quote, while the administration works to achieve this goal at nih, a smart targeted approach is needed in order to not hinder life saving. Groundbreaking research at high achieving institutions like those in Alabama. This university is also top employer in the state. Very important economically, prestige wise, et cetera, et cetera. So she's concerned about that. Tommy Tuberville on the other hand is all on board with it. He's not concerned.
- [43:46]
Sagar Enjeti
See that actually kind of highlights my point. And that's part of the problem with all of this is that these are jobs programs like NIH and especially no offense Alabama, but incredibly reliant on the federal government in terms of spending coming in there. One of the reasons why these senators and all them don't wanna vote against it is that they create a lot of jobs in their area and hospitals, unfortun this gets to the heart of it are some of the biggest employers in the entire United States. And you actually, if you pull the employment data and really unfortunately if you look at growing areas, one of the main drivers of economic growth in a lot of states that are non technology, non oil based is healthcare because so many Americans are sick. So there's just, there's filthy rich amount of money to be made around this. And I don't disagree with you. 4 billion is not okay. And I know, I'm sure people will clip it and make fun of you. Oh, four billion. How dare you say. It's like guys, we're talking in proportions and I understand it sounds ridiculous, but we have a $15 trillion economy, the world's largest economy in the world. I guess I'm just talking more at a principled level where it comes down to what the lab leak showed me was again the slush fund, the corruption for the jobs program. But at a higher level it is important to say what are we getting out of this? And, and the truth is, is that if anybody's getting rich or benefiting from a lot of this research, it appears to be the drug companies to me. Now I'm not saying Trump and all these other people are going to crack down on spending for these drug companies or any of that, if anything is likely the opposite. For what we're gonna see out of CMS and others, I would hope that we don't. But at a principle level, I do think it is fair to say, and this is from my understanding, looking at some of Huberman's and others talk about the NIH as well, is that the current system very clearly does not seem to be working. Now how we do that and how we change it is very important. Do I trust necessarily there's some grand arching plan, but it does seem as if there is just this runaway, not even runaway. There seems to be a thoughtlessness in the way that we just cut checks to all of these different things that does not fit with a concerted strategy for the United States. So like we should start with a couple of presumptions. It's like the United States should. It's not about cure. It's not just cancer. It's like, well, what is causing cancer? Now obviously there's research behind that, but as you just pointed out with the process incentive in others, it all comes down to like these crazy drugs which cost tons of money. What RFK has said at least, and part of the reason I liked a lot of things he said for HHS was because it gets down to these chronic disease and these factors that lead to the need for all of these drugs. And it doesn't seem that all of our research or healthcare spending is in that direction.
- [46:23]
Krystal Ball
But the problem isn't. So problem has been identified correctly by you that the NRFK that these chronic diseases are, you know, are literally killing us. Big part of the reason our life expectancy is going down, et cetera, et cetera. But the purported solution here will only make that issue worse by pushing things away from public funding and towards private industry funding. If you actually want to deal with that, if you're actually serious about dealing with, you have to deal with the fact of the profit mode of being at the center of our healthcare system. That is the root of all of this. I mean, and that's why it's, you know, we're the only developed country that doesn't have universal healthcare and we get horrible results because it is profitable for people to be sick. So while I Totally agree with your diagnosis of the problem. This purported solution pretty clearly to me makes things worse because at least with the public research, as I said before, every new drug molecule that's been discovered has been publicly funded research. Okay? The private industry, what counts for research and development there is literally figuring out how to game the patent system so that they can extend their patent monopolies on whatever their most profitable product is. Is that's what counts for research and development over there. So with this sort of change, you're pushing things more in that direction. And this is again, sort of the elon, anarcho capitalist ideological direction. And he said outright, like he wants to privatize the entire federal government. He wants to. His ideal utopian state is that there are no public sector workers, that they're all, quote, unquote, higher productivity private sector workers. Well, we know there are certain things that if they're not, like, if they're not profitable, the private sector is just not going to do. And certain things that are really important that the American people count on and depend on that have to be housed under the federal government. So I see it very much in the direction of mass privatization of public resources. And I see it very much in the direction of just trying to use whatever cudgel you can to undercut the university system. Not to mention that, listen, that's where.
- [48:51]
Sagar Enjeti
I have no sympathy for them.
- [48:53]
Krystal Ball
I agree. Well, I'm sure you don't. But I mean, you have to. Not like that is part of the ideological project here. So the other piece is like the way they did it is brazenly illegal. And so if you want to cut the research for cancer and other, you know, other disease funds, you have to go through Congress. You have to go through Congress. It's really quite simple. Not only because these grants have already been written, it's literally in the law. And actually, we can put a 9 up on the screen because this was pointed out by Susan Collins was the other person. So she's objecting to the move to cut the nih. She told Robert F. Kennedy about her strong opposition to arbitrary cut. I think she's still voting for him, though. But she said she called him to express her strong opposition to these arbitrary cuts in funding for vital research at our main institutions, which are known for their excellence. He's promised as soon as he's confirmed, he'll reexamine this initiative that was implemented prior to his confirmation. And if you think that RFK is gonna be running the show, I mean, I think it's pretty clear who's holding the reins in the federal government right now? Our new CEO, Dictator King. But in any case, there's specific legislative language that says pretty directly, like once these funds go out, you cannot change the ratios or the nature of the contracts that we've signed and agree to with these institutions. So I object to it on principle because I think it's a foolish place to cut. I think it leaves us worse off in terms of health, I think it pushes things more in the direction of private industry, et cetera. But I also think it's brazenly illegal, which is what the court case obviously is about and why the courts have. This hasn't reached a final decision yet, but why the courts have come in and said, whoa, whoa, whoa, whoa, whoa, you cannot go forward with this until this goes through litigation and we figure out what's going on here.
- [50:42]
Sagar Enjeti
Oh yeah, it's already been shut down. The NIH director, Jay Bhattacharya actually still has not been confirmed in the Senate. And as I understand it, this is something that they're going to try and put into the legislation. Yeah, I mean, look, I actually would be curious because. Because what I wanna know is how exactly you spent 60% on administrative budgets. Cause from what I was reading, it seems that the 60% to 15% what they were claiming in terms of what we cut, they cited some of the things that you did. But it's like, well, how much of this though is administrative cost? Cause that's one of those where if you look at overall growth in healthcare spending, it's not just about the cost of services. A huge reason why so many of our bills are so high is directly tied to so many of these hospital administration costs. It's not one to one, I'm just giving an example of like it's clear that quote unquote administrative cost has become a huge segment of spending and that there just seems to be this endless money printer from the federal government for a lot of this stuff. So we could get back to just funding research or whatever. I'd be totally fine. Not even that. We just need a concerted national strategy. And I'll give it to you, it's true. I mean, I don't feel like there's some great big hand on the wheel. And that's probably the big difference from how this program and all that was originally conceived. It's part of the reason why the instinct today is to cut, cut, cut is just simply, it's like better than just simply funding a bunch of make work jobs and all That I would.
- [52:05]
Krystal Ball
Say the instinct is to cut. Cut, because that is Elon's specific ideological ancap project, you know, to render the federal government effectively irrelevant, small, unable to check him and his ambitions. Like that is his ideological project. And so he'll use whatever legit, you know, truly legitimate problems there are to justify accomplishing his goal of stripping the federal government down to the bones in all areas, areas you'd agree with, areas you wouldn't agree with, etc. He will, you know, he'll say Social Security is full of fraud, that's why we have to cut entitlements. He'll say Medicare, Medicaid, also full of fraud, that's why I have to cut entitlements. Obviously, with this one nih, this is preposterous. These administrative overhead, it's all a push towards privatization. It's a push towards stripping down the government. It's a push towards, and we can see this in some of the agencies that he specifically targeted that have investigated him or gone after his business interest or that are just simply strategic in terms of making the case that we can just cut an entire agency like USAID and not involve Congress, and it's perfectly fine. So, you know, to me, it's about his overall ideological project that he is pursuing because, you know, he's decided that he should be king.
- [53:38]
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- [55:08]
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