Matt Kibbe (0:00)

Foreign welcome to Kibby Liberty. Welcome to Kibbe on Liberty. I'm going solo again in part because Congress is on recess and I wasn't able to get Senator Rand Paul or Senator Mike Lee to come on and discuss the ongoing budget drama and all of the confusion and misinformation and accusations and all that stuff. And I promise that I'm not going to do endless episodes on the budget. But this seems important and there's some historical context that I want to get into. Hopefully next week going to turn that down. Hopefully next week I will get Senator Paul to join us and give his perspective because as you probably know by now, the big beautiful bill named by President Trump, bill, technically budget reconciliation, has passed out of the House. Thomas Massie voted against it, Warren Davidson voted against it, and I believe Chip Roy voted present or something like that. But anyway, it passed by the skin of its teeth and is moved on to the Senate. And there's all sorts of fights going on about what's really going on. But perhaps most importantly and politically consequential was a statement interview by Elon Musk where he's asked if he's going to stay involved in Doge and political activity. He says, if I see a reason to do political spending in the future, I will do it. I don't currently see a reason. I think I've done enough. Pretty curt. He's very circumspect in his comments. He's doing yes and no answers, that kind of thing. And he's clearly frustrated with the failure of Republicans to pick up his big beautiful vision on Doge. Remember when he started, he said, I think we can do $2 trillion in savings just going after waste, fraud and abuse. He eventually scaled that back and said, I'm going to do 1 trillion in savings. Right now I think the number is about 160 billion. And even that there seems to be very little traction on that sort of spending. You may recall that Rand Paul pushed an amendment early in this process trying to get Republicans to vote for the cuts in usaid. And I think NPR was in there as well. But let's say it's just USAID. And he lost. 26 Republican votes got crushed. All the Democrats voted against him, 26 Republicans voted against him. And get this, you know who voted against him? Joni Ernst, who is ostensibly the chairman of the Doge Special Select Committee in the Senate. And she said something to the effect of we got to follow the process and I don't want to disrupt the budget resolution and budget reconciliation. We're going to go through the appropriations process and do it that way. I think that's a dodge. I think it's a political fiber otherwise known as a lie. And I think we'll see over time that there are a number of Republicans, at least 26 in the Senate, who have zero appetite for doing anything that Doge proposed. And of course there's a bigger context here because Doge is not the solution to our budget problems, but it's certainly an indication of whether or not Republicans have an appetite to do that. And I thought it would be useful to go back and remind you about an epic budget battle that I was intimately involved in as a member of the Tea Party and a spokesperson to a certain degree. And this has to do with the passage of Obamacare. And you remember we got to go Back to John McCain's infamous day when he suspended his campaign to come back to Washington D.C. in 2008 to rubber stamp the Wall street bailout. Mr. Shake it up and change it Rubber stamped George W. Bush's I have to abandon the free market to save it Wall street bailout. And as a result of that, the 2008 election for Republicans was catastrophic. Not only did we lose the presidency, not only did Republicans lose the presidency to Barack Obama, they got clobbered in the House, they got clobbered in the Senate, ended up with 59 Democrats in the Senate. And then Arlen Specter, sort of the ultimate rhino Republican from Pennsylvania, actually switched teams and joined the Democratic Party giving them a filibuster proof vote in the Senate. So Nancy Pelosi, who say what you will about Nancy Pelosi, I have to give her props. This is someone that actually puts her money where her mouth is. She is a hard nosed progressive who was able to push her Democratic caucus in the House. The opposite of Mike Johnson was able to push her Democratic caucus in the House to actually do the things the Democrats promised they would do in the election. Imagine that. Imagine doing that first and foremost in that world was Obamacare, government takeover of health care. And because they had 60 votes in the Senate and because they had a huge majority in the House, they were able to pass out of the House a pretty sweeping bill including the so called public option, which is actually the government option, government run health care. You remember that argument that we used to have and she did that. Senate passed a more watered down bill. And in the midst of all this, the Tea Party movement, which had been given rise in large part in response to George W. Bush and John McCain abandoning the free market to save it and pushing a huge bailout of Wall street while they were all getting clobbered by the market, by job losses, by too much government spending, all that stuff that animated the Tea Party movement. Well, the Tea Party, of course, was highly focused by this point. By the time Nancy Pelosi passes Obamacare through the House, she's highly animated about the Tea Party's animated about that. And they're fired up to the point where they got involved in the Massachusetts Senate race to replace Ted Kennedy, who untimely passes away in the middle of this fight. And a guy named Scott Brown in Massachusetts Tea Party Republican running against the implementation of Obamacare actually wins a Senate seat in Massachusetts. Imagine how crazy that is. Imagine how unpopular Obamacare must have been for a Republican. A Tea Party Republican animated by the activists of the Tea Party, wins that Senate seat. So what is Nancy Pelosi going to do? She does the most extraordinary trickery and legislative manipulation and use of budget reconciliation and things that I would argue are, are fundamentally unconstitutional, but also just continues to force her caucus to walk the plank, do the things that she said that Democrats were going to do. So they did a bunch of things they actually took. Now, remember, there's something called the origination clause in the Constitution that says that tax bills have to originate in the House. Obamacare ultimately involved a lot of tax increases to, quote, unquote, pay for it. And they could no longer reconcile the House bill with a much more moderate Senate bill. So what did they do? They took a different House bill. Get this, they took a House bill, HR 3590, the Service Bill Members Home Ownership Tax act of 2009, eliminated all the text in that bill and dropped in the Senate health care bill. Apparently you can do that. You can do whatever you want if you're writing the rules in the House and Senate. And this, it was called the gut and amend process. And the idea was that the Senate would pass that bill and House would affirm that bill technically originating in the House because they took a House bill and gutted it, but not really and passed that. Now, how did she get her members to go along with the squishy Senate bill? They did it by using the reconciliation process in an extraordinary way to pass a bunch of sweeteners that were demanded by her moderates, her progressives. She's buying votes one by one from Democrats in the House. So they use reconciliation arguably in a way. Absolutely was not intended to be used, sort of torturing Senate rules to do all that. And as a result, she was able to pass Obamacare through the Senate with a simple majority vote, despite the fact that Scott Brown had taken away their filibuster proof majority. That's why you have Obamacare today. There was a Supreme Court case about this question of the origination clause. And remember, origination says all bills for raising revenue shall originate in the House of Representatives, but the Senate may propose or concur with amendments as on other bills. You'll be shocked to know that Chief Justice John Roberts played a pivotal role in upholding the constitutionality of Obamacare. Maybe that sounds familiar. So what's the point of that story? The point of that story is Nancy Pelosi decided to go big or go home. And she decided to do the things that Barack Obama and the Democrats promised they would do should they win the majority. She gets arguably a mandate from voters by getting huge majorities and House a huge majority in the Senate. Landslide victory for Barack Obama. And she decided she's going to do it. Now, of course, the American people, particularly Tea Party, didn't want her to do that. And they rose up and they did the things that you're supposed to do to stop legislation that the American people are against, including grassroots organizing, lobbying, public dissent at Texas town hall meetings, and ultimately swinging Massachusetts red for the Republicans opposed to Obamacare. She did it anyway. So maybe, maybe, maybe Republicans could, could learn something from that. Maybe they could do the things that they said they were going to do in the last election. I'm thinking specifically about the coalition that elected Donald Trump to a second term. The coalition that elected a House majority and a Senate majority. Tell me if this sounds familiar. It's a new presidency. It is a new Republican majority in the House and Senate. And a big part of what they ran on was what I call the Doge wing of the MAGA coalition. There's the tech Bros. There's, there's the Doge wing, there's the Maha wing. There were even some libertarians that got involved. And then of course, traditional maga, but none of those majorities. That presidency of the second term of President Trump doesn't exist without the coalition. So what happens if Republicans disappoint the people that were particularly animated by Elon Musk's decision to join, to endorse Trump, to. To join that coalition to actively campaign for him? What happens? I don't know. Well, I do know, and I've said this before, a midterm election for a new president, particularly when the party in power has the House, they have the Senate, the people that are animated to show up in a midterm election, traditionally lower turnout election elections than presidential years. The party out of power and the activists who are pissed off at the party in power are the ones that show up. So historically, you're going to get losses in the House and Senate. Now, what happens if the Republicans fail to deliver on the things they said they were going to deliver on, particularly spending restraint is what I'm talking about here. It could be a clobbering. Right? It could be a clobbering. Conversely, if Republicans chose to actually go big like Nancy Pelosi, maybe they could actually reverse that trend. Maybe they could get people to show up. Maybe they could create the kind of energy that happened just last November. That's my take on it. So I'm going to go back again because I want to go through the perspective of, of Thomas Massie, Stephen Miller, who's the senior advisor to the president, who has been throwing a lot of shade at people like Massie and people like Rand Paul. And then we're going to take a look at what Rand Paul is doing as well, because it'll give you some context for what's really in the big beautiful bill, how it relates to the budget resolution and the appropriations process and, and how it supposedly would work to do the sorts of things that Senator Joni Ernst and others are promising. And as you probably know, I'm skeptical that they'll actually do the things that they said they were going to do. Thank you for joining me today on Kibbe on Liberty and for being part of our fiercely independent audience. Every week, my organization, Free the People, partners with BlazeTV to bring you this show. My guests bring smart perspectives on everything from current events to timeless philosophical debates. If you like what you hear, go to freethepeople.org kol and support Kibbe on Liberty so we can continue to produce these honest conversations with interesting people. Now, let's get back to it. Let's go back to March 2020. Thomas Massie drives all the way from Kentucky to make sure that House Republicans don't pass that $2 trillion in emergency supposedly one time spending on Covid relief. This is March of 2020. He drives back, everybody hates him. President Trump hates him. Everybody's mad at him. But he famously says, I came here to make sure our republic doesn't die by unanimous consent in an empty chamber. Awesome quote. And his point was that this trillions of new spending that they were proposing was going to be a economic disaster for Americans because we didn't have the money can only borrow so much money. So we were going to print, print that money. He called it the cheese and the trap. There were small checks being handed out to people that weren't allowed to work, to people that were suffering, genuinely suffering, because of the government's response to Covid. But he called it a cheese and a trap because ultimately they were going to pay a much higher price in terms of the government printing money and inflating the currency. And he's been a thorough thorn in the side of Republicans and quite often President Trump ever since 2020, because he keeps saying, telling the same story and blowing the same whistle, and nobody seems to be listening to him. But here's his bottom line on the big beautiful bill. He says the bill codifies Biden level spending while dramatically increasing the debt ceiling. The House increases it by 4 trillion. This is important. The House increases the debt ceiling by $4 trillion. The Senate is talking about increasing it to 5 trillion. So if you want to know if the big beautiful bill increases the deficit and the debt and you're saying they don't, you have to ask, well, why are you increasing the debt ceiling by 5 trillion? Maybe that's the real story. He argues that this unsustainable borrowing with the national debt already at 36.8 trillion, which is 120% of GDP, would have been unthinkable. When I was a young budget analyst, the voters who gave President Trump a mandate did not vote for Biden level spending and increased deficits. We're not rearranging deck chairs on the Titanic tonight. We're putting coal in the boiler and setting a course for the iceberg. So what does this bill do? I'm going to try to look at the good things and the bad things, because not everything in the big beautiful bill is bad. There are some beautiful parts of it, but it's the bigness itself that is the problem. So in nominal terms, 2025 spending, based on the Republican budget resolution and the big beautiful bill will be 49% higher than it was when Thomas Massie gave that speech. Fiscal year 2019, the last year before the pandemic, 49% higher. And in real terms, it's 25% higher. Spending as a percent of GDP is increasing from 2019, which was 21.3%, to 23.8% in 2025 under the big beautiful bill. That's a 12% increase in the total size of government in just those years. Think about how unsustainable that is now. Guys like Chip Roy have come in and said that the Medicaid provisions in the big beautiful bill and there are some reforms, including some reforms to Obama level expansion of Medicaid, although not explicitly, but targeting the same population that Obamacare expanded. Chip Roy says not nearly enough, not nearly enough. And the few dissident voices are saying if we really want to be honest about tackling our debt and stopping careening over this fiscal cliff, our goal should be to get back to 2019, 2020 before all, all of these trillions of new emergency spending. Because what they did is they ratcheted up the baseline and we were promised to be temporary. They're supposed to come back down. Government never comes back down. It's always permanent. And they're arguing that between the continuing resolution that codified Biden level eras of spending for most of this current fiscal year, the budget resolution and the big beautiful bill, we're not getting it done. We're definitely not touching Doge. And this is where Stephen Miller comes in and he's right, but he's being disingenuous about some of these. And I'll read this to you and you can decide. I've seen a few claims making the round on the big beautiful bill that require correction. The first is that it doesn't codify the Doge cuts. A reconciliation bill, which is a budget bill that passes with 50 votes is limited by Senate rules to mandatory spending. Only example given Medicaid and food stamps. He's right. And that has been the tradition. But these are, I should point out, Senate rules and I should point out, going back to what Harry Reid and Nancy Peloton Pelosi did, those extraordinary games that they played to pass Obamacare after they lost a filibuster proof majority in the Senate suggests that if the Senate makes the rules, the Senate can change the rules and the so called Byrd rule and the relevance to budget reconciliation can certainly be reimagined to deal with discretionary cuts. But there's other ways to do the Doge cuts assuming they're all discretionary. And they're not. There are some mandatory proposals that Elon Musk was proposing that very much should be explored as well. They're not in the big beautiful bill as far as I can tell. The mandatory cuts that Elon Musk proposed are not in the big beautiful bill, but it's mostly discretionary per Steve Miller's point. And I'll get back to that because there is an expedited process to do discretionary spending cuts as well that have to start with the White House. But That's Rand Paul's point, and I'll get to that in a minute. But I'm still quoting from Stephen Miller. He just said that the Senate rules on budget reconciliation are sacrosanct. Keep that in mind. Quote, I've also seen claims the bill increases the deficit. This lie is based on a CBO accounting gimmick. Gimmick. Income tax rates from the 2017 tax cut are set to expire in September. They were also planned to be permanent. They were always, always planned to be permanent. CBO says maintaining current rates add to the deficit, but by definition, leaving these income tax rates unchanged cannot add one penny to the deficit. The bill's spending cuts reduce the deficit against the current law baseline, which is only, which is the only correct baseline to use. Two points there. He just told us that reconciliation rules are sacrosanct. And the reason that the 2017 tax cuts expire is that they used reconciliation to pass them under the first Trump administration. And under reconciliation, you can either go with a 10 year window, which limits the, the cost, the scoring cost, or you could have made them permanent. But they couldn't make them permanent because they didn't have the votes to do that. So they used reconciliation to do a 10 year bill. So it's not a lie. It's the same rules that they passed the tax cuts with and now they're constrained by those same rules. But this is the thing that just annoyed the heck out of me. He says that the bill's spending cuts reduce the deficit against the current law baseline, which is the only correct baseline to use. I'm old enough to remember when we all mocked fiscal conservatives. Republicans almost to a person, mocked current services budgeting because it is the ultimate lie in fiscal policy in Washington, D.C. let me give you an example. Current services budgeting is like a fat guy who's been gaining 10 pounds a year for the last 10 years, goes on a diet, succeeds in only gaining 8 pounds instead of 10 pounds, and declares that he's reduced the deficit, his fat deficit, by 2 pounds. That's what current services budgeting is all about. So he's not saying that the big beautiful bill is reducing the deficit. He's saying that the big beautiful bill apparently reduces the deficit relative to just how big it was going to get otherwise. I'm not impressed. Maybe he is so. And he goes on. But I'm perhaps going too deep down the rabbit hole there. The bottom line is that Stephen Miller says this as well. They've done some meaningful entitlement reforms in the context of budget reconciliation that go after welfare spending and go after the Medicaid population, specifically focused on undocumented illegal immigrants and the Medicaid expansion population that happened under Obamacare. I'm going to assume that all of those reforms are real and meaningful. But it's important to know that that 1.6 trillion number that Stephen Miller is talking about in entitlement savings is incredibly backloaded. Virtually none of those savings will happen in 2025 or 2026. They will happen further and further out in that 10 year budget window. By that time, I'm going to predict that Republicans don't control the presidency, the House and the Senate, and that some future Congress, some future administration will happily roll back any potential savings in that number that they're claiming credit for right now. And this is the fundamental basis of Chip Roy's criticism of the bill. Now there's another thing that I think is even more disingenuous. There appears to be about 350 billion in new spending in the big beautiful bill. That's right. A deficit reduction plan going to tackle the debt. We're going to fund tax cuts. They're increasing spending on a bunch of other stuff. Now you probably know what some of this is. It is inexplicably a massive increase in defense spending. Supposedly this is the administration that wants to get us out of wars. Supposedly under Doge, we were going to actually audit the Department of Defense for the first time. They can't pass an audit. It. We don't know where they're spending their money, but we're increasing defense spending. We're also increasing funding for the border. Maybe you support that. I would say that there's plenty of money in the federal government, in the agencies that are appropriately assigned to defend the border to actually do their job without increasing that money. But let's, let's say that spending is good spending, if that's where you're coming from. And then there's a bunch of infrastructure for industry. It appears to be undefined as far as I can tell, but a bunch of new money for industry, infrastructure and rural infrastructure. Don't know what that is. Going to guess. It's a slush fund for swing Republican districts that want to bring the bacon home in order. Everything I just mentioned is historically discretionary spending. Stephen Miller says you can't do discretionary cuts like Doge under budget reconciliation. But somehow they're increasing what has traditionally been discretionary spending in budget reconciliation. And they're doing it apparently by making it mandatory spending. What an insanely stupid idea to expand. Like right now, the vast majority of the budget and the reason that it burns out of control, it's mandatory spending. It requires actual legislation from Congress. It has to get past the filibuster. It has to be signed by a president. If you actually want to reform the big entitlement programs and a number of other now mandatory spending programs, like a lot of the programs under Obamacare, it's almost impossible to do it. So now we're adding mandatory defense spending, mandatory border security spending, mandatory infrastructure spending. Well, we have to to get through reconciliation. But we can't do anything about doge. We can't do anything about the Department of Education. We can't do that stuff because that's discretionary spending. So maybe, maybe they're playing games, maybe they're not being really honest. And here's where Rand Paul has come in. His criticisms pretty much mirror everything that Thomas Massie said about the big beautiful bill in the House and the budget resolution in the House and the continuing resolution in the House. Rand Paul's been right there, lockstep every step of the way, but he's focused more on presidential impoundment and the President's ability to send a formal rescission bill to the House and Senate through a similar expedited process that only requires 50 plus one. So we can in fact do discretionary spending. We could do all of the Doge cuts. We could do the 2 trillion in Doge cuts that Elon Musk originally was talking about. We could do this through a similar process to budget reconciliation. And here's what he said. There's a tweet from Rand. Congress can't cut spending through Doge without the President sending a formal rescission bill. That's the law. It only takes a simple majority pass. But so far no bill has been sent. In this case, Congress is waiting rating on the White House for over a month, we've heard rumors of a 9 billion rescission, 8 billion in foreign aid, 1 billion from NPR. But it never happened, mainly because weak Republicans threatened to vote no. 9 billion is a rounding error, but it's something. Caving to big spending Republicans is business as usual for the gop. The Senate's big beautiful bill bill jacks up the debt ceiling by 5 trillion in its current form. No Congress in American history has ever approved a hike that massive. All the while, interest on the debt now tops 1 trillion a year. Then he goes on to say, this isn't about loyalty to President Trump. I support him. It's about the tsunami of debt that's about to drown this country. Someone has to be brave, brave enough to stand in his path. Now, if you happen to agree with me on this critical assessment of our budget situations and you express yourself on X, you're going to take unlimited amounts of abuse from people that seem to be blindly trusting that the President is in charge of this process. I don't think the President is in charge of this process. What. What I think is that that wing of the gop, the big spending wing of the gop, I call them the neoconservative wing. And if you want to get a good proxy for how big the neoconservative wing is of the Senate caucus, just look at those 26 Republicans that voted against Rand Paul's proposals to gut USAID. 26 Republicans out of a caucus of, what is it, 51 votes? Something like that. That's a huge wing of the party. And their deal with the devil is that they want to fund the wars. They want to fund the war on terror, they want to fund the deep state, supposedly to keep us safe. Now, if those are your priorities, do you really think that Doge cuts matter to you? Wouldn't you trade those away to the Democrats to ensure that the wars keep going? I think that's what's going on. And I really hope that the good guys in the Trump administration wake up to this dynamic, because at the end of the day, and remember Lindsey Graham, who President Trump has endorsed for reelection? He's the chairman of Senate Budget Committee. If you Google neocon on Grok, you're going to get a picture of Lindsey Graham. He's the guy that the neocons don't really care about spending because you can't spend on forever wars and still be a fiscal conservative. So it's a clash. It's a clash that Thomas Massie warned me about when I was so bullish on Doge, going all the way back to January of this year. And he's like, there's a problem because we have these different wings of the gop, and one that they still sit in many of the committee chairmanships, they're the most senior members of the gop. And I tweeted this out and someone challenged me on this and I say, you have to beat the Republican establishment before you can beat the Democrats. And someone responded and said, well, didn't Trump beat the Republican establishment? I'm like, no. A lot of the guys that we're fighting today are precisely the guys think Mitch McConnell, Lindsey Graham, many others they were there in 2010, 2011 when we tried to stop Obamacare, they were there when we tried to rein in spending. And ultimately they gutted the spending caps that we pushed the Republicans to embrace. So it's a problem and it goes back to the political viability of anything that you like about the Trump agenda. Because if the Republicans get clobbered in the midterm, if they don't get something done this year, that imperils anything. And as you know, I'm pretty bullish about what RFK Jr and Jay Bhattacharya and Tulsi Gabbard are doing to gut the COVID industrial complex. That's literally a life saving event if they accomplish those things. But ultimately the budget matters. And you can't ultimately unwind the deep state. You can't unwind the pandemic industrial complex, you can't unwind the education industrial complex. Fill in the blank. Whatever you're most passionate about, you can't do that unless you ultimately deal with it through the budget process. Because if you're rearranging deck chairs in a government agency without eliminating that budget authority that they have the ability to spend dollars, sooner or later the bureaucracy, the deep state, just comes back and, and sets up all those chairs again exactly where they wanted them. Let me close with this. There is an alternative model, and I could call it the Nancy Pelosi model because, you know, mad respect, she got done what she set out to do. Maybe you don't like her because you disagree with her philosophy, but man, she knew how to get it done. Another example might be Javier Milei. Now, the Argentinian system is different. I'm going to acknowledge that right up front. The Peronis never imagined that anarcho capitalist like Javier Milei would take the presidency there and use the executive power that the bad guys put into that position to just go through the government with a chainsaw. Literally. Javier Milei's chainsaw. So he started by taking 21 federal government ministries and cutting it down to nine. That's pretty good. He dissolved merged departments, including those for Education, Culture and Social Development into broader ministries like Human Capital. Fired hundreds of bureaucrats within an estimated 70,000 public sector layoffs in 2024. What Milei called useless government jobs reduced administrative overhead, contributing to a 30% cut. 30% cut? That's actual spending, not the current services baseline that Stephen Miller apparently loves so much. He actually cut 30% of government spending relative to where he started in 2023 for the first time in 123 years. Argentina achieved a fiscal surplus in 2024. That's what you could do. That's arguably where the Trump administration should be leading. That's what Elon Musk wanted to achieve, some sort of transformative changes that would make the political price that anyone might pay worth the pain. But I'm going to argue that it's not necessarily pain politically to do the things that you said you were going to do, because that's how you animate your base. That's how you animate the voters that bothered to show up for you last time. That's why they might show up again in the midterm elections and deny that historical trend that will give more power to the other party. Because ultimately I believe that good policy is good politics, and doing what you said you were going to do has a political dividend. But I guess we'll find out. That's all I got. Thanks. Thanks for watching. If you liked the conversation, make sure to like the video, subscribe and also ring the bell for notifications. And if you want to know more about Free the people, go to freethepeople.org.