← The 47 Morning Update with Ben Ferguson
The 47 Morning Update with Ben Ferguson
Biden-McCarthy Debt Deal: the Good, the Bad, & the Ugly
00:40:06
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- [00:01]
A
Welcome. It is 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 Republicans? And if there is, what does that look like for the American people?
- [00:23]
B
Well, and it was announced on Sunday that there was an agreement in principle between Joe Biden and Kevin McCarthy. And the agreement in principle included some cuts in 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, 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.
- [01:29]
A
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 the House. Is there a, 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.
- [01:55]
B
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 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 4 trillion things, which is the 4 trillion in new debt that this deal adds and that they also get. I said 87,000 new things with the 87,000 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 a 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 are 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 as a significant victory is work requirements for SNAP and tanfs. Now, SNAP are food stamps, and TANF is what used to be AIDS to Families with Defending Children with Dependent Children. And from what we understand, it expands work requirements from individuals from age 49. It expands it up to age 54, 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 1%. 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 leadership's describing them, those are positive. Those are not nothing.
- [04:47]
A
There's obviously the big question that many have heard about. There's been a lot of attention on this, Senator, on social media, and that's about IRS agents. There is a concern that the IRS cannot be trusted, that they're targeting people. We saw what happened with Matt DB when he was testifying before Congress, and the IRS 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. Tibi 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 gotten a little bit older, you have More that weakness and complacency. That is something that, well, it's not really a problem. It's a reality. For many men, testosterone levels have fallen off a cliff. Historically. They're at an all time low and that is exactly where chalk comes in. They're here to help real American men get back your strength and vitality. I've been taking chalk. You can go online to choq.com and I've been taking it now for several months. The male vitality stack. I can tell you personally it works and it can help you boost your testosterone levels up to 20% over 90 days. Let me say that again. Boost your Testosterone levels over 20% up to 20% over 90 days. All you have to do is go to chalk.com Chalk's Natural Herbal Supplements are clinically proven to have game changing effects on your energy, your focus and your mood. Maximize your masculinity today@chalk choq.com use a promo code BEN for 35% off any chocolate subscription for life. Choq.com promo code BEN those IRS agents sender are something that so many are concerned about. You mentioned that as well in your tweet today. Where are we on those this army of IRS agents, is that in this deal are we going to be able to stop that?
- [06:52]
B
Well, it's not entirely clear. So the original bill the House passed what was called the limit save and grow bill that zeroed out the 80 billion in new funding that Democrats rammed through in the prior Congress for the IRS. That 80 billion was going to be directed to 87,000 new IRS agents and employees to be hired to harass the American people. And the first bill the House passed zeroed 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 10 billion. In other words from 80 billion to 70 billion. So that's pretty disappointing. And one House Republican tweeted out that the cuts are only 1.88 billion. So 1.9 billion instead of 10 billion. We don't know for sure. I will say when, when, when I tweeted out based on the public reporting that the 87,000 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 we'll fight over subsequent years in 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 zeroed out next year. If that's in there, I'd rather see the whole 80 billion zeroed out. But zeroing it next year is a significant step in the right direction. But again, the devil's in the details.
- [08:41]
A
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 gonna 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 gonna try to stop 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, and to be clear what this is, suspend to suspend the federal government's $31.4 trillion debt ceiling in the coming days. And they're acting like this victory. I worry that, yes, this is a short term victory, Senator, and many Americans, I think, worry that, yeah, this is short term. But how much damage are we doing to this country when we're going this much into debt without real cuts to spending?
- [09:41]
B
Yeah, and look, 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 are two components. There's what's called mandatory spending and there's what's called discretionary spending. So mandatory 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 1.7 trillion in fiscal year 23 to 1.47 trillion in fiscal year 24. So that was 230 billion cutting the actual spending levels. And then it kept spending at 1% per year. And that was calculated just that reduction in spending was calculated to save a total of $3.2 trillion. 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, 1.7 trillion, that it was in fiscal year 23. In other words, that it we lose the entirety of that cut and it then grows from 1% from there on now. It's a big difference if you're growing 1% from 1.7 trillion or growing 1% from 1.47 trillion because makes a $3.2 trillion difference over time. What does that mean? In total, the New York Times is reporting that the total savings of the deal are about 650 billion. That is a massive reduction from the 4.8 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 bill text. What else do you want me to believe? All I have are the public reports. If the bill text 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 4 trillion in new debt in exchange for much, much smaller spending cuts. If that is true, that's pretty deeply disappointing.
- [12:22]
A
There's always people, Senator, they're 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?
- [12:56]
B
Well, there may be some truth to all of those. Look, leadership in both the House and Senate are gonna pitch that this is the greatest deal since sliced bread. 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 $32 trillion in debt is there's a dynamic 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 on 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 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 want your guns, we get our butter. And so they typically leverage the military hawks in 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. So we will see the details. I will tell you something that leadership is pitching as positive. So the first version of Limit save and growth rescinded the unspent Covid spending that Congress had appropriated that saved about $30 billion. This agreement is likewise expected to rescind unspent Covid relief funds and also vaccine research and disaster relief. We don't know the details of that, but we're being told that could be saving 50 to 70 billion dollars. So depending on what that is, that could be a positive element. Now let me give you a negative element. The Limit save and grow bill repealed almost all of the ridiculously named inflation reduction acts, energy and climate tax credit expansions, which saved $569 billion. 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 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, although we'll see how stringent there are. But there are 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, is that House Republicans got some of what was included in the first bill. But it's not clear how much I.
- [16:17]
A
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 bipartisan 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 about our friends at Augusta Precious Metals. If you are sick and tired of worrying about your retirement and protecting your hard earned dollars, you're tired about being stressed out about what's happened with interest rates and you're tired about worrying about losses and not having enough time to make them up. This is why you should call a guest of Precious metals. You can understand how a gold IRA can actually help you protect your hard earned dollars. I work with Augusta Precious Metals and I can tell you it is a company that I trust and use because they made it simple. They helped me with a gold IRA and they made sure that was the right answer for me. They give you just the facts, no pressure. In fact, Augusta Precious Metals will tell you If a gold IRA or a 401k is not the right move for you. And it's a crazy economy right now. It is so important, very close to retirement or if you're in retirement that you preserve your wealth because there's no time to make up losses. So if you've saved a hundred thousand dollars or more, take a look at their free guide and you can sign up for a one on one web conference. Both of them are filled with economic insights and gold IRA info for your peace of mind. Call a guest of Precious Metals today and you can also find out about free gold. Yes, when you switch over part of your IRA or 401k, you can even get free gold 1877, the number four gold IRA. Get your free gold, free information and retirement protection by calling 877-the number four gold IRA. That's 877, the number four gold IRA or Augusta precious metals dot com. That's Augusta precious metals dot com. Senator, I want you to hear how Biden described it. Some thought he was you, you know, not that excited. And I'm like well it is Biden. It's kind of hard to read them on most days. Let's be honest. Here's what he had to say.
- [18:30]
C
Sorry to keep you waiting but we've got good news. We've got a just spoke with Speaker McCarthy and we've reached a bipartisan 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 the threat of catastrophic default off the table, protects our hard earned and historic economic recovery. And the agreement also represents a compromise which means no one got everything they want. But that's the responsibility of governing. And this is a deal is good news. I believe you'll see for the American people. The agreement prevents the worst possible crisis. A default for the first time in our 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, 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 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.
- [19:58]
A
I'll take a few questions now, Senator, 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 and 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 gonna find a way to get us off this merry go round?
- [20:49]
B
Well, look, I think Joe Biden is gonna continue to try to create crises and continue to go hard left and try to ram through his hard left agenda. It's gonna 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 and the house in 2024 so we can save our economy now and get better policy in 2025. That was Ron Klain's reaction. Let me give you another reaction to it. And this was Bill Kristol. Now, Bill Kristol used to be somewhat conservative. When Trump became president, Kristol lost his mind and has been a hard left Democrat cheerleader ever since. Here's Kristol's reactions, quote, first reactions to the deal, one, good for the US through the need to get rid of the debt ceiling in 2025 and two, good for Biden 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 Kristol's assessment and Bill's Kristol's assessment beyond that. He also, quote, tweets a tweet from a reporter, guy named Max Cohen, who tweeted the 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 Kristol'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 says, and for the future, wouldn't McCarthy prefer being speaker with a President Biden than having to deal with a President Trump? As 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, but that does tell you something about how people are reacting to this deal, that folks on the far left are cheerleading it right now.
- [23:30]
A
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, you said at the beginning that.
- [24:01]
C
The debt ceiling was not negotiable. Isn't that what you've just done here? We're not negotiating that. 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 have all these cuts in it. I said, I'm not going to do that. You pass 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 to something totally different attached than was attached before. Suppose you want to try to make it look like I made some compromise in the debt ceiling, and I didn't. I made a compromise on the budget. That's what they wanted, is you 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?
- [25:01]
A
Can you think of an alternative? And there's the chuckle. I mean, really, that's what you've got from the president in the White House tonight.
- [25:08]
B
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 gonna talk, he wasn't gonna 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 Senate or 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 going to negotiate. And he came to the ocean 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 student debt cancellation that would have saved at least $460 billion. What's been reported publicly is, nope, all of that's still in there now. Allegedly. And what Kevin said 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 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 it 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 1.5 trillion or until March of 2024. So it was a partial debt increase, but not a blank check. What this does is it suspends the debt limit altogether until January 2025. So on the face of it, instead of 1.5 trillion, it's about 4 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 2017, that the total federal budget was about $4 trillion. 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 1.5 trillion to 4 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.
- [29:09]
A
I gotta 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, 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, Senate and the White House all at the same time?
- [29:54]
B
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, There are about 20 Republicans who are willing to vote no. And you usually get all the Democrats and 20 to 30 Republicans who will vote for damn near any spending bill they see. I did last week. I was on Squawk Box on cnbc, which I really like doing Squawk Box because you actually get into substantive conversations in greater depth and the five or six minute sound bite you get on most other shows. But in the course of being on Squawk box, at one point we were talking about the out of control spending and they said, well, gosh, you had the inflation Reduction act, you had 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 $20 trillion. Today it's $32 trillion. 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.
- [31:26]
A
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 the national debt clock and those numbers, if we want to pay it all off of the US national debt, debt per citizen is over 95,000 now for the first time ever. But not every citizen pays taxes. So if you had debt per taxpayer, you'd be 248,000. And that would just pay off the debt for 1/1,000th of a second and we'd still immediately go back in the red. You look at the US federal debt to GDP ratio, for example, in 2000 it was 57.78%. The US federal debt to GDP ratio. Now it's the worst it's ever been in history, 120.47%. 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 D.C. over this. And before you answer that, let me tell you about our friends at 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. North Face, we've seen this. And if you are sick and tired of giving your money to companies are destructive, their woke ideology is coming after your family. Then I've got a way you can make a difference. For years big mobile companies have been dumping millions of dollars into leftist causes and you didn't have another option because it didn't exist. You just had to go along with it. Not anymore. Patriot Mobile is America's only Christian conservative wireless provider. They offer dependable nationwide coverage on all three major networks so you get the best possible coverage for your area without the woke propaganda pushed by leftists working hard to destroy this country. Now when you switch to Patriot Mobile you support free speech and religious freedom, the sanctity of life, Second Amendment. Our military, veterans and first responders, they have 100% U.S. based customer service team so they're supporting American workers. And when you switch a portion of your bill every month goes to these causes at no extra cost to you. So check out Patriot Mobile. Stand with a company that stands with your values. PatriotMobile.com verdict. Use a promo code. Verdict. You'll get the best deals of the day. Free activation. You can keep your same cell phone number you have now and keep your same cell phone or get a new one. If you want to get free activation. Patriot mobile.com or call them 878-PATRIOT. That's 878-PATRIOT patriot mobile.com Senator, that lastly that question for you. I see a US debt ticking time bomb. I think every economist says it. This is not just about our kids and our grandkids having debt. This is about losing control of a country. In essence, when this explodes, if we don't right this ship, how concerned are you on that level?
- [34:41]
B
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 about, 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 II, GDP growth has averaged about 3.3% a year. That number is critically, critically important. During the second half of the Obama years, GDP growth averaged less than 1% a year, 0.9% a year. The preceding time GDP growth had averaged less than 1% a year was 1978 to 1982. 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 are 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 12 years of Reagan, Bush coming in, cutting taxes, simplifying the tax code, reducing job killing regulations. And Reagan came in and did that. He 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 1984?
- [37:14]
A
I would love to know. And I know you know that number, so tell me.
- [37:18]
B
7.2%.
- [37:21]
A
Wow.
- [37:23]
B
That's, 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 $4 trillion 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 5% annual GDP growth and we produced 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 reining in 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 solve the problem. But with the growth, I believe we can solve it. You also asked a minute ago if we'll ever get a balanced 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 1, which is the only way it will ever happen with pressure from the states.
- [39:20]
A
Yeah, a lot of, 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 Podcasts. The top there's a follow button. You can click it and you'll make sure that you get every episode we publish on Monday, Wednesdays and Fridays. When you listen to our show, please share it on social media. You can hit that little forward arrow and share it on whatever social media platform you are on. That helps other people listen to the show and find it. And most importantly, write us a five star review if you can, wherever you're listening to the show. As always, Senator, pleasure being with you. We'll see you back here in a couple of days.