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Ben Ferguson (2:38)

Welcome. It is verdict with Senator Ted Cruz. Ben Ferguson with you. Senator, as we are doing this show, it was a pretty crazy week for airline fires, especially if you were on Spirit Airlines. This was a crisis that was created by the prior administration. They had been struggling for a while, and there was a bailout, in essence, in the private sector with JetBlue merger. And guess who stopped it. Yeah, the Biden administration. And Americans need to know this story. It's really important.

Senator Ted Cruz (3:10)

Well, it is now an objective fact that Democrats kill your Spirit. That, of course, means Spirit Airlines, as Of this week, 17,000 employees have lost their jobs. Now, look, Spirit was always an ultra budget airline. They always had challenges in their business model. Those challenges resulted in, for years, Spirit losing money, and their customer service has been consistently at the very bottom of airlines. All that being said, in 2024, Spirit had a plan to survive, and the plan was to merge with JetBlue. JetBlue is another budget airline, but unlike Spirit, JetBlue actually manages to provide pretty decent customer Service. And both JetBlue and Spirit believed combined they would be a much more effective competitor and able to turn a profit. And in fact, Spirit Airlines believe the only way Spirit could survive is if it merged with JetBlue. Well, that would have happened, except then the Democrats came along to kill it. Elizabeth Warren led the charge saying we must stop JetBlue and Spirit from merging. Pete Buttigieg led the charge, Merrick Garland led the charge, and Joe Biden led the charge, and they succeeded in blocking the merger. And now this week, Spirit has gone totally bankrupt, which is what they said would happen if they were not allowed to merge with JetBlue. And 17,000 people have lost their jobs. We're going to break it all down for you on today's pod.

Ben Ferguson (4:58)

Yeah, it's an incredible story. And before we get into that, I want to just talk to you about the international fellowship of Christians and Jews, the incredible work that they're doing to help people in Israel right now. And so many of you that have gotten involved. Number one, thank you. But there's still a lot of work to get done. And for many of you that haven't gotten involved, this is your moment where you can have a huge impact on people's lives in Israel. All right, I want to take a moment and I want to talk to you about the incredible impact that you can have for the people of Israel right now. Right now, our Jewish friends are feeling forgotten. There's a Jewish woman named Esther I'd like to tell you about. And her home is in Israel. Esther is living through days and nights of fear. Sirens are sounding, rockets screaming through the sky, long stretches spent in a bomb shelter. She's 84 years old. Esther is elderly. She's fragile and all alone. Now imagine that. No help, no food deliveries, no medical care, no one knocking at the door. It's a war zone. But because of friends like you, Esther is not alone. Now through the ifcj, they are there bringing her food, meeting her urgent needs, and reminding Jewish people like Esther, you are not forgotten. In times of fear and uncertainty, your compassion brings hope and real help. Esther asks that you hear these words, quote to those who give. You are doing a very great mitzvah, a good deed. You give from your heart. May God protect you. Friends, I want you to know that your gift to God's people is truly hope giving and life saving. So if you've not gotten involved with the IFCJ, please do it now and don't wait. Call 888-488-IFCJ right now. That's 888-488- IFCJ or go to ifcj.org that's ifcj.org all right, center. So let's get back to the history of Spirit Airlines. There was a very interesting post and it went viral on X. And an individual just said, spirit Airlines died tonight the hands of socialist crusader Elizabeth Warren. She must be proud to add another casket to her achievements tonight at 3:00am Spirit. Turn off the lights. 14,000 jobs directly gone. 30 plus smaller airports lost service. We now know those numbers are way bigger of the number of job losses, not just direct, but indirect. And to go back and remind the American people, JetBlue offered 3.8 billion in cash to buy Spirit in 2022. The shareholders, the flight attendants union, literally everyone involved voted yes. The combined company would have held 9% of the US market against the big four that already owned 80%. And they were saying, oh, this could create a monopoly. All right. Those numbers don't add up to a monopoly. Elizabeth Warren led the charges you mentioned. She said no. She wrote letters. She pressured Mayor Pete Buttigieg, who was then in charge of the Department of Transportation. Then the Biden Department of Justice sued. A federal judge killed the deal in January of 2024. Her argument was simple. The merger would cost consumers a billion a year. Well, now look at the collateral damage. This is the fault of the left who doesn't understand business. And these socialists like Elizabeth Warren in

Senator Ted Cruz (8:20)

My opinion well and understood. Spirit airlines was offered $3.8 billion just two years ago. That would have been the difference, or could well have been the difference between surviving and going under. And yet, as a result of Elizabeth Warren and Pete Buttigieg and Joe Biden, Spirit got zero. You look at Spirit and JetBlue are two of the smallest players in the entire arena. They're competing against much bigger airlines. And so they were trying to come together to have some scale, to be a more effective competitor. When the Biden administration blocked the merger, Elizabeth Warren celebrated. Here's what she tweeted out. Quote, I've warned for months that a JetBlue Spirit Airlines merger would have led to fewer flights and higher fares. The U.S. department of Transportation was right to stand up for consumers and fight against runaway airline consolidation. This is a Biden win for Flyers. Now, I gotta say that last sentence, she's absolutely accurate. This is a Biden win for Flyers. You want to see what a Biden win is? It is 17,000 people losing their jobs. It is small communities losing the air travel that was going into and out of those communities. And it is less competition, which means ticket prices will rise altogether. It is a disaster for consumers, which is exactly what a Biden win for Flyers is. Now, today, I guess Elizabeth Warren realizes that there's a problem, that this is not good. So today she's tweeting something different. Now she is tweeting the big four airlines, American, Delta, Southwest, United States control 75% of the US market. Fewer choices equals higher prices for you. Now, once again, her last sentence is exactly right. Fewer choices equals higher prices for you. And guess what? Elizabeth Warren just gave you fewer choices, which means higher prices for you. This is misguided government control, and sadly, it has real consequences.

Ben Ferguson (10:45)

You know, it was going viral. The last Spirit Airline flight to be actually carrying passengers, and the official sign off, it came into Texas in the DFW airport. The flight attendants, or air traffic control, I should say, they even said, hey, we wish you guys luck. You know, after an airline that's been around for quite some time. And we, you know, we feel for you guys. It's not just the 17,000 jobs that you mentioned directly. That was just the people in Spirit uniforms, the catering people, they're gone. The fuel guys, they've lost their job. The baggage crews for those airplanes, they're gone. The gate agents, they're gone. The airport coffee shops, the hotels, the rental cars, and 70 series cities that Spirit flew to, that's going to change every airline job they say carries three more on its back. So an infrastructure because of that one job in the industry. So you're now talking about on an honest number of about 40 plus thousand people that are either out of work or basically losing major income, all because Elizabeth Warren's insane crusade against, you know, this, quote, consolidation when she just doesn't understand business or the math. Spirit, not only now, now you talk about the other fallout center, and that IS spirit abandoned 90 routes during the death spiral. Fares on those routes went up about 15% on average. Oakland to Newark, for example, went from 135 to 288. Fort Myers of San Juan went from $92 to 219. Kansas City, New York went up 66%. So now every consumer out there is probably going to be paying a lot more money because of her not understanding business well.

Senator Ted Cruz (12:36)

And Elizabeth Warren spin, and we're seeing this repeated by a lot of the corporate media, she tweeted out this week, quote, spiking fuel prices from Trump's war was the nail in the coffin for twice bankrupted Spirit airline. And their whole spin on this is, well, it's entirely because of fuel prices and that's because of Trump. And look, understand their talking point is always everything bad is because of Trump. It is true that fuel prices have gone up during this military conflict with Iran, a military conflict that I believe is making America substantially safer. Fuel prices go up, they go down. That is part of running an airline. Every other airline is dealing with fuel prices going up. And ask yourself one question. Would Spirit be better or worse dealing with higher fuel prices if it had merged with JetBlue and had an additional $3.8 billion? Now, that is a question that answers itself. It is obvious. Now, look, is it possible that even if Spirit and JetBlue had merged that they might ultimately not survive? Sure, that's possible. But the odds of the combined company surviving are much, much higher. And now, because Elizabeth Warren and Joe Biden and Pete Buttigieg jumped in and killed it, Spirit is gone. And I want you to listen to Pete Buttigieg cheering on their efforts to block this merger. Give a listen. Our department, the Department of Transportation, has generally not gotten involved in these merger cases, but that's changing today. It is so important to make sure that passengers have choices, that they have access to low fares, that they have access to competition. And yet we've seen less and less and less of that competition over the years. We are taking a step that, again, is unusual in terms of recent years, but we think is the right thing to do, supporting the DOJ's lawsuit and independently using our own authorities, which are a little bit different from the doj, starting our own investigation and taking other actions.

Ben Ferguson (14:51)

This is, again, goes back to when you don't understand business and you don't understand what's happening in the marketplace. You go and you look. There was studies that were done talking about cheap carriers and markets dropped fares by an average of 21% across the board. Southwest, by the way, did this in the 90s. They saved Americans about 68 billion over 20 years in fares. And Elizabeth Warren killed it and said, oh, I'm giving you more choice. Well, do we have more or less choice today? Are we closer or further away from a monopoly? Senator, you already answered those two questions.

Senator Ted Cruz (15:28)

Well, Pete Buttigieg further tweeted in 2023, quote, Americans deserve robust competition and affordable airfares. U.S. department of Transportation supports DOJ's antitrust lawsuit. And we plan to deny the JetBlue spirit request for an exemption on their merger deal. We will continue with our own investigation while supporting DOJ's work. Now, that policy obviously failed. It was a disaster. And by the way, if you're not inclined to believe me on this, maybe you would believe Neera Tanden. So who was Neera Tanden? Neera Tanden is a Democrat. She was the head of the Domestic Policy Council in the Biden White House. So she is a senior policy person in the Biden White House. Here. Here's what she tweeted this week, quote, given the news today that Spirit Airlines is shuddering and thousands of people are losing their jobs, I think we should honestly assess whether the Garland DOJ stopping the JetBlue merger with Spirit Airlines was the right call. Perhaps it was. But any analysis must consider as part of the equation the loss to so many families to decide, look, to her credit, that is. Now, I think she got some real pushback as Democrats screamed, no, no, no. No reason allowed. Because then she put a second comment. Lord, of course, Trump's war was the Spirit Airlines killer here. I'm simply asking if we should assess all the evidence. I'm expecting the third tweet to be, I have now been located to witness protection because no Democrat is allowed to dissent on anything. But good for her for a moment, she hasn't, as of right now, deleted the tweet. It is kind of amusing. The first one was sent at 5:54am and then the clarification, oh, no, no, no, it wasn't us. It was Trump. It was Trump was at 10:39am yeah.

Ben Ferguson (17:29)

That's after you got a lot of heat from people, right?

Senator Ted Cruz (17:31)

Oh, enormous heat. You're not allowed to say anything remotely honest, remotely reasonable. Instead, it is a partisan line is the only thing that is acceptable.

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Senator Ted Cruz (18:57)

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Ben Ferguson (19:01)

All right, I want to take a moment and I want to talk to you about the incredible impact that you can have for the people of Israel right now. Right now, our Jewish friends are feeling forgotten. There's a Jewish woman named Esther I'd like to tell you about, and her home is in Israel. Esther is living through days and nights of fear. Sirens are sounding, rockets screaming through the sky, long stretches spent in a bomb shelter. She's 84 years old. Esther is elderly, she's fragile and all alone. Now imagine that. No help, no food deliveries, no medical care, no one knocking at the door. It's a war zone. But because of friends like you, Esther is not alone. Now through the ifcj, they are there bringing her food, meeting her urgent needs, and reminding Jewish people like Esther, you are not forgotten. In times of fear and uncertainty, your compassion brings hope and real help. Esther asks that you hear these words, quote to those who give. You are doing a very great mitzvah, a good deed. You give from your heart. May God protect you. Friends, I want you to know that your gift to God's people is truly hope giving and life saving. So if you've not gotten involved with the IFCJ, please do it now and don't wait. Call 888-488-IFCJ right now. That's 888-488- IFCJ or go to ifcj.org

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Ben Ferguson (22:08)

You you go back to when this merger and it was. It was an issue. Right? And they decide to flex their muscles. I'm still trying to understand exactly why they thought this was a, a good idea. Right? Like what, who was behind it? That's the other question I have. Or. Or is it just they generally have no idea how the private sector works? Or is this just socialism and the way that they do socialism where they're just like oh, we get involved in anything to flex our muscles and show you our power because we think government is better than everybody else.

Senator Ted Cruz (22:43)

Yeah, look, I think it's they have very little understanding of basic economics and they believe government power is always the right answer. While Spirit and JetBlue were litigating to merge, here's what they said. They said, quote, we continue to believe that our combination is the best opportunity to increase much needed competition and choice by bringing low fares and great service to more customers in more markets, while enhancing our ability to compete with the dominant US Carriers. And look, often when you have a couple of giant providers. By the way, there was chatter last month about United and American merging. I think that would be terrible. Those are both major and dominant providers and they quickly abandoned that. American put out a public statement saying, we're not interested in merging with United. That merger would unquestionably have run into real antitrust concerns because when you have dominant market players combining, that's what the antitrust laws are designed for. In this instance, you had two relatively small players in the most vulnerable position wanting to join forces so that they could be more effective competitors against the big guys. The antitrust law is actually designed to allow that and even encourage that. And yet the federal judge in Boston, Massachusetts who entered the order blocking the merger wrote the following quote, while it is understandable that JetBlue seeks inorganic growth through acquisition of aircraft that would eliminate one of its primary competitors, the proposed acquisition in this court's attempt to predict the future in murky times does violence to the core principle of antitrust law to protect the United States markets and its market participants from anti competitive harm. Now, let me stop right there and we're going to get a little bit wonky on two things. Number one, what the court said, which was repeating what the Biden DOJ had said to it is flat out wrong as to the purpose of antitrust law. Antitrust law is not designed to protect market participants from anti competitive harm. It is designed to protect consumers. That is a very different concept. So when Democrats are in charge, they want to use government to protect one competitor from another. The purpose of the antitrust laws is to protect consumers. And the way you do that is by having robust competition. In this instance, JetBlue and Spirit combined would have been a much more effective competitor than the two splintered apart. And the antitrust analysis typically looks at one of the central questions is what percentage of the relevant market are the players that are seeking to merge? The way that DOJ managed to hoodwink the court into blocking the merger is they didn't define the market as commercial air travel, like in any normal world. That's what you would think of, if I want to fly from Houston to New York, my market is who Can I go buy a ticket from that flies me there? That would be a normal way to assess it. So then you would look at JetBlue and Spirit and you would compare them to American, Delta, United, Southwest, and that would be the market. And looking at it that way, JetBlue and Spirit are really small players in that. Well, what DOJ argued is, no, no, no, the argument is not airline travel. The market is not airline travel. The market is ultra budget airline travel. So it basically defined the market as JetBlue in spirit. And then it said, well, gosh, then, then if these two combine, there'd be no competition in the market. That is an idiotic way to look at it. They literally hurt the lowest cost competitors. And it is the presence of low cost competitors and competitors fighting with each other that drives down prices. And the consequence is they left the lowest cost provider completely vulnerable. And by the way, this was not a mystery. Both Spirit and JetBlue were telling them this over and over and over again. Do you know what the Biden administration said when, when the merger was blocked?

Ben Ferguson (27:20)

What'd they say?

Senator Ted Cruz (27:21)

Attorney General Merrick Garland said in a statement that the ruling, quote, is a victory for tens of millions of travelers who would have faced higher fares and fewer choices had the proposed merger between JetBlue and Spirit been allowed to go forward. Garland added, that DOJ quote will continue to vigorously enforce the nation's antitrust laws to protect American consumers. Now, every word of that is gobbledygook and wrong. And right now, 17,000 workers have lost their job and American consumers are facing fewer choices and higher prices.

Ben Ferguson (28:01)

Love, generosity, and compassion. We say those words all the time. And they sound good, they feel good. But here's the truth. Those words don't mean anything unless they turn into action. And right now, not later today, not tomorrow, there's a child in the world who doesn't know if they'll eat, if they'll have a chance to learn, or if there's any hope at all. And while we're all busy, life keeps moving forward. But that child is waiting. This is where you come in. With Compassion International, you have the chance to change a child's future. Not just with words, not with promises, but with real help that provides food, education and hope through local churches and people already in their community. Put your words into action and join me. Introduce a child to a loving heavenly father today@compassion.com that's compassion.com let's talk about another aspect of this. And it was the. There was a lot of, you know, fodder online. And there was a lot of media reports that, well, maybe America would. Would give a. Government would give a bailout. We'd own, you know, 80, 90% of the company, whatever the number was, ultimately, that did not happen. Explain. I hear bailout, and I always get real cringy. We've had some that have been really good where we've gotten our money back as taxpayers, but in this scenario, there's many that say, you know what? It makes me really nervous. It did not happen. But can you explain how the government getting involved with that and how that works and who's making that decision of saying yes or no?

Senator Ted Cruz (29:43)

Yeah. So this last week, there was considerable discussion about the Trump administration potentially bailing out Spirit Airlines. And the bailout that was being discussed was the federal government would give Spirit Airlines $500 million, and in exchange for that, the federal government would own 90% of the airline. And there were differences of opinions within the administration on that. So the Secretary of Transportation, Sean Duffy, was vocally arguing against that, saying, that's a bad idea. Howard Lutnick, the Secretary of Commerce, was the one who was advocating this idea. I publicly came out against it. I came out loudly. I sent a tweet a little over a week ago that said the following, quote, this is an absolutely terrible idea. The TARP corporate bailouts were a huge mistake, and the government doesn't know a damn thing about running a failed budget airline that the Biden administration killed. Now, when I said that, I'm the chairman of the Senate Commerce Committee, which has jurisdiction over aviation. When I came out against it, that got quite a bit of media attention, and it prompted a number of other members of Congress spoke out against it after I did so. I will tell you, Ben, that was my public statement. I also went, so last week, I had dinner with Howard Ludnick. Howard is a friend. He and I work together very, very closely. He's the Secretary of Commerce, and the Commerce Committee is with. Is the Senate committee that has jurisdiction over the Commerce Department. So Howard and I had dinner last week, and a good chunk of the dinner was spent discussing the potential Spirit bailout. And I will tell you, one on one with Howard, it was just the two of us having dinner. I leaned in really hard and said, this is an absolutely horrible idea. Corporate bailouts are a bad, bad strategy. They were a bad strategy when we did tarp. They're a bad strategy when you have the government coming in and bailing out giant corporations, but they're particularly bad when the government doesn't know a damn thing about the business. And so if we'd ended up giving $500 million to Spirit and having the federal government own 90% of Spirit number one, I believe we would have lost our money. In fact, I had said, somewhat cynically, a better idea was simply to put $500 million in a pile on the floor, pour gasoline on it and light it, because then at least you'd get some warmth. You could like roast marshmallows by it. That would get something positive and beneficial from it. But fundamentally, who in their right mind thinks the federal government knows anything about how you run an airline? How do you set pilot schedules? How do you run baggage handling? How do you make sure somebody's suitcase that's headed to Pittsburgh doesn't end up in Milwaukee? How do you negotiate with pilots unions, with flight attendant unions? How do you ensure safety and all of that? The federal government doesn't know a bloomin thing about it. And it is a really dangerous road. Look, there are some voices and some voices within the administration that are pretty excited about the federal government taking ownership shares in lots and lots of companies. I think that is a really bad idea. And Ben, I'm going to harken back to when I was a kid. When I was in high school, and you may recall, I was part of a group in Houston that was called the Constitutional Corroborators. And it was started by this nonprofit in Houston called the Free Enterprise Education Center. And as high school kids we studied free market economics. We read Milton Friedman and Hayek and Bastiat and von Mises, and we studied the Constitution. And we ended up touring around Texas speaking on the Constitution. And it was five high school students. We would set up esals and say we'd go to like a Rotary Club or a Kiwanis Club or a Lions Club, and folks would be sitting there having lunch and the five high school students would set up ESALs and we would write from memory the entire Constitution in shortened mnemonic form. And we would write a definition of socialism, which is government ownership or control of the means of distribution or production. And the reason we wrote this, and this is what I was doing at 14, 15 years old, is if you don't know what it is, you can't identify it when you have it. Well, the folks who are arguing the federal government should own or control the means of production and distribution and economy are directly arguing we should adopt socialism for our economy. That is a really, really bad answer. And I think a budget airline made it obvious to most observers. Look There are limited circumstances. So for example, in national security, where you're dealing with critical minerals and rare earth minerals, where it makes sense to have some government control because you need to be able to ensure that we can defend our nation from national security threats. But outside that very limited category, it is a really dangerous, slippery slope to start having the government be a shareholder and especially be the biggest shareholder in major companies. That's how you lose the competitiveness. That's how you lose the incredible success of the American free enterprise system.

Ben Ferguson (35:44)

Yeah, it really is. You know, when things like this happen, I always go back to there are real people that are affected by it and there's always, you know, people that are out without a job today. There's also stories that come out of it that I think are amazing. The New York Post had this story and I think it's a great way to just wrap this up in a human way. It said Spirit Airlines pilot given emotional send off from rival airline after his retirement flight, which is a huge deal when you're a pilot, was cut amid the shutdown. The Spirit airline pilot received a hero send off with the help of another airline captain John Jackson was scheduled to fly one last time for Spirit into Baltimore Washington International on Saturday when they ceased operations and went out of business. In the, not in the dead of the night. Jackson was left stranded by the permanent shutdown. He hits to ride with Southwest Airlines in Fort Lauderdale. He rode alongside his son who was a first officer. And this was the coolest part. It went online viral. They basically Southwest gave him the send off that he deserved. Southwest put it up on their social media. It went to well over a hundred thousand people that responded to it very quickly. They showed him in the cockpit with his son. It was awesome. And I just got to say, even when things like this happen, I do love seeing the, just the hearts of Americans and, and people that do this and gave him a send off. The, the Southwest Airlines carry him. They went under the water Canyon salute after arriving at bwi. I just, I, I tell you, it's awesome when you see things like that happen. So to that retiring pilot who didn't get his final flight, job well done to Southwest and, and thanks for making that guy's day special.

Senator Ted Cruz (37:32)

Well, good for Southwest. That was the right thing to do. And I'll say Southwest is a great Texas company. American Airlines is also a great Texas company. You know, Texas is really a critical hub for aviation. And I'll say I fly just about every airline all the time. I jokingly refer to Southwest as the company plane. You know, people ask sometimes they assume Senators fly private jets all around, and the vast majority of the time you fly commercial and you fly coach. And so I tell people, I say, oh yeah, I've got a private jet. It's a 737 and it's with 135 of my closest friends on Southwest. That's my private jet. But you know, Southwest I think does a great job and that was a very class move. I'm glad they honored the spirit pilot who was retiring. I'm sorry that so many other pilots are now out of a job. I think many of them will end up getting hired by other airlines. But it's still an awful lot of pain and hurt from the disastrous Biden economic policies.

Ben Ferguson (38:37)

Yeah, it's real life. This is going to affect people and I hope people pay attention to exactly what brought this to become a reality and the disaster it ended up being. Don't forget, we do this show Monday, Wednesday, Friday. Hit that subscribe or auto download button wherever you get your podcasts. And make sure you also follow us on YouTube as well. The Senator and I will see you back here on Wednesday morning.

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