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- [00:00]
Michael Knowles
People think that the President of the United States has the power for debt forgiveness. He does not. He can postpone, he can delay, but he does not have that power. That has to be an act of Congress. The president can't do it. So that's not even a discussion. Not everybody realizes that. But the president can only postpone, delay, but not forgive. That is a quote from Democrat House Speaker Nancy Pelosi 27 days before Joe Biden unilaterally forgave student debt. This is Verdict with Ted Cruz.
- [00:45]
Ted Cruz
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- [02:21]
Michael Knowles
Welcome back to Verdict with Ted Cruz. I am Michael Knowles, joined as ever by Senator Cruz. We're so happy to be with all of you and condolences to all of the poor schmucks out there who actually paid off your student debts or your kids student debts. You really blew it, folks. You could have gotten a freebie, but you did the right thing. And now too bad for you, it's fairly stunning.
- [02:46]
Ted Cruz
You know, I'm reminded of Mel Brooks when he observed, it's good to be the king. What Joe Biden is doing is completely lawless.
- [02:55]
Michael Knowles
So Senator, I not only take your word for it that this is not legal, I also take Nancy Pelosi's word for it. Never thought I would say that statement.
- [03:04]
Ted Cruz
But when's the last time Nancy and I agreed this might be the one.
- [03:09]
Michael Knowles
And only time Joe Biden bringing the country together. I think the argument they tried to make was that this in some way related to the Heroes Act. After September 11, there are all these kind of bizarro ex post facto explanations of how Biden did this. But I take both of your word for it that it's not really legal. And yet obviously he is doing it. So while he might not have the right to do it, he apparently has the power to do it. My question then is less about the law and more about the politics of this Biden. I guess he just thinks he's buying votes in the way that machine politics has often bought votes. Is this going to work in November?
- [03:50]
Ted Cruz
Well, let's take those one at a time. On the law question, I think it is clear that he does not have the legal authority to do this. And this week's Cloakroom on Verdict plus is entirely about that. We do a deep dive into the statutes, into the asserted justifications. The Biden Department of Justice put out a new memorandum from the Office of Legal Counsel trying to claim it had the authority to do this. And so on Cloakroom, I go into the statutes, into the details and explain why all of that is nonsense. And in terms of the politics, I don't know. So there are cross cutting concerns. And the honest answer is I don't know how this will play politically. Let me give the argument for why it will play badly for the Democrats and then I'll give the argument why it'll play well. The argument why it plays badly is, is that it is reverse Robin Hood. Robin Hood stole from the rich and gave from the poor. This is Joe Biden stealing from the poor and giving to the rich. And let me give you some statistics. According to Brookings, the left wing think tank, the median income of households with student loans is 76,400. Only 7% of those are below the poverty line. So these are not typically the poor that we're talking about that have student loans. But look, they've gone to college or grad school. So that, that tends to move you up in the, in the income strata. To begin with, among those making payments on their loans. So if you exclude the people who aren't making any payments and you focus just on those making payments on their loans, the median income is $86,500. So that's starting to get. Get up there. And only 4% are in poverty. Overall, the top 40% of American households hold 60% of the student loans. How many Americans have degrees? Well, 37% of Americans have a bachelor's degree, and 14% of Americans have a graduate or professional degree. That's according to the Census Bureau. And the unemployment rate for college graduates right now is 2.9%. Approximately 87% of American adults do not have student loans. So it is benefiting a relatively small, discrete class. This could play very badly for Joe Biden if the people who are paying for it are pissed off. You know, this will cost every taxpayer, on average, $2,100 to give away this money.
- [06:36]
Michael Knowles
Well, Senator, do you remember a couple of years ago, there was a voter, a constituent on the campaign trail. He approached Liz Warren, your colleague, when Senator Warren was pitching student loan forgiveness, and he didn't like the idea.
- [07:00]
Liz Cheney
I just want to ask one question. My daughter's getting out of school. I've saved all my money. She doesn't have any student loans. Am I going to get my money back?
- [07:08]
Ted Cruz
Of course not.
- [07:09]
Liz Cheney
So you're going to pay for people who didn't save any money, and those of us that did the right thing get screwed?
- [07:15]
Ted Cruz
No, it's not even a good point.
- [07:17]
Liz Cheney
Of course we did. My buddy had fun, bought a car, went on vacations. I saved my money. He made more than I did. But I worked a double shift, worked extra. My daughter worked. She was 10. So you're laughing. Yeah, that's exactly what you're doing. We did the right thing and we get screwed. I appreciate.
- [07:36]
Michael Knowles
Didn't look like that was playing very well in Peoria.
- [07:38]
Ted Cruz
So I do think folks like that guy questioning Elizabeth Warren are going to be pissed off. I do think steel workers and truck drivers and plumbers have a reason to be pissed off. All of this could bounce badly for Democrats. Now, let me give you the flip argument. It may be a political masterstroke. Why is that? There's a school of thought in economics that's called public choice theory. And public choice theory examines how decision making is made in a democratic society. And essentially, what it focuses on is when you have a relatively small group with a concentrated benefit and you have a large group with a diffuse harm, the small group cares a lot about it. And the large group typically doesn't. And so look, there is a real risk if you are that that slacker barista who wasted seven years in college studying completely useless things, now has loans and can't get a job. Joe Biden just gave you 20 grand. Like, holy cow, 20 grand that, you know, maybe you weren't gonna vote in November and suddenly you just got 20 grand. And, you know, if you can, you know, get off the bong for a minute and head down to the voting station or just send in your mail in ballot that the Democrats have helpfully sent you, it could drive up turnout, particularly among young people and the people who are getting screwed. It's not necessarily the case that they understand they're getting screwed. It's a little more diffuse of I'm paying taxes. But it's not like you get a bill in October, Dear Michael, Send in your $2100 to pay for slacker boys loans getting forgiven.
- [09:40]
Michael Knowles
When I think of the, whatever the estimated 300 billion to $600 billion that this could cost, we don't have a really firm number yet. I think, yeah, that's a lot of money. But in the perspective of all the other money that the federal government spends, it's just not gonna make a huge difference. So that is one great fear. And then the other fear long term, as to whether or not this is a Democrat political masterstroke is you've now created a system of incentives whereby people will be more likely to go to college, assuming that they're not gonna have to pay back their loans, assuming that the big daddy government is gonna come in and take care of them whenever a Democrat is in the White House. And the thing we know about college these days is it doesn't train you for jobs, it doesn't give you a liberal education that seemed to go out the window decades ago. All it really seems to do is make people more likely to vote for Democrats. So forgetting even about the midterm elections or 2020, 2024 in the long term as a result of this education bill, that almost certainly will not result in any real additional education for people. You could have Democrats grooming a whole new generation of voters to be more likely to support them.
- [10:54]
Ted Cruz
Well, I think that's possible. I think there's another effect that this act is gonna drive up inflation, I think significantly. It's amazing. Between this and the build back broke bill they just jammed through, the Democrats have just spent another trillion dollars. Inflation is the number one issue country. And they're just pouring Gasoline on it. You know, we just saw today the Wall Street Journal reported that home mortgage rates have jumped up even more to five and a half percent. You know, look, that's real economic pain for a first time home buyer. For that matter, anyone trying to buy a home, what are the effects of the inflation most concentrated is going to be on college tuition. You know everyone, this does nothing about the crisis. I actually agree there's a student loan problem because universities are engaged in hyperinflation. You know, they've got, you know, you're in my alma maters have endowments, you know, 30, 40, $50 billion and yet they're bilking students out of massive amounts. They keep jacking up the prices year after year after year. And they've got tenured faculty who teach one class. They've got 50 diversity administrators who all make six figure checks. This is the very worst of leftist politics, which is they take care of their friends and they give them money. You look at this build Back Broke bill where they paid off all these left wing environmentalist groups who are just making billions of dollars. And all the Washington lobbyists that are making billions of dollars, they take care of their friends and they screw their enemies. I mean for the left it is a zero sum game of reward and retribution and it creates a vicious cycle where all the people they're paying off are then going to keep trying to keep the people paying them off in power. I'm reminded of one of my favorite Simpsons episodes where Grandpa Simpsons has been getting checks for, I think it was having like an Itchy and Scratchy cartoon or something and he hadn't done it, it was a mistake. And Lisa says, well grandpa, didn't you think it was strange that you were getting checks in the mail for not having done anything? And he says no, Lisa, I just figured the Democrats were back in power.
- [13:29]
Michael Knowles
Well, speaking of the friends of the Democrats and actually speaking of your ability to send your kids to school and to make any money at all. Senator, I don't know if you saw this headline, but someone is coming for your job. You have got a major figure, at least according to CNN and MSNBC coming after you. The future former Congress lady Liz Cheney is launching a political action committee. She's targeting not Democrats, of course, she's targeting Republicans. And you sir, are at the top of the list.
- [14:04]
Ted Cruz
Well, you can tell a lot about a person by their friends and you can tell even more by their enemies. Listen, I gotta say, Liz Cheney, I've known Liz a long time. I've known her 20 plus years. There are some people who Donald Trump just broke. They hate Trump so much that their mind went on Fritz. And I gotta say, Liz is unrecognizable. She has become a left wing Democrat now. And like 10 years ago, the idea that Liz Cheney was a left wing Democrat would have been ludicrous. Obviously. Her dad was Dick Cheney. He was a conservative Republican. She was. Look, they're both too neo Connie for me. They're both too eager to get us involved in foreign wars. But that being said, on taxes, on social issues, on most issues, Liz Cheney was a down the road conservative Republican. And by the way, that's where Wyoming is. And then Trump came into power and her mind just shattered. And what's amazing is that she's become. It's not even just that she says, okay, I don't like Donald Trump. Like, I don't like what he says, I don't like how he acts. I understand someone who says that. I don't like everything he says and does. I like the policies we enacted together. I worked closely with him on that. But she doesn't limit it to that. It's like Bill Kristol as someone else like Liz Cheney who has just become a liberal Democrat, who, what they say, you know, Cheney's circus act on the January 6th commission is indistinguishable from what Nancy Pelosi would say. It's indistinguishable from what Chuck Schumer would say. And so we just had the primary and in Wyoming and you know, she had won by, I don't know, 70, 80% last time around in the primary. This time she didn't just lose, she lost by almost 40 points. 39 points is what she lost by. And the reason is simple. She doesn't represent the people of Wyoming anymore. The people of Wyoming are conservative. And she's decided she is a Washington, D.C. left wing Democrat now. And so it's completely unsurprising, you know, right after she gets just trounced by the voters. Yeah, there's no remorse, there's no contrition, there's no, gosh, you know, for some reason the people of Wyoming don't think I'm representing them anymore. There's none of that. It is, instead, she says it's her mission to do what? Defeat conservative Republicans. And I guess it's a badge of honor that I'm the number one person on her list, that she's gonna take the PAC money she raised. And I think she's got like seven, eight million Dollars that came from lefty Democrats all over the place. And she's gonna use that now to attack Republicans. And listen, there are two things Liz Cheney is doing. Number one, she's got a fundraising grift where she will raise money, like the Lincoln Project. Lincoln Project is a great example where it's a fundraising grift of people who used to be kind of sort of Republicans who now make millions of dollars when they're not engaged in other illicit activities, now make millions of dollars raising money from lefties to attack Republicans. And they're, to use that phrase, useful idiots, because their attacks arguably have some salience, because they can say, I was once a Republican, now I can be a left wing Democrat, attack them. So she'll engage in a fundraising grift for a while. My guess is she probably runs for president, she gets crushed, and then she will happily retire to being a commentator on either MSNBC or cnn. I don't know which one it'll be. Or maybe Mother Jones. I think those are her choices now.
- [18:02]
Michael Knowles
Senator, speaking of large amounts of money and empowering bad forces, the Iran nuclear deal seems to be back on the table. The Obama administration crafted this deal and sent pallets of cash to Iran and paid obeisance to Iran after they captured our sailors and set them on the path to getting a nuclear weapon. All of which was very, very bad. And then Obama leaves, Trump comes in, and the Republicans and Trump tear up the Iran nuclear deal. Now Biden seems to be reviving it, although the details are a little bit unclear. I know you've been very, very involved in this issue. What do we need to know?
- [18:40]
Ted Cruz
Look, Biden is desperate to announce an Iran deal, and he doesn't care what the substance is. He is willing to give the Ayatollah, I think, literally anything the Ayatollah wants. It is a political mission for Biden and the White House. And to say it is indefensible. You know, it was a year ago that Biden surrendered to the Taliban in Afghanistan. Biden is right now trying to give Iran and the Ayatollah nuclear weapons. That is the effect of the deal that they are negotiating, is to make it inevitable that Iran has nuclear weapons. And let's be clear. The Ayatollah leads chance of death to America and death to Israel with thousands of people. In fact, every year, they celebrate in Iran what they call Death to America Day. And that is, it is the anniversary of the Islamic Revolutionary Guard taking American hostages in 1979 in Iran. And that is, in effect, a national holiday. Where they celebrated in Iran every day. Right now, today, the current Ayatollah Khamenei is actively trying to murder the former Secretary of State of the United States, Mike Pompeo, the former National Security Advisor in the White House, John Bolton, and another State Department official, Brian Hook. All three of them have hit squads being paid for by the Iranian government actively trying to murder them. And you may recall a couple of months ago, Tony Blinken, the Secretary of State, was testifying in the Senate Foreign Relations Committee. And I asked him in the hearing, I said, is it true that the State Department is right now paying $2 million a month for security for Pompeo and Hook to protect them from Iranians trying to murder them? He said, yeah, that's true. And I said, is it true that as you were sitting down in Vienna negotiating with the Iranians, that the Biden State Department asked the Iranians, hey, would you guys stop actively trying to murder former senior US Government officials? And that they said, no, no, we will not stop trying to murder them? And you still sat there and said, okay, well, let's keep negotiating. And Blinken backpedaled and he obfuscated. He didn't want to answer that question because the answer is yes. And about the only thing I got candor from Blinken on is I said, my next question was, I said, Mr. Secretary, would you agree that trying to murder the U.S. secretary of State is a pretty big damn deal? And Blinken was forced to laugh and say, yeah, okay, that is a big deal, but don't stop Biden.
- [21:43]
Michael Knowles
Who among us hasn't.
- [21:44]
Ted Cruz
Yeah, it is ludicrous. Here's some good news. The chances that the next Republican president, which I think will be in 2025, will rip up whatever ridiculous deal these guys negotiate, I think they're very close to 100%. And that's something I'm trying to make very, very clear. I'm trying to lay the basis for it, lay the factual predicate for it. The Ayatollah, the biggest thing the Ayatollah wants an agreement is some sort of promise that will bind the next president. Because Trump, the most important national security decision he made was to tear up the old Iran deal. The next Republican president, whoever it is, I think there's widespread agreement. Whoever the next Republican president is, will tear up whatever disastrous deal this is. That's a very good thing. And, you know, look, one of the things that the Biden team is desperately trying to find is some way to tie the hands of the next president. I don't think they'll succeed, but they're trying to write into the agreement clauses that, you know, hand over a massive amount of money if the next administration pulls over. They're trying to put poison pills in there to prevent the next administration from pulling out. We'll see what they come up with. But I think regardless, the next president is pulling out of this disastrous deal because allowing the Ayatollah to have a nuclear weapon is an unacceptably high risk that that weapon would be used to murder millions of Americans.
- [23:20]
Michael Knowles
Now, the Biden administration is clearly working overtime in this regard, but Gen Z is not working overtime. And I know that we are going over time, but I have to get your opinion on this. This is completely outside of the Iran deal or even the education bill. This is just a cultural matter. But it really shocked me. I was reading the Wall Street Journal that there is a trend that has taken over TikTok and all sorts of commentary among the Zoomers, among Gen Z, the people younger than millennials, which is the trend of quiet quitting. And quiet quitting is when you keep your job. You don't quit, you don't resign, you don't even get fired. You just do the bare minimum. You clock in at 9:00 on the dot, you clock out at 5:00 on the dot, you don't pick up your phone, you don't work weekends, you don't do anything. And it was so bizarre to read this because I was always raised that you just work hard and you never stop working hard. And all the guys at the top are working really hard. I know you work about 27 hours a day. I've seen it up close in cities all around the country. How do you explain this trend? And do the Zoomers have any sort of point when they're looking for work, life balance?
- [24:34]
Ted Cruz
Well, Michael, I gotta say, I think you're being ageist. And it may just be that you've gotten too old and you're too far removed from the youngsters and you need someone like me who's more in touch with the Utes. Listen, we have a prominent example of someone doing this. Joseph Robinette Biden Jr. The guy's had a job for a year and a half and he hasn't left his basement. You know, it, it. Look, I do think the pandemic had all sorts of harms, but it was particularly harmful to Gen Z. It was particularly harmful to people starting their careers. It was very harmful to kids too. I mean, kids who had school shut down that was incredibly harmful. But you have a lot of people in their early 20s who have their first job, and their first job was during the pandemic where they worked from home and they just zoomed from home. And I gotta say, now, and I talk to lots of people in the workplace who say that, you know, 20 something say, hey, I'm just gonna work from home this week. And they think that it's just the way it's done, that you just zoom in. And there are lots of problems with that. One of which is that often people who are working from home don't work like they claim I'm working. And magically they're doing everything from playing golf to sleeping to, you know, running on the beach, but none of which are actually the job presumably you're paid to do. But it also really hurts young people not to be in the office. And I look at, you know, I mean, I think back to when I was in my 20s and just starting working, the experience of being there, of being in the office culture, of seeing people who are more experienced, of learning from them. You know, look, I work obviously as a lawyer. It is still very much the case that the way you learn how to be a lawyer, you don't learn how to be a lawyer in law school. You learn to be a lawyer much like they did in the days of Abraham Lincoln, which you carry someone's briefcase, you just watch someone, you apprentice under someone who is doing it. And you learn by osmosis, you learn by just observing and being there and seeing the day to day rhythm and how you do it. And I do think young people in particular who think I don't ever need to go into the office to work, are robbing themselves of really critical education and on the job training. And that at the end of the day, it's not healthy for society, but it's not healthy for them either, like working hard. And you know, listen, I had years after years after years of, you know, working 16, 18, 20 hours a day and that discipline, if you want to do things that are important and significant, it takes that time and commitment and energy. And so I do worry that all of the lessons society is teaching the younger generations are lessons that are gonna be really harmful for them in the long term.
- [28:15]
Michael Knowles
Well, I'm glad that I could get that insight from someone who is young and hip to what the youths are talking about. And I can take that back and stew in that. Before we go, I have to remind you to subscribe if you're on Apple podcast, Spotify, Stitcher, Wherever. Go subscribe YouTube. Make sure you join Locals and the Verdict plus community because there will be a whole other episode of the Cloakroom coming up with our friend Liz Wheeler. Liz, what are you gonna talk about?
- [28:41]
Ted Cruz
Hi Michael. Hi, Senator. Yeah, so it's very obvious that Biden's student loan debt cancellation executive order is unfair to people who have paid their debts off. It's also very expensive. It's gonna cost the American taxpayer billions of dollars. Its redistribution of wealth, but opposite from what the Democrats usually advocate for. This is actually taking from the poor to give to the rich. It's also inflationary. It's going to increase or worsen inflation. But here's here's the million dollar question. Is Joe Biden canceling student loan debt via this executive order even legal? That's what we're going to explore today on the Cloakroom. Join us at verdict with TedCruz.com plus if you use my promo code cloakroom, you can watch for free for the first month of your annual subscription. That's Verdict with TedCruise.com sounds fabulous.
- [29:28]
Michael Knowles
By the way, speaking of speaking, we want to see all of you in person. Verdict is going back on the road. You can apply to have your school be one of the verdict stops@yaf.org verdict that deadline is coming up, so make sure you submit your school today. Yaf.org verdict and I very much hope that I will see all of you in person soon. In the meantime, I'm Michael Knowles. This is Verdict with Ted Cruz.
- [30:04]
Ted Cruz
This episode of Verdict with Ted Cruz is being brought to you by Jobs, Freedom and Security pac, a political action committee dedicated to supporting conservative causes, organizations and candidates across the country. In 2022, jobs, freedom and Security PAC plans to donate to conservative candidates running for Congress and help the Republic Party across the nation.