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A
Welcome. It is Verdict with Senator Ted Cruz, Ben Ferguson with you. And Senator, I never thought I'd say there was a whole lot of action today in the Senate when it comes to the Panama Canal, but that is exactly what happened, is we're learning a lot more about the corruption there that should shock a lot of Americans.
B
Well, today I chaired a hearing in the Senate Commerce Committee on the Panama Canal. And listen, Donald Trump has raised this issue. It is a very significant issue. I gotta say, when he raised it, a lot of people in the media, a lot of Democrats dismissed it, thought it was crazy talk. But. But I actually think it is a very serious point. We've talked about this before on the podcast, but today I chaired a hearing on the Panama Canal and in particular on the conduct that Panama has committed potentially in violation of the treaty. So the United States built that canal. Over 30,000 lives were lost in the construction of that canal. Over $15 billion in today's dollars were spent by America, by American taxpayers in building that canal. And Jimmy Carter, sadly, gave it away. Gave it to Panama. It was indefensible. I remember I was a little kid. You. You were not even, Ben, a sparkle in your daddy's eyeball when this happened. But I remember it well, and I remember being pissed. And by the way, this was one of the major issues that got Ronald Reagan elected in 1980, because Jimmy Carter gave this away. Well, Donald Trump has rightly raised this. And in particular, when Jimmy Carter gave it away, Panama agreed to a very specific treaty, a treaty to keep the Panama Canal neutral and to charge America fair and equitable rates. And the hearing we had today was testimony from numerous experts that Panama is in violation of that treaty, that, number one, that they have ceded enormous control to China over the canal. And this is the point President Trump has made that is really quite powerful.
A
And.
B
And number two, that they are charging exorbitant rates to American shippers, to commercial shippers, and to the U.S. navy. And so that hearing we're going to break down today, we also, we saw this weekend, President Trump went and did a major event, pressing his policy for no taxes on tips. This is a policy we're going to get enacted. I am the author of the legislation in the Senate to get this done, and I believe we're going to get this done this year. We're going to break that down as well.
A
I want to take a moment real quick and talk to you about January 27th. You may not have realized, but the 27th was international Holocaust Remembrance Day, a day to Remember the great evil of the Holocaust when millions of Jews were slaughtered during the Nazis reign of terror. Today, unfortunately, the rise in global anti Semitism and the constant attacks on Israel are showing us that it's more important than ever to remember the atrocities of the Holocaust to ensure sure that it never happens again. And that's why I'm proud to stand with the International Fellowship of Christians and Jews. They do incredible work by providing food, shelter and safety to Jews in Israel and around the world, including those remaining Holocaust survivors. Your donation today will help provide food, water, medicine, and not only basic necessities to the Jewish community, but also things like bomb shelters and armored ambulances that they need in Israel right now. And through your gift, you will stand with the Jewish people and against this growing anti Semitism and hatred. So to give, to show your support to the Jewish people, you can visit supportifcj.org that's one word. Support. Ifcj.org you can also call and give them a donation 888-488ifcj. That's 888-488ifcj 888-488-4325 or support ifcj.org all right, so Senator, let's go back in history and really dive into how all this got started. And, and you mentioned in the intro there, America built Panama Canal and then it was given away. So let's talk about the building, let's talk about the price, let's talk about the cost. And including people that literally gave their lives building this incredible thing, why it was built. And then let's get to why we gave it away.
B
Listen, it was a massive investment from the United States. It was an extraordinary endeavor. Teddy Roosevelt had the vision to build the Panama Canal. Look, it used to be that to traverse from the Atlantic to the Pacific Ocean, you had to go all the way south below South America. And that took enormous time. It was enormously costly. And America said, we can construct a canal through Panama. We can cut that journey dramatically shorter. It was a major investment and as I said, over 30,000 lives were lost building that canal. It was not a small investment. $15 billion. And, and, and, and listen, before we get started, I, I, I want to just, just take a musical moment to reflect. So give a listen. That's what we're talking about today.
A
So I love that you played the song there and you guys actually talked about possibly playing that today in Congress, which made me laugh at the hearing as well.
B
Well, that's true. And so let's start so we open the hearing. And by the way, the. The Senate Commerce Committee, of which I'm chairman, has explicit jurisdiction over the Panama Canal because it is enormously important for American commerce. And so that's why we started with this major hearing. So give a listen. This is my opening statement as we open the hearing.
C
We're here today to examine a monument to American ingenuity, the Panama Canal. Senator Moreno down there suggested we open the hearing by playing Van Halen and Panama. We may not do that, but between the American construction of the Panama Canal, the French effort to build an isthmus canal, and America's triumphant completion of that canal, the major infrastructure projects across Panama cost more than 35,000 lives. For the final decade of work on the Panama Canal, the United states spent nearly $400 million, equivalent to more than 15 billion today. The Panama Canal proved a truly invaluable asset, sparing both cargo ships and warships the long journey around South America. When President Carter gave it away to Panama, Americans were puzzled, confused, and many outraged. With the passage of time, many have lost sight of the canal's importance both to national security and to the US Economy. Not President Trump. When he demanded fair treatment for American ships and goods, many in the media scoffed. But the Panama Canal was not just given away. President Carter struck a bargain. He made a treaty. And President Trump is making a serious and substantive argument that that treaty is being violated. Right now, this committee has jurisdiction under the Senate rules over the Panama Canal. And today we will examine evidence of potential violations. President Trump has highlighted two key issues. Number one, the danger of China exploiting or blocking passage through the canal. And number two, the exorbitant costs for transit. Chinese companies are right now building a bridge across the canal at a slow pace so as to take nearly a decade. And Chinese companies control container points, ports at either end. The partially completed bridge gives China the ability to block the canal without warning. And the ports give China ready observation posts to take to time that action. This situation, I believe, poses acute risks to US national security. Meanwhile, the high fees for canal transit disproportionately affect Americans. Because U.S. cargo accounts for nearly three quarters of canal transits, U.S. navy vessels pay additional fees that apply only to warships. Canal profits regularly exceed $3 billion. This money comes from both American taxpayers and consumers in the form of higher costs for goods. American tourists aboard cruises, particularly those in the Caribbean Sea, are essentially captive to any fees Panama chooses to levy for canal transits. And they appeared paid unfair prices for fuel bunkering at terminals in Panama as a result of government Granted monopoly, Panama's government relies on these exploitative fees. Nearly one tenth of its budget is paid for with canal profit. As those fees cascade through the American economy. In the federal fisk, the Chinese Communist Party advances its global economic contest against the United States and takes a militaristic interest in the Canal. While President Trump has rightly focused on these key issues, there are additional problems. In the last two years, the Canal Authority generated record revenue even while transits were depressed by drought conditions. And the only comfort to delayed and overcharged ships is that Panama may invest in more freshwater reserves in the future. Even as it takes advantage of the global maritime system, Panama has emerged as a bad actor. Panama has for years flagged dozens of vessels in the Iranian ghost fleet, which brought Iran tens of billions of dollars in oil profits to fund terror across the world. And Chinese companies have won contracts, often without fair competition. As the infamous Belt and Road Initiative has come to Panama, China often engages in debt trap diplomacy to enable economic and political coercion in Panama, it also seems to have exploited simple corruption.
A
So, Senator, you look at these warnings, and they're like multiple red flags here. Iran and China and this bridge. And basically, the highest bidder can get whatever the hell they want, no matter how shady they are, from Panama and the Panama Canal. Am I wrong?
B
You're not. And there were several striking things in the hearing. Number one, we had a series of witnesses from the Federal Maritime Commission, and we had an international law professor who testified about the neutrality treaty, and they testified about a number of things. Number one, there's a treaty that governs this. So this is not simply Donald Trump raising an issue. Gosh, we want the Panama Canal. Panama made a commitment when Jimmy Carter gave this away. And they made a commitment, number one, that the Panama Canal would remain neutral, that it would not allow another foreign power to have control over it, to have military access to it. And number two, they made a commitment in treaty that they would charge fair and equitable fees. Now, on the first point, we heard an enormous amount of testimony that Panama has made a massive pivot towards China. Listen, China is engaged in something called the Belt and Road Initiative, where they're investing in ports and infrastructure all over the world, and they're spending billions and billions of dollars trying to gain power over the United States. And the Panama Canal is critical to. To U.S. national Security and to our economy. So on both ends of the Panama Canal, on the Pacific side and on the Atlantic side, China controls. Chinese corporations control massive ports that are right there that give them access and give them the ability to observe all traffic going through the canal and potentially to shut down all traffic going through the canal. As I mentioned also in my opening, they are building a bridge across the canal. They are spending over a decade building that bridge. That bridge gives them the capacity, number one, to engage in surveillance of every ship going through the canal. But number two, if, listen, we get to a time in the future where we're in serious conflict with China, let's say a military conflict, let's say they invade Taiwan and we are suddenly at risk of a shooting war, China has the capacity to shut down the Panama Canal, to use that bridge, to use the ports on both ends, to say we will allow no transit through that canal. That would be enormously harmful to the United States. And the point that was made in the hearing, that is directly contrary to, to the treaty Panama signed. Secondly, Panama makes roughly $3 billion in fees from transit across the Panama Canal. 75% of those transits are American ships. So they are either American cargo ships, commercial ships going across, or they're American military ships, the US Navy going across. But either way, Panama is making billions. And the testimony we heard in the hearing today is that on both of those grounds, there is a strong argument that Panama is in violation of the treaty. Now, what's interesting, Ben, I asked the international law professor who was testifying. I said, okay, if Panama is in violation of the treaty, number one, how is that determined? And number two, what is the remedy? On the question of how is that determined? The testimony we got today is, the professor said, well, under the terms of the treaty, each party determines unilaterally whether the other is in violation, which means the United States has the ability to determine President Trump and this administration can determine Panama is in violation. That is decisive. And then secondly, the remedy, initially, when I asked the remedy, what the professor testified is that the remedy contemplated in the treaty was direct military action by the United States to reassert its control. I also asked, okay, if they're in violation of the treaty, is there a potential to assert that the treaty is null and void and the United States will reassert control? On that question, he went back and forth. But I will say that testimony, I think, gave enormous heft to the points President Trump has been making.
A
So you look at this and you say, all right, what are the options now for President Trump and then for Congress? Because we can't get it back, right? There's. I've seen a lot of you, like, once we just take this thing back, we built It. I don't think it's that simple. Is that a fair, fair point to make, starting off?
B
You know, it's interesting. You and I did a podcast early on when President Trump was talking about Canada, Panama and Greenland, and I put them on a spectrum. I said, Canada, it ain't gonna become the 51st state there. President Trump is just trolling Canada. He's messing with. With Trudeau. And by the way, his trolling of Trudeau probably cost him being prime minister. I mean, it was perhaps the most epic troll in history. Greenland, on the other hand, as we discussed at length on this podcast, I think there's a very serious argument that it is in the United States interest to try to acquire Greenland. To try to acquire it, number one, for national security reasons, because Greenland has a critical geographic location in the Arctic. If, God forbid, we had a military conflict with Russia or China, any ICBMs and any military attack would likely come over the Arctic. Greenland is precisely situated to be able to intercept and combat that. But also Greenland has vast natural resources, in particular rare earth minerals and critical minerals. And so I think it is very much in our interest to pursue Greenland. Now, I will say, little over a week ago, I had a long conversation with the Danish ambassador. So Greenland is controlled by Denmark. And the Danish ambassador was quite distressed because I've been very vocal, including on this podcast. And so I got a call from the Danish ambassador, what are you saying? On Verdict, which is an interesting.
A
Did your response was, do you go listen to it? It's up.
B
I did have a good laugh. And the Danish ambassador is like, why are you attacking us? And I said, listen, let me be clear. You're a friend, you're an ally. I'm not remotely proposing military action against Denmark or Greenland, but friends and allies can have real conversations. And I think it is very much in our interest to acquire Greenland. And the ambassador said, it's not for sale. And I said, well, everything's for sale. And we're at least going to have a conversation, because I think it is both in our interest and your interest to have that conversation. And so that we had a very direct, I think a very positive conversations. And I expect over the next four years, the Trump administration is going to press that discussion. Now, at the time you and I did that podcast, I viewed the Panama Canal as somewhere in the middle. I said, at the time, I said, we're not going to get it back, but I think the president is negotiating over price, negotiating to lower the prices of transit. Now, I think that's still true. I think the worst case outcome of this discussion is we end up with a very significant reduction in the cost, the price for American ships to transit the Panama Canal, both commercial ships and US Navy ships. That's a very good outcome. I also think it is very likely we will see a significant diminution in China's control and influence over the Panama Canal. That is a massive benefit. But, but I gotta say, after this hearing today, I've moved. I actually think the treaty arguments here are quite serious. And I get Panama would be horrified to give up the canal because they were given a gigantic gift from Jimmy Carter at the expense of the United States of America. But I think the arguments that Panama is violating the treaty and has forfeited its right to the canal, I think those arguments are very serious and I expect the administration to pursue them seriously.
A
Let's talk about also the contraband, in essence, that's going through there. Iran and China really getting a grand deal. But also the idea that we don't know what's going through there on those ships. How concerned are you about that? And could this also bring that into perspective where Panama says, hey, we can't do this right now. We're under too much of a spotlight.
B
Well, look, that is a very real problem. So, for example, Panama has flagged multiple ships from Iran from their ghost fleet, the ghost fleet that they're using to transit oil and Iran.
A
Iran has a definition by the way, of a ghost fleet for people that don't understand what that means.
B
So there were in law massive sanctions on Iran selling oil under Joe Biden. He essentially refused to enforce those sanctions. And so Iran used a ghost fleet to get around those sanctions. It was ships that were operating under foreign flags that were basically hiding from the sanctions regime. By the way, I think that's one of the most significant things the Trump administration is going to do, is reimpose those sanctions on Iran and cut off their revenue. Joe Biden, the Democrats basically gave $100 billion to the Ayatollah who's chanting Death to America and death to Israel. And I believe that that has ended on January 20 and it should end. Panama was complicit in that. They were part of that endeavor. And by the way, Panama also made it made a very deliberate decision to pivot towards China. So, for example, several years ago, Panama severed diplomatic relationships with Taiwan and instead embraced China. And they did so at the same time that China was making massive investments in the ports on both ends of the canal. And understand the way China does This, the Chinese government subsidizes those investments so that no American company can outbid them because the Chinese government is essentially subsidizing them. They're not doing it for economic purposes. They're not doing it because it makes business sense. They're doing it for strategic purposes because China wants to control the Panama Canal. Now, I get why the Chinese Communist government wants to do that, but Panama letting them do that is, I believe, in direct violation of the treaty. And that's what the hearing was about today.
A
Final question on this moving forward, how quick will there be movement on this issue?
B
Look, I don't know. I think this hearing was important today. And I'll tell you what I thought was most significant. So I called the hearing, and as chairman, I can call a hearing on any topic I want. I didn't know how the Democrats would react. I didn't know if the Democrats would show up at the hearing and begin screaming and saying, Trump is a lunatic and how dare he do this? I didn't know what they would say. The most interesting thing about the hearing today is the Democrats, almost every Democrat, echoed the points that you and I have been making, that China has far too much influence over the Panama Canal. And also the Panama Canal is charging excessive fees. I'm not sure what that means, but it surprised me. We did not have. I sort of anticipated some long Democrat speeches about how Trump is a crazy man. We didn't get any of that. And I think that was a very interesting. Particularly the Chinese influence on the Panama Canal. There was very significant bipartisan agreement. I think that's a very promising sign.
A
All right, well, then we got to use that bipartisan sign to move into topic number two. And that is, yep, Donald Trump was a big proponent of taxes going away on tips. Now, this is a very big issue in the campaign. He got a lot of traction with a lot of Americans that work hard. Part of their salary is tips. Not having taxes on those tips would be huge for American workers and also our economy. So this is something that has come back up again where Donald Trump's trying to pay off on this. The question is, what's going to happen with Congress on that? And before I get to that, I want to tell you about our friends over at Patriot Mobile. While we may have won this election, the fight to restore our great nation is only beginning. And now is the time to take a stand, especially when it comes to the dollars you spend. Well, that's why I want you to know about Patriot Mobile, because they are America's Only Christian conservative wireless provider Patriot Mobile offers a way to vote with your wallet without compromising on quality or convenience. And Patriot Mobile isn't just about providing exceptional cell phone service. It's a call to action to defend our rights and freedoms. With Patriot Mobile, not only do you get outstanding nationwide coverage because they operate on all three major networks. So you get the coverage you want every day, but you get it without the woke agenda of big mobile. Patriot Mobile has a coverage guarantee. And here's the best part. Every time you make a call and every dollar you spend, you support the first and the second Amendments, the sanctity of life. Our veterans are first responders and our wounded warriors. And switching has never been easier. You keep your same number you've got now, keep your same phone or upgrade to a new one. Right now, go to patriotmobile.com verdict or call them 972 Patriot and get a free month of service with a promo code Verdict. Switch to Patriot Mobile today and defend freedom with every call and every text you make. That's patriotmobile.com verdict or call them 972-patriot. All right, so taxes, tips. It was clearly a big campaign issue. It brought in a lot of voters. A lot of people came to Donald Trump and said, this could have a huge impact. Now it's paying off on it. Is there a real chance?
B
So, yes, and I believe this will happen. This will happen by the end of the year. So let's rewind. In the middle of the presidential campaign, Donald Trump was in Las Vegas, Nevada, and he actually told us a story. So he came by in the middle of the campaign. He had lunch with all the Republican senators. And he said, listen, I was in Vegas, I had a rally that night. He said, I was having lunch. And he said there was a waitress who came and was, you know, serving me my meal. And he said she began, like, complaining about the enormous burden that the Biden administration had put on recording her tips on paying taxes on tips. And he said, I pulled out a piece of paper and I got out a pen and I just wrote, no taxes on tips. They said, it's just an idea that popped in my head. And he said, look, some people, they, they focus group things, they do white papers. He said, I didn't do any of that. I just wrote it down from a, from the conversation I had with the waitress over lunch. And he said, I had that rally later the day and I had thousands of people there. And he said, I just threw it out there. No taxes on tips. And he said, and they went crazy. They went absolutely crazy. And I got to say, there are times when Trump, I just think, has an instinct that is a very good gut instinct. And I think this policy makes enormous sense. And so when he announced it, he's right. The crowd went crazy. I looked at it and I said, this is a great idea. I immediately went to my team and I said, let's draft the legislation to make this happen. So the next week, I filed federal legislation of no taxes on tips. Now, what's interesting, Ben, is when I filed this, it immediately became bipartisan. Both senators from Nevada, Jackie Rosen and Katherine Cortez Masto, both of them immediately co sponsored it. One of them said to me, she said, look, in Nevada, 25% of the employees in the entire state are tipped workers. And so it was bipartisan. And then shortly thereafter, Kamala Harris endorsed it, and she said, this is a great idea. So it became. There was enormous bipartisan support. Now, obviously, Trump has won. We have a Republican Senate, Republican House. I've refiled my legislation. Here's what I'm pressing to happen. So Trump just was back in the. In Nevada, in Las Vegas, just made a huge push to pass this. I am pressing for Congress to pass the legislation right now. It doesn't have to be part of budget reconciliation. Now, for any tax bill under the Constitution, the House of Representatives has to originate it. So if that's a provision in the Constitution, the Senate cannot start a tax bill. A tax bill has to originate with the House. So I am urging the speaker of the House, I'm urging the Majority Leader, take up my legislation, no taxes on tips. Just pass it. We have the votes in the House. Republicans can pass it. If it passes and goes over to the Senate, I believe we can pass it in the Senate, and I think we'll get 60 votes. So we don't have to wait for reconciliation. Reconciliation is. Is the process that gets around the filibuster, lets us pass something with just 50 votes. I don't think we need that for no taxes on tips. If the House passes it, what I'm urging, John Thune, the Senate majority leaders put it on the Senate floor. I think we'll get 60 votes, and that means we could pass it. It would be a big bipartisan win. And we'll put it on President Trump's desk. He can sign it into law as a huge victory. And by the way, it's a win win, Ben. If we put it on the floor and Democrats decide to be partisan, they decide, okay, we're going to oppose it because we just oppose any tax cut. We oppose anything Trump wants. Okay? That's not the end of the day. If Democrats defeat it in the Senate because we can't get to 60, that's fine, then we'll stick it in budget reconciliation. We can get it done with 50. But it's a win win because every Democrat senator who votes no, that is an ugly issue. In two years to go face the voters and say, hey, I voted against no taxes on tips. Even though every waiter, every waitress, every bartender, every taxi driver, every Uber driver, every barber, every hairstylist, every nail salon person, everyone who is relying on tips cares a lot about this. So if the Democrats all want to vote against it. Look, I think this policy is an incredible embodiment of the most important political transformation of the last decade, which is that Republicans have become a blue collar party. We are the party of waiters and waitresses and working men and women. And so Democrats can decide where they stand. But I think we ought to get this passed. And one way or another, my prediction is this will get done before the end of 2025.
A
Is this one of those issues where people should call their congressmen their senators? I mean, we talk about this.
B
Yes.
A
I mean, and what do you say? I, this is good for my state, this is good for my city, this is good for hourly workers. What is the best argument?
B
Just pass no taxes on tips. So look, one of the things to understand when you call your congressman, when you call your senator, if you make a detailed, subtle argument that doesn't get through. So every member of Congress gets what I get every day, which is I get an email. So, all right, let me find my email from today. Call totals. So 128 25. Today there were 1,372 calls to my office. There were 754 to D.C. there were 618 to Texas. There are 482 live calls. So we had interns and staff assistants who answered 482 calls. Today there were 890 calls that went to voicemails. Of those calls, 1,322 Texans called. 50 non Texans called. So overwhelmingly the calls were Texans. So let's break it down. Casework. So that's. I've got an issue with Social Security, I've got an issue with the VA. I've got an issue with the government. 45 of those calls were casework. And I've got a whole team that works to help Texans deal with the government every day. 24 dealt with the academy. So, so young Men and women, high school students that want to go to Service Academy. So 24 of them. Eight concern the campaign. I don't know what they concerned. 91 concern scheduling. So people calling saying, hey, can you come do this event or this other event? Now, of the breakdown, 18 called in support of me. 28 called in opposition to me. So people called and said, I can't stand Cruz. He's terrible. Okay, that. That gets recorded. 10 people called in support of President Trump. 79 people called in opposition to President Trump. Now, nominations. 75 people called in support of President Trump's nominees. 70 people called in opposition to President Trump's nominees. Now, it's interesting. RFK Jr got a bunch of calls. 187 people, this is yesterday, called in support of RFK Jr for HHS Secretary. 93 people called in opposition to RFK Jr so about two to one, Bobby Kennedy, the calls were coming in. 19 people called in support of Cash Patel for FBI director. 432 people called in opposition to Cash Patel as FBI director. And I think there probably were some liberal groups stirring up calls because that number is big enough.
A
432, I was going to say, when you see days like that, you got to be thinking somebody went on an email campaign or a call blitz campaign and said, yeah, target this member today specifically, because if it doesn't match the day before, the day after, that's when that's kind of the tell, right?
B
And that happens. There are groups that will focus and say, make these calls. And I think Those calls, the 432, that's a big enough number. That's where that probably came from. Now, in addition, 48 people called in support of Tulsi Gabbard. 22 people called in opposition to Tulsi Gabbard on legislative issues. Thirteen people called in support of border security. Two people called in opposition to border security. And interestingly enough, 474 people called in opposition to the OMB pause of federally appropriated funds. So, look, that's the sort of report. I get that report every day, and I read it every day. Now, look, we get, over the course of the year, hundreds of thousands of calls. So I can't listen to every voicemail that comes in. I could literally spend all day long doing nothing but listening to voicemails and not do any hearings, not do any legislation, and I still wouldn't have enough time. So the way I consume that data is through a report like that. I just read you the report that came today. Every other member consumes it the same way. What I'm saying is if you want Congress to pass no taxes on tips, you don't need to present a long, detailed, subtle argument as to all of the pros and cons. Just pick up the phone and call your member and say, pass no taxes on tips. If you say that sentence, it will get recorded in a report just like that to the House member, the Senate or your calling. That's how the information gets consumed.
A
That's encouraging. By the way, you said everybody looks at their call list like the same way you do.
B
I hope so. I don't know that. There may be some people that don't give a damn. I look at it every day. I can't promise that all 535 members of Congress do, but I certainly look at it every day because I work for 31 million Texans. And so I want to see what issues people are engaged on and what they care about.
A
It's incredible. Don't forget, call your congressman, call your senator. It can make a huge difference, especially during confirmations and on issues like taxes on tips. Going away. We do the show Monday, Wednesday, Friday to give you this exact type of information. So make sure that subscribe button, auto download button and share it on social media. A lot of people right now are looking for answers with all the changes in Washington and it makes a massive difference when you guys share this podcast on social media and also when you write us a five star review. And the center and I will see you back here Friday morning.
The 47 Morning Update with Ben Ferguson Episode: The Legal Basis for Retaking the Panama Canal, plus No Taxes on Tips is Happening Release Date: January 29, 2025
Introduction In this compelling episode of The 47 Morning Update, host Ben Ferguson engages in an in-depth conversation with Senator Ted Cruz. The discussion centers around two pivotal topics: the contentious issue of the Panama Canal and the legislative push to eliminate taxes on tips for American workers. This summary captures the essence of their dialogue, highlighting key points, notable quotes, and the overarching implications for U.S. national security and economic policy.
Historical Context and Treaty Violations
Senator Ted Cruz opens the discussion by recounting the historical significance of the Panama Canal, emphasizing the substantial American investment and the tragic loss of over 30,000 lives during its construction. He states:
"[02:12]...Jimmy Carter, sadly, gave it away. It was indefensible. ...Donald Trump has rightly raised this. And in particular, when Jimmy Carter gave it away, Panama agreed to a very specific treaty, a treaty to keep the Panama Canal neutral and to charge America fair and equitable rates."
Cruz highlights President Donald Trump's efforts to address what he perceives as Panama's violations of this treaty. The treaty stipulates the canal's neutrality and fair pricing for American usage, which Cruz argues are being breached in two primary ways:
Chinese Influence: Panama has ceded significant control of the canal to Chinese entities. Chinese companies are constructing a bridge across the canal, expected to complete in nearly a decade, which could potentially allow China to block passage through the canal in geopolitical conflicts. Additionally, Chinese firms control major ports at both ends of the canal, providing strategic observation and control points.
Exorbitant Transit Fees: The fees charged by Panama for canal transit are disproportionately high for American commercial and military vessels. Cruz points out that U.S. cargo constitutes nearly 75% of canal transits, and the resulting profits—exceeding $3 billion—are seen as exploitative, burdening both American taxpayers and consumers.
Senate Hearing Insights
Cruz details the recent Senate Commerce Committee hearing he chaired, which brought forth expert testimonies supporting his claims of treaty violations. Notably, an international law professor testified that under the treaty, the United States has the unilateral authority to determine and address any breaches by Panama. Cruz underscores:
"[16:11]...I think the treaty arguments here are quite serious. And I expect the administration to pursue them seriously."
Bipartisan Support and Future Actions
Surprisingly, Cruz notes a lack of opposition from Democratic senators during the hearing, with many acknowledging concerns over Chinese influence and high transit fees:
"[22:38]... the Democrats, almost every Democrat, echoed the points that you and I have been making..."
This unexpected bipartisan agreement strengthens Cruz's position and suggests a unified legislative front moving forward. He anticipates that the administration will take robust steps to address these violations, which may include renegotiating transit fees or reconsidering Panama's control over the canal.
Legislative Initiative and Bipartisan Momentum
Transitioning to domestic policy, Senator Cruz advocates for the elimination of taxes on tips, a move aimed at benefiting millions of American workers who rely on tipping as a significant portion of their income. He shares an anecdote illustrating the grassroots inspiration behind this policy:
"[26:18]...Donald Trump was in Las Vegas, Nevada, and he actually told us a story...a waitress was complaining about the burden of paying taxes on tips. He wrote 'no taxes on tips' and presented it at a rally where it was met with overwhelming support."
Cruz explains that he promptly drafted and filed federal legislation to implement this change, which garnered immediate bipartisan support, including endorsements from Senators Jackie Rosen and Katherine Cortez, as well as Vice President Kamala Harris.
Legislative Strategy and Congressional Process
Senator Cruz outlines the pathway to enacting this legislation:
House of Representatives: As tax bills must originate in the House, Cruz urges House leadership to take up and pass the legislation promptly.
Senate Approval: With a Republican-controlled Senate, he is confident in securing the necessary 60 votes to pass the bill without resorting to budget reconciliation, though he is prepared to utilize it if needed.
Presidential Action: Upon passing both chambers, the bill would be presented to President Trump for signing into law.
He emphasizes the dual benefit of this policy: alleviating the financial burden on workers and reinforcing the Republican Party’s commitment to blue-collar Americans. Cruz asserts:
"This policy is an incredible embodiment of the most important political transformation of the last decade, which is that Republicans have become a blue collar party."
Public Engagement and Support
Cruz encourages listeners to actively support this initiative by contacting their congressional representatives with a clear and concise message: "Pass no taxes on tips." He highlights the effectiveness of direct communication in conveying constituent priorities to lawmakers.
Senator Cruz provides insight into the nature of constituent interactions, revealing significant engagement on key issues:
Support and Opposition Metrics: Daily reports indicate robust support for both the Panama Canal reforms and the no taxes on tips legislation, alongside opposition primarily driven by organized campaigns or specific interest groups.
Impact on Policy: Cruz underscores the importance of constituent feedback in shaping legislative agendas, emphasizing that active participation can directly influence policy outcomes.
Conclusion In this episode, Ben Ferguson and Senator Ted Cruz delve into critical issues impacting both national security and the everyday lives of American workers. The Panama Canal discussion highlights serious concerns over treaty violations and foreign influence, while the push to eliminate taxes on tips showcases a commitment to supporting blue-collar workers through pragmatic legislative action. The bipartisan support for these initiatives signals a potential for meaningful change, underscoring the episode's relevance and significance for listeners seeking comprehensive analysis on pressing political matters.
Notable Quotes:
Senator Ted Cruz on Panama Canal Treaty Violations [02:12]:
"Jimmy Carter, sadly, gave it away. It was indefensible... Panama agreed to a very specific treaty, a treaty to keep the Panama Canal neutral and to charge America fair and equitable rates."
Senator Ted Cruz on Bipartisan Support [22:38]:
"The Democrats, almost every Democrat, echoed the points that you and I have been making, that China has far too much influence over the Panama Canal."
Senator Ted Cruz on No Taxes on Tips [26:18]:
"This policy is an incredible embodiment of the most important political transformation of the last decade, which is that Republicans have become a blue collar party."
For those interested in the intricate dynamics of U.S. policy-making and the ongoing efforts to safeguard national interests while championing worker rights, this episode offers a thorough and insightful analysis. Stay informed and engaged by subscribing to The 47 Morning Update with Ben Ferguson.