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- [00:00]
Al Franken
Hey, prime members, you can listen to the Al Franken podcast ad free on Amazon Music. Download the Amazon Music app today. Hey, everybody, we got a great one today. You know, for a change, because my guest is Kathryn Rampel. You may know Katharine from her Washington Post column or her previous visits on our show. Plus, be seeing more of Katherine soon when she starts Co hosting MSNBC's the Weeknd, which will be in prime time. We recorded this immediately after, immediately after Trump's Rose Garden speech announcing his new tariff regime. So this is an historic conversation. I'm essentially asking Katherine to explain what we had just heard on the fly. But just for clarity's sake, Trump has put steep tariffs on nearly every country in the world, which will cost Americans at least a couple thousand dollars a year each. It will adversely affect low and middle income Americans far more than high income Americans who will get a giant tax break there. Before we go into my discussion with Katherine, I want to talk to you about the special election in Wisconsin. It was a very important win for the state Supreme Court. Judge Susan Crawford was elected by a 10% margin. Now, Elon Musk put $20 million in the efforts to support the ultra conservative candidate. But Wisconsin voters across the state came out and voted to elect Crawford. That's because Democrats turned out and shifted the margins statewide when compared to Trump's narrow victory there in November. After Crawford's win, Musk commented that he, quote, expected to lose, which I guess is why he put only 20 million into the race. At least he's accepted the results and isn't spreading election hoax lies. Still, we should celebrate Crawford's victory with it. The liberal justices maintain a 4, 3 majority and will be able to un gerrymander the state's congressional map. Wisconsin has eight congressional districts and is basically a 5050 state, so you'd think they'd have four Republicans and four Democrats in the House. But currently it's six Republicans and two Democrats. A fairer map will in all likelihood allow Democrats to pick up a seat or two, or maybe more in 2026. The court will also be able to change the state's abortion law, which currently prohibits abortion with the exception for life of the mother. So this was a big, big victory. The next day, Trump said that Musk would be leaving soon, but White House press secretary Caroline Levitt said that won't be quote, until his incredible work at Doge is complete. And she wasn't being sarcastic. Oh, and the stock market crashed in an immediate reaction to Trump's tariff speech. But we've Got a great one today, you know, for a change. Kathryn Rampdell on tariffs, Doge and the economy.
- [03:17]
Kathryn Rampel
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- [03:51]
Mr. Ballin
You know those creepy stories that give you goosebumps? The ones that make you really question what's real? Well, what if I told you that some of the strangest, darkest and most mysterious stories are not found in haunted houses or abandoned forests, but instead in hospital rooms and doctor's offices? Hi, I'm Mr. Ballin, the host of Mr. Ballin's Medical Mysteries, and each week on my podcast you can expect to hear stories about bizarre illnesses no one can explain, miraculous recoveries that shouldn't have happened, and cases so baffling they stumped even the best doctors. So if you crave totally true and thoroughly twisted horror stories and mysteries, Mr. Ballin's medical mysteries should be your new go to weekly show. Listen to Mr. Ballin's Medical Mysteries on the Wondery app or wherever you get your podcasts. You can listen early and ad free right now by joining Wondery in the Wondery app or on Spotify or Apple Podcasts.
- [04:48]
Al Franken
Kathryn Rampel what happened?
- [04:54]
Kathryn Rampel
Trump just finished speaking in the Rose Garden to announce his Liberation Day agenda in which he is liberating Americans from their money, it seems. But I am still scrambling to figure out what it actually means. Okay, and maybe between the time we record this podcast and it is distributed in a few days, the there will be some clarity. But I wouldn't bet on that.
- [05:23]
Al Franken
Let me ask you something. I mean, I'm listening to him speak during this and I'm going like, I can't tell whether this is complete bullshit or if it's. And a couple of things he said just struck me as, okay, that's a lie. He said just a couple. Yeah, that's why I need you, because I had once he said that he said Biden had the highest inflation in the history of the country.
- [05:52]
Kathryn Rampel
Not true.
- [05:53]
Al Franken
Not true. You know, and then he said that they won't cut Medicaid benefits, which.
- [06:01]
Kathryn Rampel
Depends on whether you believe in the Laws of arithmetic or not. And you know, not everybody does.
- [06:06]
Al Franken
So well, basically the House voted to cut it in half. Right.
- [06:12]
Kathryn Rampel
The House voted to order the committee that basically decides how much money goes to Medicaid to cut the things in their purview, buy so much money that they would have to cut some of Medicaid, if that makes sense.
- [06:31]
Al Franken
Yeah.
- [06:32]
Kathryn Rampel
Doesn't actually literally say like, take this money away from Medicaid. But again, arithmetic suggests that they will have no choice but to cut money from Medicaid among the other things that they appropriate funds for. So it's this like weird ledger to math that's going on here where they claim, oh, there is, we haven't said anything about Medicaid, but they've basically set the constraints for themselves such that they would have to put it on the chopping block. That that's sort of how it works. But they're saying, oh, there's nothing in this legislature, whatever the resolution, we don't use the word Medicaid. Ha ha, ha. But at some point, you know, they're going to have to actually like produce the budget itself. And yes, it will include cuts to Medicaid.
- [07:21]
Al Franken
I believe him when he says we're not going to cut Social Security because he's actually said we will not cut Social Security. And the Republicans haven't said they were going to do that in Congress or haven't voted to do that. So I had two, I had just two things that just jumped out at me like, Jesus Christ, how do you, how do you say that? Did you have any others?
- [07:42]
Kathryn Rampel
No. I mean, I'm sure like every other word out of his mouth was some kind of distortion or cherry picking, you know, that like, just like general things about people are ripping us off, like they're selling us stuff, we are buying the stuff at low prices or reasonable prices and he would be making it more expensive. So I don't know in what universe that's ripping us off. So like there are things like that. And then other stuff about this is this is gonna bring back jobs. So which it's not now, how do you know that?
- [08:17]
Al Franken
How do you know this isn't gonna just be a boom for American workers?
- [08:22]
Kathryn Rampel
So a few reasons. One is that one is that in his first term he did a baby version of some of this stuff, which at the time seemed like gigantic and disruptive. Right. He had tariffs on lots of other products, not, not like globally. Like in what Trump has announced today is that there will be a global. It sounds like 10% minimum tariff, but that a lot of other countries are going to have much higher tariffs. So like one of those is China, China 34%. I'm looking at my list. Or what was in his QVC style billboard that he held up. South Korea 25%, EU 20% Vietnam 46. Anyway, so he did smaller versions of this last time it did not increase employment in the United States.
- [09:16]
Al Franken
He kept saying, we've never done this before. This is the first time we've done. And he had done it before some version of this.
- [09:23]
Kathryn Rampel
He had imposed tariffs, he had waged trade wars. Again, by comparison, those trade wars were more like trade battles, I guess than trade wars per se.
- [09:35]
Al Franken
But the numbers here are of a different.
- [09:37]
Kathryn Rampel
Yes, yeah, it's just a totally different scale. But you know, he did this before, it did not improve employment. And beyond that, like he's tariffing a lot of the stuff that US Manufacturers need to make their own products, which means that their costs are going to go up. So just as an example, like they had people come on stage from the UAW about how this is going to be great for auto industries and auto workers and. No, no, no, no. If we are tariffing the inputs for.
- [10:12]
Al Franken
Automobiles because many car parts are made in Mexico and in Canada and elsewhere.
- [10:19]
Kathryn Rampel
And elsewhere. Right. So you know, there are Toyota factories in the United States where they assemble cars, they make cars, but they get parts from Japan. Same thing. I think there are BMW plants in the US but they get engines from Germany. So those are just a couple of examples. But more generally the issue is that the auto industry, the auto supply chain in North America, so US, Canada and Mexico is really integrated over borders. And parts might cross borders six or seven times or more than that.
- [10:57]
Al Franken
And does the tariff get collected on each time or is it at the end product?
- [11:03]
Kathryn Rampel
So he didn't clarify today based on other stuff he has said in the past, it sounds like it would be a new incursion of the tariff every time it crosses the border. We don't know, maybe he'll change his mind again.
- [11:19]
Al Franken
So something piece of equipment in a motor that, that they're making putting together in Detroit will go from Canada to Detroit and there'll be a tariff on that. And then when it goes back with inside the motor to Canada, they'll charge it again.
- [11:41]
Kathryn Rampel
That is my understanding of how this would work. Again, based on other things that the administration has put out in the past, that they wouldn't rebate back the tariff if it crosses multiple times. You know, the previous tariff. It's like every time it Reenters the United States, it would be another 25% or whatever.
- [11:59]
Al Franken
Biden kept some of Trump's tariffs, right?
- [12:02]
Kathryn Rampel
Yeah. He either kept them or swapped them out for other kinds of trade barriers like a quota. So Trump put in place steel and aluminum tariffs, for example, back in, I want to say 2018. And Biden kept them around or introduced voluntary import quotas with specific countries.
- [12:25]
Al Franken
I mean, is it kosher to put on tariffs if China is shipping US Stuff for under the price? In other words, they have a surplus of steel because they've overbuilt the place and they can't use the steel, so they send it to us at a lower price, then we can put a tariff on them. Right. I mean, then it makes sense.
- [12:46]
Kathryn Rampel
So what you're talking about, I think is dumping, which has a specific idea.
- [12:51]
Al Franken
There you go. Yeah, of course I know that. I'm from Minnesota, where we have a big iron ore business. So steel is very important to Minnesota. So when they were dumping steel, that's when we put tariffs on.
- [13:06]
Kathryn Rampel
Yeah, there is a process for that. And you're supposed to actually prove that they're selling below cost. Now, my feeling is like basically every administration going back, I want to say, at least to the 90s, maybe to the 80s, has put some new tariffs on steel. This is not a Trump specific thing or even a Biden specific thing. Like there's always some steel tariffs because the steel industry pulls at the heartstrings of the administration or whatever. The problem is that it doesn't seem to have actually served the steel industry well, whether it's because of the pretext is dumping or something else. And in fact, that's part of the reason why U.S. steel put itself up for sale, because they, in being shielded from international competition proportion repeatedly over the years by multiple administrations, they like, never did the upgrades that they needed to to become as productive as their competitors abroad or even their competitor, like some of the upstart there. There are a bunch of these, they call them mini mills in the United States that have developed like, much more productive technologies for producing steel.
- [14:19]
Al Franken
More efficient.
- [14:19]
Kathryn Rampel
Right, exactly. And so when you shield some of these companies from competition, you might be doing them a favor in the short run, but in the long run, they like, they never do the adaptations that they need to do. And so that's a different way to look at all of this, which is like, if you want to help the industry and if you want to help its workers, maybe you should not just say, we're going to make everybody else more Expensive for a little while so that you can keep doing exactly what you're doing and not be hurt by it. And, you know, the other thing to consider in all of this is that in the United States, there are a lot more downstream companies that use steel than companies that produce steel. So, like, I think the estimates that I had seen last time around when we were talking about, you know, when, when Trump implemented steel tariffs, were that there were like 70 to 80 jobs that were at companies that depended on buying steel for every one job at a steel company. So maybe you're helping some mill in Minnesota that is in like, the iron ore business or whatever.
- [15:28]
Al Franken
Right.
- [15:29]
Kathryn Rampel
But you're also probably hurting. I don't know if there's like a lot of auto plants in Minnesota or appliance manufacturers, but all of those jobs downstream are hurt.
- [15:39]
Al Franken
Let me ask you, so are. Are we going to be retaliated against?
- [15:45]
Kathryn Rampel
Yes. We haven't even. Yeah, exactly. It's like, not only will a lot of US Industry be hurt because Trump is making the stuff, their inputs, you know, their intermediate goods, their parts, more expensive, but also all of these other countries, or at least enough of our significant trading partners, have said they're not going to just like, lie down and take it. They're going to target our industries, too, for retaliation. And, and by the way, they are much smarter and more sophisticated about which industries they target. Like Trump is just like, sure, tariffs across the board. That sounds fun. I'm a tariff man. I'm gonna tariff everything. And meanwhile, you have other countries say, hmm, let's look at what products are most politically sensitive in the United States.
- [16:39]
Al Franken
So talk about agricultural products like soybeans.
- [16:43]
Kathryn Rampel
Soybeans, Florida orange juice, corn, corn, Kentucky bourbon, Kentucky peanut butter. That was another one that I had seen on some of these lists. Harley Davidson, motorcycles, like, they're just much more precise about how they fight back. And, and it hurts. Look, it, it's. That's going to be bad for their economies, too. It's going to be bad for our economy. Basically. When you start a trade war, you just make everybody poorer. That is the net result. You know, you'll get some shifting of some manufacturing activity. Probably not to the US like last time around. Vietnam was the big winner when we tariffed China, that production did not move to the United States. It moved to other countries that became, by comparison, more competitive.
- [17:33]
Al Franken
That makes sense.
- [17:34]
Kathryn Rampel
So you get some shifting of, of production, but I'm not even sure you'll get that much because, like, who knows how much staying power these tariffs will have. If you're deciding to build a new factory, that's like a multi year, potentially multi decade investment decision. And if Trump is changing the tariff rates from day to day, from country to country, you know, minute to minute, he's, he's making these changes. It's seems. Why would you do any long term planning around that? Probably for now you're just going to say I'm going to do nothing. Like I'm going to see how this shakes out. And that's what companies have been doing. And that's part of the reason why you see the manufacturing industry not doing so well the past few months and orders dropping because nobody knows what the rules of the road are and how to adapt to them.
- [18:21]
Al Franken
And won't the rules of the road change when other countries respond these. So there could be an accelerated pace to increasing tariffs by China responds to us, then we respond back to China. I mean, are these going to be, is he keeping these at 10% or.
- [18:42]
Kathryn Rampel
I don't even know if that's true since he spoke 30 minutes ago, you know, so I wish I could tell you, but I don't think he knows. All the reporting from the past few days was that the people around him didn't know what the plan was going to be. As late as last night, I'm still not even sure based on what he announced just now, which again was at whatever4something on Wednesday, 4pm something on Wednesday in the Rose Garden. I don't even understand how all of this will work from what he described. You know, maybe there'll be a fact sheet or something that comes out soon, soon. But it's gonna cause a lot of confusion and there'll be responses from other countries and then, and if you look at just what the futures market. Trump just coincidentally made this announcement after stock markets closed for the day. But futures market when I last looked at it, tanked as expected because these tariffs are like way worse even than they had been signposting in the past few days. You know, maybe he'll walk them back. I don't know. Like, he seems somewhat responsive to markets, but the problem is he doesn't seem to know what his own objectives are. Right. Is it about pressuring countries on fentanyl or immigration?
- [20:04]
Al Franken
He didn't mention fentanyl at all.
- [20:07]
Kathryn Rampel
Well, he, Mexico and Canada were not part of this today. But like is this about some non trade related objective? Is it about trying to help our exporters which again won't work if they're facing retaliatory tariffs from the countries that we're targeting, is it about raising revenue? He's also said, like, oh, we're just gonna use all of this, all these tariffs to raise a bunch of revenue and then we can cut other kinds of taxes.
- [20:36]
Al Franken
Now, to be sure, to just be clarify, a tariff, we pay the tariff when the importer pays the tariff.
- [20:47]
Kathryn Rampel
So the importer is the party that actually, like, remits the tariff to the government. Now the question is, where does that cost go? Like, does the importer then pass along that cost to the wholesaler or the retailer and then the retailer passes it on to consumers? Does the importer just like, eat the cost and have a smaller margin?
- [21:11]
Al Franken
Or as a combination of. They'll eat half of it and.
- [21:15]
Kathryn Rampel
Right. And usually there'll be some combination. It'll depend a lot, depending on what the product is and how competitive the market is and how much they were willing to negotiate with trading partners. Like, I had seen something recently. I think the Journal reported that Walmart executives were pressuring their Chinese factories, or whoever they were, you know, their suppliers. Chinese. The suppliers. Exactly. To cut their prices to make up for the increased price that Walmart was eventually having to pay, you know, by importing it because of the tariff. And then, like, the Walmart CEOs got hauled into the principal's office in China and yelled at by some Chinese officials and saying, don't you dare make your suppliers pay this cost. You know, like, this is not our fault. This is Trump's fault. You guys have to eat the cost. And so it'll be some combination. If you look at what happened last time, again, first Trump term, Trump did a bunch of, like, he did tariffs on China. He did tariffs on specific products, steel, aluminum, washing machines. Basically every study done on each of those tariffs found that most or all of the cost of the tariffs were paid by Americans, not by the foreign countries.
- [22:43]
Al Franken
In terms of how increased prices.
- [22:46]
Kathryn Rampel
Exactly. The prices being passed along. So Americans might not only mean consumers, it might mean the small businesses or whatever. Maybe they're eating it through smaller margins. But it's not like that has no effect like that. That means that maybe they don't have the money to invest, to hire, whatever. So, you know, this. They will have costs. This is not free.
- [23:11]
Al Franken
Is this going to be a trade war?
- [23:15]
Kathryn Rampel
I mean, I think it already is.
- [23:16]
Al Franken
Okay.
- [23:18]
Kathryn Rampel
I think it already is. Yeah.
- [23:19]
Al Franken
Define my terms. What does that mean? These countries are going to respond to what we do.
- [23:26]
Kathryn Rampel
They've already. A bunch of countries have already said that they're responding. So we Raise tariffs. We jack up tariffs. They jack up tariffs higher as well. Maybe Trump gets angered by that and decides to raise his tariffs even higher. And you know the expression, an eye for an eye leaves everybody blind. That's where you're headed. And we have seen this happen before. It's so frustrating to me. Trump talks about his trade policy as if, like, no one has been smart enough or brave enough to have tried this before. And it took Donald Trump.
- [24:02]
Al Franken
That was the narrative today.
- [24:05]
Kathryn Rampel
Yes, except that's bull. Like, we have done this before. It's just. And it was disastrous. And it's just we haven't been dumb enough to do it again. Like, if you've seen Ferris Bueller's Day Off. Yeah.
- [24:21]
Al Franken
Yes. Anybody? Anybody?
- [24:23]
Kathryn Rampel
Yes. Do you remember what they were talking about?
- [24:26]
Al Franken
Was it Smoot Hawley?
- [24:27]
Kathryn Rampel
It was, yes. Although I think Ben Stein calls it Hawley Smoot in the clip. But whatever. Most people know it as Smoot Hawley. Smoot Hawley is the nickname for this bill that passed in 1930, you know, shortly after we went into recession in the United States.
- [24:44]
Al Franken
It's sometimes credited with the Depression.
- [24:47]
Kathryn Rampel
Smoot Hawley, exactly that. Smoot Hawley jacked up tariffs here in the US it led to retaliatory measures elsewhere, and you end up in this global trade war that, again, makes everybody poorer and is thought to have been at least a major contributor from turning what was then a recession into a prolonged Great depression. Like, we saw this happen before. And in fact, there's a letter that was published, you know, some public petition from like, a thousand economists at the time, basically saying all the things that economists are saying now, like, please don't do this. This is such a bad idea. And they did it anyway. And again, we lived with the consequences and learned from them, I hope. Or some. Some people did. But Donald Trump is like, hey, how come nobody's ever thought of this? And we're going through the same thing again? And look, I really hope it's not as bad as what we saw in the 1930s. I'm not predicting that that will be the specific outcome. I hope at the very least, Trump looks at the markets and it's like, whoa, maybe this was a bad idea, but I don't know.
- [25:57]
Al Franken
Well, he's stubborn, so he's not going to, you know, in a week be going like that turned out to be a bad idea.
- [26:03]
Kathryn Rampel
Well, he did suspect spend the tariffs on Mexico and Canada a couple of times.
- [26:09]
Al Franken
That's true.
- [26:10]
Kathryn Rampel
Right.
- [26:10]
Al Franken
But this is worldwide, this thing.
- [26:14]
Kathryn Rampel
Yeah. So it's Worse. And there are economists in the White House, like some people with fancy degrees who definitely know better and I imagine are telling him this is a really dumb idea and you need to find an off ramp. But I don't know if they're reaching him and I don't know if he would listen.
- [26:40]
Al Franken
So we're probably starting a trade war right now.
- [26:44]
Kathryn Rampel
Yeah, it certainly seems that way.
- [26:46]
Al Franken
We're gonna take a quick break. We'll be right back with Katherine Rampel. You know, I want to ask you a little bit about Elon Musk. You wrote a piece about Doge a few weeks ago that was sort of about just the chaos that these cuts.
- [27:08]
Kathryn Rampel
Are creating under the guise of greater efficiency. Right. DOGE stands for Department of Government Efficiency. They are making the federal government almost comically inefficient. And it's not like it was like a super well oiled machine before, don't get me wrong. Lot of administrative bloat and waste in government. I agree with that. But it's not like they actually consulted with anybody to see how the government works to try to figure out how to make it work better.
- [27:35]
Al Franken
It seems like that is the case that they created chaos and that they fired the wrong people and then rehired them.
- [27:44]
Kathryn Rampel
Yeah, they're like, you know, some of the anecdotes are very well known. Like they fired the nuclear inspectors and then for like, oops, and then they couldn't figure out how to find them again. They fired the bird flu experts and then tried to rehire them. There's a lot of that, but there's a lot of other, like, equally dumb, petty stuff, including, you know, making it impossible for various agencies and departments to, like, buy equipment.
- [28:13]
Al Franken
So if you're a surveyor, right?
- [28:16]
Kathryn Rampel
So like, if you're at the Bureau of Land Management and your job is to work as a federal surveyor, where you're figuring out, like, where property lines end and whatnot, and you're on some remote site and your equipment dies, your shovel breaks or whatever. You can't just go to the local hardware store, if there is one, and buy a new shovel. You have to shut down the entire project. Track down one of the handful of people nationwide who is authorized to like, file a federal procurement form, wait for that shovel to come in, and in the meantime, the work stops and the workers are idle. And that's just one example.
- [29:01]
Al Franken
The FDA lost their LexisNexis.
- [29:05]
Kathryn Rampel
Yeah, explain.
- [29:06]
Al Franken
What the. Now you get LexisNexx at the post, right?
- [29:11]
Kathryn Rampel
Yes.
- [29:12]
Al Franken
And it's cool. I've had it. I've paid for it once when I was researching books and stuff like that.
- [29:18]
Kathryn Rampel
Yeah. It's a reference tool. And in the case of the fda, they need it to look up, like, the history of different regulations to figure out what interacts with what or what the intent was or something like that. You know, it's like library research. They basically can't do basic library research that they need to do their jobs. But I'm not even sure that they've noticed because they're too busy looking for toilet paper. Because not only are they, like, losing access to the tools they need, whether I don't know if they fired the custodial staff or they forgot or like, they're not allowed to buy more toilet paper or whatever, but I've heard multiple reports from employees at fda, which just had its own round of layoffs this week. So this was before then that the bathrooms are all running out of toilet paper and, like, they're busy trying to track down more toilet paper. Which, incidentally was also a thing that happened at Twitter after Elon Musk bought Twitter. Now X that like, there were all of these complaints.
- [30:27]
Al Franken
Fool me once.
- [30:28]
Kathryn Rampel
Yeah. So I don't even. I don't even know if this was an accident. I assume a lot of what's happening and a lot of the disruption is just they don't care how much chaos they cause. But maybe this was like deliberate psychological warfare on employees. I don't know.
- [30:43]
Al Franken
That is what it feels like to me, that they don't care.
- [30:47]
Kathryn Rampel
Yeah. Or like, okay, so you know how they have to do these stupid five bullet points of things that I achieved last week and I have to do this every Monday. Right. At the irs. A lot of the workers don't have their own computers because the IRS has crappy it. Doge also fired all of the IT modernization people, by the way. That's a whole separate thing. The IRS desperately needs to, like, they got this cash infusion under Biden.
- [31:16]
Al Franken
They've laid off a lot of people at irs. Right.
- [31:18]
Kathryn Rampel
Correct.
- [31:19]
Al Franken
And didn't a few years ago Congress pass extra funding so that. And to get people with expertise on high income tax returns. And that was about raising more money.
- [31:34]
Kathryn Rampel
Yeah. So under the Inflation Reduction act, which was. What year was that? I don't know, 2022, 2023. I'm losing track of one of those. Yep. Under Biden, it did a bunch of things, but they gave the IRS $80 billion for improving customer service. Like having more people answer the phone, modernizing their it, which if I Actually visited an IRS service center and I was astonished at like how much paper they use. They're using like software from the disco era. Like it's, they don't, they didn't have scanners. They had people literally like, if you mail in your tax return, which some Americans still do, they didn't have a way of scanning the tax returns to put them in the system. They would have somebody like henpecking at a computer manually, keystroke by keystroke, writing in the numbers that you had for your entries. Anyway, it was terrible.
- [32:31]
Al Franken
This is for. From equipment.
- [32:33]
Kathryn Rampel
Yeah, it's just like their software, their technology, super old and they know it and they've been trying to get money, but it's been very hard for them to actually make the investments given how much Congress had been cutting their funding anyway. And then the third bucket was essentially for greater enforcement so that they could not be so outgunned when they're auditing Donald Trump's tax return, for example, or any complex partnerships, things like that, because it's easy and quick basically to audit a poor person's tax return to see if they're improperly claiming the eitc. And so.
- [33:12]
Al Franken
Right. So more of those are done than on very, very high income people who use complex.
- [33:20]
Kathryn Rampel
Right. Exactly where they have armies of accountants and tax attorneys to help them plan. And it's really complicated to figure out when they're cheating or non compliant, as the IRS likes to put it. And there's a lot more money at stake than like the small dollars you get from a poor person who gets audited, even if the poor person misrepresented their income. So whatever. So they were supposed to do enforcement, they're supposed to invest in enforcement, particularly enforcement of these more complex returns for wealthy individuals, corporations, partnerships, things like that.
- [33:51]
Al Franken
And this was going to bring hundreds of billions of extra dollars into our coffers.
- [33:59]
Kathryn Rampel
Every dollar that the IRS invests in more enforcement brings in a lot more money in return. Particularly, you know, they find a Donald Trump if they have the resources to go after these people, it's a lot of money at stake.
- [34:14]
Al Franken
So the latest I saw was that they will be taking in a lot less money because of the layoffs.
- [34:21]
Kathryn Rampel
Well, but it's all three buckets seem. Well, even before Trump came into office, Republicans in Congress had been clawing back some of that money that had been appropriated under the inflation Reduction Act. And DOGE has been laying off the new people hired for enforcement. They disbanded the IT modernization part of it and they fought fired people who answer the phones and where I was going before, you know, for customer service, where I was going before about this five bullet point thing is that because not every employee at IRS has their own computer because they have crappy it, you know, like some of them are just using a red pen and like circling things on paper.
- [35:02]
Al Franken
That's so insane.
- [35:04]
Kathryn Rampel
What's happening is people are lining up on Mondays when the five bullet points are due to use the shared computers. And so they're stuck in this queue all day and they're not doing their actual work. Right. This was like a common theme that I heard, that I've heard from civil servants across agencies and departments that there's so much stupid, busy work that they now have to do. Like the five bullet points, emails, or, you know, having to get permission from the secretary himself or herself before they can do, like very routine work, such as renewing a contract for like the severe weather alerts at noaa. You know, like very. This is a real thing. This is a real contract that I think has already lapsed or is about to lapse.
- [35:58]
Al Franken
Are they going to privatize noaa? Are they gonna actually try to go for a privatized weather service?
- [36:04]
Kathryn Rampel
And they've talked about it, and certainly that's laid out in Project 2025, right? Which once upon a time, Trump said was not the boilerplate, you know, the blueprint or whatever for his administration, but has clearly proven to be. I think there's a lot of interest in privatizing parts of government that were not privatized, But I feel like that's only part of the story. Even parts of government that have been privatized already because there was like a privatization push, you probably remember, under George W. Bush, even those things that have already been contracted out, DOGE has been killing. So, like, for example, the Department of Education collects a lot of data. They have kind of two jobs. One is the student loan portfolio, or the Department of Education, I guess, rest in peace, what it used to be. They have their student loan portfolio that they manage. And then they also measure how well kids can read, stuff like that, Right? They produce a lot of statistics.
- [37:01]
Al Franken
So who's all that work going to go to?
- [37:03]
Kathryn Rampel
I mean, it had been contracted out. They had contracts with, you know, these different, like, consulting firms that conducted the surveys and analyzed the data. Can the kids read? Can they do the math? You know, and then producing best practices for how do you help kids with special needs do well in school? Like, that's the kind of stuff that the Department of Education has been publishing but they don't actually compile it themselves. It gets contracted out to private firms. And all of those contracts have been canceled.
- [37:38]
Al Franken
Is that by Doge?
- [37:40]
Kathryn Rampel
Yes, by Doge. This happened like a month ago. It got almost no attention. So, you know, that kind of cuts against the. Oh, they're just trying to privatize stuff. I think the better way to characterize it is they are not. It's not something like that. They're trying to fulfill some libertarian dream of the government. Just all of the functions of government get done by the private sector. It's really about where the contracts go to. It's not that they want these, these things to be contracted out, these basic government functions to be contracted out, whether it's the weather service or anything else. It's that they want that business to go to their friends. There are a lot of government contractors right now, probably too many. Again, there's lots of bloat in government and in government contracts, government procurement.
- [38:28]
Al Franken
Do you get the feeling that they're taking care in the way they do this or basically you laugh.
- [38:34]
Kathryn Rampel
I knew you were a comedian, but you're really on your game today.
- [38:39]
Al Franken
Yeah, I mean, it seems like as long as we're doing this job, we might as well do it well. Is there any of that?
- [38:47]
Kathryn Rampel
No, I have seen no evidence of that. Again, there are long time good government groups out there. Like there's this organization called the Partnership for Public Service. They're best known for, if anybody has heard of them, there's this like unsung hero type group. They produce these awards every year for like the best civil servants. They're called the Sammy's. I forget what it stands for. Their name for some model civil servant where it's like they find, you know, they find like the person at NIH who helped develop the COVID vaccine or whatever, and then they like have awards for people who are not usually recognized. But they also do a lot of work figuring out how to train civil servants and like, make government more efficient. And how do we actually, like, there are. Again, there are problems with government, including that it is hard to fire people who are low performers. Every organization has low performers. And in government it is hard to get rid of the people who are not pulling their weight and to reward the people who are especially meritorious.
- [39:55]
Al Franken
And it seems now that what's going on lately is that they're firing everyone. Everyone.
- [40:02]
Kathryn Rampel
Or at least indiscriminately. It's totally arbitrary.
- [40:05]
Al Franken
Indiscriminately?
- [40:06]
Kathryn Rampel
Yeah. It's not like they're consulting with the managers and staff saying, like, who are the good people on your team? Who are the bad people on your team? They're like, eenie, meenie, miny, moe, or.
- [40:15]
Al Franken
Who are the last ones hired? We're going to get rid of them.
- [40:18]
Kathryn Rampel
Because they're the easiest to fire. So my point is that places like the Partnership for Public Service, they have these off the shelf plans for. Here's how we would fix government. Like if anybody showed any, had shown any interest in this, here's a plan, here's a plan for improving the it. Not just at the irs, but lots of other agencies that have horrific software and like, are susceptible to cyber risks and whatever else they like. There are people who have thought about this. Those are not the people who are being consulted. It's these 19 year olds, you know, with the nickname Big Balls or who have worked for like, you know, hacking groups in some cases or for the Russians who are just deciding, I don't know, this like, doesn't seem like the most useful thing. We're going to cut all of these people or, you know, to some extent it's probably related to what is a more politically sensitive area. So for example, I mentioned FDA had had a bunch of layoffs this week, really all of hhs, and that's that.
- [41:26]
Al Franken
You want, you want to really lay off people at Food and Drug, at Food and Drug Administration, because what they do is not very important.
- [41:34]
Kathryn Rampel
Yeah, they had layoffs across hhs, the Health and Human Services Department, which includes the fda, it includes the cdc, the NIH and other, you know, function. There's, it's like the liheap, which is the program, I forget what it stands.
- [41:52]
Al Franken
For, but it's like it's heating for people in their homes, especially for older people or poor people.
- [41:59]
Kathryn Rampel
Right, right, exactly. They provide support so that people don't freeze to death in the winter. That is in HHS for some reason. And they laid off all the people who work on a liheap. So I don't know what happens next winter, you know, when people still presumably are dealing with severe weather and need financial assistance so that they can adequately heat their homes. Those people are just gone. People who work on Head Start, that's also in HHS for whatever reason. So there are a lot of these functions that have been cut.
- [42:36]
Al Franken
That wasn't in education. Head Start.
- [42:39]
Kathryn Rampel
No.
- [42:40]
Al Franken
Wow. Okay.
- [42:41]
Kathryn Rampel
Head Start is part of like the, I don't know, there are a bunch of things in the government that make no sense. I agree with that. There are probably ways to streamline it again, there are people who have thought quite in depth about how to do that. None of them are being consulted. So some of this just seems totally random and arbitrary. Some of it, you know, there are some patterns. So like for example, the group in CDC and the group in the FDA that both deal with like tobacco and smoking, they've been either disbanded or decimated. And it's like, oh, that seems not a coincidence that they're going after the people who are like monitoring tobacco risk or enforcing actions against like tobacco companies that are, whatever, they're breaking the law. You know, they're. Both of those groups have been kneecapped. Probably that's not a coincidence. But who knows? The government is being, excuse me, Doge in particular is being so non transparent about who they're culling, who they're firing that it's really hard to know what's going on.
- [43:56]
Al Franken
That seems so, so irresponsible and selfish. This. I mean, Gore, he tried to get the scale down the government when he was the vice president over eight years, right?
- [44:13]
Kathryn Rampel
Yeah.
- [44:14]
Al Franken
And he was successful. Part of the reason he was successful was that the Cold war ended and we could get rid of people in the Defense Department. But it seemed like that there was tremendous amount of care taken and not that Musk actually feels like he has it in for people and just thinks it's funny. I mean, that's what the, you know.
- [44:40]
Kathryn Rampel
Well, and he said, right? Yes, he. Or the chainsaw. Chainsaw, like the gold plated chainsaw. And he said, oh, well, if we make a mistake and we fire the Ebola people, like we can just hire them back. First of all, he hasn't hired them back. He hasn't hired the Ebola people. So that specific example, first of all.
- [45:01]
Al Franken
He hasn't hired them back.
- [45:03]
Kathryn Rampel
Yeah, that specific example example is wrong. But second of all, a lot of these things, like even if you realize your mistake and you try to undo it, the damage may already be done. Right. So I mentioned before that there are these contracts at NOAA for like maintaining the radio alerts if there's a, if there's severe weather, if there's no care of our.
- [45:29]
Al Franken
Keeps track of our weather. That's how, that's what NOAA does. I mean, a big part of what it does, Right?
- [45:35]
Kathryn Rampel
Yes. They produce data for the weather. They have like the hurricane hunters who go out and figure out the path of the hurricane and like, and, and.
- [45:44]
Al Franken
They'Re located all over the country so that they can report on the weather all over the country and they have Satellites and the whole nine yards.
- [45:53]
Kathryn Rampel
So my understanding is that there's some maintenance contract to maintain the hurricane hunters, which are these sp. Specialized, I don't know, vessels like their ships and whatever, aircraft of some kind. I don't know enough about it, but I know that there, there are maintenance contracts that are lapsing or have already lapsed. So just do the basic maintenance work on those as well as the tornado alerts and everything else and it's like, okay, you can try. Well, first of all, if you let the contract lapse rather than just renewing it and you know, which normally would have taken a few hours from the whatever procurement officer, contracting officer at noaa, if you let it lapse, then by law you have to like put it up for bid again. It's going to be a months long process. And so by the time you realize you've made your mistake, like it'll take a long time to fix it and stuff breaks down in the meantime. Right. And it becomes harder and more expensive to fix. And that's just a simple thing that nobody would really know about. But everybody relies on Noah for, for weather alerts, for just the apps on their phones to figure out what's going on, you know, whether it's going to rain today and they're laying off scientists and they're letting these contracts lapse. And maybe Doge will belatedly realize this was a dumb idea. But by the time they do, it's gotten very expensive and potentially people's lives have been put at risk because they didn't get the tornado siren or whatever. Nobody was there to fix whatever the equipment was.
- [47:27]
Al Franken
They keep track. They look for tsunamis and they.
- [47:30]
Kathryn Rampel
Yeah, yeah.
- [47:32]
Al Franken
Those kind of things.
- [47:32]
Kathryn Rampel
It's just, it's so dumb. It's so dumb.
- [47:36]
Al Franken
And Noah is I think, the biggest part of the Commerce Department.
- [47:42]
Kathryn Rampel
I don't know. Yeah. I don't know how big they are relative to the other agencies at Commerce. Commerce has a lot of these statistical agencies. They House Census, the Bureau of Economic Analysis. I think NIST is in Commerce. So a lot of the people at Commerce, like despite the name, it's, it's really more like the Department of Statistics and all of that stuff is also under threat. And I've written about that too, that they're like trying to cook the books on a lot of.
- [48:11]
Al Franken
In Social Security. Now they're saying that people have to come into the office instead of calling.
- [48:19]
Kathryn Rampel
Yeah.
- [48:20]
Al Franken
Which is insane.
- [48:22]
Kathryn Rampel
How is this more efficient? How is this more efficient? You're requiring people who might have to drive hours to wait in line at an office, to do basic routine stuff that they might have otherwise been able to do over the phone. Meanwhile.
- [48:41]
Al Franken
And these people are old too.
- [48:42]
Kathryn Rampel
They're. They're older. You know, they may have mobility problems. They're also. The government or Doge is also closing some of these Social Security field offices, which means they're funneling more Americans to these offices that have less capacity to deal with the public and to help the public. There was a story recently in, I think it was in the Seattle Times about a person who was wrongly declared dead.
- [49:10]
Al Franken
Mm. And he was sent to president in El Salvador.
- [49:15]
Kathryn Rampel
He was not. That's other unfortunate human beings, which is unbelievable garbage. Yes. That's a. Yes. Separate crisis. But you know, this guy is like, he gets this letter saying he's been declared dead. The money is clawed back out of his bank account that he has been receiving from Social Security and they won't help him on the phone and he has to go to an office and just imagine that, you know, orders of magnitude worse that more and more people are going to have to like if there's a screw up or if you need to start your benefits, let's say, which lots of people do every year. Now you have to wait. You have to drive somewhere, you have to wait in line, hope that the office can serve you. And meanwhile they're get. The people who work there are getting laid off. So none of this is efficient? You know, ostensibly, again, this is all under the COVID of making government more efficient, but it's not. It's like they're taking their chainsaw to random parts of the government or parts of the government they don't like. They are presumably trying to direct more business to their friends or to themselves in the case of Elon Musk. And none of this is in the service of the general public. Are taxpayers.
- [50:31]
Al Franken
Yeah. They're not cutting SpaceX or, you know.
- [50:35]
Kathryn Rampel
No, they're buying more Teslas.
- [50:37]
Al Franken
So when will we understand what happened? What the President just talked about today on tariffs? Yeah.
- [50:47]
Kathryn Rampel
I don't know. As I said, I strongly suspect that the market react. The after hours trading reaction in the market may chasten them and maybe they'll try to walk things back tomorrow, which would be Thursday, but I don't know.
- [51:07]
Al Franken
That seems unlikely because that's admitting error and defeat, isn't it?
- [51:13]
Kathryn Rampel
Well, last. So like I said, Trump has suspended or delayed tariffs on Mexico and Canada a couple of times. And he found some fig leaf right. Where like, you know, he ostensibly he was going After Canada, because of immigration and fentanyl initially.
- [51:34]
Al Franken
And fentanyl is not.
- [51:36]
Kathryn Rampel
Not an issue. No, we send that. We have more fentanyl going from, from the data that's available. We have more fentanyl going in the opposite direction from the U.S. to Canada than from Canada to the U.S. but, you know, the prime Minister of Canada said, we're going to appoint a fentanyl czar and all which. Who cares? And by the way, we're investing all of this new money in border security, money that had been announced, I don't know, back in November or December of last year before Trump took office. But it was enough of a fig leaf that Trump was like, see, I got them to do what I wanted. In reality, probably the Canadians like, rolled Trump, but. But they were able to save face and Trump was able to claim his victory. He's really good at repackaging the status quo as a victory. You know, like, he'll say, aha, I got them to invest money in the border, except they were going to do it anyway. But then he proclaims victory and moves on. So maybe there's an opportunity to do that. I mean, he's picking fights with so many different countries at once. I don't even know what that would look like. But maybe the EU will say, oh, Trump, we love you so much. And you're right, we have, you know, we've taken advantage of you, so therefore we're going to stop taking advantage of, of Americans by, I don't know, allowing more Trump properties or so. I have no idea. But maybe there's some. Again, I think everybody's probably going to be looking for an off ramp, but I don't know, because Trump clearly believes incoherent things about tariffs, like what their objective is and what concessions he's trying to wring out of these other countries. Maybe he'll be satisfied by some of them, but I don't know that he's getting good advice or the good advice is reaching him. So who knows?
- [53:41]
Al Franken
We'll see these developments in the days ahead and the weeks ahead and the months ahead. And thank you for helping us on a, you know, just right off of the President finishing his speech starting this. So thank you so much.
- [53:59]
Kathryn Rampel
Thanks for having me. Hopefully some of this will still be relevant by the time your audience out there hears it, and we could have a totally different set of trade wars and concerns by then.
- [54:15]
Al Franken
Well, I hope you enjoyed listening. That beautiful music is by Leo Kottke, the great Leo Kotke. I want to thank Peter Ogburn for producing this podcast. We'll talk again next week.
- [54:43]
Mr. Ballin
If you like the Al Franken Podcast, you can listen to all episodes ad free right now by joining Wondery and the Wondery app or on Apple Podcast Podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short survey@wondery.com survey if you're running a retail business, don't let disorganized order fulfillment cause chaos. Use Shipstation instead. From running a business out of your garage to multiple warehouses, shipstation is ideal for every phase of your growth. Save time with one login for all your stores and by automating tasks. Plus, you'll get the best shipping rates from global carriers. Calm the chaos with the shipping software that delivers. Start a free trial@shipstation.com audio that's shipstation.com audio.