← The Clay Travis and Buck Sexton Show
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You're listening to an iHeart podcast.
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You're listening to the Buck Sexton show podcast. Make sure you subscribe to the podcast.
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On the iHeartRadio app or wherever you get your podcasts.
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So what's actually in the big beautiful bill? We have been told it is big and beautiful. And we've certainly heard a lot from President Trump and the White House about how great it is going to be. Let's dive into some of the specifics, some of the substance here. Steve Myron is with us. He is the Chairman of the Council of Economic Advisors to the White House, and he's an economist. He's got a PhD from Harvard. Very impressive fellow. Thank you for being with us, sir. Let's just start with this. What are the main takeaways that the general public should have about why this bill is gonna be great for the economy?
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Look, thanks so much for having me. You know, first off, the bill is big and beautiful, and it's gonna be great for America. The number one thing that it does is extend the President's historic tax cuts from 2017. Tax cuts on families, tax cuts on households, and tax cuts on firms. Now, what those tax cuts did was they created an economic boom in the United States in the first term, President Trump's first economic boom. And they're going to, in the continuation of those tax cuts and the further tax relief for American families and firms that's in the bill are going to create a boom in President Trump's second term, President Trump's second economic boom. Now, what we do in this bill is, first of all, we keep rates low. We prevent, we prevent rates from snapping back up like they would if we did nothing. And then we also provide additional tax relief to American families and to American firms that will incentivize increased labor supply because they reward families for working more and by, by letting them keep more of the money they earn in their pockets. And it'll incentivize increased investment in the American economy by firms because there will be bonus, because there will be incentives for investing in equipment, investing in factories. And the production of new equipment in new factories increases what economists call the capital stock in the economy. That's equipment that you use to make stuff, factories, and that creates more wages. That creates higher wage growth, too. So what the bill does is it keeps tax rates low. It provides further incentives to improve the economy, further tax relief, keeping money in families pockets week in, week out, providing incentives for firms to do investment. And it'll create an economic boom that'll look just like the first term and the biggest boom the country's ever seen.
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When you say keep tax rates low, I mean that sounds great to me. I like low taxes. I know I'm not alone there, but so does that mean that there are individual rates that are going to either stay where they are or be lower? Like, like, give me a little more. And for, you know, if you're listening this and you know, you own or work at a small business and you got a household income of 150 grand, are you going to feel those tax cuts? How.
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Yeah, so. So first of all, if the bill doesn't pass, it's going to be the biggest tax hike in American history because the 2017 tax cuts will go away and tax rates will snap back to what they were in the Obama administration, which was not a tax friendly environment and not a friendly environment for business and for families because those tax rates were much higher. That's a $4 trillion tax hike if we don't pass the bill, which is part of why it's so important to do it. Now, keeping those tax rates low is good. It's extending those tax rates is good. But there's further tax relief that the President has promised also. And part of that is the President's promises of no tax and overtime so that people can work more and get paid for working more without having the government take the money out of their pocket. No taxes on tips so that workers working gig jobs, working in tip jobs, can be incentivized to work more and again keep more of the money in their pockets every week. And no taxes on Social Security. That's tax bonus for seniors to help this group that was very hard hit by inflation and help them recoup some of their losses that were due to inflation. And so all of these.
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Yeah, I didn't interrupt you. I just, I mean, just the no tax on tips. I remember Trump when he was running on that, when now president, then candidate Trump was running and he had this idea and everyone said, wow, that's a great idea. And then there was a whole. But is he really gonna do that? It sounds like if this bill goes through, he's really doing that. That's actually happening.
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Oh, he's really doing it. He's absolutely doing it. And just as important as the, as the provisions for that'll help families, that'll help individuals, and individual income taxes are the provisions for businesses. And these are what I was talking about before. Full expensing on equipment investment, full expensing on factory investment. These are things that will get firms to invest more in America. And when you invest more in America, you hire more people. And so if you look at this job, so if you look at this big beautiful bill and the effect on jobs and the economy, we just released a really big paper on this at the Council of Economic Advisers today. If you go to the White House website and you go to the Council of Economic Advisors website, you can see we just put a paper on our website analyzing the one big beautiful bill, analyzing the effects of all these tax incentives, the economy. And let me just give you the numbers, okay. Because the numbers are incredibly, are incredibly great and they're going to be an economic boom in this country. It's going to raise GDP by 4.2 to 5.2%. Right. That's the size of the total economy. It's going to create 7 million new jobs, 7 million new jobs as a result of passing this bill. And it's going to boost take home payments for the, for a typical family of four. So a typical family with two kids, typical family of four, take home pay is going to go up by 8 to $13,000, $8,000 to $13,000 as a result of passing this bill. Right. And that's a result of keeping the tax rates low, preventing them from snapping back and from the new tax provisions that incentivize more work from, more work from on overtime and tips that incentivize more investment in the country, more equipment building, factories, hiring, expanding more capital stock, more productive workers and all those are great things. And they're all going to go into the economy. And this paper lays it out one by one what each provision does.
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Now talk to me about cost controls, cuts, anything having to do with the mission of. Because you've laid out all this stuff and I mean for example, the family of four with a 5 to 8, I think it was 5 to 8,000. You said more in their pocket or 8 to 12.
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8 to 13,000.
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I'm sorry, 8 to 13,000 more GDP.
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Goes up by about 5%.
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Yeah, yeah, that, that's very real to people. Right. I mean I, I know that for a lot of my radio listeners, for example, you tell them that they're going to have another 10 grand plus, let's just call it in their pocket at the end of the year, that that's really meaningful. So that's fantastic. But a big part of this as well with the new administration has been getting rid of the waste, fraud and abuse, the unnecessary spending. What can you tell us about whether it's cost controls Cuts, reining things in. Where is that in the bill?
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Yeah, so there is, there, there are cuts to waste, fraud and abuse in the bill. And these are in, these are in a variety of government programs and some transfer programs, some insurance programs. Getting, you know, making, making government agencies do more with less people every day. Every business in the country is under pressure to produce the same things with fewer inputs, with less costs. And there's no reason the government can't do the same. The government should be able to improve its status, the quality of its, of its offerings, improve the quality of its services over time, but do so more efficiently and more cheaply, just as a business does. And Congress is putting cuts to those, to those waste, fraud and abuse in the bill. The Department of Government Efficiency doge is finding more opportunities to cut waste, fraud and abuse. And these are through, these are through incentivizing workers to leave the federal workforce through cuts that don't need to, through cuts to spending that don't need to be made. Finding fraudulent numbers in Social Security or Medicare, combating fraud that sometime is perpetrated. Sometimes it's perpetrated by foreign adversaries, you know, sort of just milking money out of, out of American transfer programs. And all of this serves to bring down, to bring down the deficit and control the deficit.
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So this goes through. You see a lot of great things happening. How does the current situation of tariffs and international trade factor in now? I'm shifting a little bit. I know this is all tied together, but shifting a little bit from the big beautiful bill to where the administration is on, on tariffs. And what you see happening, you could say in the next 90 days or perhaps from now till the end of the year. I mean, what's your, what's your sense of where the tariff negotiations are and where they're going?
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No, I'm glad you are. Because look, as you, before I get to sort of to thinking about tariff negotiations, let me just emphasize something, which is that you're bringing up that all of these deficit reduction things are tied together, but they get left out of the conversation by a lot of analysts and a lot of, and a lot of the media because they don't enter into the scoring process by the Congressional Budget Office. When the Congressional Budget Office looks at how much the one big beautiful bill is going to cost, they do so with a very narrow lens and they ignore a number of things that are going to bring the deficit down materially, and tariffs are part of that. But let me just walk you through the rest of it. So it's going to create huge amounts of economic growth for what I was talking about before. Right. That economic growth delivers more revenues because as people have more income and companies have more income, they pay more income tax and more corporate tax. That's going to boost revenues by about a percentage point of GDP if we get growth to 3%. So that'll take a point off the deficit. Number two is tariffs that you just brought up. Tariffs are quite likely going to bring in hundreds of billions of dollars of revenue every year if we keep tariff rates where they are now, that shaves another point off the deficit. Another one is interest expense. Because our policies push out the supply side of the economy, because they get workers to be willing to work more, because they keep more of their wages, because firms invest in more capital stock, they invest in more factories, more equipment. That pushes out the supply side of the economy, which, by the way, our deregulation efforts help. Also, because deregulation allows firms to just do what they want to do to sell into the market without begging permission from Washington. Firms should just be able to provide to meet consumer demand. And that helps control price pressures. So as we bring price pressures down, as we continue slaying the lingering Biden inflation price pressures, interest rates will come down, too. And if interest rates on federal debt come down to where they were right before COVID struck, it'll shave another point, quite more than a point, actually off of the deficit. And then there's cuts to waste front wastefront abuse that you mentioned before. That's at least another half a point off the deficit, maybe more. So between all of these things, I just gave you between 3 and 4 percentage points of GDP worth of reduction off the deficit, and that's huge. And guess what? None of this falls into the CBO score because of the rules that Congress gave. The rules that Congress adopted when they gave CBO its mission. But they're what are going to bring the deficit down materially down over the next few years and help control the federal deficit and the federal debt. But they don't enter into the conversation because of the very peculiar rules of how the scoring process from the Congressional Budget Office works. But the administration's determined to bring the deficit down and we're going to succeed.
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Well, I mean, you know, over time they'll come down to reality. And the real, the reality is that we are, we are killing inflation in this administration. Inflation came in below expectations in the last three reports. Core inflation on an annual basis is as low as it's been since March of 2021. So we've taken out all of the Biden inflation that occurred in 2020 in, later in 2021 and 2022. And our policies will pushing inflation down by allowing the economy to produce more of getting government out of the way, getting the taxman out of the way, letting workers work, letting firms invest, letting firms produce by getting regulations out of the way. Cutting red tape allows firms to deliver into consumer demand and keeps pressure, keeps price pressures low and that will kill inflation and that will bring interest rates down over time.
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Steve Myron, Chairman, Council of Economic Advisors at the White House thanks for making the time for us today, sir. Great to talk to you. And please keep this economy roaring. All right. A lot of people are happy to see it.
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Thanks for having me. It's been a real pleasure.
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Israel experienced even more attacks last week. Latest in this onslaught, five of them, in fact, from the Houthi rebels. Just when you think the Houthi rebels may be limited from any further missile strikes, after both the US and the IDF forces eliminated their ability to launch rockets, Israel fears there are more that could be coming. There's little that could provide peace in Israel right now for young and old alike in a country that embraces their youth as well as respecting their elders, especially those that survived the Holocaust and are still with us. Eighty years ago this month, the horror of the Holocaust, the Final Solution, as it was called, came to an end. Half of all living Holocaust survivors reside in Israel today, further testimony to just how special Israel is. The pain of the past is only intensified by these kinds of missile attacks. The government of Israel does all they can, but it is time to stand with our friends and allies in Israel. That's why I support the International Fellowship of Christians and Jews. The Fellowship provides a lifeline in the form of hot meals and boxes full of healthy food. And for only $25, you can help provide a food box. In fact, you can do even better than that. $335 provides hot meals for an entire year. To give generously, call 888-488-IFCJ. That's 888-488-4325 or go to ifcj.org that's ifcj. Org.
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