Verdict with Ted Cruz: Episode Summary Release Date: January 29, 2025

Episode Title: The Legal Basis for Retaking the Panama Canal, plus No Taxes on Tips is Happening

Introduction

In this episode of Verdict with Ted Cruz, hosted by Senator Ted Cruz and co-host Ben Ferguson, the duo delves into two pivotal issues shaping American policy and the economy: the contentious situation surrounding the Panama Canal and the legislative push to eliminate taxes on tips. Through comprehensive discussions, expert testimonies, and strategic insights, Cruz and Ferguson shed light on these matters' significance for American workers and national security.

1. The Legal Basis for Retaking the Panama Canal

A. Historical Context and Significance

Senator Ted Cruz opens the discussion by revisiting the historical importance of the Panama Canal, highlighting its construction's immense cost and human toll. “The United States built that canal. Over 30,000 lives were lost in the construction...” (02:10). Cruz emphasizes the strategic value the canal has provided in terms of national security and economic efficiency, significantly shortening maritime routes between the Atlantic and Pacific Oceans.

B. Treaty Violations and China’s Influence

Cruz addresses the critical issue of Panama’s alleged violations of the treaty established when President Jimmy Carter transferred control of the Panama Canal to Panama. “Panama agreed to a very specific treaty... to keep the Panama Canal neutral and to charge America fair and equitable rates” (03:45). The Senator outlines concerns that Panama has ceded significant control to China, which poses risks to U.S. national security. He states, “Chinese companies control container points, ports at either end... gives them the ability to block the canal without warning” (12:53).

C. Senate Commerce Committee Hearing

As chairman of the Senate Commerce Committee, Cruz discusses the recent hearing he chaired on the Panama Canal. “I chaired a hearing in the Senate Commerce Committee on the Panama Canal... testimony from numerous experts that Panama is in violation of that treaty” (01:54).

D. Expert Testimonies and Findings

The hearing featured testimonies from experts, including those from the Federal Maritime Commission and an international law professor. The testimonies confirmed two primary violations:

1. Chinese Control: Panama's pivot towards China through initiatives like the Belt and Road Initiative threatens the canal's neutrality. “China is engaged in the Belt and Road Initiative... trying to gain power over the United States” (15:20).
2. Exorbitant Fees: Panama is imposing excessive fees on American ships, disproportionately affecting U.S. cargo and military vessels. “Canal profits regularly exceed $3 billion... affecting American taxpayers and consumers” (12:32).

Cruz highlights that under the treaty, the United States has the authority to declare Panama’s actions as violations, potentially leading to significant remedies, including reasserting U.S. control over the canal. “Under the terms of the treaty, each party determines unilaterally whether the other is in violation” (17:45).

E. Potential Remedies and Implications

Discussing remedies, Cruz mentions the possibility of the United States taking direct military action to regain control of the canal, as contemplated in the treaty. However, he notes that practical approaches might focus on diplomatic and legislative measures to counteract China’s influence and reduce transit fees. “I expect the administration to pursue them seriously” (21:42).

2. No Taxes on Tips is Happening

A. Policy Background and Significance for Workers

Shifting focus, Ben Ferguson introduces the topic of eliminating taxes on tips, a significant issue for millions of American workers who rely on tips as part of their income. “No taxes on tips would be huge for American workers and also our economy” (28:00).

B. Senator Cruz's Legislative Efforts

Senator Cruz details his proactive role in authoring and pushing forward legislation aimed at removing taxes from tips. Recounting a pivotal moment, he shares, “I just threw it out there, no taxes on tips. And they went crazy” (30:22). This initiative emerged from a conversation Trump had with a waitress burdened by tip taxes, inspiring Cruz to act swiftly.

C. Bipartisan Support and Legislative Strategy

Cruz highlights the broad bipartisan support the legislation has garnered, citing co-sponsorship from both Nevada senators and even endorsements from Democratic figures like Kamala Harris. “Now, Kamala Harris endorsed it, and she said, this is a great idea” (30:22). He outlines the strategic approach to passing the legislation, emphasizing the potential for a straightforward passage in both chambers without needing budget reconciliation.

D. Call to Action: Encouraging Listener Engagement

Emphasizing the importance of grassroots support, Cruz encourages listeners to contact their congressional representatives to advocate for the legislation. “If you want Congress to pass no taxes on tips, you don't need to present a long, detailed, subtle argument... Just pick up the phone and call your member and say, pass no taxes on tips” (35:52).

He explains how constituent calls are tracked and influence legislative priorities, reinforcing that direct action can significantly impact the passage of the bill. “Every member of Congress gets what I get every day, which is I get an email... Just say that sentence, and it will get recorded” (35:44).

E. Projected Outcomes and Future Steps

Cruz remains optimistic about the legislation’s success, forecasting its enactment by the end of the year. “My prediction is this will get done before the end of 2025” (26:48). He underscores the policy as a victory for blue-collar workers and a testament to the Republican Party’s alignment with working Americans.

Notable Quotes

• Ted Cruz (03:45): “Panama agreed to a very specific treaty... to keep the Panama Canal neutral and to charge America fair and equitable rates.”
• Ted Cruz (12:53): “Chinese companies control container points, ports at either end... gives them the ability to block the canal without warning.”
• Ted Cruz (17:45): “Under the terms of the treaty, each party determines unilaterally whether the other is in violation.”
• Ted Cruz (30:22): “I just threw it out there, no taxes on tips. And they went crazy.”
• Ted Cruz (35:44): “Just say that sentence, and it will get recorded.”

Conclusion

In this episode, Senator Ted Cruz and Ben Ferguson provide an in-depth analysis of two critical issues facing the United States: the strategic and legal challenges surrounding the Panama Canal and the economic relief from eliminating taxes on tips for American workers. Cruz's leadership in the Senate Commerce Committee and his active role in championing bipartisan legislation highlight the proactive steps being taken to safeguard national interests and support the American workforce. The episode underscores the importance of informed citizen engagement and legislative action in shaping effective public policies.

Listeners are encouraged to participate actively by contacting their representatives to support the no taxes on tips legislation, demonstrating the powerful impact of grassroots advocacy in the legislative process.

Note: Advertisements and non-content sections from the transcript have been excluded to focus on the episode's substantive discussions.