The Exchanges

Q Senator, is there a hard line that you'll have that if we don't Get this deficit level to X, because that's the focus, that's the objective, that's the primary objective, rather, at this point in time in this republic. That you'll say I'm a no vote, and have you been that declarative about your position on this?

A I've been pretty upfront. You know, the first goal of this Republican budget reconciliation should be don't add to the deficit, because that would be the first goal. Beyond that, what I've always said is I want a commitment to return to a reasonable pre-pandemic level spending and a process To achieve and maintain it. I mean, I'm, I'm reasonably open. Yeah, I, I, I recognize we have to get the votes. So I always say, I don't have a hard number, but what I've done is I've laid out these options, and right now the hard number accepted by and expected by a lot of senators, enough to not pass this until we achieve it, is 6.5 trillion dollars in spending in 2026. And I, I can, you know, walk through how you get to that point, but, uh, that's kind of the number. Right now we're expected to spend about 7.3 trillion next year. So that implies about 800 eight trillion dollars investment reduction rather than 1.5 trillion that the house has in their meager, uh, house reconciliation bill. So it's a pretty big delta.

AI assessment note: “I don't have a hard number, but what I've done is I've laid out”

Q I just said, I just want to make sure Senator then that we're on the same page with respect to the math. If this bill passes as is, can the general public take the 3003 or 34 odd trillion that we have in debt? Should we add 22 and say we'll be at 58 trillion by 20 2035. Is that the right math or the wrong math?

A That understates it. Now, they'll talk about dynamic scoring, and I believe in dynamic scoring as well, but in this case, if you take a look at the tax cuts that President Trump is proposing, that's not, they're not going to generate growth, they're just going to reduce the deficit. The CBO projection I'm looking at assumes we're going to gain another four trillion dollars from increasing taxes. So again, we may not, may not get that four trillion dollars, but no matter what, The CBO projection right now that is adding another 22 trillion dollars to our debt, it certainly would add at least that. I would argue probably add another three or four trillion dollars, so it's not gonna be 59 trillion, it's gonna be more like 62, 63 trillion.

AI assessment note: “That understates it... it's gonna be more like 62, 63 trillion.”

Q which is a five percent borrowing rate for America, could be on the low side, and that's the, that's the spiral that he's talking about. On Friday, Secretary Besant tried to get in front of this, and his commentary was, we will grow our way out. Can you talk to us about what he means by that, and what the boundary conditions need to be to grow our way out?

A First of all, by, by My calculation, our average interest rate over the last 50 years on government debt is about 5.8%. So that's 50 years, and we're down here about three, somewhere around three percent. Um, those are not exact calculations. Uh, listen, that is the hope of all of us. I mean, I, I will absolutely agree that the number one Component of a solution to our enormous debt and deficit problem is economic growth. We have to grow the economy, but here's the problem is when the government is sucking out of the private sector, all, you know, we're the ones borrowing the money, so there's not a whole lot of money left for businesses in the private sector, not enough capital there. Now you can print more money, uh, But then that sparks inflation, and that, of course, erodes everybody's balance sheet. It also makes our debt less expensive as well, but because we're so in debt, that drives up the interest rates, and again, it ends up being a death in debt spiral. So, so nobody can predict this, but I mean, that's just the, the wishful thinking of people putting forward a policy, a one big beautiful bill that doesn't live up to its name, but actually Actually exacerbates the problem.

AI assessment note: “the number one Component of a solution to our enormous debt and deficit problem is economic growth”

Q to lose the jobs in their state, because that's 10,000 jobs split amongst roughly seven states, and it's really important to those seven states to keep those jobs. Is that the motivation that there's economic dollars flowing into the states that keeps the representatives and the senators from making the tough decisions? Is it that they're getting donor dollars? What's the real motivation here that's keeping everyone from tackling reality?

A Oh, again, as I pointed out, most don't even recognize the full reality. They don't, they don't know the numbers. Uh, I've, I've heard it said, I didn't hear McConnell say it, uh, personally, but I've heard him say, show me a member of Congress who ever lost the election because they spent too much money. So there's no public pressure not to spend. You know, people love tax cuts. People love the free money. You know, we collectively as a society are whistling by the graveyard. Nobody wants to say that this is unsustainable because, you know, to fix it is painful. I mean, you, you are going to have to reduce spending. And then you're very open to the, the political accusations as, you know, coming in, we're, we're trying to slash Medicaid for disabled children. No, we're trying to preserve it for disabled children. Try and get the able-bodied, childless, uh, uh, working-age adults back to work and, and on private sector healthcare. Uh, but again, that's, that's a more difficult argument to make. So it's just the way that the process just plows on. We've never, as I said, there's never been a process to actually control spending. So this is what we've always done. You come up to these deadlines, you put everything into one big bill, you give people You know, things that you have to vote for. You don't want to default on the debt. You don't want to increase taxes. So, you know, th…

AI assessment note: “most don't even recognize the full reality... there's no public pressure not to spend”

Q And who, who else is shoulder to shoulder with you with the same point of view in the Senate?

A I think Rand Paul is pretty much a hard no, regardless. Um, again, I don't think you get a good enough bill where he'd vote yes. Uh, my other allies for sure in this thing are Mike Lee and, and Rick Scott. Uh, you know, each one of us has our own thoughts of, you know, may accept something different than the others. I'm, I'm pretty well dug in, but I'm, but I'm reasonable. Uh, you, you give me something that Like I say, commits to getting to a pre-pandemic level of spending, uh, and a process to achieve and maintain it, you know, I'll, I'll work with you. Now, one of the things I did, and we had it pinned to my top of my X page, I think it's further on down now, but I put together a video about a minute 30, starting with, you know, President Trump and State of the Union saying he was going to balance the federal budget, and then the Vice President and everybody on down some version of We don't have a revenue problem. We have a spending problem. At the very end of the video, I, I asked, so are we willing to fix it? You know, right now, doesn't appear we are, but I, I intend to insist that we do. Uh, so I'm, I'm, I'm gonna dig my heels in. There's no, there's nothing that President Trump can do to pressure me, other than, other than, start work with me, acknowledge the numbers. You know, I'm, I'm texting, They're probably annoyed with me, Besant and Hastit and Russell all the tim…

AI assessment note: “my other allies for sure in this thing are Mike Lee and, and Rick Scott.”

Q What are the tools then in your toolbox? So you get back in the next week or two, and you talk to your colleagues, and now it's on your desk. How do you start getting your arms around this? What do you do starting on Monday or next Monday?

A So I tried to lay out the basic numbers. That's what I was talking about. You know, my pre-pandemic levels of spending, Clinton, if you use that process, go from 1.7 to 5.5 trillion. That's how you plus up there. That's been Obama to be 6.2, Trump's 2019 6.5. So now you've got a baseline budget. You've always heard these Republican members of Congress running for office saying we're going to go to zero based budget. They're not even willing to go to 5.5 to 6.5 level baseline of budget. So again, what is the process that just might work? Doge has kind of shown it to us. You know, line by line, you have to scrutinize all this. It takes a lot of work. It takes a lot of time, and that's why I've always argued for a multiple approach here. Multiple step. Provide the border funding. I would just extend current tax law. I mean, I would have voted for that if we would have been smart enough to use current policy back then. We wouldn't be even having this conversation. Extend current tax law. It takes an automatic massive tax increase off the table. Increase the debt ceiling enough for a year. To keep pressure on the process, to do the work, to go line by line, expose spending. I've got to believe when you've gone from four thousand, four hundred billion to seven thousand billion dollars worth of spending, if you start scrutinizing that line by line, there would literally be hundreds of…

AI assessment note: “Provide the border funding. I would just extend current tax law.”

Q been talking about recently is that we could be on the precipice of an energy deficit starting next year, where we need every form of power possible to be generating as many electrons as possible, and so solar, wind, coal, nat gas, nuclear, There was a bunch of provisions here that changed the tax incentives. What's your thoughts on all of those that may change the landscape of electron availability?

A Well, I think it's insane that we've been shutting down coal-fired electrical generation. We need a lot of it. I would really focus on nuclear myself. I think that is, you know, if you're concerned about climate change, and yeah, I'm not, we'll adapt. But nuclear would be the thing we ought to be pushing. I really don't want to subsidize Energy production. I don't want to subsidize anything. Again, I want a simple and rational tax story. Uh, so my, my approach would always be to simplify those things. Again, I don't want to pull the rug out from under people. I mean, if we've subsidized things and people made investment based on certain things, kind of respect that.

AI assessment note: “I really don't want to subsidize Energy production. I don't want to subsidize anything.”

Q reconciliation bill gets done, Senator, in the next couple of weeks, what bill would you hope to see next to get to that North Star of fiscal responsibility? Is there a rescission bill that you'd be looking for? Do we need to actually have a sit down and talk about building a budget? What's the right next step here in creating a North Star that creates stability for the Republic?

A Again, it's developing a process They will achieve and maintain a pre-pandemic level spending, you know, just a lower spending level. So it's, it is, I come from manufacturing base, right? You, you can't have a good product without a good process, and we've just never had that process. So the only one I can think of is what Doge has demonstrated does work in terms of getting the public supporting You know, us in terms of eliminating just awful spending. So you gotta expose it. You gotta go line by line. Again, there, there are thousands of lines, just top lines in the federal budget, 100,000 of lines under each one of those as well. So you have to do the work. And again, I would love to take that Doge team, you know, those geniuses with all their AI and their computer skills. And get, you know, a 102 hundred forensic auditors and just go through this line by line. And again, my proposal was, uh, having this budget review panel, senators, house members, members of the administration, OMB, uh, then you, you know, basically set up the process just like you do in a business. You know, here's your budget review sheet. This is, then you bring the department heads, their financial gurus in front of this budget review panel, just, justify your spending. But again, I would be comparing it to, Outlays under Clinton plus stuff. Outlays under Obama plus stuff. Outlays under Trump plus stuf…

AI assessment note: “my proposal was, uh, having this budget review panel, senators, house members”

Q on the existing debt. That increases the deficit. We need to borrow more. The debt spirals up. Interest rates climb, and this becomes an insurmountable hill to climb. As you have the conversation with members of the Republican Party, what's the point of view? What is the motivating factor for business as usual? Why is it so difficult to get folks to see the basic arithmetic in front of them?

A Well, let me give you an example from about three years ago. Uh, this was after COVID and, you know, on bipartisan basis, we're on a massive spending spree in 2020, but then the Biden administration just continued that. Uh, so, you know, we were in, uh, omnibus spending Debate. And for the first time, even though the Republican Senate conference, we have a resolution against earmarks. McConnell is, uh, negotiating an out of the spending bill, and all of a sudden we're, members are sucking down earmarks. So I asked my colleagues at that time, I said, hey, anybody know how much in total we spent last year in the federal government? Room was dead silent. I, I went out to Washington Press Court, asked the same question. I mean, hey, anybody know how much we spent last year? And one reporter said it was over a trillion dollars. No, that's just discretionary spending. The answer was something like 6.3 trillion dollars, because we had gone from 4.4 trillion in 2018 up to 6.5, and we've never looked back.

AI assessment note: “anybody know how much in total we spent last year... Room was dead silent.”

Q of some, you know, crying child, but now we have to pay for the conditions on the ground. I have a different question, which is, I want to go back to Dave's question on Doge, Senator, which is, there was a nine billion dollar rescission bill That went to the House, and unfortunately, it didn't make a lot of progress. What is the future of DOGE as you see it?

A Well, first of all, it was beneficial for no other reason than it exposed how oblivious And ignorant Congress was of all this waste, fraud, and abuse. Okay, I mean, that has value right there. It should have embarrassed every member of Congress, all these department heads, that this kind of spending, this kind of crap was going on, and they weren't doing oversight on it, they weren't taking a look at it, and But, and I, I tried getting Elon's attention quite honestly about, uh, you know, can give me somebody in doge that I can work with. So as soon as you identify the spending, we can connect it to an appropriation account. We can connect it to a mandatory spending account. So we can actually codify it. He doesn't seem to have the time and quite honestly, in a personal conversation, he said, well, we don't have to do that. Well, we do have to do that. And so, you know, we've, we've been hammering Russ Vogt. You know, send us a rescission package. You know, finally he bundles up nine billion dollars when on, I think the last time I looked at Doge's website they were up to one 65 things higher than that now. They're kind of, they have fallen short of the goal. Listen, I'm not criticizing for this. Them that for that at all. But the fact of the matter is, it has to be codified. Just putting on a website is valuable, but we got to bank the savings. And so anything that's mandatory …

AI assessment note: “the fact of the matter is, it has to be codified.”

Q But what's the pushback? What do they say?

A They just throw, they throw in the towel. They go, well, it's too hard. I mean, that's unrealistic. You just can't do it. Even though I lay out, Well, these are, so let me just tell you, you know, how I laid out my pre-pandemic levels of spending. This is during between Christmas and New Year's, and I'm trying to figure out how can I communicate this? You know, how can I justify this? What kind of control can we put on things? So I, I literally went back in history. I went back to Clinton in 1998, Obama in 2014, and Trump in 2019. And I exempted Social Security, Medicare, and interest. You know, spend what we need to spend. But all other actual outlets, In those three years, I increase them by inflation and population. No reasonable control, right? It's what we should have. We don't have a balanced budget amendment. At least we should have some reasonable control over outlets. Population growth inflation would make sense.

AI assessment note: “They go, well, it's too hard. I mean, that's unrealistic.”

Q setup for twenty-twenty-six, and maybe if you want your thoughts about where the country goes into twenty-twenty-eight. One of the things that Dave talks about a lot is moments that galvanized some form of populist socialism. This idea, as he said very articulately, I can just vote myself the money. So who's gonna just give me the most money? Can you just walk us through some political forecasting for us?

A That's why I'm not an optimist. Um, but you know, I've heard people rationalize this, and I mean, important people rationalize, you know, just, just go along with this. Get us a path. I mean, this is what we have to do to win the majority, maintain the majority in the house in 20, 27, right? What good is the majority if you literally don't solve the problems that you're aware of? You know, what good, oh, oh, oh, so when, when we have the majority in 20, 27, then, then we're gonna actually spend the, you know, turn the spending curve down. That's when we're gonna return to pre-pandemic level spending. I don't buy it. This is, this is our one opportunity, and right now we're blowing it, and I'm gonna do everything I can to make sure we don't blow it. But again, that is the reality. Listen, I'm not, I don't discount the fact that we may lose the House, we may lose the Senate, but I would say we do that because we're not solving these problems. We're going to be looked at as unserious. You know, our base is going to go, why did we, why did we elect you guys? You didn't take the bull by the horns. You didn't solve this problem. You're, you're really no better than Democrats. I think we have to be concerned about that.

AI assessment note: “we may lose the House, we may lose the Senate”

Q are headed. So thanks for that, and thanks for joining us. Maybe we could just start a little bit with a very basic primer for our audience, something that we don't talk about very much on the show. Can you just tell us what a reconciliation bill is and how it's used so folks can understand a little bit about the process that the House just undertook and what's ahead?

A Sure. Let me start. You talked about when I first ran for election in 2010, I sprang out of the Tea Party. Never had been involved in politics whatsoever, and didn't even decide to run until the end of April, announced in May, started campaign during the summer, did all those parades. But what I would shout during the parades was, this is a fight for freedom. We're mortgaging our children's future. It's wrong. It's immoral. It has to stop. That was my campaign theme in 2010. I still view myself more Tea Party than Republican Party. We have a lot of big spenders in the Republican Party as well, and I ran, again, because of Obamacare, which I knew would not work, and it's not working. That's, by the way, that's the problem with Medicaid right now is Obamacare is now called Medicaid expansion. But to answer your question, Uh, budget reconciliation was set up by the, in the Budget Act, I think it was in Um, it doesn't work in terms of controlling spending. By the way, nothing ever has. We'll, we'll get into that in terms. We've never had a process for actually controlling spending, but it allows us to pass a budget and then to reconcile the budget. You're able to, you can pass a budget. It's not a law, uh, but you pass this budget, uh, with just 50 votes, 51 votes, majority, and then you can reconcile to that budget Also avoiding the Senate filibuster. So that's the main component.…

AI assessment note: “you pass this budget, uh, with just 50 votes... Also avoiding the Senate filibuster.”

Q So can you just explain that to us? Like what, what we see on the website, is that not saved?

A It's, there's a question that they've stopped contracts. They're, they're no longer spending money that way, but the question is whether the president on his own can impound those funds. So they may not be spent, but they're just gonna be, you know, sitting out there is, uh, you know, unallocated, uh, spending to be spent some time in the future, unless you rescind them. And again, that's the beauty of rescission reconciliation. We don't need Democrats to Help us there. We can do that with simple majorities, both the House and the Senate. And again, it'll be pretty depressing. President Trump in his first administration set up a fifteen billion dollar rescission package and has voted down in the Senate to Republican senators vote against it. And my guess is they paid no political price for doing that. Any Republican that voted, would vote against the rescission package ought to pay a pretty huge political price in voting that thing down, but it's going to take presidential leadership. He's got to be, he's got to be focusing on that. And, and I'm sorry, I don't think President Trump, he's doing all kinds of great things, he's not focused on reducing spending.

AI assessment note: “they may not be spent, but they're just gonna be, you know, sitting out there”

Q resolve to think about monetizing assets. So for example, Secretary Lutnik has talked about the vast resources. Secretary Burgum has talked about it as well. The vast resources that America has, whether it should, you know, we should consider thinking about monetizing some of those things, selling federal lands, selling drilling rights, selling royalty rights. What do you think about that as an incremental way of softening the landing here?

A I would say the only reason I'm not in a full-fledged panic Is because people like Art Laffer do point out we have vast wealth. I mean, so our debt, our debt to GDP ratio is probably not the most relevant, is relevant for inflation, that type of thing, but, you know, debt to total assets is probably the more relevant. So, so we, we literally, we can't afford this level of debt, but you have to, you do have to compare to get income as well and our ability to service the debt and the debt spirals. So again, this all ends up being a lot of different, uh, Factors coming into what's going to make it possible for people to live. And again, inflation is probably the one metric that we need to avoid. And I think that's the thing that I'm most concerned about in terms of deficit spending. I'm not concerned about America going bankrupt because we have this vast wealth. Um, I'm concerned about us being insolvent in sparking massive inflation and just wiping out people's savings, making it very impossible for them to live and retire.

AI assessment note: “I'm not concerned about America going bankrupt because we have this vast wealth.”

Q enter some form of like people conclave for you and your Senate colleagues are going to go into a room. There's either going to be white smoke or black smoke. So can you, can you walk us through like what, what is the mechanics now? Like what will it be like when you, when Senator Thune brings you together, you all caucus or how does this work now for you?

A So, so we've been in finance committee, we've been working on these things, but again, we're all, it's all about scores, right? I've got to point this out. You hear these scores, right? But they're divorced from, they're not tied to anything. It's like, okay, I got a score of 65. Well, good. I mean, it's good if you're golfing, it's awful if you're bowling. So you get all these scores, they're divorced from reality. So again, the, the process is complete. It's, it's by and large a charade, ok? Somebody else is going to write this thing, and it's going to be shoved down people's throats. So what I intend to do is I intend to open it up and bring this to the light of day. I've been doing this since January first, writing about giving, you know, three pre-pandemic levels, you know, three options on pre-pandemic levels of spending. Next column, here's the process, a line by line, deep dive, forensic audit, You know, I'd love to take the Doge team right now and just bring them over. Let's focus on this. Let's spend months doing this, but we'll need time. We'll need a two-step process, you know, and then, you know, literally my, my last column just kind of put it all together, the big numbers, and this is why you have to do it. But, but again, you, you were following the debate in the house. Did you ever hear 2.2 trillion dollar average deficit being projected, 22 trillion dollars, y…

AI assessment note: “by and large a charade, ok? Somebody else is going to write this thing”

Q these next 16 months of bills and the impact? To your point, there's a lot of people that came together in a coalition to vote for accountability, to defund, and to starve the deep state, and if we continue to feed it, it seems like a traditionalist default. We're going back to the way things were. Can you talk to us about that and what your thoughts are about that?

A Well, I'm highly concerned about just the conservative movement. I think Trump is a Completely unique political figure. I think he definitely did drive turnout. He's expanded, you know, certainly our base, which by the way is one of the reasons I'm, I am sympathetic to what you're talking about in terms of the tax cuts he's proposed. I mean, we need to focus on the working men and women of this country. This is really the, the Trump coalition. Um, but I'm concerned about how effective Democrats are. The coalition they have made up of the media, primarily social media companies, that type of thing, their relentlessness of letting All these undocumented people in this country who are voting, I mean, we're starting to see that type of fraud, um, that are, you know, they, they are trying to cheat. I think they do cheat in voting. I think they, we don't have a real feeling in terms of how, you know, the order of magnitude of their cheating, uh, but a quick example of, uh, you know, we have that important Supreme Court race here. Elon Musk came in here, did some pretty innovative things, spent a lot of money here, Uh, the liberal candidate got 78% of, uh, Kamala Harris's vote. The conservative candidate got 62% of Donald Trump's vote. Even though, you know, we were all out there seeing how important this is. If you don't want to see President Trump impeached by a Democrat-controlled …

AI assessment note: “I'm highly concerned about just the conservative movement. I think Trump is a Completely unique”