All-In with Chamath, Jason, Sacks & Friedberg - Senator Ron Johnson on the Senate showdown over Trump's Big Beautiful Bill | All-In Interview

Episode Date: May 25, 2025

(0:00) Friedberg and Chamath welcome Senator Ron Johnson (2:30) The Reconciliation Bill process, how much the Big, Beautiful Bill will add to the national debt (14:33) Problems with growing our way out of debt, why elected officials are avoiding the fiscal reality (24:53) Energy rescissions, future of DOGE (32:09) How Senator Johnson will force a real review of the Big, Beautiful Bill; future of MAGA and the Conservative movement (54:15) Next steps if the Big, Beautiful Bill passes (58:35) Post-interview recap Follow Senator Johnson: https://x.com/RonJohnsonWI Follow the besties: https://x.com/chamath https://x.com/Jason https://x.com/DavidSacks https://x.com/friedberg Follow on X: https://x.com/theallinpod Follow on Instagram: https://www.instagram.com/theallinpod Follow on TikTok: https://www.tiktok.com/@theallinpod Follow on LinkedIn: https://www.linkedin.com/company/allinpod Intro Music Credit: https://rb.gy/tppkzl https://x.com/yung_spielburg Intro Video Credit: https://x.com/TheZachEffect

Power corrupts. Government is power and it's been corrupting. Nobody knew in total how much we spend because we never even talk about it. The first goal of this Republican budget reconciliation should be don't add to the deficit. I voted for President Trump because I wanted him to defeat the deep state. You don't defeat the deep state by continuing to fund it at Biden's levels. Our base is going to go, why did we elect you guys? You're really no better than Democrats. I don't think President Trump is not focused on reducing spending. This is our one opportunity. And right now we're blowing it.

And I'm going to do everything I can to make sure we don't blow it. I can't be pressured by President Trump. He's willing to sit down with me, look at the numbers, acknowledge them, working forward in a reasonable plan forward. That's the only way he's going to get my support. So everyone has assumed that the House passage of the reconciliation bill is going to go to the Senate with some minor changes and then make its way to President Trump's desk for signing. But that may not be the case.

There are several hardliners in the US Senate who have made it very clear that the budget and the fiscal deficit problems that arise from this bill are insurmountable and they're going to take a very hard stance on voting no on this bill. Taking the lead on that point of view, Senator Johnson from Wisconsin, who's going to join us today for an emergency pod to talk about what's next with the Senate review of the reconciliation bill, what his thoughts are, what's the future of the republic, and what's ahead. We're really excited for this emergency pod. Thank you for joining us. All right, besties. I think that was another epic discussion. People love the interviews. I could hear him talk for hours. Absolutely. We crushed your questions.

Admit it. We are giving people ground truth data to underwrite your own opinion. What'd you guys think? That was fun. Senator, thanks for joining Chamath and I for this conversation this morning. Good morning, guys. Thanks for having me on. And just by way of background, Senator, you were elected to the US Senate in 2010. You've had two reelections since then.

More recently, we've taken notice and I gave a shout out to you for your comments on the scaling of the deficit and the U.S. federal debt. And as a Republican against the stated intention of getting this bill passed and through the Senate, as is, and we'd love to kind of hear from you today about your points of view on the bill that was passed in the House this week, the reconciliation bill, and then take a step back and talk a little bit about the fiscal picture for the United States and where things 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. 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 and else in May started campaign during the summer, did all those parades. 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 moral. 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, budget reconciliation was set up by the in the Budget Act, I think it's 1974. It doesn't work in terms of controlling spending. By the way, nothing ever has. We'll get into that in terms of 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 in law, but you pass this budget 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. What's weird about it is you pass this budget, but you can only through budget reconciliation

address mandatory spending. You can't touch the discretionary spending accounts, which is about 25% of our budget. That's one of the one of the ways the budget has gotten completely out of control is, you know, we put so many things into the mandatory category. You know, initially was entitled Social Security, Medicare, Medicaid, but we have, I would say, deviously slid all kinds of discretionary spending into other mandatory that really exploded during COVID where I think other mandatory hit well over two trillion dollars. Last fiscal year is about 1.3 trillion dollars. This year will be over a trillion. So it went from $642 billion in 2019, other mandatory, not Social Security, Medicare, even Medicaid, went from $6.42 to last year, $1.3 this year,

it's going to be over a trillion dollars and it's going to keep pretty much at that level as far as the eye can see. So again, that's a trillion dollars of other non entitlement spending that we never looked at. And that's the whole point about mandatory spending, it's never looked at. So anyway, so we can address mandatory spending, not social security, through this reconciliation process, change programs, do whatever we want to do as long as there's a primarily budgetary impact, not changing policy. So you can change

policy as long as it has a budgetary impact. I know that's reasonably complex, but it's an insane system and it doesn't work. What is the alternative? Well, right now we don't really have them. Again, let's just go through why we've never had a process to control spending. We don't have a balanced budget requirement like states do. And we have the capability of printing money, which we're doing, incurring this enormous debt. So we don't have a balanced budget requirement. I didn't realize this until just recently.

The appropriation committees were literally set up because the authorized committees were big spenders. So they set up appropriation committees to control spending. That didn't work. The Budget Act didn't work. Simpson-Bowles didn't work. The Budget Control Act didn't work. The Budget Act didn't work. Simpson-Bowles didn't work. The Budget Control Act didn't work. It did restrain discretionary spending for a couple of years until we wheezed our way around. So again, we've never had a process to control spending. And one of the things I've

been arguing in some Wall Street Journal columns is let's use the example of Doge. I come with the private sector. we probably spent more time reviewing my line by line budget for my business. And I think other private sector businesses spend more time analyzing what they're going to spend than Congress spends over the entire federal budget. So we've got to develop a process, Doge has shown us how to do it, go contract by contract, expose the grotesque waste, fraud and abuse. But we got to do that through thousands of lines through federal budget.

But nobody's willing to do it. Nobody's willing to take the time to do the work to do it. They're doing what they've always done. They exempt most spending. They look at a couple of programs. They try and tweak them, try and get a big score out of CBO so they can say, hey, look at we saved $1.5 trillion. and yet that's completely divorced from reality. 1.5 trillion sounds like a lot, but over 10 years it's 150 billion against a 7,000 billion dollar a year budget that only six years ago

was 4,400 billion dollars. If I've got one complaint in terms of the process in the house, it's basically a void of reality. We're not talking about the numbers we should be talking about, which is a 10-year deficit projected by CBO of $22 trillion, averaging $2.2 trillion a year. We are talking about, instead, we focus all on $1.5 trillion, and then they're patting themselves in the back that they didn't even achieve $1.5 trillion and then they're patting themselves in the back that they didn't even achieve $1.5. So 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 33 or 34-odd trillion that we have in

debt? Should we add 22 and say we'll be at 58 trillion by 2035. Is that the right math or the wrong math? 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, 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 $4 trillion from increasing taxes. So again, we may not get that $4 trillion, but no matter what, the CBO projection right now that is adding another $22 trillion to our debt, it certainly would add at least

that. I would argue probably add another $3 or $4 trillion. So it's not going to be $59 trillion. It's going to be more like 62, 63 trillion. And the CBO scores assume the interest rate on the federal debt, I believe, is an average of 3.6%. And now we're seeing the 30-year trading above 5%, meaning that if we trade up to 5% for the cost of debt for the federal government, we're probably gonna add another $5 trillion of incremental interest expense over the period, another half trillion a year on average

over the next 10 years. And I would agree the current CBO projection, that's what I'm talking about here, going from 37 to 59 trillion dollars in debt is the rosy scenario. That that's as good as we're gonna do. 59 trillion dollars in debt is a rosy, is the rosy scenario. That's as good as we're going to do. So we're simply, this does not mean the moment in terms of what we have to do.

Senator, let me just ask, I think one point of clarification on your earlier comment, which I think would be important for the audience. What has been put under mandatory that should be discretionary? It covers the entire gamut of federal spending. Education, you know, welfare, food stamps, veterans benefits. Again, they've just transferred that into mandatory spending. So it's completely out of sight, out of mind and unaccountable. When it sits in discretionary, maybe just help folks understand

what does it mean if it sits in discretionary? Does that mean that then the administration under the president has the authority to spend up to that amount to administer the law, to administer the statutes, but doesn't necessarily have to? And the mandatory demands that the capital goes out? Just help us understand for the audience what the difference is. Well, discretionary is actually supposedly passed each year through an appropriation process, which is completely broken. We don't pass individual appropriation bills. We generally at best, which is awful, mini buses or omnibuses. These are these multi-thousand page bills that get dropped on our desk and we have to vote on them literally within 24 to 48 hours. Nobody reads them. nobody knows what's in them.

That process is pretty broken down. Right now we are operating for this fiscal year under a continuing resolution which tweaks a few things but is basically spending at last year's levels on all those appropriated accounts. So again that's about 25% of our budget then 75% is in the mandatory accounts, the entitlements and just other mandatory spending. So the arithmetic indicates we're entering into a debt depth spiral in the United States with the interest rates climbing, the deficit climbing. And we then need to spend more money to pay our interest 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? Well, let me give you an example from about three years ago. This was after COVID and, you know, bipartisan bases were on a massive spending spree in

2020, but then the Biden administration just continued that. So we were in omnibus spending debate. And for the first time, even though the Republican Senate Conference, we have a resolution against earmarks. McConnell is negotiating an omnibus spending bill. And all of a sudden, 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 went out to Washington press court, asked the same question. I mean, hey, anybody know how much we spent last year? One reporter said it was over a trillion dollars. No, that's just discretionary spending. The answer was something like $6.3 trillion.

Because we had gone from $4.4 trillion in 2019 up to $6.5, and we've never looked back. And the analogy I used too is no family, if they had an illness, borrowed $50,000, pay medical bills, if they got well the next year, they wouldn't keep borrowing $50,000 to spend that level, but that's exactly what we've done. But the point of my story was nobody knew in total how much we spend because we never even talk about it. Never even talk about it. So that's out of sight, out of mind.

So it's completely out of control. I mean, I am the guy, starting with my Wall Street Journal column, January 1st about return to pre-pandemic global spending. I mean, I've been hammering the Senate Republican Conference on a weekly basis, just, you know, ad nauseum, quite honestly. What's the pushback? What are they? They just throw they throw in the towel. Well, it's too hard. And that's unrealistic. You just can't do it. Even though I lay out. Well, these are so let

me just tell you how I laid out my pre pandemic levels of spending. This is during between Christmas and New Year's, I'm trying to figure out how can I communicate this? And 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 outlays 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 outlays. Population growth inflation would make sense. – Senator, if we take your math and say that we are headed to, let's take the midpoint, $65 trillion of debt by 2035. I think it's fair to say that the bond market will have a negative reaction to that. And what Dave just talked about, which is a 5% borrowing rate for America, could be on the low side. And that's the spiral that he's talking about. On Friday, Secretary Besson 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? First of all, 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 3, somewhere around 3%. Those are not exact calculations. Listen, that is the hope of all of us. I mean, 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. 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 and debt spiral. So nobody can predict this. But I mean, that's just the wishful thinking of people putting forward a policy, a one big, beautiful bill that doesn't live up to its name, but actually exacerbates the problem. 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?

So I try 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 that's been, Obama would be 6.2, Trump's 2019 6.5 trillion. That's how you plus up there. That's been Obama would 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 gonna go to zero base 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? So again, what is the process that just might work? Doge has kind of shown 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 had been smart enough to use

current policy back then we wouldn't be even having this conversation. Extend current tax law 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 $4,400 billion to $7,000 billion worth of spending, if you start scrutinizing that line by line, there would literally be hundreds of billions of dollars that the public wouldn't even know we're not spending. The only people who would know would be the grifters who are sucking down the pork. So when you say the folks in the Republican Party that aren't willing to do the hard work, it's just so obvious how big of a crisis we are in and everyone's kind of being blind

to it. So I'm just trying to understand what is it that's keeping the blindfold on? Is it that there are donors, that there are constituents? I'll give you an example. A couple years ago, I went in for the Farm Bill review with the Senate Ad Committee 2012, so a long time ago. And we started talking about one of the agencies in the USDA and they have 10,000 employees and said, you know, does, why does this make sense in a digital age? And the answer was

it doesn't. It's like, well, why is the agency still running and employing all these people? Well, because the senators don't want 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?

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 in here, 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. No people love tax cuts. people love the free money. We collectively as a society are whistling by the graveyard.

Nobody wants to say that this is unsustainable because to fix it is painful. I mean, you are going to have to reduce spending. And then you're very open to the political accusations as coming in, we're trying to slash Medicaid for disabled children. Now we're trying to preserve it for disabled children, try and get the able-bodied, childless, working-age adults back to work

and on private sector healthcare. But again, 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 way we've always done it. You come up to these deadlines, you put everything into one big bill,

you give people things that you have to vote for, you don't wanna default on the debt, you don't wanna increase taxes. So those elements, you bundle up with a bunch of, and you twist people's arms to pay for it, having and keeping them basically ignorant, because you never talk about the massive numbers that the massive problem that we're really in. I mean, people kind of know it. But as long as the press is reporting out as long as the press isn't connecting the dots that the massive deaths of spending is why you can't afford things, why your dollar you held in 2019 is only worth 80 cents versus the bucket should be. By the way, a dollar you held in 1998 is worth 51 cents.

Okay, so again, we don't teach people, there's no public pressure in terms of reducing spending or reducing the deficit there's just virtually none you know from conservatists right now i'm getting it all the time boy make sure that you make no tax on tips permanent make sure you make no tax and overtime permanent so well first of all we probably shouldn't even be doing either of those by the way i'm all for no tax on cash tips you know we can't can't collect it anyway so don don't even try. All for that. But you've got to recognize these other tax cuts, they're not going to grow the economy. They're not going to focus on the one component that Besant's talking about that we have to grow our economy.

I actually am very supportive of the no tax on tips, no tax on overtime. The monetary cost of those things are relatively not that meaningful. And so it has a broad-based positive impact with a lower cost is actually the reason why we should do it. The thing that I was sort of like puzzled by when 50 people or 60 people are constructing something, you get this bill that comes out of the House, which has the things that the president asked for, but with all of these other Christmas tree ornaments hanging from it, and it's impossible to figure out what's actually going on. I don't even think it's even 50 and 60 people constructing this. I think it's a much smaller group of people, and then you maybe have 50 or 60 chiming in on one issue or another.

Let me push back on overtime with you though. I ran a plastic operation, continuous shift. If you're going to have work 24-7, you need four shifts. So part of the problem with no tax on overtime, first of all, no tax on some overtime. So that's going to add to the regulatory burden. I wouldn't want to be the accounting clerk having to keep track of that, but I know with computers it's easier to do so. But in public service employee units, they refuse to go to four shifts because they like the overtime, they should be forced to go to four shifts, because they burn out, pay them more. But from my standpoint, having run a continuous shift operation, I think there's enough incentive to pay time and a half or double time on Sunday for people to work. Income is income. I don't want to segregate. I don't want to socially or economically

engineer through the tax code. And that's just part of that economic engineering through the tax code. I love the fact we're focusing on working men and women. Great. But I would rather simplify the tax code for them and overall lower their tax burden. But again, lower the rates, broaden the base.

But we're not doing that. We lowered the rates and we made it more complex. Yeah, we did not simplify the tax code in 2017. One of the reasons I actually wanted a two-step process was to simplify and rationalize our tax code. Can we talk about other things that didn't make it in that we thought we're going to get in there? Another way to generate revenue would have been to close the carried interest loophole. I don't know if you have any points of view on that. Well, I've talked to numerous people who benefit from carried interest. I always ask them, can you explain to me why that's not ordinary income? And they can't. It is ordinary income.

Speaking to other ones that are pretty big into it, they do make a pretty powerful case that all these deals, all these structures, all these business arrangements are already structured that way. You can eliminate that break and it's really not going to raise any revenue. They make reasonably convincing case there too. So that's kind of where we add on that. Which is sort of like at an impasse. Yeah, my guess is just not going to happen.

Right. And kind of going the overtime, it's just not that big of revenue generator one way or the other. Might make you feel good, could screw up the way deals are made. Is it really worth messing with? One of the things that Elon has 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? 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, 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. So, my approach would always be to simplify those things. Yeah, 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. The comment that I made to my colleagues is kind of respect that. The comment that I made to my colleagues is FERC came out with a report, it said 81% of

the incremental energy that was generated in the United States were backed by some form of tax credits. This is not to judge, it's just meant to say that financial actors go to where the incentives are. And if we change them, and we take 81% of this incremental energy offline, and you can't get an at-gas turbine, you know, for example, I'm going to announce on Monday we're building a one gigawatt data center that I'm funding in Arizona, I can't get an at-gas turbine until 2032. I can get nuclear from the state of Arizona, but that's not broadly available everywhere. And so there's these practical investment decisions that the financial community wants to make to keep America at the forefront.

It's a little murkier today unless the Senate understands these nuances and helps us because if we can't make these investments, then we're just not going to do it. I say Congress in general doesn't understand what you're talking about. Again, I said I don't want to pull the rug out from other people. I understand investment because I was in business. But again, I want to move towards a more simple system. And, and again, it's insane what government, you know, all the green new energy thing, it misallocates capital. And they look what's happening in Europe and Germany, so if they're artificially driving up

the cost of power, for what? Okay, I mean, it's a fantasy. It's a self inflicted wound. It's we spent something like five or $6 trillion, building on climate change. Then whether you believe it or not, we haven't bent the needle. That's just five or $6 trillion basically wasted. So yeah, I recognize the fact we've wasted a lot of money. We've incentivized people for certain type of power. The solution would be quit doing it long-term and let the marketplace provide as much energy cheap as possible.

Again, protecting the environment. I don't want pollution, but the whole climate change thing is- I care about electron surplus and having an infinite supply of electrons, which is effectively the threshold issue between us and whatever form of abundance we're going to find with robots, with going to Mars, with building AGI, the threshold issue is just do we have enough energy to do it all? And if as long as we have that, we're going to win. And if we don't, China's going to win. Where it comes from, I really don't care. But the reality with nuclear is, you know, we can't wait till 2035 for electrons to turn on. That's just a non-starter. So as much as we have

to pay for the sins of the past and the sins of the past as we turned all that stuff off, idiotically, to your point, because of some, you know, crying child, but now we have to play 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 $9 billion 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? First of all, it was beneficial for no other reason than it exposed how oblivious 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 departments has, that this kind of spending, this kind of crap was going on

and that they weren't doing oversight on it, they weren't taking a look at it. And, but, and I tried getting Elon's attention quite honestly about 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 do have to do that. And so no, we've been hammering Russ vote, you know, send us a rescission package, you know, finally, he

bundles up $9 billion. When I'm I think the last time I looked at Doge's website, they were up to 165 days higher than that now, that the kind of they have fallen short of the goal is I'm not criticizing them that for that at all. But the fact matters, 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 has got to be done through reconciliation. Otherwise, it's got to be done from rescission. You got to get the public support for this. I don't know why they haven't done it. So can you just explain that to us? Like, well, what we see on the website, is that not saved?

It's there's a question that they've stopped contracts, they're no longer spending money that way. But the question is whether the president on his own can impound those funds. So it may not be spent, but they're just gonna be, sitting out there is unallocated spending to be spent sometime 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 sent up a $15 billion recision package and has voted down 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 recision 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 full. He's got to be focusing on that. 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. Why do you think that is? Have you talked with his staff or him directly about it? Was this not as apparent to him and his staff as it is to you? I just think they are overwhelmed.

I mean, you see all the activity and this just hasn't hit his radar yet. It's gonna hit his radar here the next few weeks. Cause so again, he liked the concept, the slogan of one beautiful bill. I don't think he was overly concerned or understanding what the details were. Yeah, I'm gonna force him to take a look at the details. Mm-hmm.

I'm going to force the discussion on spending. It feels like we're about to enter some form of like people conclave for you. Your Senate colleagues are going to go into a room. There's either going to be white smoke or black smoke. So can you walk us through like what is the mechanics now? What will it be like when Senator Thune brings you together, you all caucus or how does this work now for you? So we've been in finance committee, we've been working on these things. But again, 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 process is complete. It's by and large a charade. Okay, somebody else is going to write this thing. That's going to be shut down people's throws. 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 1, 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. And then literally my last column just kind of put it all together, the big numbers, and this is why you have to do it. But again, you were following the debate in the house. Did you ever hear $2.2 trillion average deficit being projected? $22 trillion, $59 trillion in debt? Nobody. It's just just 1.5 trillion. Oh, like that's a lot. It's it's it's it's almost meaningless. It's a rounding error. So I'm going to force this debate. That's what that's why I'm on your show here today. That's why I'm going to be

doing jake tapper tomorrow. You know, I'm there is the numbers to the four. 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? I've been pretty upfront. 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'm reasonably open. I recognize we have to get the votes. So 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 in spending in 2026. And I can walk through how you get to that point, but that's kind of the number right now. We're expected to spend about 7.3 trillion next year. So that implies about $808 trillion in deficit reduction rather than 1.5 trillion that the house has in their meager house reconciliation bill.

So that's a pretty big Delta. What scoring do you go off of? Is that the CBO scoring that you would use to make that estimate? Some of the conversation that we've heard is that the revenue effects of some of the new programs are not taken into account fully, that there may be revenue coming in from tariffs, there may be revenue coming in from the sale of the Trump immigration card at five million a pop and there's a limited effect of the tax cuts on GDP growth, etc. So there's a lot of arguments to be made to make the line seem a little more blurry than perhaps the scoring might indicate. That's why I try and

simplify things. Okay, I'm focusing on spending. We went from 4.4 to it'll be 7.3 next year. Let's bring it down to a reasonable pre-pandemic level 6.5 spending spending spending. I voted for president trump Because I wanted him to defeat the deep state You don't defeat the deep state by continuing to fund it at biden's levels So the minute you start bringing revenue, nobody can project that nobody knows exactly what the impact is going to be Now so that starts, you know mud is going to be. So that starts muddying the water. So I focus on spending. I don't really want to fund the deep state. Okay. I would like to bring certainty to the economy. I'd like the trade wars to end

so we can bring that level of stability. I don't want to increase taxes. So again, my approach should be multiple step border defense, bank the savings, take whatever good work the house did, bank that, extend current tax law as often as complex it is, just extend that, increase the debt ceiling for a year to put pressure on us to come back and do the work on the spending. And then we can bring up President Trump's taxes as well. I mean, I would keep this as simple as possible, get it passed, and start doing the work. That would be my approach. Do you think that there's any upside or legislative resolve to think about monetizing assets? So for example, Secretary Lutnick 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 land, selling drilling rights, selling royalty rights. What do you think about that as an incremental way of softening the landing here? 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 we literally, we can afford this level of debt,

but you have to, you do have to compare to income as well and our ability to service the debt and the death spiral. So again this all ends up being a lot of different 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 death suspending. I'm not concerned about America going bankrupt because we have this vast wealth. 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. What do you think is the future through 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 traditional is default. We're going back to the way things were. Can you talk to us about that and what your thoughts are about that? 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 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 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 we don't have a real feeling in terms of how the order of magnitude of their cheating. But a quick example of, we had that important Supreme Court race here. Elon Musk came in here, did some pretty innovative things, spent a lot of money here. The liberal candidate got 78% of Kamala Harris's vote. The conservative candidate got 62% of Donald Trump's vote.

Even though, you know, we were all out there saying how important this is, if you don't want to see President Trump impeached by a Democrat-controlled Congress in the next Congress, you got to get out and support President Trump. That didn't resonate. Again, 78% of Democrats came out, 62% of Republicans. Do you think there's a risk that MAGA becomes a version of Tea Party 2.0 where it starts with energy, but then there's just a gravitational pull of the establishment is just too strong for the rebels to fight off? No, I think the greatest danger of MAGA is it's really tied toward one individual. The Tea Party movement was tied

toward the vision of America. Freedom, debt and death, so that not more injured kids future. I think that survived. I mean, they did a pretty good job of marginalizing Tea Party, but we're alive and well. We are the House Freedom Caucus.

We're the people that are going to stop this until we just get a much better bill in the Senate. So we're still alive and well. But in terms of voters, the Tea Party pretty well merged with the Republican Party. I'm not sure all the mega voters are just disgusted by the whole process, as am I. And they're much more

likely to sit on the couch unless their guy is on the ballot. Do you think that our model of representative democracy is broken and has the same sort of inevitable outcome that others have had in the past that ultimately people realize they can vote themselves all the money and they do and the system breaks. I mean like do like if you were to go back and be a founding father what would you have done differently here and or am I off on this? No I'm not sure you you are off at all. No I think we may have already passed that hinge point. That's my concern. People ask me are you optimistic? No I'm a pessimist. I'm looking around.

That is the death knell of a democracy or a Republican. A majority of voters realize, hey, I can vote myself benefits. Don't worry about the debt and deficit. We can print money. No, that's what brings down everything. I mean, this is what I've noticed is Democrats, Republicans, populists, or elitists, whatever populists or elitists, whatever side of the spectrum on whatever dimensional category you want to assess an individual or representative on, at the end of the day, they're just trying to use the government to deploy capital to their constituents as best they can. I mean, that's the mechanism of the electorate at this point. And just hearing your words resonates with me, because I've made a number of visits to DC in the last couple of months since the inauguration.

And there was a lot of proclaim about Doge and it's a new day in Washington. And I felt a degree of optimism and hope that things were changing in DC. But every member of Congress I sat down with was a disappointing conversation that reflects the views that you just shared that they don't really understand what's going on and they don't really care. It's not a priority to solve the fiscal crisis that we're in and they're not willing to admit it. It's like a stage four terminal patient not willing to admit that they're sick and they need to take some therapy.

Well, the data that backs us up is, I wrote this in my Wall Street Journal column, 1930, the federal government spent about 3.5% of our GDP. 3.5. State and local governments were about 9.1. That was the foundational premise of America. Government close to government, where it's more effective, more efficient, more accountable. Now we're spending close to 24% the federal level. States are probably somewhere at 12 to 15, haven't looked looked at research and as Lord Acton pointed out, you know, power corrupts. Government is power.

That's what I mean. That is really the definition of government is power. So it gets corrupted and it's been corrupted. And I don't know we're, you know, I fear we're passing point of no return. Why did I run again for a third term as disgusted as I am in this process? A, I couldn't turn my back on this country. I can't give up on it. I'm not overly optimistic. And again, it's not just the, as government grows, your freedom recedes. As government grows, you get more and more people dependent on it. Well, that's right. And they're not doing things productive. You don't

have a vibrant economy. That's right. You know, it's just it's all in all, it's destructive of society. To the point about your numbers, Senator, you know, and I've talked about this on our show where I've tried to estimate what percent of Americans gain their employment through government paycheck, servicing the government or a government contractor. And I think it's probably at 50% today. So 50% of Americans are either working for a public agency, a federal, state, or local, or working for the contractor of a government agency. And that's where you pass the tipping point where it's no longer possible to bring down the spending, because at that point, everyone in a representative democracy has every incentive to keep it up.

Otherwise they will individually lose, not just have something individually to gain. That's where I worry we're at. I guess the hardliners like yourself may be the last line of defense here, but that's where I was really curious to hear how far are you willing to take this in this particular reconciliation bill process

that's about to hit your desk in the next couple of weeks. And who else is shoulder to shoulder with you with the same point of view in the Senate? I think Rand Paul is pretty much a hard no, regardless. Now, again, I don't think you could get a good enough bill where he'd vote yes. My other allies for sure in this thing are Mike Lee and Rick Scott. Each one of us has our own thoughts, you know, may accept something different than the others. I'm pretty well dug in, but I'm reasonable. You give me something that, like I say, commits to getting to a pre-pandemic level of spending

and a process to achieve and maintain it, 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 President Trump and State of the Union saying he was gonna 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. And the very end of the video, I asked, so are we willing to fix it? Right now, it doesn't appear we are, but I intend to insist that we do. So I'm going to dig my heels in. There's nothing that President Trump can do to pressure me other than start work with me, acknowledge the numbers. I'm texting, they're probably annoyed with me, did not acknowledge the numbers. You know, I'm texting, they're probably annoyed with me, Besant and Hassett and Russell all the time,

said, here's my viewpoint, what am I not getting right? So they know exactly what I'm thinking. They know exactly my concerns, they know exactly numbers. You know, I had a nice lunch with Scott Besant in the treasury department. I gave him my charts and graphs, all that kind of stuff. He asked for the electronic version of those so he could distribute those to the Treasury Department. So none of this should come as any surprise to anybody. And again, the ace I hold is I am going to force the numbers that we have

to look at out in the public. Because to this point, we haven't discussed it. And the number from your perspective, if you had to create a hierarchy just in your messaging, is the number we should take away is that we're about to tune the debt to 60 to 70. So call it 65 at the midpoint. Is that the number that we should be focused on? I first focused on spending. Okay. Maybe 9.3 trillion. Again, that represents government, right? That represents that power that's been corrupted. That represents the just unprecedented, other than World War II, increase in spending from 2019 of 58 to 60%. So if you can't deal with that, in my column,

I pointed out our forefathers, the greatest generation, responsible leadership, you know, entered World War II spending about 11.7%. Ramped it up to 41% during the war. By 1948, they were down to 11.4%. So it's entirely possible, but you need leadership. I need the President of the United States. By the way, I've been in the White House with him.

I've shown him my charts and graphs. He goes, I love this. I love this. The House ought to love this. Has this been presented? So now, Mr. President, let's go to the House. Let's present this. He didn't do that. We need President Trump to embrace the reality that we are spending way too much money. He was elected to defeat the D state. You don't defeat it spending at Biden's levels. He needs to see the detail.

Again, I think, you know, to be charitable, I think he's been so busy doing so many other wonderful things that I support, he hasn't focused on this. I'm going to force him to focus on this. This will be the moment you think. And so when you speak with Besant, does he think he can get the president there as well? I mean, I always think back to Bill Clinton with his balanced budget, economic poster boards that he put up, right? The like, here's the simple charts. Let me explain it to you. And every American could watch that on television and understand what he was

talking about, nodded their head. And Congress and the entire populace went along with it. Do we need that? Do we get that moment? Do you think? Yeah. And again, I don't think the numbers are that complicated. Yeah. Just like about, you know, $22 trillion of additional deficit spending. That's a rosy scenario. That's $2.2 trillion per year. You know, Obama, he has about $900 billion in

your deficit. Trump before the pandemic is about $800 billion. You know, but binds up to almost $2.2 trillion. It's $1.9 trillion average deficit. Clearly unsustainable. We got to get back to a reasonable level. And by the way, if we do, I think the bond markets would rejoice. We wouldn't be looking at a ramping up of interest costs. We can talk about debt to wealth as opposed to debt to GDP because we've got that monkey off our back. You said something interesting I just want to come back to which is you said, when the government absorbs all the dollars in the system, there's fewer and fewer dollars left for private industry. Just to build on this, one of the things that I brought up at

the beginning of this year, I said the most important thing that you need is tail insurance. The tail risk needs to get managed at the beginning of this year. And there's a very important market that is a gauge of that towards private industry, which is called credit default, which is what is the risk of private industry not being able to pay back their obligations. And unfortunately, through the course of this year, we've seen the cost of that insurance ramp. But at the beginning of Liberation Day, there was some relief there because people saw a path out of this. And unfortunately, we're back to almost near highs. And it is the market signaling that first will go private industry,

and then the second will be the repricing of the risk for the US government. And I think that if people can really understand that that's the cascade, to your point, that first card has unfortunately been turned over. Now we haven't seen the implications on Main Street of that, but that's what we need to avoid. We need to get these markets to understand the bigger picture, but we need to show them something. We also have to focus on economic growth through the private sector, not fueled by government deficit spending. I mean, I don't know what percent of our actual growth came from $2 trillion a year deficits. I think a pretty good chunk. So have we really had real private sector growth? I think we have, but not as much as I think the

headline numbers because so much of it has been fueled by the government. By the way, that's also true in terms of revenue coming from the government. It is true that we beat the CBO estimates. That's because of trillions of dollars of deficit spending starting the pandemic years followed through with Biden. Prior to the pandemic, we really weren't matching even the CBO's downgrade of revenue coming in after the TCGA. We weren't hitting it. But then we had COVID hit and again, trillions of dollars in deficit spending, that also boosted revenue. So again, all these people saying, oh, we're going to, you know, that tax increase is going to be dynamically scored and what's going to pay for itself. Listen, I'm all for dynamic scoring, but let's be realistic. And again, I'll point out the CBO

projection I'm dealing with, $22 trillion, that assumes we go from 17.1% to 18% of GDP in terms of revenue. So if we don't cancel the tax increase and there's dynamic scoring effects, it just means we don't hit 18.1. And that number is still lower. Talk to us about the setup for 2026. And maybe if you want your thoughts about where the country goes into 2028. One of the things that Dave talks about a lot is moments that galvanize some form of populist socialism. This idea, as he said, very articulately, I can just vote myself the money. So who is going to just give me the most money? Can you just walk us through some political forecasting for us? That's why I'm not an optimist. 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 2027, right?

Well, what good is the majority if you literally don't solve the problems that you're aware of? What good? Oh, oh, oh, so when we have the majority in 2027, then, then we're going to actually spend the, you know, turn the spending curve down. That's when we're going to return to pre-pandemic level spending. I don't buy it. This is our one opportunity and right now we're blowing it and I'm going to do everything I can to make sure we don't blow it. But again, that is the reality. Listen, 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, what, 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 really no better than Democrats. I think we have to be concerned about that. If this 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? It's developing a process that will achieve and maintain a pre-pandemic level spending, you know, just a lower spending level. So it is, I come from a manufacturing base, right? 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

us in terms of eliminating just awful spending. So you got to expose it, you got to go line by line. Again, there are thousands of lines, just top lines in the federal budget, hundreds, thousands 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 100, 200 forensic auditors and just go through this line by line. And again, my proposal was having this budget review panel, senators, house members, members of the administration, OMB, then you basically set up

the process just like you do in a business. Here's your budget review sheet. Then you bring the department heads, their financial gurus in front of this budget review panel, just like you do in a business. 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 you spending. But again, I would be comparing it to outlays under Clinton plus stuff, outlays under Obama plus stuff, outlays under Trump plus stuff. Go through every line and go, first of all, why are you spending more than even Trump? Why are you spending more than Obama or Clinton? Plus, why are you spending any money at all on this? But you have to go through the work you so you need the time

I've been proposing this now for months Nobody's put in the effort. OMB said we don't have enough time. I realized they're they're busy the house said no We've been working on this for a year. We're satisfied with our numbers, we didn't have the time. The Senate really, Senate leadership is just the only one that's been fully behind what I'm trying to do here. But I can't, we can't do it alone. I mean, I can't do it. I don't have the budget expertise. So it literally is it's getting the commitment of the president that he he is determined to not keep funding the deep state of buying levels, return to a reasonable

pre pandemic levels, level spending and then get his OMB fully behind this effort. This has got to be every, this has got to be the biggest effort on budget ever. And then set the thing up, show it works, and then hopefully maintain it over the years. I can't think of anything else. We've tried all this other stuff, it never worked. Well, look, I hope you find a path towards that goal, We've tried all this other stuff, never worked. Well, look, I hope you find a path towards that goal, Senator. I think it's a critical time. And speaking as an American, appreciate your resiliency in the face of what I'm sure is a lot of political pressure and tension right now in trying to make sure

that the right thing is done here for the long term of American prosperity. So thank you for your service. Thank you for the work you do. We appreciate it. So thank you for your service. Thank you for the work you do. We appreciate it. I appreciate you having me on. I will say one thing that is different about me than others. I'd rather go home. That's the significant difference when we need rather I'd rather return to my private sector life than keep serving here in this total dysfunction. That is what, again, I can't be pressured by President Trump.

I can't. I mean, he's not gonna flip me just by the force of his argument or any kind of political pressure. There's just no pressure he can apply to me. He's willing to sit down with me, look at the numbers, acknowledge them, working forward in a reasonable plan forward, that's the only way he's gonna get my support. Well, I hope that there are others that get into the same mindset as you. I've always found it

off-putting that folks choose to be politicians as a career rather than rotating in and out of doing this as a service and then going back into the private sector where I think that a lot of the misalignments and conditioning can be avoided. So yeah, I appreciate that mindset and thank you. Thank you, Senator, for your candor. Thanks for having me on. Transparency, thank you. I mean, my conclusion today is similar

to how I finished the pod yesterday, which is concern that the bond market is not going to take this well. I do think that that puts a lot of pressure on America. And I think it's going to put pressure on private industry. And what will happen as a result, is not necessarily that we go bankrupt or whatever. But there is no clear dividing line between public and private industry. And I don't think that that's a great outcome.

Not to mention the value of everyone's assets. To go to zero. They go to zero. Well, I mean, look, like, but as the senator made the point, a dollar in 2019 is worth 80 cents today because of the inflation we've experienced from the rampant spending since COVID. And if that continues, which is the steady state that we've now assumed is we're now assuming to continue emergency spending as if it's the kind of standard, then that same level

of decline in value of $1 or decline in value of any American asset will continue, and it will only accelerate. And I think the worry is that in 10 years, you know, $1 is worth 30 cents. Yeah, and that makes it harder for everyone to prosper in America. The ability to buy a home, the ability to have greater wealth, the ability to improve your conditions and your livelihoods are significantly diminished.

That's the biggest consequence that we've seen many times over the last couple of centuries as countries have gone through the same cycle that the American Republic now finds itself in. This is kind of one of those last stands of the Alamo if you will because the arithmetic gets to the point that it becomes unstoppable. This train is gone. So anyway, I thought it was great to have some time with the senator to talk about it today. Again, when we have these conversations, Chamath, obviously we're not fully endorsing all the views and points of view. It's good to hear from people. It's good to understand

their point of view, let them speak and have the conversation. There are things that we'll agree with, things that we don't agree with. But I think on the fiscal condition of the United States, I've been pretty clear, pretty vocal on my point of view on this. And on this particular point, I think the senator is a very important voice. I think it's really important for America to let private citizens have agency and do the things that they think they should be doing. And I think that if you move to a place where we become fiscally crippled and reliant on the government, that's a horrible outcome. Yeah, absolutely.

Okay. Well, I'm glad we did this. I know it was a push to get it done on a Saturday. But I thought it was really worthwhile to give the senators a very I already made love to Nat twice this morning. So I'm from all the boxes have been checked. What did you do after those six minutes? Did you play with the kids played with the kids for an hour? Yeah. So I've done everything I need to walk the dogs. Good. Yeah. All right, bro. We'll talk later. Love you.

Love you. Yeah.