Voices of Freedom - Interview with Senator Phil Gramm

Episode Date: April 7, 2026

An Interview with Senator Phil Gramm, Economist, Legislator, and Author From the classroom to the halls of Congress, to international banking, and the public square, few Americans have made a more sustained and consequential case for economic freedom than our guest on this episode of Voices of Freedom. Senator Phil Gramm taught economics at Texas A&M University for twelve years before serving in the United States Congress for more than two decades — first as a Representative from Texas, then as United States Senator. His legislative record includes the Gramm-Latta Budget, which reduced federal spending and paved the way for the Reagan tax cut; the Gramm-Rudman Act, which placed the first binding constraints on federal spending; and the Gramm-Leach-Bliley Act, which modernized the nation's banking, insurance, and securities laws. He is currently a visiting scholar at the American Enterprise Institute and the author of The Myth of American Inequality and The Triumph of Economic Freedom. Senator Gramm is a 2026 Bradley Prize winner. Topics Discussed on this Episode: Senator Gramm's path from the classroom to Congress The legislative legacy of the Gramm-Latta Budget, Gramm-Rudman Act, and Gramm-Leach-Bliley Act Whether Congress can recover a commitment to fiscal discipline How the country arrived at today's polarization over free enterprise and markets The case for economic freedom and what's at stake for the next generation

Hello and welcome to Voices of Freedom, a Bradley Foundation podcast. I'm Rick Graber, President and CEO of the Bradley Foundation. On the podcast, we'll explore issues that affect our freedoms with a focus on free enterprise, free speech, and educational freedom. So let's get started. From the classroom to the halls of Congress to international banking in the public square, few Americans have made a more sustained and consequential case for economic freedom than our guest today.

Senator Phil Graham taught economics at Texas A&M University for 12 years before serving in the United States Congress for more than two decades. First as a representative from Texas and then as a United States Senator. His legislative record is truly remarkable. The Graham led a budget, reduced federal spending, rebuilt national defense, and paved the way for the Reagan tax cut. The Graham Rudman Act placed the first binding constraints on federal spending. Imagine that. And as chairman of the Senate Banking Committee, he steered the landmark Graham-Leach-Blyle-Act, which modernized the nation's banking, insurance, and securities laws. Since leaving the Senate, Senator Graham has continued to advance the cause for free enterprise

and fiscal responsibility. First, as vice chairman of UBS Investment Bank, now as vice chairman of loan star funds, and as a visiting scholar at the American Enterprise Institute, where he's working on a comprehensive plan to reform the American economy, no small task. His most recent books, The Myth of American Inequality, and the Triumph of Economic Freedom, Challenge Prevailing Narratives about markets, prosperity, and the future of the American economy. And Senator Graham is also a 2026, Bradley Prize winner. Welcome, Senator. Welcome to Voices of Freedom. Great to have you. Thank you, Rick. I very much appreciate being here, and I appreciate all the nice things you said about me. Let's get started. And let's talk a little bit about you to begin, Senator. You grew up in Georgia and Texas,

but your path to economics wasn't exactly a straight line. What ultimately drew you to economics as a discipline? Well, first of all, at the end of my freshman year at the university, I ran out of money. So I went to Atlanta to work, and I worked for 18 months for the CNS Bank. And during that 18 months, I took sort of anything that was offered in not school, which when I got back to the university, did add up to a lot. And then I took three physics courses. that I thought, maybe I'm good at physics. And so I went to see my professor, Professor Rooning, and I said, you know, I like academics.

I think maybe I want to be a college professor. What would you recommend to somebody who wanted to get a PhD in physics? This is 1963. So he said, in a totally honest answer, which is one of the great blessings of my life, If you really love physics more than anything in the world, do it. But if you don't, don't. He said there are no jobs.

You'll spend 15 years in a postdoc. You may never get tenure. And so I would recommend you not do it. So I walked out of his office to the National Science Foundation office on campus, and there was a new poster that had just been taped up on the wall that had the starting salaries of new PhDs in 1963, and economics was number one, $7,100, a nucleus of a fortune. And so I thought, well, you know, economics has something to do with the stock markets.

And so I signed up for an economics. And immediately I was attracted to it. It explained the world that I'd grow. I had no idea that anybody had ever formalized what I felt I already knew from my childhood and life's experience. And so I was hooked immediately. And I've been interested in it, studied it tried to understand it for my whole life. It's funny the twists and turns that careers take. What a great story. And it shows how one person's honesty really affects people's lot.

Absolutely. Not many colleagues associations. Right. Well, good for him. The world's better off for it. So then you spent 12 years teaching economics at Texas A&M before running for Congress. Was there a moment when you knew you wanted to take the ideas that you were talking about in the classroom into the political arena? I mean, that's a big leap, Senator, from academic.

To the halls of Congress. My mother certainly thought so. I tried to explain this moment to her unsuccessfully, I might say. My mother cried the day I quit my job at Texas of A&M. But what happened is I came to A&M. I was very young when I got my degree. I was about to turn 25. And I was successful at A&M.

Wendy, my wife came. met, fellow love, got married, had two children. I was promoted a full professor. And one morning, I just woke up as an adult. I had two children. Everything in my life was great, was making more money consulting that I was at the university. I had seen this house when I first moved there and I thought to myself, someday I went on that house and it came up for sale.

I went up and took the for sale side down and bought it. And I woke up one morning, I was indulged, and I didn't like what was happening. My life was great, but the life of the country wasn't great. And so I wrote an article for the Wall Street Journal on Energy. I knew we weren't running out of oil and gas. I didn't buy into the idea that the joyride was over. We would go out to learn to live on a list. That wasn't the America that I had signed on.

for. And so anyway, I got 100 first-class letters from that article in the Wall Street Journal. Now, I'd written a lot in academics, and Milton Friedman had cited an article I wrote as a very young economist in his price theory book. I'd been successful. I don't know how many people really read those articles other than the tenure committee, and that got me promoted and got me tenure, but suddenly people were interested in an alternative view of what was happening in America. So I started speaking out, and ultimately that led to me running for public offices. Fantastic. Well, I mean, you had some success in your early years in the House, too. You co-authored the

gram ladder budget, which, big deal, helped enable the Reagan tax cut, and the military buildup that many people credit with hastening the end of the Cold War. So that had to be heady stuff. What was it like to recognize as... It was heady stuff. Yeah. The first day in the Energy and Commerce Committee, I met David Stockman.

He and I... Remember? ...an alternative budget in 1980 before Reagan came. He then became OMB director. Our budget became the Reagan budget. Republicans had a good election. in 1980, and with the conservative Democrats that had voted for our budget, we had a majority. And so it was a long, hard battle, but it was very heady stuff.

I remember vividly the night I came home, it's 2 o'clock in the morning. I woke Wendy up, and with tears in my eyes said, did you hear about the moment? man who came to Washington to change America. I would have never said that to anybody else, but it was a special moment. And I remember when the reconciliation bill, which really set all this in the law past, I talked to the president on the phone, and so I was thinking, you know, what are you going to say? So rather than launching in the general conversation, I said, oh, Captain, our Captain, the fearful trip is done.

The ship is weathered every rack, the prize we sought is won. The port is near the bills I hear. The people are exulting. He loved it. I bet he did. So you were one of those conservative Democrats at that point, right? Yeah. I mean, you made, in today's world, an unusual decision.

You switched parties in 1983, signing your seat as a Democrat, winning it back as a Republican. How did you get there? Did it come at a cost personally, politically, at the grocery store? The Democrats voted to take me off the Budget Committee, which they had every right to do. Interesting. I had every right to change parties,

and the president and everybody else made it clear they'd be happy if I did. but I felt that if I just changed parties that there would be some people in my district who would believe or at least say they believed that I'd flown full of colors. So I decided the only honorable thing to do was to resign from Congress and run again as a Republican.

I told Lee Atwater, I was going to do this and he begged me not to do it and said, you know, we just lost the 1982 elections, and you're going to lose, and it's going to be the end of the Reagan presidency. And so I said, well, you know, I've made the decision. It's the right thing to. I'm going to do it. And I said, I believe I can win. He said, I don't believe you can win. And so anyway, in about 10 minutes, Reagan called me.

He said, Phil, Lee Outwater is having a stroke. And can you tell me, can you explain to me what's going on? And so I explained to him, you know, that I'd run as a Democrat, and there were no Republican elected officials at any level in my district. And to me, party didn't matter, America mattered, but that I had decided to change parties, but I thought the honorable thing to do was to resign and go back home and run again. And so Reagan said,

sounds to me like that's exactly what you should do. He said, people have a way of judging a man's character based on what he does. And I agree with you. Well, I resigned, ran again in a district where no Republican had gotten more than 37% of the vote. But Texas must have been changing at that time. They were changing. And after the fact, oh, I was a political genius. But before the time, it looked risky.

And I never brought Reagan into it because if I didn't win, I didn't want it to hurt him. And anyway, I didn't discover until I was reelected and the president invited me and my family down the White House to celebrate that at war had gone back into the office and told Reagan, Graham's going to lose and it's going to be the beginning of the end of your. a presidency. So what did Reagan say? Lee, the whole world does not revolve around my presidency. Now, can you imagine

that? Wow. Can you imagine it? He said, this is right for him. And Atwater said, where you're going to regret, and I called him back. And Reagan said, I can live. And Lee Atwater was the political

genius of his time. That's right. That's right. Well, anyway, I did win. I got 53% of the vote. I had nine Democrat opponents. And it was a simple election, as I told people, I'd choose to win y'all, tip O'Neill. I chose y'all. It wasn't complicated.

And then you decided to run for Senate in 1985. Interesting. Rick, because the day I got back to the House was sworn in, I sat down with the pad and wrote on the top of it things to do. And the first thing I put down was get a letter signed by the requisite number of House members committing to sustain a presidential veto on any bill that's vetoed trying to save money. And I had written down two in my phone line. And it was John Tower, then Senator from that.

who said, I am running for the election. I didn't want to run for the election. I was running because I thought I was the only person who could win. But now I believe you can win, and I wanted to tell you I'm announcing tomorrow that I'm not running again. And before I could say anything, he hung up. So I went home. I got my two children, Wendy, around the table,

said, you know, we got to make a big decision here. And finally, my baby son said, pop, you know you're going to run. And so I said, yes, I know I'm going to run. So I did. And I had won in my first housewaves by 122 votes. There were eight days of recounts. I was elected to the Senate by over a million votes. Wow.

And then in the Senate, you also had some remarkable success. Graham Rudman Hollings, Graham Leach Bliley, Commodity Futures Modernization Act. Big deals. Yeah, well, I went to Washington to try to get things done. Probably the best thing it ever happened to me when I was in Congress was I missed the first vote. I was trying to convince John Dingell that the world was. going to come to an end if I wasn't on the Energy and Commerce Committee, and I forgot to vote. You know, I'd won by 122 votes. All six of my opponents were going to run again, and my chief of

staff who was tough and mean, and she was born in a relocation camp at Germany after the war, her parents were Holocaust survivors. When I got back to the office, she yelled at me, I'd put everybody's job in jeopardy. A big deal was going to be made that I'd miss the first vote. But it induced me to think, how am I going to vote? What am I here to do? And I'd seen the movie Patton, I guess, with what caused me to think in these terms. I told to myself, I don't want to someday be sitting on the front porch of a nursing home.

And my grandchildren asked me what I did in the Senate. I didn't want to say a country went to hell, but I voted against it every step of the way. I wanted to be able to say I made it better. And I decided to vote on every issue the way I wanted the outcome to be. And I never worried about what it was going to look like or how to explain it. And I knew enough to always be able to explain why I did what I did. I killed the oil import fee in the Senate, and I spent nine months of my life defending it, because I represented Texas in the Senate, but I did defend it.

And it was tough, but it won me a lot of credibility, both in the Senate and at home. We could use more members like that today. Let's pivot a little bit to the present, and I think it's accurate that many Americans think both parties in Congress have failed by just not. dealing with the unsustainable levels of government spending, and you can count me in that group. You've always encouraged fiscal prudence. Can we recover it, or is it gone? Well, in fairness to the people that are there, when I put my hand on the Bible and took the oath, inflation was 13 and a half percent. Yes. The interest rates, 21 and a half percent. We had a question. We had a question. We had a question.

in America. And so it wasn't hard to get people's attention. Now you've got all these groups, and all of us are part of some of these groups, that are looking over the congressman's left shoulder, letting people back home know whether he cares about the old, the poor, the sick, the bicycle rider, list goes on and on. Often nobody's looking over the right shoulder. and so it's very difficult.

I wrote Graham Rudman because in 1984, the Reagan program, it worked. It was mourning in America. The inflation had stopped. The economy was exploding. The defense buildup had been successful. And nobody was paying any attention to the debt and the deficit. And so what I was trying to do was to force special interests to compete against each other. Anyway, the law had some success, but the triggering mechanism I had to compromise to take.

I was worried about it from the beginning, ended up being declared unconstitutional. And in order to get it reset, the way I wanted to do it to begin with, I had to agree that after the election that the new president could decide whether to suspend the law, and President Clinton, of course, was elected and suspended. Wow. So the parties are now so far apart that America's got to decide. I mean, the plain truth is Americans want the benefits of more government,

but they don't want to pay for it. Yes. And so they've got to make a decision. There's no free luncheon this. world. And at some point, we're going to have a come to Jesus moment when the decision will have to be made. Now, fortunately, when it was made in 1980, we had Ronald Reagan. And we had people that were serious about dealing with it. Hopefully, we'll be that fortunate in the future. Indeed. I mean, you've written a tremendous amount on the state of the American economy,

including in your most recent books, the myth of American inequality and the triumph of economic freedom. I mean, you just alluded to this. We're seeing more polarization today than perhaps in any time in a generation, including real division about the value of free enterprise, how markets work, whether prosperity broadly benefits everyone. And this polarization isn't just left versus right. It's within the right where this debate is going on. How do you think we've arrived at this point? Has the turmoil in any way changed your core economic beliefs, or, as I suspect, just reinforce them? No, look, I believe in economic freedom,

not because I have faith in it, which I do, but because I have evidence. It works. Yes. It worked in my life. In America, if you work hard and you make good decisions, you ultimately succeed. And so I know there are many, especially young people

who have come to question the value of economic freedom, but life has a way of awakening you to the truth. And the one thing we know about socialism is it doesn't work. And Americans have always demanded that the economy perform, and they've been unwilling to tolerate either Republicans, or Democrats that can't deliver economic growth. And so I'm confident the ship will light itself. And I'm also confident that freedom,

but especially economic freedom, has been the key to our progress in the past. It's the key to our progress in the future. If we can preserve economic freedom, there's no limits to the future of the American people. Do you think it's going to take a crisis, Yeah, I think so. Do you?

Yeah. And we will have one. Social security. Say again? Social security. Well, you know, Social security is going to become a problem, but please remember that if there had never been a social security system, the debt would have actually been higher than it is. On average, Social Security is more than paid for itself since 1935. I would begin with social welfare spending, some tough love reform in requiring able-bodied people to work.

You know, if we could get every able-bodied personal welfare to work, and we could get all of our seniors to work one more year, be a trillion dollars. So, you know, I still work. I lie and say, I have a million. a young wife who wants money and would put me to cheat nurse on quit working. But the truth is, I like

working. It keeps me alive. I like being around smart people. I learn something. People are now healthier than they've ever been longer than they've ever lived. And to make America

work, we're going to have to work long. and in the end we're going to be better off than happier. I never end the debate about spending and welfare and Social Security and Medicare. I never gave the moral high ground to the left. I was always doing it because I love people. And I never seated that ground because I didn't think they deserved it and I thought I deserved. Senator, I've got one last question for you.

What does it mean to receive a Bradley? prized. Well, you know, you have to control your ego in this world. It's sort of, it's a recognition of lifelong work of things you've done because you believe done. And I think I'm the first former public official, congressman, who's ever wonderful. So I guess it means I've overcome the stigma of having one's been a ball. I think you're right, yes. But I've gone straight. Now, you know, I was in academics for 12 years and I was in government for a quarter of a century. And I've now worked in finance almost as long as I was in Congress. So I've been blessed with three good lives. And I guess in a sense, surprises, recognition of the work I've done in each of those lives.

Mr. Phil Graham, thank you so much for joining us today. Thank you for your decades of leadership you have made. You continue to make a big difference, and we're deeply appreciative. We really look forward to celebrating with you and your family in a few weeks at the Bradley Prize's celebration. Thank you. Thank you very, very much. And as always, thanks to all of you for joining us on this episode of Voices of Freedom. Join us on Apple Podcast, Spotify, or wherever you are you.

get your podcasts for our next conversation on issues impacting our freedom and America's foundational principles. And make sure to subscribe so you don't miss an episode. I'm Rick Graber, and this is a Bradley Foundation podcast.