Speaker 1: There is a really big debate happening Washington, DC right now.
Speaker 1: And this is why I love doing the show, because
Speaker 1: reconciliation is already underway, the debate how it's going to
Speaker 1: be done, even before Donald Trump is inaugurated. And you
Speaker 1: have a lot to say about what happened in DC.
Speaker 2: Well, there's a major strategic decision, a major battle that
Speaker 2: is playing out right now in Washington, d C. And
Speaker 2: it concerns how do we win the biggest legislative victories
Speaker 2: of the Trump presidency. They are two paths to doing it.
Speaker 2: What's called one bill or two bill. Now that may
Speaker 2: sound our cane, but I think it's the difference between
Speaker 2: failure and success. This week, Donald Trump came and spent
Speaker 2: two two and a half hours with all the Republican senators.
Speaker 2: It's all we talked about that time together. I'm going
Speaker 2: to break it down and explain it to you because
Speaker 2: it matters enormously if you want to see President Trump
Speaker 2: and this Republican Congress deliver on our promises. How we
Speaker 2: do it, how we get to success matters a lot.
Speaker 1: We're going to deal with all that, but first I
Speaker 1: want to talk to you real quick about this new
Speaker 1: year and help that is needed for the people in Israel.
Speaker 1: On January the twenty seventh, the International Holocaust Remembrance Day
Speaker 1: will be here, and we're going to remember the great
Speaker 1: evil of the Holocaust, when millions of Jews were slaughtered
Speaker 1: during the Nazis regime and the reign that they had
Speaker 1: over people with just pure terror. Today, the rise in
Speaker 1: global anti Semitism and the constant attacks on Israel show
Speaker 1: us that it's more important than ever to remember the
Speaker 1: atrocities of the Holocaust to ensure it never ever happens again.
Speaker 1: And that's why I've partnered with the International Fellowship of
Speaker 1: Christians and Jews. They provide food, shelter, and safety to
Speaker 1: Jews in Israel and around the world, including those remaining
Speaker 1: Holocaust survivors. Your donation today will help provide food, water, medicine,
Speaker 1: and other basic necessities to the Jewish communities in need,
Speaker 1: and through your gift, you will stand with the Jewish
Speaker 1: people and against the growing anti das Semitism and hatred.
Speaker 1: So if you want to stand with Israel and the
Speaker 1: Jewish people, you can give a gift to show your
Speaker 1: support right now by visiting support IFCJ dot org. That's
Speaker 1: one word, support if CJ dot org. Or you can
Speaker 1: call them at eight eight eight four eight eight forty
Speaker 1: three twenty five.
Speaker 3: That's eight eight eight four eight eight forty three.
Speaker 1: Twenty five or SUPPORTIFCJ dot org. So center a lot
Speaker 1: of the news and we talked about that. This week
Speaker 1: on Verdict has been around the wildfires and all the
Speaker 1: politics are going on in California. But what you guys
Speaker 1: have been working on in Washington, d C. Is a massive,
Speaker 1: not only just strategy of how we're going to move
Speaker 1: forward with the Republicans having control of the House and
Speaker 1: the White House, but also this could be a big
Speaker 1: failure if we get it wrong. So break it down,
Speaker 1: explain people. There seems to be two pathways here people
Speaker 1: are fighting over and you have this conversation Donald Trump
Speaker 1: for several hours.
Speaker 2: Yeah. So, look, we had an incredible election in November.
Speaker 2: We have a mandate from the voters. It's now our
Speaker 2: job to deliver on that mandate, to deliver on the
Speaker 2: promises we made to the American people. How do we
Speaker 2: get it done? This week, Donald Trump came to Capitol Hill,
Speaker 2: he came up to DC for Jimmy Carter's funeral. He
Speaker 2: spent over two hours with all of the Republican senators
Speaker 2: up on the Capitol talking, and what we talked about
Speaker 2: virtually the entire time was how to proceed to enact
Speaker 2: his legislative agenda. Now, as you know, in the Senate,
Speaker 2: we have a filibuster. What is the filibuster? The filibuster
Speaker 2: is the requirement that you need sixty votes to take
Speaker 2: up major legislation. The effect of the filibuster is, because
Speaker 2: we have a fifty three vote majority of Republicans, you
Speaker 2: cannot take up major legislation in the Senate unless you
Speaker 2: get seven Democrats to support us. So the bulk of
Speaker 2: the mandate from the voters, things like securing the board,
Speaker 2: they're not going to get seven votes from Democrats. So
Speaker 2: we can't get it done through ordinary legislation. So how
Speaker 2: are we going to get it done. We're going to
Speaker 2: get it done using something called reconciliation. What is reconciliation.
Speaker 2: Reconciliation is a process that comes from a specific statute,
Speaker 2: the Budget Act of nineteen seventy four, and the Budget
Speaker 2: Act sets up that when both chambers pass a budget,
Speaker 2: they come together and you reconcile the budget. By the way,
Speaker 2: none of that matters. That's all gobledygook. Here's what matters.
Speaker 2: Under budget reconciliation. You only need fifty votes to pass it,
Speaker 2: not sixty. So budget reconciliation is the vehicle that you
Speaker 2: can get around the filibuster and pass our agenda. So
Speaker 2: the reconciliation matters enormously. Now, there are a whole series
Speaker 2: of rules for what's permissible on reconciliation and what isn't,
Speaker 2: and they're laid out in the statute. The basic idea
Speaker 2: is that on reconciliation, you can pass things that are budgetary,
Speaker 2: but you cannot pass things that are policy. Now, how
Speaker 2: should we perceive The House of Representatives and the Senate
Speaker 2: are having a big argument right now, and the House
Speaker 2: and Senator are on different places. What the House has
Speaker 2: argued for is that we should do one gigantic reconciliation bill.
Speaker 2: We should do a bill that secures the border. We
Speaker 2: should do a bill that rebuilds the military. We should
Speaker 2: do a bill that unleashes American energy. We should do
Speaker 2: a bill that extends the twenty seventeen Trump tax cuts
Speaker 2: and makes them bigger and bolder. And we should do
Speaker 2: all of that gigantic bill as part of one bill,
Speaker 2: one big, beautiful bill. It is how Speaker Johnson has
Speaker 2: said that Donald Trump has put.
Speaker 1: In And by the way, there's a lot of people
Speaker 1: that just heard what you said and go that sounds amazing.
Speaker 3: So what's the problem.
Speaker 2: The problem is it is a path that I think
Speaker 2: is almost certain to fail.
Speaker 3: Explain why.
Speaker 2: Yes, Look number one, doing a massive bill, complicating things,
Speaker 2: doing a ton of things all all at the same
Speaker 2: time makes it harder to accomplish. We just had a
Speaker 2: couple of weeks ago a big fight in Washington over
Speaker 2: a CR, a continuing Resolution. The first version of it fell.
Speaker 2: Why did the first version of it fall because a
Speaker 2: bunch of people criticized it, said it's too damn big.
Speaker 2: It's fourteen hundred pages, this is too much, and everyone
Speaker 2: went nuts and the whole thing collapsed. Apparently, the lesson
Speaker 2: we've taken from that is that CR was too big,
Speaker 2: and our solution is, let's have something ten times bigger.
Speaker 2: Let's have something so massive, because that's what it'll take
Speaker 2: to get the votes on board. I believe if we
Speaker 2: end up trying to put everything in one bill, it'll
Speaker 2: drag on for seven eight months and it'll collapse in August,
Speaker 2: and we risk losing all of the momentum we have
Speaker 2: right now to accomplish and deliver results on Trump's legislative agenda.
Speaker 2: So what's the alternative. When we were with President Trump,
Speaker 2: this is the case I made to him, and I
Speaker 2: argued this forcefully. The alternative is to do two reconciliation bills.
Speaker 2: The first bill we would take up right now, and
Speaker 2: it would do three things. Number one, it would secure
Speaker 2: the border. Number two, it would rebuild the military, and
Speaker 2: number three, it would unleash American energy. Why do we
Speaker 2: start with those three because those three are relatively easy
Speaker 2: among Republicans. We have widespread consensus on all three of those.
Speaker 2: On those issues. In the Senate, we got fifty three Republicans.
Speaker 2: We can get fifty three Republicans to come together through.
Speaker 3: Do you think that those three are unanimous?
Speaker 2: Yes, I think all three of those.
Speaker 1: So that's why it's a no brainer in the sense of, like,
Speaker 1: we get this done, and we can get done quickly.
Speaker 2: For that reason, it's a quick early win number one.
Speaker 3: And that's important. Momentums everything.
Speaker 2: Quick early wins matter. But more importantly, let's take the border,
Speaker 2: the number one mandate out of the election.
Speaker 3: Is secure the border.
Speaker 2: Now. Trump is going to show up on January twentieth,
Speaker 2: and he's going to issue a whole series of executive orders.
Speaker 2: I think we may see up to one hundred executive
Speaker 2: orders issue on day one. It is going to be
Speaker 2: shock and awe that is going to come, and I
Speaker 2: expect a lot of that to focus on the border,
Speaker 2: and we will see the border crossing numbers plummet. All
Speaker 2: of that is good. The biggest driver of that will
Speaker 2: be Trump ending catch and release and actually deporting people
Speaker 2: who are here illegally. However, you still need resources. You
Speaker 2: need Congress to come in and appropriate likely one hundred
Speaker 2: billion dollars to build the wall, to hire more border
Speaker 2: patrol agents, to hire more ice agents, to build more
Speaker 2: detention facilities and more detention beds, to purchase more assets
Speaker 2: like fixed wing and rotary wing aircraft and infrared and drones,
Speaker 2: all of the material you need to secure the border.
Speaker 2: To back up the policy. We can get all the
Speaker 2: Republicans on one page to do that and get that
Speaker 2: done quickly.
Speaker 3: That's a day one thing.
Speaker 2: It's not day one, but it's it's a month or
Speaker 2: two or three. It's early border security. We can come
Speaker 2: together and do that quickly. Secondly, the military, We have
Speaker 2: got to invest and rebuild our military. With the threat
Speaker 2: of China abroad, every enemy has gotten stronger. We need
Speaker 2: a serious investment in our military to enhance our ability
Speaker 2: to defend ourselves, in particular to rebuild our navy. China
Speaker 2: is kicking our ass. They are investing in their navy,
Speaker 2: and under Joe Biden and the Democrats, they have allowed
Speaker 2: our investment into our navy to wither dramatically. Now why
Speaker 2: is it important to do the military bill in an
Speaker 2: early reconciliation. Well, this is where strategy and the realities
Speaker 2: of legislation matter.
Speaker 1: By the way, this is a moment in the podcast
Speaker 1: where I would say everybody listening pay very close attention
Speaker 1: so you can advocate for because this might be the
Speaker 1: most brilliant thing set all day.
Speaker 2: In the middle of March, the Continuing Resolution is going
Speaker 2: to expire. That is what funds the government. When that happens,
Speaker 2: Chuck Schumer and the Democrats are going to use the
Speaker 2: expiration of the funding to hold Donald Trump hostage. Chuck
Speaker 2: Schumer wants to force a government shutdown. The biggest reason
Speaker 2: a government shutdown is really, really painful for Republicans is
Speaker 2: it shuts down much of the military, and Republicans care
Speaker 2: about defending this nation. Democrats, many of them simply don't.
Speaker 2: They're happy to shut the military down. They do it
Speaker 2: because it drives Republicans crazy. If we pass military funding
Speaker 2: as part of the reconciliation before March, we take it
Speaker 2: off the table. It's done, it's funded. It's not depending
Speaker 2: on the cr for funding.
Speaker 1: So even if there is a government shutdown, and this
Speaker 1: is where it gets complicated by what people understand, you
Speaker 1: do it early before there could be the threat of
Speaker 1: the government shutdown. If once you funded the military, regardless
Speaker 1: of a quote shutdown, the military still has everything they
Speaker 1: need to operate on normal term.
Speaker 2: It means we would have fully funded the military. It
Speaker 2: means we would have fully funded border security. So both
Speaker 2: of those continue. And now Chuck Schumer is saying, damn it,
Speaker 2: I'm going to shut the government down and we're not
Speaker 2: going to pay our s agents and the EPA will
Speaker 2: shut down.
Speaker 3: You're like, okay, not a bad deal.
Speaker 2: And suddenly Republicans are like, okay, Chuck, let us know
Speaker 2: when you're done with this little shutdown thing. It shifts
Speaker 2: the entire leverage, and it's how Trump wins that is
Speaker 2: hugely important. A third component is energy, and again you've
Speaker 2: got absolute consensus among Republicans that we want to unleash
Speaker 2: American energy. America is the world's energy superpower, with the
Speaker 2: number one producer of oil and gas. The Biden administration
Speaker 2: has been waging war on text energy, on oil and
Speaker 2: gas for four years. That's going to end January twentieth.
Speaker 2: But we can pass major legislation to really unleash energy,
Speaker 2: which a drives down prices and tackles inflation. The second
Speaker 2: huge mandate that came out of the election, secure the border,
Speaker 2: drive down inflation. We can do both of those early
Speaker 2: early on. And unleashing energy also drives job creation, which
Speaker 2: is another huge mandate. So all of this we can
Speaker 2: get done and done quickly. The second bill, I believe
Speaker 2: should be another reconciliation. We can take up more than one,
Speaker 2: and that should be tax reform. That should be taking
Speaker 2: the twenty seventeen Trump tax cuts that are expiring this
Speaker 2: year and extending them, making them permanent, and I hope
Speaker 2: making them bigger and bolder. Now, why should that be
Speaker 2: broken into a separate piece rather than combined with the
Speaker 2: first one. Because tax reform is really damn complicated. There
Speaker 2: are lots of trade offs that happen. They're trade offs
Speaker 2: that are trade offs between all of the different interest
Speaker 2: effects affected. So you have trade offs between C corporations
Speaker 2: and S corporations, big companies and little companies. You have
Speaker 2: trade offs between employers and employees. You have trade offs
Speaker 2: between individuals and families. You have trade offs between parents
Speaker 2: and kids. You have trade offs between how you handle seniors.
Speaker 2: You have trade offs between how you handle capital gains
Speaker 2: and dividends. And will resolve all of that, but that
Speaker 2: takes a lot of time. When we did this in
Speaker 2: twenty seventeen, I spent literally hundreds of hours negotiating all
Speaker 2: of these trade offs. You can't get that done in
Speaker 2: a month or two or even three.
Speaker 3: So what is that? Is that an eight month nine
Speaker 3: month timeline?
Speaker 2: Yeah, it'll be the way we ought to do it.
Speaker 2: I think we ought to pass the first reconciliation and
Speaker 2: get it done by say, March one. We can do
Speaker 2: border security, rebuild the military, and energy by.
Speaker 1: February or March, and then it's done, and then then
Speaker 1: it's off the table, and that's a big win.
Speaker 2: And then do tax reform. Look, if we leaned in,
Speaker 2: we could do tax reform by the end of July,
Speaker 2: right before the August recess. I think we either do
Speaker 2: it then or in September. Those are the two times
Speaker 2: on either side of the August August recess. But the
Speaker 2: trade offs you got to understand when when tax reform
Speaker 2: is happening, every single lobbyist in Washington is engaged because
Speaker 2: the tax code affects everything, and that process of trade
Speaker 2: offs just takes time.
Speaker 1: And when you say it takes time, can you paint
Speaker 1: a picture of what it looks like on Capitol Hill?
Speaker 1: Because there's certain let's say you're a hardcore lefty, you're
Speaker 1: gonna have certain lobbyists are coming to you saying we
Speaker 1: need X, Y and z. Then that office takes it
Speaker 1: up on their day to say we're gonna get this
Speaker 1: in there.
Speaker 3: Is that how that works?
Speaker 1: And there's conservatives saying we need this over here, and
Speaker 1: then there's radoffs.
Speaker 3: Is that how this is?
Speaker 2: Yes? Yes, but remember this is during reconciliation. So this
Speaker 2: is almost certainly a republican's only play.
Speaker 3: Okay, so it's only Republicans.
Speaker 2: In all likelihood, all of the Democrats will vote. Now,
Speaker 2: maybe they'll surprise us. But the last time we passed
Speaker 2: the Trump tax cuts. So you look at something like
Speaker 2: tax cuts, Historically tax cuts have been bipartisan.
Speaker 3: Yeah, not anymore.
Speaker 2: Not anymore. The Trump tax cuts in twenty seventeen and
Speaker 2: the House of Representatives zero Democrats voted for them. In
Speaker 2: the Senate, zero Democrats voted for them. By the way,
Speaker 2: that's a big shift from you go back to the
Speaker 2: eighties when Ronald Reagan was president, the nineteen eighty one
Speaker 2: tax cut. The lead author of the nineteen eighty one
Speaker 2: tax cut was Phil Graham, who was then a conservative
Speaker 2: Democrat in the House from Texas. Later became a Republican,
Speaker 2: but he was a Democrat. Then you look at nineteen
Speaker 2: eighty six, Reagan's major tax simplification. One of the leading
Speaker 2: authors of that was Bill Bradley, a liberal Democrats senator
Speaker 2: from New Jersey. It used to be that when you're
Speaker 2: cutting people's taxes, you could get both parties together. Today's
Speaker 2: Democrat party is so radical that, at least in twenty seventeen,
Speaker 2: they weren't willing to do it. So that's part of
Speaker 2: what makes this so complicated. The House of Representatives has
Speaker 2: a two vote majority, and you can lose votes on
Speaker 2: all sorts of things. Now here is the argument of
Speaker 2: the House for why they say they want one big
Speaker 2: beautiful bill. They say, well, we got to get the votes,
Speaker 2: and we need all of the elements in there to
Speaker 2: get the votes we need to get to two hundred
Speaker 2: and eighteen. And I got to say, I think that
Speaker 2: argument makes no sense whatsoever. So they're claiming we got
Speaker 2: to have border security in there because they're people who
Speaker 2: wouldn't vote for the tax cut unless border security was
Speaker 2: part of it. And they're also claiming we got to
Speaker 2: have the tax cut in there because they're people who
Speaker 2: wouldn't vote for border security, but.
Speaker 3: They vote for that unless the tax cut's there.
Speaker 2: I'm gonna call bs on all of that, and I'll
Speaker 2: tell you We sat down and I made this point
Speaker 2: to President Trump. So I spoke very forcefully making this
Speaker 2: case out. I said, mister President, I went because the
Speaker 2: House had leaned in. They said this is the only
Speaker 2: way we can get it past one big beautiful build.
Speaker 2: And so Trump came in and said, hey, that's what
Speaker 2: the House has told me.
Speaker 1: Let me ask you this, just to paint the picture
Speaker 1: of the room. When you guys meet with him. Are
Speaker 1: you seated yep? And then when you talk to him
Speaker 1: when you're making your points, do you stand? How does
Speaker 1: it what does it look like? Is it very chill room?
Speaker 1: Is it a is a casual room or very formal.
Speaker 2: So we're in a room called the Mansfield Room, which
Speaker 2: is a room named for Mike Mansfield, former Senate majority
Speaker 2: leader Democrat senator from Montana. Has a big picture of
Speaker 2: Mike Mansfield holding a pipe, the big painting on the wall.
Speaker 2: It is a large room in the Capitol and when
Speaker 2: we met with him, there's a table that's basically a
Speaker 2: giant table set in a rectangle, so we're all facing
Speaker 2: each other. Okay, so you know, fifty three of us
Speaker 2: plus the president around a table looking at each other.
Speaker 2: And it's a very nice room, and it's where we
Speaker 2: have lunch every day. It is it's actually one of
Speaker 2: the perks of being in the majority. So the majority
Speaker 2: has lunch in the Mansfield Room. The minority has lunch
Speaker 2: in the lbjroom, which is smaller. So when we became
Speaker 2: a majority, we got into the bigger room, which is
Speaker 2: nice because the LBJ room it's pretty tight quarters. And
Speaker 2: so there's a lot more space in the Mansfield room.
Speaker 2: So look, I made a case to him because he
Speaker 2: came in and he'd been told by the House, Hey,
Speaker 2: this is the only way we can get it done.
Speaker 2: And I said, miss President, I want you to understand something.
Speaker 3: I said.
Speaker 2: We had a meeting earlier today of all of the
Speaker 2: Senate committee chairs, all of us, every single one of
Speaker 2: us agrees that doing this with two bills is the
Speaker 2: only way to get it done. And one bill has
Speaker 2: a massive, massive risk of failure.
Speaker 3: And extending it to eight months.
Speaker 2: And I pointed out to him, I said, look, there
Speaker 2: are fifty three of us in this room. I want
Speaker 2: you to look around the room. Every single one of
Speaker 2: us agrees. All of us I agree, John Thune agrees,
Speaker 2: Lindsey Graham agrees. Said look, you've got Susan Collins and
Speaker 2: Ran Paul. They agree on nothing. They agree on this.
Speaker 2: I want you to understand why. And one point that
Speaker 2: I made to him is I said, look, you need
Speaker 2: to understand. I love the House of Representers. I love
Speaker 2: Mike Johnson. He's a great man, he's a good friend.
Speaker 2: He has a nearly impossible job. So I feel for
Speaker 2: how difficult that job is. The House of representatives. More
Speaker 2: than sixty percent of the House was not here when
Speaker 2: we pass twenty seventeen texts.
Speaker 3: Wow, that a significant number.
Speaker 2: So they do not understand what goes into it. They
Speaker 2: do not understand these thousands of hours of back and forth. Look,
Speaker 2: they're passionate, they believe in what they're saying, but they
Speaker 2: don't have the experience of having gone through this. By
Speaker 2: the way, they also many of them don't understand the
Speaker 2: rules of records faciliation of what the Senate could do.
Speaker 2: Remember I talked about we can do budgetary things and
Speaker 2: not policy things. There's always a battle between the House
Speaker 2: and Senate because the House gets mad at the Senate.
Speaker 2: You damn senators, you won't do what we want. It's like, well,
Speaker 2: there's a statue that governs what we can do, and
Speaker 2: it does limit what the Senate could do. On reconciliation,
Speaker 2: that'll be a back and forth. It always is. Every
Speaker 2: reconciliation there's a battle between the House and Senate because
Speaker 2: the House wants to do things that the Senate is
Speaker 2: not allowed to do under the terms of the statue.
Speaker 2: What I told President Trump is I said, listen, if
Speaker 2: we put this all in one bill, we have a
Speaker 2: massive risk of failure. If we do it in two bills,
Speaker 2: we can start with a huge victory, securing the border,
Speaker 2: rebuilding the military, unleashing American energy, and then we will
Speaker 2: get tax cuts past. It's just going to take longer.
Speaker 2: And you know, on the argument that, well, gosh, this
Speaker 2: is the House leadership's argument, we need each piece as
Speaker 2: a sweetener to get the votes. What I've said in
Speaker 2: response is, Okay, show me this magical unicorn of a
Speaker 2: House member. Cause I know most of these guys. Yeah,
Speaker 2: so show me. Don't talk about well, I got members,
Speaker 2: I can't get their vote without it. All right, tell
Speaker 2: me who you're talking about, crazy right wing knuckle draggers. Okay,
Speaker 2: I'm a crazy right wing knuckle dragger. Those are my peeps.
Speaker 3: I'll go talk to them.
Speaker 2: I'll go talk to them. But when I'm talking to them,
Speaker 2: they're not saying that. Are you talking about really moderate Republicans?
Speaker 2: All right, Fine, that's a different that's a different, different
Speaker 2: problem to solve. But we talk about that. One of
Speaker 2: the issues that complicates this is what's called the salt tax.
Speaker 3: Explain that.
Speaker 2: Okay, so the salt tax is state and local tax deduction.
Speaker 2: So One of the things that happened when we passed
Speaker 2: the twenty seventeen tax cut is we eliminated. Initially, we
Speaker 2: eliminated deducting state and local taxes. So it used to
Speaker 2: be before twenty seventeen, if you're in California and you
Speaker 2: pay a crap ton of taxes to the state of California,
Speaker 2: you could deduct all those taxes on your federal taxes. Now,
Speaker 2: what that ended up doing was having the federal government
Speaker 2: subsidize big blue states that tax the hell out of
Speaker 2: their constituents, and big blue states that have massive taxes.
Speaker 2: You just got it deducted from your federal taxes. And
Speaker 2: so we were, like Gavin Newsom, keep raising taxes, the
Speaker 2: Feds will subsidize you on that. So in twenty seventeen
Speaker 2: we eliminated that. Now we eliminated it, but we actually
Speaker 2: allowed some deduction. We put a cap of ten thousand dollars,
Speaker 2: so you can deduct up to ten thousand dollars of
Speaker 2: state in local taxes. So you and I are both
Speaker 2: homeowners in Texas, the biggest state tax we pay is
Speaker 2: property tax. So you and I deduct our property tax
Speaker 2: on our federal income tax. But it's capped at ten
Speaker 2: thousand dollars. So if you're paying more than ten thousand dollars,
Speaker 2: it's on you. It's on you. Now, what's the political problem.
Speaker 2: The political problem is there are a number of House
Speaker 2: Republicans who come from blue states, in particular New York
Speaker 2: and California, and the blue state Republicans, the New York
Speaker 2: and California Republicans, have a problem because eliminating the salt
Speaker 2: deduction really impacted people in high tax states because unfortunately,
Speaker 2: their big government democrats keep taxing the hell out of them.
Speaker 3: We talked about this in California this past week.
Speaker 2: Those New York and California Republicans feel an obligation to
Speaker 2: do something to help the problem of not being able
Speaker 2: to deduct more than ten more than ten now, and
Speaker 2: so the argument is, well, if we add border security
Speaker 2: to it, they'll have to vote for it because they
Speaker 2: can't vote against border security. So this is where the
Speaker 2: argument makes no sense. I'm like, all right, first of all,
Speaker 2: we tee up the first bill, secure in the border,
Speaker 2: rebuilding our military, unleashing American energy. I don't know a
Speaker 2: Republican is voting against that. The mandate out of this
Speaker 2: election was secure the border. Show me the idiot Republican
Speaker 2: who is going to say, no, I'm for open borders.
Speaker 2: That is a recipe for disaster. You're retiring when you're
Speaker 2: doing that, because you ain't running again.
Speaker 3: And if you do, you're gonna get primary, You'll get killed.
Speaker 2: None of them will vote against border security. They're just
Speaker 2: not going to.
Speaker 3: They know the American people, they know what they want.
Speaker 2: On the salt issue. Look, will there have to be
Speaker 2: an accommodation for New York and California Republican? Sure, there will.
Speaker 2: There will have to be an accommodation. I understand that
Speaker 2: that's part of why this takes a while. You got
Speaker 2: to negotiate. There are geographic and regional issues that you
Speaker 2: have to negotiate, and there's a trade off. Now, will
Speaker 2: the accommodation be restoring in full the state and local
Speaker 2: tax deduction? I don't believe it will be, because that's
Speaker 2: terrible tax policy. That means the red states are all
Speaker 2: subsidizing the blue states, and they're bad tax policy. Here's
Speaker 2: what I think the resolution will be. This action idea
Speaker 2: I got from Norquest. Grover Norquist runs Americans for Tax Reform.
Speaker 2: He's a longtime friend of mine, one of the eating
Speaker 2: thinkers when it comes to tax policy and Grover's idea. So,
Speaker 2: right now, there is a marriage penalty in how you
Speaker 2: deduct state and local taxes. You as an individual, if
Speaker 2: you file your tax return, you could deduct up to
Speaker 2: ten thousand dollars of state and local taxes. If you
Speaker 2: are married, as you are, you and your wife can
Speaker 2: deduct a total love ten thousand dollars on state and
Speaker 2: local taxes. What Grover suggests it as a fix is
Speaker 2: eliminate the marriage penalty, which means you and your wife
Speaker 2: would be able to deduct not ten thousand, twenty thousand,
Speaker 2: so it doesn't hurt you.
Speaker 3: You're not being penalized forhur being married.
Speaker 2: Right now, that's good tax policy as well, getting rid
Speaker 2: of the marriage penalty. One of the negative things federal
Speaker 2: law does is discourages marriage, and marriage is a very
Speaker 2: good thing for our society. I think will end up,
Speaker 2: if I were to predict the bill that gets enacted,
Speaker 2: I think will end up eliminating the marriage penalty on
Speaker 2: the salt deduction, which lets the California and New York
Speaker 2: Republicans go back and say, hey, big win, big win,
Speaker 2: We doubled the deduction. Now, what it doesn't do is
Speaker 2: give a multimillion dollar tax break to Michael Bloomberg. What
Speaker 2: it doesn't do is give a massive benefit to billionaires
Speaker 2: in New York and California who have massive taxes. And
Speaker 2: I think that's where we'll end up. But again, that
Speaker 2: takes time, and so I don't know how we resolve this.
Speaker 2: I think we'll end up seeing the two proceeed on
Speaker 2: parallel tracks. I think we're gonna see the set the
Speaker 2: house for a while, go forward and say we're doing
Speaker 2: one big, beautiful bill. Yeah, And I think the setate's
Speaker 2: gonna say, yeah, that's fine, We're moving forward.
Speaker 3: We're not wasting time.
Speaker 2: You're going to go forward with our bill on the border,
Speaker 2: on the military, and on energy because we can get
Speaker 2: it done. We want a victory and this is how
Speaker 2: you win. And look, I don't know how it resolves,
Speaker 2: but I can tell you I think it is an
Speaker 2: enormously consequential question. And frankly, this this is exactly the
Speaker 2: reason I think people listen to Verdict for sure, because
Speaker 2: there is not another show. There's not a news.
Speaker 3: No one's talking about this or covering it or not
Speaker 3: a podcast.
Speaker 2: People don't understand this, and I will tell you this
Speaker 2: is the single biggest topic that the Senate and House
Speaker 2: and President Trump are discussing right now, and nobody is
Speaker 2: covering it in the news. But the reason it's the
Speaker 2: single biggest topic is I believe it is the difference
Speaker 2: between succeeding on Trump's legislative agenda and winning massive victories
Speaker 2: or losing and having a crushing failure. And in my
Speaker 2: view of failure is not an option. We cannot fail,
Speaker 2: which means we've got to do it right.
Speaker 1: So let's talk strategy to wrap this up, because I
Speaker 1: think this is an important point. I go back to
Speaker 1: one of the best I think PR moves I've ever
Speaker 1: seen was in nineteen ninety four, Contract with America. Firste
Speaker 1: hundred days, We've got a contract with the American voters,
Speaker 1: New Gingers comes in, we get the House for the
Speaker 1: first time in forty years.
Speaker 3: We're delivering quickly.
Speaker 1: I believe a lot of voters feel like that is
Speaker 1: the mentality right now, and if we wait eight months,
Speaker 1: I think there's a lot of people going to be
Speaker 1: very angry that just took so long to get it done.
Speaker 1: And this is about momentum because and you've been in
Speaker 1: Washington for a while, how important is momentum out of
Speaker 1: the shoot here to get the win early to then
Speaker 1: have momentum on other issues. Because I also think that
Speaker 1: helps people get along. I think that helps conservatives go, hey,
Speaker 1: we just had a big win. We just got along,
Speaker 1: we just worked out this last deal. Let's do it again.
Speaker 2: Look a quick win. Momentum helps when winning produces winning.
Speaker 2: There is an argument from the House, well, we can't
Speaker 2: do two reconciliations. It's too hard for us. We only
Speaker 2: get one bite at the apple. I don't find that
Speaker 2: remotely plausible. Again, show me the hypothetical Republican that all right,
Speaker 2: we passed the bill security of the border, and then
Speaker 2: the Republicans says, all right, I don't want to do
Speaker 2: tax reform. I'm out. And by the way, if we
Speaker 2: do nothing on tax reform on December thirty, first, there
Speaker 2: is a four and a half trillion dollar tax increase
Speaker 2: that happens automatically. There is not a Republican in the
Speaker 2: House or Senate that is willing to vote for a
Speaker 2: four and a half trillion dollar tax increase. So we
Speaker 2: have to get this done. So in my view, yes, momentum.
Speaker 2: If you score victories, you win victories, That helps you
Speaker 2: win more victories, That helps you win more victories to say, hey, wait,
Speaker 2: we can get this done. This is good. Let's get
Speaker 2: another victory. Let's get another victory. Let's get another victory.
Speaker 2: But there's an even broader risk if the one big
Speaker 2: beautiful bill would happen, and it would happen in say
Speaker 2: eight months. Okay, fine, that would be okay. I'm very
Speaker 2: concerned we get to eight months and the whole thing
Speaker 2: collapses because when you make something so complicated, you put
Speaker 2: so many pieces in there, you just increase the risk
Speaker 2: of people bailing for one reason or another. It becomes
Speaker 2: much harder to resolve the trade offs when you complicated.
Speaker 2: I think one of the keys to getting things done
Speaker 2: is simplifying and focusing on where you can come together.
Speaker 2: And I think breaking it up and doing a big
Speaker 2: victory on the border of the military and energy, and
Speaker 2: a big victory then next on taxes. I think that's
Speaker 2: the path to success.
Speaker 1: Final question for you on this, and that deals with
Speaker 1: the listeners. They're going to say, what do I need
Speaker 1: to do? Is this one of those moments where you
Speaker 1: encourage your member of Congress to get a quick win
Speaker 1: and you say, hey, I sent you there. I want
Speaker 1: to secure border. I want to encourage you to do this.
Speaker 2: Now, Look, I don't know that this is the kind
Speaker 2: of issue that you will. I mean, if you want
Speaker 2: to call your congressman, you can. I don't know that
Speaker 2: this is the kind of issue that that is needed.
Speaker 2: This is more just look deliver wins. This is for
Speaker 2: you to understand what's going on because these are the
Speaker 2: discussions and fights that are happening behind the scenes and
Speaker 2: what the stakes are. And what we try to do
Speaker 2: in Verdict is explain things that the media won't explain
Speaker 2: to you.
Speaker 3: Yeah, they're not touching this in at all.
Speaker 1: Don't forget. We did this show Monday, Wednesday, and Friday.
Speaker 1: This is why it's going to be a very fun
Speaker 1: year here on Verdict. So make sure you grab this podcast.
Speaker 1: Hey that subscribe auto dalwo button. Many of you maybe
Speaker 1: watched this on YouTube. Make sure you hit that follow
Speaker 1: on YouTube as well so you don't miss one of
Speaker 1: these video episodes as well. And the Center and I
Speaker 1: will see you back here on Wednesday morning.