Speaker 1: Bloomberg Audio Studios, podcasts, Radio News House speaker Mike Johnson
Speaker 1: joins us. Now, thank you so much for your time
Speaker 1: this morning. We'd love to begin there. Have you received
Speaker 1: a call back from mister Musk.
Speaker 2: Yes, Look, Elon's a good friend. We texted late last night.
Speaker 2: We're going to talk this morning. I just want to
Speaker 2: make sure that he understands what I think everybody on
Speaker 2: Capitol Hill understands. This is not a spending bill, my friends.
Speaker 2: This is a budget reconciliation bill. And what we're doing
Speaker 2: here is delivering the America First agenda. This is all
Speaker 2: the President's priorities and all the priorities of the Republican Party.
Speaker 2: Everything we promise the American people. That is what we
Speaker 2: are delivering with this piece of legislation. And the reason
Speaker 2: we're using the reconciliation process is because that is the
Speaker 2: only way to get around the sixty vote threshold in
Speaker 2: the Senate.
Speaker 3: Everybody probably recognizes.
Speaker 2: Chuck Schumer and the Democrats are in no mood and
Speaker 2: not going to be helpful in delivering President Trump's agenda
Speaker 2: for the people.
Speaker 3: We have to do it this way.
Speaker 2: We can do it with fifty one votes in the
Speaker 2: Senate only, and that's the urgency of the hour, and
Speaker 2: we have to do it quickly for all the reasons
Speaker 2: we can.
Speaker 3: Discuss this morning.
Speaker 1: So did you get a sentence from Elon Muster in
Speaker 1: those tex exchange that he was going to stop his
Speaker 1: insistence on this bill that he thinks needs to be killed.
Speaker 2: He seems pretty dug in right now, and I can't
Speaker 2: quite understand the motivation behind it. But I would tell
Speaker 2: you that what we're delivering in this bill is not
Speaker 2: only historic tax cuts, but historic savings as well.
Speaker 3: He seems to miss that.
Speaker 2: I mean, the projection is that this legislation is going
Speaker 2: to save us one point six trillion dollars with a t. Now,
Speaker 2: there's never been a piece of legislation ever delivered in
Speaker 2: the history of government on the face of the earth
Speaker 2: that saves that much money. So this is truly historic. Now,
Speaker 2: is it enough? No, because all three of us understand.
Speaker 2: But we have a large federal debt. We've had deficits
Speaker 2: for some time, and it's a serious concern. In fact,
Speaker 2: it's the number one threat to our national security. But
Speaker 2: this is the biggest step using that problem that Congress
Speaker 2: has ever delivered, and we must do it, and I
Speaker 2: will hasten to say this. I've told Elon and tell
Speaker 2: everyone this is the first of a series of steps
Speaker 2: that we will take to bring that debt under control.
Speaker 2: But you can't turn.
Speaker 3: It on a dime.
Speaker 2: It took us decades to get into this situation, so
Speaker 2: we have to we have to do it incrementally, and
Speaker 2: this is a huge step forward in that endeavor.
Speaker 1: What's the driving force behind Elon Musk's problems with this bill?
Speaker 1: Has he asked you directly to potentially keep the electric
Speaker 1: vehicle benefits we saw under the Inflation Reduction Act of
Speaker 1: the Biden error into the bill.
Speaker 2: Look, I'll let everybody draw their own conclusions about Elon's motivations.
Speaker 3: I'll tell you that.
Speaker 2: I mean, obviously, the ev mandate going away is I'm
Speaker 2: sure a concern for you know, the leader of.
Speaker 3: Tesla and other things as well.
Speaker 2: But I think there's a lot of confusion out there
Speaker 2: about what the legislation is. There's certainly a lot of misinformation.
Speaker 2: I mean, the Democrats have been engaged in this effort,
Speaker 2: this strategy for many, many weeks and many months. But
Speaker 2: remember it took us over a year to develop this
Speaker 2: piece of legislation. We have eleven different committees in the House,
Speaker 2: all the areas of jurisdiction that worked on the reconciliation
Speaker 2: effort to reconcile the budget. And what we're going to
Speaker 2: deliver her again is historic tax relief and savings. At
Speaker 2: the same time, if we do not get this bill done,
Speaker 2: the tax cuts of twenty seventeen, the tax cuts and
Speaker 2: JOBZAC will expire at the end of December. Every American
Speaker 2: will receive the largest tax increase in US history, all
Speaker 2: at once.
Speaker 3: It would be.
Speaker 2: Devastating for the economy. So we've addressed that here. We've
Speaker 2: made the tax cuts permanent, and we've infused.
Speaker 3: It with a pro growth.
Speaker 2: Series of policies that will get the economy going again.
Speaker 2: It will be jet fueled to the economy because we're
Speaker 2: going to reduce wasteful spending. We're going to reduce taxes,
Speaker 2: and we're going to reduce regulations as well.
Speaker 3: And that is what will allow.
Speaker 2: Job creators and the energy sector and everyone else to
Speaker 2: get going again.
Speaker 1: And your version of the bill, of course, increases the
Speaker 1: salt deduction cap, which yesterday Senatement Jardy leader John Thune said, quote,
Speaker 1: there isn't a single Republican senator who cares much about
Speaker 1: the salt issue. You and I both know you cannot
Speaker 1: pass this bill without increasing the salt deduction cap. How
Speaker 1: do you envision that deduction changing given the fact that
Speaker 1: no senator Republican senator wants.
Speaker 3: A vote for this, Well, I appreciate that they don't.
Speaker 2: They all come from red states, right as do I,
Speaker 2: and we have very different perspective on salt than our
Speaker 2: colleagues in the Blue states, for example, in California and
Speaker 2: New York, in New Jersey.
Speaker 3: But that is the reality in the House.
Speaker 2: Remembering, and they have to remember my senate friends and
Speaker 2: colleagues have to remember.
Speaker 3: I have to deliver two.
Speaker 2: Hundred and seventeen votes to get that thing across the
Speaker 2: line if they modify it. So I had lunch with
Speaker 2: my senate friends Tuesday, last two weeks ago, before we
Speaker 2: passed the bill in the House on that Thursday, and
Speaker 2: I encourage them to modify it as little as possible,
Speaker 2: right because I gave a metaphor, I said, my friends,
Speaker 2: I am crossing the Grand Canyon on a piece of
Speaker 2: dental flaws.
Speaker 3: Okay, olibrium that we reached here.
Speaker 2: It took quite a bit of time to get to
Speaker 2: where we are, and you can't load me up on
Speaker 2: either side. And if you go and slash the salt
Speaker 2: cap that we negotiated carefully for over a year, it's
Speaker 2: going to make it very difficult for me to deliver
Speaker 2: the necessary number of votes. Remembering I can only lose
Speaker 2: three in the House. They can only lose three in
Speaker 2: the Senate to get this done.
Speaker 3: So we're all working together.
Speaker 2: It's one team, House and Senate together, united in this effort.
Speaker 2: They understand that, and I think they understand certainly Leader
Speaker 2: Thun and the leaders over there understand the complexity of
Speaker 2: what we're having to deal with here, Speaker.
Speaker 4: Johnson, just to sort of put a bow on it,
Speaker 4: So forty thousands still likely to remain the cap.
Speaker 2: That's what we negotiated here, and I'm certainly trying to
Speaker 2: hold to that number.
Speaker 3: And look, we've paid for it.
Speaker 2: I think we've got it worked out and all the
Speaker 2: math and the legislation, and I think it's something that
Speaker 2: I know they're not in love with it, but I
Speaker 2: certainly hope they'll tolerated so we can maintain our vote
Speaker 2: tally over here.
Speaker 4: Speaker Johnson, as you walk that piece of dental floss
Speaker 4: over the Grand Canyon. There is this question of how
Speaker 4: the bill is currently being used, whether it's for budget
Speaker 4: negotiations and budget reconciliation over the next decade, or whether
Speaker 4: it's to negotiate trade agreements. There is two point eight
Speaker 4: trillion dollars of revenue that is being penciled in by
Speaker 4: the Congressional Budget Office from tariffs that might be used
Speaker 4: as a negotiating tactic might not be How do you
Speaker 4: understand the way that tariffs are looked at as part
Speaker 4: of this budget balancing Act.
Speaker 2: Well, it hasn't been included in the calculations, and that's
Speaker 2: because groups like the CBO, the Congressional Budget Office, as
Speaker 2: you noted, won't give us any credit for that.
Speaker 3: But it is very real.
Speaker 2: I mean, the revenue is real, and it is realized,
Speaker 2: and it's not included in the calculation that we've made
Speaker 2: or they've made. But obviously it's a big factor.
Speaker 3: We believe that we're.
Speaker 2: Going to bring about a rory and economy again. And
Speaker 2: it's not based on conjecture or ground list optimism. I mean,
Speaker 2: this is based on the history. We did this in
Speaker 2: twenty seventeen after the first two years of the Trump
Speaker 2: administration when we passed the tax cuts and jobs ac
Speaker 2: We reduce taxes, we reduce regulations, and the economy is roaring.
Speaker 2: I mean, you all remember before COVID, we had the
Speaker 2: greatest economy in the history of the world.
Speaker 3: I mean, everybody was doing better.
Speaker 2: Every demographic wages were up, the job participation numbers where
Speaker 2: at record highs, inflation was down, and manageable things were
Speaker 2: going great.
Speaker 3: And then COVID hit.
Speaker 2: So we're going to do that same series of policies,
Speaker 2: implement that same philosophy, but this time, as I say,
Speaker 2: on steroids, and it's going to make a major difference
Speaker 2: for every in everybody's lives.
Speaker 3: Spare Johnson.
Speaker 4: A lot of people in Marcus are concerned about a
Speaker 4: number of provisions here and actually don't think they will
Speaker 4: spur growth, one of them being Section eight ninety nine,
Speaker 4: which talks about taxing foreign investment in the United States
Speaker 4: from specific countries that have non tariff barriers like the
Speaker 4: VAT tax and other things that have been contentious during
Speaker 4: negotiations of trade deals. How much do you see that dampening.
Speaker 4: I mean, there's not a concern for you because right
Speaker 4: now around the world. There are people wondering whether they
Speaker 4: can still invest in the United States without getting penalized
Speaker 4: for it.
Speaker 2: Yes, Look, there's a complexity to the tariff negotiations. I mean,
Speaker 2: we tip our hat to the White House, and President's
Speaker 2: strategy is working. As you know, there's more than seventy
Speaker 2: five countries renegotiating their trade agreements right now, finalizing that
Speaker 2: even as we speak, that's going to.
Speaker 3: Be better for America because it will be more fair.
Speaker 2: You know, I'm always liking myself to be a Reagan
Speaker 2: Republican and free trade is one of our core principles
Speaker 2: that we've all supported over the years. And every time
Speaker 2: I would say that over the last several years to
Speaker 2: President Trump, he would say, yes, free and fair trade,
Speaker 2: and he's right. I mean, this is a disparity that
Speaker 2: must have needed to be addressed and it has been.
Speaker 2: So we think in total, this is going to be
Speaker 2: good when it's all when all the dust settles on
Speaker 2: the tariff negotiations and the new trade agreements.
Speaker 3: So it's going to be good for America and good
Speaker 3: for the world. And so we're factoring that in.
Speaker 2: We're working in tandem with the White House, and it's
Speaker 2: part is going to stay in calculation in the la.
Speaker 4: Liaker Johnson, just to be clear that provision will stay
Speaker 4: in that is important to you.
Speaker 3: Look, I think it is.
Speaker 2: I mean, obviously the bill is still a live instrument
Speaker 2: that's being worked on in the Senate, so we'll see
Speaker 2: if they modify those provisions. But I think for now,
Speaker 2: I think that's good policy for US, and I want
Speaker 2: to say to foreign investors, you're in good stead to
Speaker 2: invest in America. This is the time to do it,
Speaker 2: because the American economy is about to take off again
Speaker 2: and it's going to be good for you and good.
Speaker 3: For the world.
Speaker 2: We're the largest trading partner for most other nations. They
Speaker 2: need America, and a.
Speaker 3: Strong America is good for the whole world.
Speaker 2: And that is what we are going to bring about
Speaker 2: with these sound policies and pro growth initiatives.
Speaker 1: Speaking Johnson, you and your colleagues have a self imposed
Speaker 1: July fourth deadline. Partially that is because you have to
Speaker 1: raise the debt ceiling. Are you considering raising the debt
Speaker 1: limit if this deal isn't finished by July fourth with
Speaker 1: a different measure, Well.
Speaker 3: It'd be very difficult to do it.
Speaker 2: I mean, it would require bipartisan measure in that regard,
Speaker 2: and I would like to believe that Chuck Schumer and
Speaker 2: the Democrats and the Senate would do the right thing,
Speaker 2: but I wouldn't count on that. That debt cliff as
Speaker 2: we're regarding it, is coming soon, and that's why Secretary
Speaker 2: Besson has said we've got to get this done by
Speaker 2: Independence Day, and I think it'd be a great celebration
Speaker 2: for all of us. But it's not just because of
Speaker 2: the debt ceiling. It's also because we need to get
Speaker 2: tax relief in this new roaring economy to the American
Speaker 2: people as quickly as possible. They're owed that and this
Speaker 2: is going to be a great thing for everyone. And
Speaker 2: I have to also think about the politics of it.
Speaker 3: Right we have a midterm election coming up in twenty
Speaker 3: twenty six.
Speaker 2: If we get this done soon and quickly this summer,
Speaker 2: then everyone will feel those effects before they have to
Speaker 2: go vote again in that midterm election. We want to
Speaker 2: keep the House majority and keep this going for four
Speaker 2: years for President Trump and not two. And if we
Speaker 2: lost the majority, there's no doubt that the House Democrats
Speaker 2: would try to impeach the president and everything would be
Speaker 2: truly chaotic for investors and job creators and consumers. So
Speaker 2: we have to keep this going, keep the momentum going.
Speaker 2: The timeline is very important, and that's why I put
Speaker 2: this on a very aggressive schedule.
Speaker 3: I said the early part of this year that we.
Speaker 2: Would pass the big, beautiful bill out of the House
Speaker 2: before Memorial Day, and people laughed, they mocked me when
Speaker 2: I said that, But we beat it by four days.
Speaker 2: We're going to stay on track and we're going to
Speaker 2: deliver for the American people.
Speaker 1: Will you have exactly twenty nine days to hit that deadline?
Speaker 1: Are you saying there's no plan B for raising the
Speaker 1: debt ceiling if this bill is not done between House
Speaker 1: Republicans and House Senators.
Speaker 2: Look, Republicans in a House and Senate will deliver and
Speaker 2: will take care of our business one way or the other.
Speaker 2: But I'm just telling you the smartest and most efficacious
Speaker 2: way to do this is to stay on this schedule
Speaker 2: and deliver for the people. And that's what we're doggedly
Speaker 2: determined to do or laser focused on it. And if
Speaker 2: we take our focus off of that, then the strategy
Speaker 2: doesn't work. So I'm telling you that we are working
Speaker 2: on that regard. Leader Thun and I are in constant communication.
Speaker 2: He understands that deadline as well.
Speaker 3: The Secretary of the Treasury and.
Speaker 2: The NEEC and all the leaders in the White House
Speaker 2: and the Administration understand that.
Speaker 3: So we're going to get it done.
Speaker 4: Speaker Johnson, how closely are you watching the bond markets
Speaker 4: right now, given fact that we've seen a real sense
Speaker 4: of concern, particularly in longer duration US treasuries, We.
Speaker 3: Watch it closely.
Speaker 2: Look, I really do believe that delivering this historic legislation
Speaker 2: is going to be critically important for a lot of reasons,
Speaker 2: not the least of which is that Congress can.
Speaker 3: Send a very important signal to the.
Speaker 2: Bond markets, to the stock market, to investors everywhere that
Speaker 2: we're very serious about this not only in getting the
Speaker 2: US economy roaring again, but also in addressing the long
Speaker 2: term debt. And I think that's an important thing for
Speaker 2: everyone to understand. We have a strategy that's a multiple steps,
Speaker 2: as I said, multiple steps strategy to address this over
Speaker 2: the next year, two years, three years, and we're going
Speaker 2: to get the US economy back on sound footing. We're
Speaker 2: the Party of Fiscal Responsibility, and you'll see that demonstrated
Speaker 2: day after day here.
Speaker 4: How speaker Mike Johnson, thank you so much for being
Speaker 4: with us.