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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Democratic Senator Peter Welch

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Speaker 1: of Romani's a member of the Senate Finance Committee, and

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Speaker 1: it's great to have you back, Senator on Bloomberg TV

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Speaker 1: and Radio. I'd like to start with the CBO, since

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Speaker 1: we were just talking to Senator Haggerty about that. It

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Speaker 1: is quite the dual headline today. The tax bill would

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Speaker 1: add two point four trillion to US deficits. But at

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Speaker 1: the same time, the CBO is estimating that Donald Trump's

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Speaker 1: tariffs could cut the budget gap by even more two

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Speaker 1: point eight trillion dollars. So will tariffs pay for the

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Speaker 1: tax cuts?

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Speaker 2: No, I mean I actually see it exactly the apposite way.

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Speaker 2: It's five point two trillion dollars is essentially going to

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Speaker 2: be added to the deficit. Here's how okay, Dave CBO

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Speaker 2: says it's a two point four trillion deficits buster right now.

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Speaker 2: The tariffs. The question on tariffs is who pays? Are

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Speaker 2: those paid by foreign governments? That's essentially what President Trump

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Speaker 2: is asserting. But when I talk to folks of farmers,

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Speaker 2: they're paying twenty five percent more for their fertilizer. When

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Speaker 2: I talk to steel manufacturers that you steal, they're paying

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Speaker 2: fifty percent more. So that revenue is a tax that's

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Speaker 2: paid by our businesses, in by our consumers, and you're

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Speaker 2: seeing the President trying to shield that by telling Walmart

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Speaker 2: to eat it. They're not going to do it any

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Speaker 2: more than any other supplier can, So that's really bogus.

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Speaker 2: Everybody knows we're going to pay those tariffs.

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Speaker 3: Well, as we consider the way in which Tariff's senator

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Speaker 3: factor into this revenue picture, knowing there could be revenue

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Speaker 3: lost as a result of these tax cuts, it is

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Speaker 3: worth noting that taxes are not the only thing in

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Speaker 3: this one big, beautiful bill. It also is intended to

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Speaker 3: raise the debt ceiling by four trillion dollars, at least

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Speaker 3: the version that passed the House, and President Trump today

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Speaker 3: suggested the debt ceiling should be abolished entirely, actually saying

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Speaker 3: he agrees with your colleague, Democratic Senator Elizabeth Warren of Massachusetts,

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Speaker 3: who we spoke with about that earlier today. This was

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Speaker 3: her live reaction, Sir, let's listen together.

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Speaker 4: I think that Donald Trump and I hey listen, I'm

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Speaker 4: ready to join up with him and make that happen.

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Speaker 4: We need to get rid of the debt ceiling altogether,

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Speaker 4: not extend it. Not say ooh, while this is going

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Speaker 4: on this budget negotiation, let's just roll out a few

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Speaker 4: trillion dollars more in the debt ceiling. Nope, that has

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Speaker 4: gotten us into trouble before, it continues to get us

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Speaker 4: into trouble. Donald Trump is right, let's get rid of

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Speaker 4: it all together.

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Speaker 3: Is this an effort you too would sign on to?

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Speaker 2: Senator You know, I think the debt's healing is a

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Speaker 2: bit of a sideshow here at this moment. The question really,

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Speaker 2: with or without the debt sealing, should we be raising

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Speaker 2: the debt by two point four trillion dollars when we're

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Speaker 2: going to pay for that by kicking sixteen million people

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Speaker 2: off of healthcare on the Medicare program, where we're going

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Speaker 2: to make folks who are on the Affordable Care Act

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Speaker 2: lose it because they won't be able to afford it,

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Speaker 2: when families that depend on nutrition benefits in the SNAP

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Speaker 2: program are going.

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Speaker 4: To lose that.

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Speaker 2: So, you know, what I see here with the economic

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Speaker 2: policy of Trump is one tax cuts that are not

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Speaker 2: going to be pro growth. I do disagree with Senator

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Speaker 2: Hagriy to a deficit that is going to result in

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Speaker 2: higher interest rates. It means higher car payments for folks,

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Speaker 2: higher cost of mortgages, and of course any businesses that

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Speaker 2: want to borrow money, you're going to pay more. So

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Speaker 2: when I'm concerned about it is not the policy of

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Speaker 2: the debt ceiling. I'm concerned about the policy of fiscal

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Speaker 2: policy of increasing the debt that's going to increase our

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Speaker 2: interest rates and doesn't go into any productive pro growth activities.

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Speaker 1: Senator, I know you're joining forces with the aforementioned Elizabeth

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Speaker 1: Warren on an inquiry into Republicans' effort to use something

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Speaker 1: called the current policy baseline. Our audience here on Bloomberg

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Speaker 1: is pretty familiar with it at this point. It essentially

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Speaker 1: sets the baseline for this entire construct. When it comes

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Speaker 1: to how to pay for these tax cuts, you're arguing

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Speaker 1: it amounts to magic math and a sleight of hand.

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Speaker 1: This was back in February when the inquiry was launched.

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Speaker 1: What have you come up with?

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Speaker 2: This is a political debate where we're the proponents of

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Speaker 2: the tax cut are trying to make it appear as

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Speaker 2: though it's not going to result in a deficit by

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Speaker 2: doing essentially magic accounting. I mean, the bottom line here

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Speaker 2: is we should have an on the level debate. The

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Speaker 2: CBO says this will add two point four trillion dollars

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Speaker 2: to the deficit. So the question is it worth it?

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Speaker 2: What are we going to get out of it?

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Speaker 4: Who's who's going to lose?

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Speaker 2: That's really the heart of this question.

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Speaker 3: Well, as we consider the CBO score not just of

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Speaker 3: this bill, but what you were speaking about a moment ago, Senator,

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Speaker 3: they're scoring on tariffs as well, who ultimately will bear

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Speaker 3: the cost of them? I would like to ask you,

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Speaker 3: given you were just part of a congressional delegation to

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Speaker 3: Canada over the mo Memorial Day recess, about Canada in particular,

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Speaker 3: as earlier today we spoke with Danielle Smith, the Premiere

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Speaker 3: of Alberta, and this is what she had to say

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Speaker 3: about the prospects of trade negotiations going well between our

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Speaker 3: two countries.

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Speaker 5: In Canada, there's optimism. I just this week met with

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Speaker 5: my counterparts, the thirteen premiers as well as the federal

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Speaker 5: Prime Minister. And because we've got G seven taking place

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Speaker 5: in the coming weeks in my home province of Alberta

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Speaker 5: in Kanadascus, I think that everybody's hopeful that it would

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Speaker 5: be really nice, either just before or during or just

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Speaker 5: after to announce that there has been some kind of

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Speaker 5: Dayton or interim step towards getting to a comprehensive renegotiation

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Speaker 5: of trade.

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Speaker 3: Senator, did you leave your trip to Canada feeling like

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Speaker 3: they are ready to make a deal and do you

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Speaker 3: think the same of the Trump administration?

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Speaker 2: Well, the tone that I just heard is the tone

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Speaker 2: I heard there. They regard themselves as our closest allies,

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Speaker 2: and I regard us as their closest ally, especially those

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Speaker 2: of us like Kevin Kramer North Dakota on the border,

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Speaker 2: me Vermont Senator Sheehan on the border. But the reality

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Speaker 2: is there was really significant heartburn on the part of

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Speaker 2: Canadians with the fifty first state discussion, the Governor of

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Speaker 2: Canada discussion. And what is happening right now is our farmers,

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Speaker 2: like in Vermont three pans twenty five percent more for

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Speaker 2: their fertilizer and their tight margins. They can't make it.

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Speaker 2: Our tourism is collapsing with the Canadians. Senator. She mentioned

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Speaker 2: that the manufactured products that used to be going to

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Speaker 2: Canada from New Hampshire are really way down. So the

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Speaker 2: real world impacted these tariffs is affecting business. The other

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Speaker 2: thing that's really problematic is the President has changed his

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Speaker 2: tarror policy twenty two times already. And what I hear

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Speaker 2: from business is we were down at Corvis in southern Vermont.

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Speaker 2: There's no way they can plan with this constant situation

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Speaker 2: up and down. The business folks wake up, they look

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Speaker 2: at the news, or they try to find from whatever

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Speaker 2: source they can't what are our teriffs today? And folks

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Speaker 2: who have products coming in on a boat they don't

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Speaker 2: know whether they're accept delivery because of the ever changing

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Speaker 2: nature of these tariffs. So the chaos is really tough.

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Speaker 1: Well, if in fact we are on track to some progress,

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Speaker 1: your Senator, just to get back to the question, is

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Speaker 1: there any chance you could see the framework of a

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Speaker 1: deal or something more robust around the G seven of

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Speaker 1: the weeks ahead?

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Speaker 2: You know, the reality is none of us know. You know,

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Speaker 2: I know as much as you know. So we ask

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Speaker 2: somebody and we get some the latest information. We read

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Speaker 2: what's on the news and what's on the blurs. But

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Speaker 2: the fact is there's been no coherent policy that has

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Speaker 2: been sustainable. That's the constant changing so in truth, none

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Speaker 2: of us know, and as important that I know, it's

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Speaker 2: really important that a farmer knows what are they going

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Speaker 2: to pay for fertilizer, really is important. What a manufacturer

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Speaker 2: knows what they're going to have to pay for steel

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Speaker 2: or aluminum, and stability is so essential. And it doesn't

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Speaker 2: matter whether you're a Republican business that might have voted

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Speaker 2: for President Trump or of a business where you voted

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Speaker 2: for Harris. The bipartisan nature of this policy is to

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Speaker 2: inflict pain on everyone.

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Speaker 3: All right, Senator, we appreciate you joining us. Democratic Senator

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Speaker 3: Peter Welch of Vermont, thank you for your time