As the clock ticks toward the deadline to raise the U.S. debt ceiling, President Trump and House Speaker Paul Ryan have yet to come to an agreement on a compromise on a solution to the $16.7 trillion debt ceiling and the threat of default.
00:01:24.000He aligned himself with them and put forth a cruel proposal, a proposal that is going to devastate working American families.
00:01:32.000That's what this proposal is going to do at the same time.
00:01:36.000It will hold America's economy hostage so that they can take a hatchet to veteran services, to meals on wheels, to education, to cancer research, to law enforcement.
00:01:48.000That's what they put forth for the American people.
00:01:51.000Now you're asking me about a potential meeting.
00:01:53.000Look, we're going to continue to take a look at this legislation.
00:01:58.000We're going to analyze the impacts that it will have on, again, veterans services, again, education, cancer research.
00:02:15.000Speaker McCarthy and MAGA Republicans showed us what they valued.
00:02:19.000And this is what the American people have to look at, right?
00:02:22.000And so we are going to continue to make sure, we saw this in the President's budget, that we lower costs for Americans, that he is continuing to make sure that we fight to lower the deficit.
00:02:33.000That's what he put forth in his proposal.
00:02:36.000He's going to lower the deficit by $3 billion over 10 years.
00:02:40.000He has showed us our value and we're going to continue to be happy to have that conversation about the budget.
00:02:46.000But when it comes to the debt, the debt limit, they need to, Speaker McCarthy needs to put a piece of legislation on the floor to deal with the debt limit, to make sure that we do not default.
00:02:57.000Something that he did three times before in the last administration.
00:03:01.000And certainly his voting record speaks for itself.
00:03:03.000But with the fundamental impasse here and a disagreement as to what you guys are even negotiating, White House versus the House Republicans.
00:03:10.000What do you say to those who are really growing alarmed at the time?
00:03:13.000Because we got an update this week that there's an estimation that because of lighter than expected tax returns heading to the Treasury, the U.S. may be on the verge of default come June.
00:03:23.000Not August as we thought, but come June, just maybe six or so weeks away.
00:03:28.000Again, Jonathan, I'm going to be very clear.
00:03:32.000We have been clear for the past six plus more weeks, which is Speaker McCarthy needs to stop playing chicken with the full faith and credit of our nation.
00:03:42.000He needs to put forth immediately a piece of legislation so that we do not default.
00:04:19.000It is their constitutional duty to get this done.
00:04:22.000Yeah, I want making you to look at the what's up right now.
00:04:26.000And if people are listening on the radio, it what we have up is a chart that shows that the debt ceiling has been raised since 1960.
00:04:36.000Twenty nine times under Democratic presidents, but forty nine times under Republican presidents, forty nine times.
00:04:45.000And so now suddenly these Republicans that broke all records for deficits and debts under Donald Trump are suddenly claiming that they really care about deficits and that it doesn't wash.
00:04:57.000By the way, I said this in twenty seventeen, twenty eighteen, twenty nine times.
00:05:03.000And twenty twenty about Republicans is that don't claim if you're not going to fight your own Republican president, who's a big spender breaking records every year with budget busting budgets.
00:05:16.000Don't do it when there's a Democrat in office.
00:05:19.000Don't do it when there's a Democrat in office.
00:06:38.000Cortez, Kevin McCarthy has put out something that he's trying to get to 218 on and compliments to Speaker McCarthy.
00:06:46.000He has followed closer to the House Freedom Caucus in the hardcore than to the moderates.
00:06:54.000And Kerry's going to talk about in a second some of these misdirection plays on on commissions and things like that.
00:07:00.000But give me your assessment of Joe Scarborough, because this is going to be the barrage you're going to hear that we're jeopardizing the full faith and credit.
00:07:09.000We're going to default. This is all the Republicans fault.
00:07:12.000This is these and these meanies are taking away meals on wheels and all of it.
00:07:16.000Give us your your first cut assessment on the opening salvo here, sir.
00:07:19.000Sure. A couple of really important points.
00:07:21.000First on default, as you have correctly pointed out many, many times, and I would say correctly predicted because I think you were the first major figure in politics to talk about this.
00:07:31.000We do not have to default if we default. That is a choice of the White House.
00:07:36.000Why? Because we can prioritize payments because tax receipts continue to flow in to the United States Treasury, not at the rate that they should be because of the weakness of Joe Biden's economy.
00:07:46.000We showed that statistic yesterday. But nonetheless, tax receipts come in plenty to pay for the things that the United States needs to do, including servicing the debt obligation.
00:07:57.000So that's number one. We do not have to default.
00:07:59.000But number two, to this important point about the Democrats, Corinne Jean-Pierre, Joe Biden, the corporate media, all of them screaming that there's something draconian or cruel about going back to last year's spending level.
00:08:12.000Now, I don't remember any of them, Steve, in 2022 saying this is a cruel budget that we are passing at the behest of Joe Biden.
00:08:19.000I don't remember any of them saying that there was cruelty in the spending levels of 2022.
00:08:24.000So I think what Speaker McCarthy has put forward here is a very, very sensible.
00:08:28.000Now, if it were up to me, I would be a bit more aggressive.
00:08:31.000But I understand he's got to get to a majority and that will not be easy with it with an only five seat majority lead for Republicans in the House.
00:08:39.000But a very sensible starting point to say, hey, let's all agree that last year, as exorbitant as that spending was, we're not going to make it worse.
00:08:47.340So it's sort of like doctors saying the hypocritical first do no harm.
00:08:50.700OK, we're not going to make it any worse than that.
00:08:53.200That is a very sensible starting point.
00:08:55.580And for the leftists to come out and the corporate media cheerleading them to try to say that that is somehow cruel or that is somehow a cut.
00:09:02.000Remember that, too, Steve. This is so important.
00:09:03.720According to the left, not increasing, not dramatically increasing spending is a cut.
00:09:09.820OK, in no other part of life or mathematics is that correct.
00:09:14.280Staying at last year's level is not a cut by definition.
00:09:18.800I want I want to put a pin on what Steve Cortez is saying.
00:09:21.580We're going to come back to it because sensible and has a certain internal logic to it.
00:09:24.780Remember, one of the things we pride ourselves here in the war room is being, you know, insensible that that somebody's got to take somebody's got to be the dead ender.
00:09:34.700Somebody's got to take the hard line that draws the whole conversation or talk about that, because what McCarthy did is quite is quite sensible about how to pull a coalition is a coalition government on our side.
00:09:45.640And he did take a lot from the House Freedom Caucus.
00:09:48.500Eli Crane is going to be on the second hour to talk about that.
00:09:50.980We're going to come back in detail on this.
00:09:52.360But I want to go to Kerry Sheffield, senior policy analyst over the Independent Woman's Voice.
00:09:57.500There's a lot of the moderates are jumping in here and saying, hey, what we got to do is let's have a cooling off period.
00:10:04.340Let's work out a deal we can live with and let's get a commission.
00:10:07.580Let's get a commission on Social Security.
00:10:22.880So what we have is a proposal that's been put forward by they're calling themselves the Problem Solvers Caucus, 64 members on both the left and the right here.
00:10:32.340And they're trying to say we're the moderates, we're the reasonable, the grownups in the room.
00:10:36.680And what they're proposing is to just kick the can down the road with the debt ceiling.
00:10:41.500So put no strings attached, increasing the debt ceiling through December 31st of this year.
00:10:46.780And then they say here's the here's their little secret sauce is that they want to have a fiscal commission to review and recommend a package to stabilize the long term deficits and debt.
00:10:57.760They say the report's going to be due no later than December 31st, 2024, and must receive expedited consideration with an up or down vote in Congress by February 28th, 2025.
00:11:09.640So I know, Steve, you and I, we weren't born yesterday.
00:11:14.540That sort of timeline, I don't buy it for one second that they would actually adhere to it, let alone actually do anything substantive as a result of this commission.
00:12:20.500The war and posse is that we don't we appreciate Speaker McCarthy for his effort here of really initiating some action and getting the ball rolling.
00:12:29.840But we don't believe you need one penny increase to the debt ceiling.
00:13:01.540And yeah, we got to keep beating the drum here because this is I mean, this actually reminds me a little bit of the nuclear deal with Iran when Obama just totally caved.
00:13:11.540Even when Iran was on the ropes and that's when you're supposed to take it to your enemy, when you actually have leverage and instead Obama capitulated.
00:13:19.860So I hope and I pray that McCarthy will not capitulate.
00:13:24.000And I think getting people to stand in support of what he's doing, I think that's important.
00:14:00.400We now have 25 straight months over two years consecutive, worst streak in American history of crashing real wages, meaning your income adjusted for the goods and services you need to buy in your life.
00:14:13.460And that's why a record 70 percent of Americans, according to CNBC, not according to us on the right, according to CNBC, all time record 70 percent of Americans are pessimistic about the economy both now and looking into the future.
00:14:27.040So we are in a deep economic crisis, even if the White House won't admit it, even if MSNBC won't admit it.
00:14:32.320It's time to hold the line and start fixing this mess.
00:14:34.660We also know, Steve, I think two thirds of the American people back us right now that you've got to have cuts.
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00:16:37.900I mean, whether you're borrowing for a college education or whether you're borrowing for a new car or a used car or you're borrowing for anything.
00:16:48.300Are your credit card costs going to skyrocket?
00:16:53.520You're going to have bigger price tax for everything you buy.
00:16:57.320This is going to be inflation brought to you by Kevin McCarthy's Republican House.
00:17:39.000And, by the way, hearing Joe and Mika, hearing them talk about economics – and I'm serious, Steve – it's like hearing Gomer Pyle opine on astrophysics.
00:17:55.820And the trajectory of the economy under Joe Biden, right, the man who they do battle for every single day and who they run cover for and act as a PR agency for every single day, the trajectory of the economy under Joe Biden is unmistakably miserable for the American people.
00:18:13.100And, Steve, the way we know that is not because it's my opinion or yours, because it's their opinion of the American people.
00:18:19.440In every single relevant survey and by every single important metric, the people of the United States are working harder to get poorer every single day, and they know it.
00:18:30.360As I pointed out yesterday, Steve, there was a great article by Paul Bedard in the Washington Examiner about how even in Biden districts of the country, even if you look at the places, the congressional districts that went heavily for Joe Biden, the polling in those districts suggests that the people desperately want to have a deal that reduces the deficit.
00:19:20.460It's an exorbitant borrowing and spending in Washington, D.C., and they desperately want and demand that Washington, D.C. get serious about starting to fix this problem.
00:19:30.660That's why, look, it's not just the right thing to do for the country to hold the line in these negotiations.
00:19:35.560And these are tense times, Steve, these coming days and weeks, but these are exciting times.
00:19:40.300It's exciting because, again, we earned this lever of power.
00:19:43.760We earned a say in this process because of what we did last November.
00:19:47.860We didn't win the way we wanted to, but nonetheless, we got this important victory.
00:19:51.460And I think Kevin McCarthy, given the limitations on him, OK, given the fact that there are dozens of members of the Republican caucus who, let's face it, are in no way conservatives.
00:19:59.860They are uniparty Washington permanent political class operators.
00:20:04.760Given those limitations, I think this is an excellent starting point for negotiations from Speaker McCarthy saying, first of all, stay at last year's levels on spending.
00:20:14.100That was too much, but we're going to stay there.
00:20:15.940We're not increasing anything by a dime.
00:20:24.480And the fact that the left is howling in horror and trying to claim that it's a cut because you're not extending and expanding their ridiculous programs shows you how unserious they are.
00:20:35.980And if we have to come down to a point where the debt ceiling cannot be expanded, where there's no concessions from the left, so be it.
00:22:34.220No, this ridiculous notion of a commission, okay, what that reveals is the total lack of seriousness and the lack of urgency in Washington, D.C.
00:22:42.900And, Steve, I would suggest one of the reasons that there's a lack of urgency is because the people who physically live in Washington, D.C.
00:22:50.260and the people who are connected to Washington, whether they live there or not, okay, the people who benefit from the current system, from the administrative state and the permanent political class,
00:22:59.100they are not feeling the pinch of inflation because, let's be honest, it doesn't really matter to them.
00:23:03.440So, if you're a very wealthy lobbyist in Washington, D.C., it might annoy you that your prices have gone up at the grocery store and at the gas pump to put the gas into your luxury SUV.
00:23:30.220J.B. Hunt, one of the biggest trucking firms in the United States, said what they are facing is they are facing falling prices, okay, deflation on the prices they can charge customers,
00:23:40.400and inflation rising prices on the input costs, particularly energy for them, that they have to pay, okay?
00:23:46.100That's the definition of an economic vice, of a brutal economic squeeze.
00:23:50.620Well, it's not just happening to big firms like J.B. Hunt, as important as that is for us.
00:23:54.940It's happening to American families all over the country.
00:23:57.860So there's a lack of seriousness among far too many politicians in Washington, D.C.
00:24:02.460There's a total lack of urgency, but thankfully, Speaker McCarthy seems to have a total sense of urgency.
00:24:08.540And again, I think this is a great opening bid.
00:24:11.620It's a great opening spot to begin the negotiations and show Washington that we're serious about this and that deficit reduction matters to the United States.
00:24:25.400When you combine that with wages that can't keep track, so you have falling real wages, the point is the prosperity of the American people is suffering greatly, and it demands immediate action, not some commission that will get back to us in a year.
00:24:38.800Let's go ahead and talk about the microeconomics.
00:24:58.860They are accelerating, especially in the tech space.
00:25:01.540But one job that's very much in demand, being a repo man, because Americans cannot afford their cars.
00:25:07.720Let's look at the numbers in a chalk talk.
00:25:09.480Last year, 2022, Americans lost $1 trillion in real disposable income.
00:25:14.740That was the worst percentage drop since the Great Depression,
00:25:17.800making it incredibly hard for Americans to deal with rising interest rates and more expensive loans on things like automobiles.
00:25:25.300Car payments, $1,000 a month or higher, that's now 16% of all auto loans, all-time high.
00:25:32.280For context, three years ago, that number was only 6%,
00:25:36.320which translates into a giant jump in the percentage of Americans who are severely delinquent in their auto loans, meaning they haven't paid in three months.
00:25:46.380We just put in a number of almost 6% there, which is worse than the levels of the Great Recession of 2008-2009.
00:25:55.020Patriots, these numbers, this economic reality makes it imperative that the House GOP hold the line regarding the debt ceiling.
00:28:16.200Cortez is going to hang with us, get some more capital markets, economics to talk about.
00:28:19.840And then we're going to talk about the Chinese Communist Party, all next, in the War Room.
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00:31:35.060So that's Sheila Jackson Lee, one of the most progressive members of the entire United States Congress, and clearly telling the American people in plain English that we are taking the direction of the business roundtable.
00:31:47.300So that is yet another important data point, more evidence of the union between the secular humanist radical left and big business.
00:31:55.880They have an unholy alliance to push globalist policies, including open borders.
00:32:14.000And remember, at a time, as we were just discussing, when real wages are crashing for Americans – and, Steve, this is also important – when millions and millions of Americans have simply dropped out of the labor pool.
00:32:25.620So they don't count as unemployed, according to economic statistics anymore, because they have dropped out, which is even worse than just being unemployed, than just being in between jobs.
00:32:34.980And I want to show this in chart form, by the way, what we are doing right now in the United States in terms of importing workers.
00:32:40.800And I'm talking now about the legal side, not the illegal side, which, of course, should be absolutely at zero.
00:32:47.220I'm talking about legal migrants to work in the United States, whether it's by work visas or through regular immigration flows.
00:32:56.940This is foreign-born labor force by the millions.
00:32:59.940That chart goes back five years to 2018.
00:33:02.780As you can see, not surprisingly, in Donald Trump's term, particularly during 2019, that number was steadily ticking downward, which I would argue is a very good thing.
00:33:11.520In other words, American citizens, whether native-born or legally naturalized to this country, American citizens were being prioritized, fewer and fewer foreign workers, legal foreign workers being imported into the United States.
00:33:24.640It then went far lower during 2020, not surprising, because the entire world was locked down, including the U.S.
00:33:30.560But what has happened since then and what has particularly happened under Joe Biden, this number is soaring.
00:33:36.680So we went from 19 million foreign-born workers in the labor force to 22 million.
00:33:43.060We increased 3 million foreign workers at a time, Steve, when American workers are struggling to simply pay their bills.
00:33:56.560How about we take care of our own people first?
00:33:59.440And by the way, I would draw a contrast here, Steve, to this issue of migration.
00:34:02.900Of course, they're very much connected, migration and the economy, but to migration and the debt ceiling negotiations, where you and I take a very harsh stance, which maybe isn't politically possible on Capitol Hill, but it's important for us to be here, nonetheless, to try to move the center.
00:34:16.160So when it comes to legal immigration, I believe the correct number is zero, okay?
00:34:25.400But I think we need to make the policy case why it should be zero so that we can at least reduce legal immigration and we can eliminate illegal immigration.
00:34:33.800So it's very similar to the debt ceiling situation, Steve, is the point that I'm trying to make here.
00:34:37.900So you and I would probably do something that is far more harsh regarding budget cuts, not just stopping the increases, but actual budget cuts.
00:34:44.920But I also am very cognizant that Speaker McCarthy faces a caucus where he doesn't have much wiggle room politically, probably can't get that done.
00:34:53.820And so I think he's starting from a pretty sensible place.
00:34:59.020When we take positions that might seem extreme, at least to the ruling class, but they are backed by facts and arguments and persuasion, when we make that case, we can move the political center.
00:35:10.620I think that has already happened on the economy and on the deficit.
00:35:12.940I think it's starting to happen on immigration.
00:35:17.560And I think that's a big part of what you do and what this show does.
00:35:21.620Yeah, that's what we need to do on everything, on Ukraine, from the invasion on the southern border to our war with the CCP.
00:35:28.620I want one more element before I let you go, Steve, is about commercial real estate, because I'm very concerned.
00:35:33.300Because here's the counterargument that's about to happen in this whole debt debate.
00:35:37.240You heard the trial balloons going up on Morning Joe and with Zen master Jean-Pierre, is that they're going to say, hey, the bottom's falling so far out of the economy, we need a stimulus.
00:35:51.140One of the things they're going to point to is commercial real estate.
00:35:53.820Steve Schwartzman, who's pro-CCP, no friend of MAGA, but a very smart guy over Blackstone.
00:36:00.600Tell me about the reporting today about commercial real estate.
00:36:04.060So Blackstone earnings out today, not to be confused with BlackRock, by the way, even though the two firms have a lot in common and certainly have a very similar worldview.
00:36:12.580And what I mean by worldview is a complete leftist, globalist, anti-American, anti-American worker agenda.
00:36:19.720But nonetheless, as I often point out, Steve, these companies are very important to watch.
00:36:24.300Even if you revile these firms, and I certainly do, there's still important reflections of where the U.S. economy is and where it is headed.
00:36:31.520And if you look at Blackstone, which is traded by the ticker BX, Blackstone issued its earnings today, and these were the results.
00:36:38.600Year-over-year earnings down 36 percent and specifically cited, quote, a weak property market.
00:36:46.760And property market there, they don't mean residential.
00:36:50.440So it is becoming more and more apparent, Steve, to more and more people and more firms that the commercial real estate situation in the United States is bad and it is worsening.
00:37:01.000And I would argue that the risks in 08 and 09 were almost entirely in residential real estate, in regular individuals signing no-doc liar loans.
00:37:11.260If anything, the credit standards are very, very tight, maybe too tight on the residential side.
00:37:16.400But we have the exact opposite now on the commercial side.
00:37:19.620So particularly as it pertains to downtown office space, that's where the risks are.
00:37:25.340And the results today from Blackstone is yet another data point, I think, proving that thesis that the emerging risks in commercial real estate are intense and that they have ramifications for the entire economy.
00:37:37.480But again, the White House will claim that that's a reason to further stoke inflation, which only makes the commercial real estate situation worse.
00:38:14.080And by the way, on commercial real estate, I have an article that I encourage folks to read on exactly this point, the syllabus of economic errors.
00:38:20.520You can find me at stevecortez.substack.com.
00:38:23.440On the Twitter, I'm at Cortez, Steve Cortez with an S.
00:40:12.980Even if you've never graduated from high school, even if you've never got out of the first year of high school, we make this accessible to you.
00:40:18.400Because at the end of the day, it's common sense, and we explain it to you in a common sense way.
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00:40:48.960Now, if he's a Chinese agent, how is he getting bailed out instantly?
00:40:53.380Well, when you look at the indictment, and I have a few of the pages here,
00:40:58.120the indictment against these 34 and the two arrested reads like a Chinese Communist Party manifesto of how you destroy not just Chinese dissidents in America,
00:41:09.420but American society and the value system in general.
00:41:13.900On one of these pages, it spells out what they call the 9-12 Project,
00:41:19.920which was Chinese agents to disrupt the American value system using social media accounts and the like.
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00:46:39.980Yeah, there's a lot of, there's a bunch of articles I've got up on Getter, where we try to immerse you in all the different aspects of what we're covering here on the show.
00:46:48.920And it's really about Governor DeSantis' failure to launch here.
00:46:51.520I don't think there's any doubt right now that what Governor DeSantis should do is very much focus on Florida, very much focus on Florida, having a great run in the second term.
00:47:02.120He's done so much for the state already.
00:47:16.880He's doing a great job in Florida, but that's not the scale you've got to roll in.
00:47:20.300And so it is, I think, in his best interest, in MAGA's best interest, in our movement's best interest, in the country's best interest, to continue to have a great run, the great battles you've got against Disney, other world companies, and what you're trying to do in Florida, which is incredible.
00:47:35.980But hey, I give my advice, and you take it, you take it.
00:47:39.260If not, it's going to be a long, tough slog, because it has not started off very well.
00:47:49.320Miles Guo did something for this country that is of the utmost importance.
00:47:53.840Before Miles Guo really came to the West, as a whistleblower, you know, because he was dialed in as a businessman, as many of these businessmen, like Jack Maughan, these guys are, he was a whistleblower to their corruption.
00:48:04.920He was a whistleblower to their real intent, and his biggest thing he did, he says, in the West, you've got to separate out the CCP from the nation of China and the Chinese people, Lao Bajing, because, you know, we were all allies in World War II, and Lao Bajing has a great affinity for the American people, as the American people have for the Chinese people through our entire history.
00:48:24.960The Chinese Communist Party is a gangster organization, and since that time, if you go back from where we really came to the West in 2017, we have, and I know I have, really focused on identifying the Chinese Communist Party as the central existential threat, not just to the United States and to our citizens, but to the Chinese people, and that is caught on quite big.
00:48:47.460You can tell in speeches, you can tell in focus, and they hate it.
00:48:50.020They hate it, and that's why there's a massive effort.
00:48:52.840It's always been a massive effort to extradite Miles Guo back to China and to immediately execute him.
00:51:48.540You know, even before Miles came to the U.S. as a whistleblower, he was already a successful businessman, so you can't accuse him of fraud.
00:51:55.740And he already had uncovered things that put various CCP officials behind bars.
00:52:00.340So we know he's legitimate, and there is a coordinated effort to censor him.
00:52:05.120So in the Pras-Michel trial, you know, you mentioned Leonardo DiCaprio has testified.
00:52:10.420Well, they want to get Guo to testify as well, but they are preventing Michelle's lawyers from even serving Guo, which is a bit odd.
00:52:19.000And the reason why is because he will further expose the DOJ and FBI corruption.
00:52:24.260And also of note, people like Higginbotham, he got a plea deal.