Verdict with Ted Cruz - Dems' Poll Numbers PLUMMET, plus How to Save $1TRILL in Fed Spending & Why We Need to Fix the Tax Laws to Treat Poker Pros Fairly

00:00:00.000 This is an iHeart Podcast.

00:00:02.580 Guaranteed human.

00:00:05.340 Welcome. It is Verdict with Senator Ted Cruz, Ben Ferguson with you as always.

00:00:09.860 And Senator, it's nice to be with you as we've got a couple of big things to chat about today,

00:00:15.400 including the Democrats getting the lowest rating from voters in 35 years.

00:00:23.260 Well, that's right. The Wall Street Journal just did a poll and found that the Democrats

00:00:26.520 approval rating has plummeted. It is at the lowest level in 35 years. It turns out being angry,

00:00:32.740 filled with rage, and being a party that stands for nothing but hating Donald Trump

00:00:36.700 is not actually a popular platform. We're going to break that down and talk about what that means

00:00:41.840 for elections coming up in 26 and going forward. Secondly, we're going to talk about a proposal

00:00:47.920 that I've been championing to cut spending and to cut spending dramatically. And that is for the

00:00:54.980 Federal Reserve to stop paying interest on bank reserves. This is a proposal that could save

00:01:00.620 over a trillion dollars over 10 years. I've made this case directly to the president of the Oval

00:01:06.040 Office. I've introduced legislation to make this happen. We're going to talk about exactly what it

00:01:10.440 would mean and why it makes a difference. And finally, we're going to talk about an element of

00:01:15.320 the one big beautiful bill that was an unintended mistake, which is the one big beautiful bill

00:01:21.820 changed how gambling losses are counted in taxes. And what it did for people like professional

00:01:30.120 poker players is it ended up putting in place a rule that is wildly unfair, that punishes them,

00:01:36.460 that taxes them on income they didn't earn. And so I've joined with some Democrats in terms of

00:01:41.380 trying to fix this. I hope we can fix it because we ought to have a tax system. That's fair. We're

00:01:45.560 going to explain that issue to you also. Yeah, it's also really interesting because it goes back to

00:01:50.280 part of what the president did with no tax on tips. And he's like looking out for little guys and their

00:01:55.760 jobs. It matters. We're going to break that down. It'll be very interesting. I want to tell you real

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00:03:42.820 Make the switch today and make a difference with every call you make. All right. So let's go to

00:03:47.140 the Democrats in disarray. I have a theory, Senator, and I want to run it by you. I think the reason why

00:03:53.320 Democrats have the lowest rating from voters in 35 years is because they didn't police their own party

00:03:59.160 and get rid of the most extreme members who've now taken over the microphone. The AOCs, the Alamo

00:04:05.200 Omars, the list goes on and on. The guy running for mayor in New York City, the radical Marxist,

00:04:11.400 socialists, and communists have taken over the microphone. And that's why I think the American

00:04:15.300 people are terrified of them right now. Yeah. It's not just they've taken over the microphone.

00:04:20.480 They've taken over the party. Yeah. There is nobody in the party. Name one prominent Democrat

00:04:26.900 who has stood up to comrade Mondami. You literally have a communist who is the Democrat

00:04:32.700 party nominee to be mayor of New York other than John Fetterman. And I think John Fetterman is

00:04:37.160 the exception that proves the rule. Other than John Fetterman, I do not know a single one of my

00:04:42.540 colleagues in the Senate who has said a word of criticism that, gosh, maybe a guy calling for the

00:04:47.700 abolition of private property, maybe a guy that is openly calling for a communist government,

00:04:53.680 is not the best face of the Democrat party. And yet nobody disagrees. You look at when Chris

00:05:00.840 Van Hollen flies down to El Salvador and has margaritas with an MS-13 gang member illegal

00:05:08.180 immigrant who's right now being prosecuted for human trafficking. Not one single Democrat,

00:05:15.040 again, except for John Fetterman, spoke out against it. And so it's not just that the crazies

00:05:20.640 have been given the microphone. The crazies have been given the agenda. And here's what the Wall 0.79

00:05:25.840 Street Journal reported. The Democrat party's image has eroded to its lowest point in more than

00:05:30.780 three decades, according to a new Wall Street Journal poll, with voters seeing Republicans as

00:05:35.220 better at handling most issues that decide elections. The new survey finds that 63 percent of voters

00:05:42.520 hold an unfavorable view of the Democratic party. The highest share in journal polls dating to 1990

00:05:50.520 and 30 percentage points higher than the 33 percent who hold a favorable view. So the Democrats

00:05:57.620 polling is 33 percent favorable, 63 percent unfavorable. And journal goes on to say that is a far weaker

00:06:06.240 assessment than voters give to either President Trump or the Republican Party, who are viewed more

00:06:11.540 favorably than favorably by seven points and 11 points, respectively. So the Democrats are minus 30.

00:06:20.340 President Trump is plus seven and the Republican Party is plus 11. That is a huge difference. And

00:06:27.780 and what percent of voters do you think view the Democrats very favorably?

00:06:32.940 I'm going to guess it's probably not a very high number based on the overall polling data.

00:06:37.640 Eight percent. Yeah, that's not good. That's not good. Just so everybody knows in politics,

00:06:43.320 that's bad. And by the way, by comparison, 19 percent of Americans view Republicans very favorably.

00:06:50.760 So there's more intensity. People are very happy. And the Democrats, nobody except the communists are

00:06:59.300 excited about the Democrats. That is a problem going into an election.

00:07:03.260 Yeah, it's a huge problem for them. And then you go forward with Democrats. They've got everybody on

00:07:09.520 their team. I'm referring to the media. I also think some of this comes down to the fact that

00:07:14.020 there's so many Americans are just going around the mainstream media now and will never go back.

00:07:18.580 You look at the canceling, for example, of one of the late night shows. We talked about that last

00:07:22.540 week, Stephen Colbert. Why? I think a lot of people are just like, we're done with you when you alienate

00:07:27.140 half the country and mock us. And there's so many lies that have happened over the last five, six,

00:07:33.340 seven years that were egregious. The Russian hoax is a great example. I think that this is part of 1.00

00:07:39.360 the reason why the Democratic Party is failing right now is because they don't have people covering for

00:07:44.100 their propaganda. Well, and they're embracing, you know, it's amazing when a party decides let's pick

00:07:50.860 five issues and let's take the wrong side of 80-20 issues or 90-10 issues. It turns out that's really

00:07:57.140 bad politics. When you say as a party, hey, let's be for open borders and Venezuelan gang members and 1.00

00:08:04.160 releasing criminals and rapists and child molesters, that is a really, really unpopular position. It turns

00:08:11.360 out when you say, hey, let's be for abolishing the police and attacking ICE and fighting against law

00:08:17.660 enforcement, that is a really, really unpopular position. It turns out when you cheer on pro-Hamas 0.97

00:08:23.320 protesters who are cheering on we love Hamas, that is a really, really unpopular position. It turns out

00:08:31.120 when you advocate for boys competing in girls' sports and for doing surgeries that sterilize and

00:08:38.580 mutilate little boys and girls, that is a really, really unpopular position. And the Democrat Party as a

00:08:44.700 whole has said, let's look at all those issues. Let's take the wrong side of 80-20 or even 90-10

00:08:50.640 issues and let's see how that works out. And the way it works out is you get the most unpopular

00:08:55.860 Democrat Party in the last 35 years. What is your biggest concern? And I always say there's a

00:09:01.840 reaction to every action, right? So it's low right now. What is the worry that, do we get overconfident?

00:09:09.600 Do we not continue to stay together as a party? Because look, we are notorious, I'm talking about

00:09:14.540 conservatives, of screwing it up when we have these types of leads. We have the House, we have the 0.86

00:09:19.180 Senate. We actually have a chance, I think, to even have some gains in the midterms. And this is a

00:09:24.180 midterm, I want to be clear, that actually is more favorable towards Democrats in the districts and

00:09:29.400 the Senate seats that are open. You look at it, we have a real opportunity here to solidify our base and

00:09:36.000 get even more done with the president. What is your worry about that, though?

00:09:39.880 So my concern is twofold. My concern is political and my concern is policy.

00:09:44.180 On the political side, when one party is out of power, that can be a dangerous dynamic because

00:09:50.240 even though the Democrat Party is very unpopular, generally speaking, their hardcore partisans

00:09:56.600 are pissed. They are filled with rage. They hate Donald Trump. That means their hardcore partisans

00:10:03.820 will crawl over broken glass. These are the nuts that are having riots in the streets of L.A. saying

00:10:09.220 we want more criminal illegal aliens in our country. That energy is dangerous. Look, right now the 1.00

00:10:15.620 Democrats are outraising Republicans because their side is really energized. They hate Trump. And if you

00:10:21.640 send out an email on the Democrat side, Donald Trump is the devil, turns out people give a lot of 0.98

00:10:26.440 money because if you're a crazy left winger, that energizes you. I worry about the enthusiasm gap that 0.96

00:10:33.580 on the right. Look, Republicans, by and large, are feeling pretty good. We're winning massive

00:10:38.640 victories. We talked about last week's podcast. We went through all of the major victories in the

00:10:44.660 first six months of President Trump's term. That's fantastic. But the danger from a political

00:10:49.700 perspective is that our guys get complacent. OK, we're winning. Everything's taken care of. It's not

00:10:55.220 urgent anymore. And that plays out both in terms of fundraising, that people just give less money

00:11:01.860 to candidates this this cycle around. But it also can manifest in turnout. If the crazies on the left

00:11:08.440 are much more likely to show up in a midterm and our guys are complacent and feel like everything's

00:11:13.520 fine, that can yield a really bad election. Secondly, the policy piece that I worry about.

00:11:20.020 We've talked a lot on this podcast about the battle within the Trump administration on tariffs,

00:11:24.420 how there is one camp within the Trump administration that wants to use tariffs as leverage

00:11:30.400 to lower the tariffs of our trading partners. And Scott Besant, the Treasury Secretary, is in that

00:11:36.740 camp. Elon Musk, when he was part of the White House, he was very much in that camp. And I'm

00:11:41.620 enthusiastically in that camp. I very much agree with what the president has been doing,

00:11:46.000 using tariffs, but using them as a means to an end to lower the tariffs and remove non-tariff

00:11:52.800 barriers so that we can trade more and export more with our trading partners. The problem,

00:11:58.120 and we've talked about this a lot in the pod as well, there is a contingent in this administration

00:12:03.640 that doesn't view tariffs as a means to an end, that rather views tariffs as an objective, as a good

00:12:11.560 economic outcome that we have high tariffs forever. And if that contingent prevails, I worry next year

00:12:20.900 that if we have really high tariffs that the U.S. has put in place, and if our trading partners have

00:12:25.480 really high tariffs, retaliatory tariffs, that we could end up going into a recession, the economy

00:12:31.920 could turn downhill. And if that happens, that could lead to a really rough election. And so I'm going to

00:12:38.760 continue to engage closely and regularly with the president to say, keep using them as leverage,

00:12:42.900 keep lowering the tariffs of our trading partners. That will produce good economic results,

00:12:47.280 but it's not clear which side of that battle is going to prevail day by day on the policy battle.

00:12:52.820 Yeah, great point there. One of the policies that got this president elected was the issue of fiscal

00:12:59.280 responsibility. Doge was a huge part of that. And there is something that is happening in D.C.,

00:13:05.200 and it deals with eliminating Federal Reserve interest payments on reserves. This could sound

00:13:11.840 certainly wonky and like, wait, what? Or, hey, it's over my head. This is actually something that is

00:13:19.320 about reform. It is within the Federal Reserve, and it's something that I think is very clear,

00:13:24.820 long overdue, and can have a major impact for all Americans. Dive into how this could work.

00:13:30.160 Yeah, so this is an idea that I went to the White House, went to the Oval Office, and I pitched to

00:13:35.780 President Trump in the middle of the one big, beautiful bill. And in terms of spending cuts,

00:13:41.640 I gave the president a total of $3 trillion of spending cuts that we could have included in the

00:13:46.060 bill, and that I think we should have included in the bill. Ultimately, my views did not prevail,

00:13:51.080 and we didn't do it on this first reconciliation bill. I hope we come back and do it on a later

00:13:56.200 reconciliation bill, and we can have two more reconciliation bills. This idea is one of the

00:14:02.200 biggest ticket items, because if we do what I'm suggesting, we could save over $1 trillion over

00:14:10.640 the next 10 years. That is a big, big number. When we were doing reconciliation, we were pulling our

00:14:16.440 hair out to save $50 billion or $100 billion. $1 trillion is a lot of money. Now, what does this

00:14:23.700 issue mean? So, banks, big banks, they store reserves, and they deposit reserves with the

00:14:31.520 Federal Reserve. Now, the Federal Reserve was created in 1913, and from 1913 until 2007, how did it work?

00:14:41.440 Banks would keep reserves with the Fed, and they would get paid zero, nothing for the reserves. There

00:14:48.260 was a requirement. It was typically about 10%. So, if you're a big bank, let's say you've got $100

00:14:53.580 billion in deposits. You were required to keep $10 billion with the Fed. You didn't get paid any

00:15:00.460 interest on it. You just had to keep that there, because it's what's called fractional banking,

00:15:04.900 which is you had $100 billion of deposits. $90 billion of it, you'd loan out. You'd loan out

00:15:10.400 to individuals. You'd loan it out for home mortgages. You'd loan it out for car loans. You'd loan it out to

00:15:14.440 small businesses. So, of the $100 billion in deposits, you didn't have $90 billion of it, but you were

00:15:19.320 required to keep typically about 10%. Just keep it with the Fed, so that if Ben Ferguson comes in

00:15:25.120 and says, hey, I want to withdraw $1,000 because, you know, I want to go buy a nice present for my

00:15:31.980 wife, they had to have the $1,000 to give you. So, that's the way the system worked for almost 100 0.99

00:15:38.160 years. Then, starting in 2008, when you had the great financial crisis, Congress changed the law,

00:15:46.960 and the Fed began paying interest on reserves. So, the reserves that the banks kept with the Fed,

00:15:53.220 they began paying interest. Now, at the time, the interest rate was incredibly low. And so, 2008,

00:16:00.400 you know, you had financial chaos everywhere. Do you know how much the Fed paid in interest on

00:16:05.880 reserves in the entirety of 2008? How much? About $1 billion. So, in big picture budgetary terms,

00:16:14.340 a very small amount. It was almost nominal, but it was the first year they began paying interest on

00:16:19.500 reserves. Since 2008, they've been paying interest on reserves going forward. And it was small most of

00:16:27.340 the time until the last two years of Joe Biden. And the last two years of Joe Biden, the interest rate

00:16:34.020 went up and up and up. And for both 2023 and 2024, the Fed paid over $100 billion in interest on

00:16:46.280 reserves. Wow. Last year. But it's just pure tax dollars. You're paying your taxes, and that money

00:16:53.200 is just going to interest, period. Interest to giant banks. So, it is literally the Fed is transferring

00:16:59.900 your tax dollars to the biggest banks in the world. Now, it gets worse. So, they no longer have a

00:17:06.420 requirement, a reserve requirement of, say, 10%. There's actually no requirement at all. You know

00:17:11.340 why? Because they're paying such a big interest rate that the banks are happy to park their money

00:17:19.160 there. And in fact, they're not just doing the 10% reserves. They're putting a bunch more capital

00:17:25.200 there. Right now, today, the Fed is paying 4.4% to the banks to just park their capital with the Fed.

00:17:32.820 So, in 2024, last year, the last year of the Biden administration, the Fed paid $168 billion

00:17:41.240 in interest on reserves. That's taxpayer money that went straight to giant Wall Street banks. I think that

00:17:50.160 makes no sense. I think we need to end that. So, what is it going to be, obviously, hold up here.

00:17:57.320 It seems like it's a sane policy. Is it going to be the lobbyists, and how many people are being

00:18:03.100 lobbied by the big banks to not change this? Is this going to be fighting also the Federal Reserve? I

00:18:07.460 mean, where are the roadblocks here? Yes, yes, yes. And dive in. I mean, because this seems like a very

00:18:12.400 simplistic, fiscal, responsible thing to do. You would certainly do this in the private sector in your

00:18:19.060 own life, so why wouldn't the government do the same thing? So, I'll tell you, while we were in

00:18:23.540 the middle of the one big, beautiful bill, I went on TV. I went on Squawk Box on CNBC. I love doing

00:18:28.780 Squawk Box. It's one of my favorite shows, because they're really smart. You can get into substance.

00:18:32.840 You can get into details. In fact, several times I've done what they call guest hosting Squawk Box,

00:18:37.540 where you spend an hour on TV. And so, instead of a little six-minute interview where you have to do a

00:18:42.740 soundbite, if you guest host Squawk Box for an hour, you can really get into substance and economic

00:18:48.680 issues and issues dealing with finances. So, I was doing Squawk Box during reconciliation,

00:18:55.020 and I raised this issue. And I got to say, Becky Quick, who's one of the hosts, she's like,

00:19:01.380 oh my goodness, well, this would be terrible. I mean, how could this possibly work? The Fed

00:19:06.060 couldn't do its job. So, there's several arguments that are made against this. One

00:19:09.280 is, well, the Fed uses this to control interest rates. And that's right. She's like, well,

00:19:14.640 if you took this away, the Fed wouldn't be able to control interest rates. How would they do it?

00:19:18.800 And my response was, Becky, the same way they did it from 1913 to 2007. Like, the Fed existed

00:19:26.220 for a hundred years and didn't pay a penny in interest on reserves. And somehow the Fed managed

00:19:34.600 to operate until it began. Ben Bernanke was the head of the Fed at the time, and it was interesting.

00:19:38.780 Ben Bernanke said, when this idea was being debated, he said, well, if we pay interest on reserves,

00:19:43.720 that's going to be terrible. That's going to be corporate welfare. People are going to get pissed

00:19:47.660 that we're giving taxpayer money to giant Wall Street banks. That's what Bernanke said when it

00:19:52.680 was just a billion. Now it is $168 billion. But their argument, and listen, it is true,

00:20:00.440 the Fed's job has become much easier. They have a very direct way to control interest rates now.

00:20:05.720 They're paying 4.4 percent if they want interest rates to go up. They just raise the interest rate.

00:20:10.160 They say, okay, we'll pay you 4.6 percent. And all the other interest rates go up automatically.

00:20:15.260 So it makes the Fed's job easier. If they don't do that, they have to do open market transactions

00:20:20.340 to impact the interest rate. It's much more complicated. But again, they did it for a hundred

00:20:25.640 years. Ben, let me give you another fact that's going to blow your mind. Of the $168 billion

00:20:33.120 that the Fed paid last year in interest on reserves. Say that number again. You said

00:20:38.220 $168 billion. Billion. Golly.

00:20:42.360 Roughly half of that, nearly 50 percent, went to foreign banks. So not even American banks.

00:20:50.260 Foreign banks getting tens of billions of dollars of U.S. taxpayer money.

00:20:55.960 Every year. Every year. And so I'll tell you, when I got off Squawk Box, I literally walked back to my

00:21:02.240 office. And the CEO of one of the biggest banks in the United States, a very, very well-known CEO,

00:21:08.380 who I'm not going to name, but he's someone very well-known, he called me, very dismayed,

00:21:16.080 and saying, this is a terrible idea. And I was sort of chuckling, saying, so you're saying you like

00:21:22.600 getting billions of dollars of taxpayer funds every year? And his argument was, well, look,

00:21:28.440 if the Fed stops paying interest on reserves, it's very simple. We'll just buy treasuries instead.

00:21:35.900 So you'll have to pay interest regardless. Now, and he said, and if you don't let us,

00:21:43.340 if you just make us keep reserves, that's confiscation and you can't do that.

00:21:48.580 And I'll tell you my reaction. Let me take each of those arguments that he made. On the first one,

00:21:53.000 the Fed would be forced to buy treasuries. Well, or I'm sorry, not the Fed. The banks would be forced

00:21:59.300 to buy treasuries instead of just parking their money at the Fed. That in and of itself would be

00:22:05.120 a good outcome. Look, there's a lot of concern about a failed Fed auction. If the banks were buying

00:22:12.520 treasuries, that would create demand for treasuries. And you know, one of the things it would do,

00:22:17.780 it would drive down the interest rate by creating more demand for treasuries, which means, listen,

00:22:24.000 one of the things Donald Trump is trying very hard to do is to get the Fed to lower the interest rate.

00:22:29.100 And Jay Powell doesn't want to do it. This change would create a market dynamic that would lower

00:22:35.560 interest rates. That's a good thing. Secondly, you got a ton of money that are what are called excess

00:22:42.280 reserves. They're beyond what a reasonable reserve requirement is. Yeah. And it's just sitting at the

00:22:48.280 Fed. You know what that means? It means those billions of dollars, or even those trillions of

00:22:53.000 dollars, are not being loaned to small businesses. They're not being loaned to open a new store,

00:22:59.500 to buy new equipment, to hire new workers, to expand a new stuff. They're not creating jobs. It's just

00:23:05.380 sitting there. The Fed is paying them, just park your capital and do nothing. I'd much rather banks,

00:23:11.060 if they want to earn a return, have to make loans and loan that out. And as for the second argument

00:23:18.620 that this CEO said of, well, if you don't let them buy treasuries, you just force them to keep

00:23:23.700 reserves. And he said, that's confiscation. I would point out for the entire history of our country,

00:23:30.140 that has been the law. There has been a reserve requirement. That's called fractional banking.

00:23:35.500 You know, if you have a bank, again, use the example, you got a bank with a hundred billion dollars.

00:23:39.040 It has not been legal for most of the history of our country for someone to take a hundred billion

00:23:43.800 dollars in deposits and loan out a hundred billion dollars. Why is that not legal? Because if your

00:23:49.160 depositors come in and say, hey, can I have my money back? If they've loaned all the money out,

00:23:52.820 they don't have money to give it back to you. And so we have long had a regulatory system that says

00:23:58.140 you have to keep a reasonable reserve so that if your depositors want their money back, you can pay

00:24:03.720 them. That has never been confiscation. And so the banks have loved it because they have made

00:24:08.980 massive amounts of money just ending this one one provision over 10 years would save more than one

00:24:19.440 trillion dollars. It's a powerful, powerful idea. But I got to say, they're really powerful forces

00:24:25.700 that do not want to see this happen. Canadian women are looking for more, more out of themselves, 1.00

00:24:31.360 their businesses, their elected leaders, and the world around them. And that's why we're thrilled

00:24:35.440 to introduce the Honest Talk podcast. I'm Jennifer Stewart. And I'm Catherine Clark. And in this

00:24:41.100 podcast, we interview Canada's most inspiring women, entrepreneurs, artists, athletes, politicians,

00:24:47.000 and newsmakers, all at different stages of their journey. So if you're looking to connect,

00:24:51.680 then we hope you'll join us. Listen to the Honest Talk podcast on iHeart Radio or wherever you listen

00:24:56.700 to your podcasts. I want to finally move to that fix that you mentioned coming for the one big,

00:25:02.880 beautiful bill. There's a push. It's actually bipartisan to undo a gambling tax hike that they

00:25:10.360 passed in the mega bill. And there was an outcry because it's, as you mentioned, it's unfair how it

00:25:16.620 was written specifically to one group of people in the job that they do.

00:25:21.640 Yeah. So there was a little provision that was written in the one big, beautiful bill. And nobody

00:25:27.300 saw this. This was a tiny little provision. The bill is a massive bill. It's thousands of pages.

00:25:32.460 And what this provision said is it deals with how you pay taxes on gambling winnings and losses.

00:25:39.600 And the way the law used to work was very common sense, which is that you deduct your losses from

00:25:46.080 your wins and you pay taxes on your net, what you actually made, your profit. That's actually a

00:25:52.080 sensible way to do a tax law. The change, now anyone gambling can only deduct 90% of their losses

00:26:01.500 rather than 100% of their losses. Now, what does that mean? Let's take, for example,

00:26:06.360 as you know, I like to play poker. I play poker with a lot of buddies. I always play really low

00:26:11.500 stakes poker, but I enjoy the game. And I've got several friends who are poker pros. So, you know,

00:26:17.200 I do every year, I do a fundraiser in Vegas that raises money for my campaign. And we get

00:26:23.640 people who come and hang out and several poker players come and hang out with us and play poker.

00:26:29.180 So let's say you're, and look, I like, I think poker is a fascinating game. It is strategic game. It

00:26:36.400 involves math, but it involves reading people. I love watching like the World Series of Poker,

00:26:43.060 watching the strategy. There's a whole vibrant world of people who earn their livings playing

00:26:50.500 professional poker. And it's, you know, as you know, several years ago, I got a chance,

00:26:55.660 I played on Poker After Dark. And I played with Doyle Brunson and Phil Hellmuth. And Doyle Brunson,

00:27:02.240 who was known as Texas Dolly, one of the greatest poker players to ever live. It was truly a bucket

00:27:07.800 list experience to play with him. I also played with Mr. Beast, which was really fun. I got to tell

00:27:13.840 you, sitting down, I was really, really excited to be playing with Doyle and playing with Phil

00:27:19.660 Hellmuth. Doyle, so my goal going in, look, both of them are much, much better players than I am,

00:27:25.680 obviously. My goal was just to take chips off them. I wanted to win at least one hand and be like,

00:27:31.400 all right, I won a hand and took chips. I ended up being lucky and doing better than that. And so

00:27:36.500 with Doyle, I went all in and ended up busting him out, which is, and you can watch it if you want to

00:27:43.580 Google, you can watch online, me busting Doyle Brunson out. That was astonishing. And I got to

00:27:49.320 say, he was so gracious. I mean, Doyle has since passed, but he won the very first World Series of

00:27:55.840 poker and is just a legendary poker player. That was incredibly meaningful. And then towards the end

00:28:01.980 of the game on Poker After Dark, I was playing with Phil Hellmuth. Phil Hellmuth, Phil will tell

00:28:06.700 you he's the greatest poker player alive. By any measure, he's certainly one of the greatest poker

00:28:10.540 players alive. And he's got a good argument that he may be the greatest. Between Doyle and Phil,

00:28:17.760 they had at the time 25 bracelets, which means together they had won 25 different World Series

00:28:23.580 events to give you a sense of just how accomplished these two players are. Phil and I end up, we're

00:28:31.320 playing Texas Hold'em and I went all in and I had ace king and he had ace queen. So I had him

00:28:39.280 dominated. I was a massive favorite. I was about a three to one favorite. And then what ends up

00:28:45.540 happening is Phil got lucky and he sucked out a queen. And it was funny. Phil, and so he crippled 0.95

00:28:51.480 me. He didn't knock me out, but he basically crippled me. And then I went out a couple hands

00:28:55.040 later. It was funny. Phil was embarrassed because I got my chips in as the dominant favorite and he just

00:29:02.540 got lucky. And he was like, oh, I feel terrible to win like that. I'm like, Phil, I am thrilled.

00:29:07.700 If I played that hand a hundred times, I'd want to play it exactly the same way and get my chips in

00:29:12.380 every time. And look, that's why they call it gambling, because some chunk of it you lose. Anyway,

00:29:17.100 let's talk about what this provision does. Let's say you're a poker pro. And let's say in a given year,

00:29:24.440 you lose $100,000 playing poker and you win $130,000. Okay. So you're, you know, you're not a

00:29:34.640 super rich player, but you're out playing and, and, and, you know, you made, you netted 30 grand. 30

00:29:38.840 grand is what, what you made that year. Ordinarily, uh, you would deduct the hundred grand from the

00:29:46.200 130 grand and you would pay taxes on the 30,000 profit you had. Which by the way, is exactly what

00:29:51.280 everyone else does. Right. Now, under the new law, you lose a hundred grand that year, you make 130.

00:29:59.360 You could only deduct 90% of the hundred grand you lost, which means instead of paying taxes on the

00:30:07.140 30 grand you made, you would pay taxes on 40 grand. You would end up paying taxes on more than you made

00:30:16.680 that that's wildly unfair. By the way, even worse than that, let's assume you had a really lousy

00:30:22.540 year. Let's assume you won a hundred thousand dollars and lost a hundred thousand dollars.

00:30:27.080 So you, you like just netted nothing. You broke even under this law. You'd have to pay taxes on 10

00:30:33.940 grand because you could only deduct 90% of your losses. So even though you made not a penny,

00:30:38.760 you would owe taxes on the 10 grand. That is wildly unfair. And, and I got to tell you,

00:30:45.020 I don't know of a Senator who knew this was in there. It was a tiny little provision buried in

00:30:49.020 there. We were moving incredibly fast at three in the morning. And so nobody saw it there.

00:30:54.220 When I heard about it, I said, that makes no sense at all, but it was already passed. It was signed in

00:30:58.920 law at the time I heard about it. And so what I've done, I've joined with, with the two Nevada senators,

00:31:04.020 with Catherine Cortez Masto and Jackie Rosen. They're both Democrats. And also Bill Haggerty,

00:31:09.340 who's a Republican. And all four of us have joined in legislation to fix this. I think we need to fix it.

00:31:14.520 We, we should not be treating people unfairly. Uh, the income tax should tax people on, on real

00:31:21.080 income, not imaginary income, uh, that, that, that is unfair. I don't know that we'll get it fixed

00:31:26.740 because look, changing anything in the law is complicated. Uh, but I hope we will, because I

00:31:31.560 can tell you, I, I don't know of a Senator Republican or Democrat who's arguing. This is a good idea. I've,

00:31:38.260 I've sat and talked with a number of my colleagues and it's not like someone is taking the other side

00:31:42.640 and saying, no, let's, let's, let's be wildly unfair. Um, I hope we can get this fixed. Uh,

00:31:49.140 and, and I think we need to, because, because we need to be fair. Um, and, and look, there,

00:31:54.960 there's a whole industry, particularly around Vegas of, of, of people who are poker pros and,

00:31:59.700 and make their livings and, and generate a lot of revenue. And if we don't change this,

00:32:03.720 the effect will be to drive those poker pros out of the U S we will force them to go

00:32:08.700 elsewhere. That, that, that, that would be really a tragic outcome. And so I don't want to see that

00:32:14.640 happen. Yeah, no doubt about it. Don't forget. We do this show Monday, Wednesday, Friday, hit that

00:32:18.980 subscribe or auto download button, wherever you get this podcast, please write us that review and

00:32:24.100 share this. It makes a huge difference in who sees and hears the show. Uh, and we will see you back

00:32:28.980 here on Wednesday morning. This is an I heart podcast guaranteed human.

Verdict with Ted Cruz - July 28, 2025

Dems' Poll Numbers PLUMMET, plus How to Save $1TRILL in Fed Spending & Why We Need to Fix the Tax Laws to Treat Poker Pros Fairly

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