An “Abomination” & Calls for a Breakup: The Trump Agenda Bill 6/4/25

0:00Bring in show music please. Hi, I'm CNBC producer Katie Kramer. Today, on our big, beautiful Squawk Pod. The reconciliation bill's fate in the Senate, Wisconsin Republican Ron Johnson has some major edits like crunching the numbers on the deficit and chopping it in half. Very respectfully, we just have to say, Mr. President, I'm sorry. One big, beautiful bill was not the best idea. We should have done what John Thune always wanted to do, split this up into multiple parts. And making the most of saving pre-tax dollars for your health, Scott Cutler, a former technology executive, now leading Health Equity.

0:38One in four Americans cannot actually afford a$400 unexpected medical expense. Plus, from the bromance to an abomination, the world's richest man sours on the spending of the Trump administration. I don't completely question Musk's motives for being angry with this. It's Wednesday, June 4th, 2025. Squawk Pod begins right now. Stand Becky by in 3, 2, 1. Cue it, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We are live from the NASDAQ market site in Times Square. I'm Becky Quick along with Joe Kernan. Andrew is out today. We are now looking at four days in a row of gains for the Dow, two days in a row of gains for the the S &P 500 and the Nasdaq.

1:25And by the way, the S &P at this point, less than 3 % from the all-time high. 2.8%. 2.88, I think, if you carry it out. 6144, I think. And to get back there, you need 3%, and it's down 2.8. Well, you need 2.9 to get back. So that's like if something comes out. Or it could go down. Or it could go down pretty significantly, too. President Trump weighing in on trade earlier this morning on his social media network at about 2.15 Eastern time. The president posted, I like President Xi of China. Always have and always will. But he's very tough and extremely hard to make a deal with, exclamation points.

2:04The White House has said that Trump and Xi would likely speak about trade this week. We'll see. Trump has accused China of violating an agreement to soften tariffs and trade restrictions and a development just a short time ago, which is noteworthy probably. We'll see if the futures respond about European trade. The EU's trade chief posting on X had what he called productive talks with Jameson Greer, the U.S. trade rep. He said the talks are moving in the right direction. The White House is reportedly pushing for countries to give their best trade offers by today. The back to the China piece, there's interesting, you know, once again, Wall Street Journal weighing in.

2:43Apparently, it's going to be different this time. They settled according to sources in China. It would be different this time. How? From last, they rolled over too easily, in their view, in the first Trump presidency. And it's this gentleman. It's not he, is it? Don't we pronounce it? Huh? Or something? Yeah. Huh. Yeah. And he's supposedly taking a much more strident tone. And then back to the markets. I think everyone who comes on and says we're going to retest the lows. And we just had another guy the other day saying, oh, yeah, anytime we go back down, 6 ,000 is going to be. This market is definitely doing weird things in terms of shrugging everything off.

3:24And when it does this, a lot of times it's best just to say, I don't know. And to say, oh, but something could happen. The market knows something could happen all the time. Maybe it will be China. Maybe it will be that we get nowhere with them and we go back to, you know, all these respites eventually lapse. So we can be back. They're talking now at this point. And look, the situation with China is the president. President Trump has been saying for, I think, three or four times now, at least, that he'd be talking with China any day. I think President Xi does not want to have a direct conversation with him.

3:58The Chinese like to do this by kind of going from lower levels where they can get in what they would like done and make sure that they are getting their demands met. President Trump likes to look at this and just deal directly with President Xi or whoever's at the top of the pyramid. And this looks like a little bit of a stiff arm, like, no, we're not going to be talking with you immediately. If we get through those old S &P highs, then it's really going to get interesting. And it could be, if we saw some weak economic data, that could change things, because all we've seen is like low inflation and pretty good labor.

4:32Look at the jobs report this week. We'll get that Friday, and we'll see. Then there's this. Expect Elon Musk to very quickly get back on the Democrats' good side. They're going to be talking about what a great man he is saving the planet because he's blasting Trump's signature tax and spending bill that was recently passed by the House. In a post on his ex-social media network, Musk said, I'm sorry, but I just can't stand it anymore. This massive, outrageous, pork-filled congressional spending bill is a disgusting abomination. Shame on those who voted for it. You know what you did is wrong. You know it.

5:09Since that message, Musk has also posted or reposted a number of comments criticizing big government spending. At one point, he said, in November next year, refire all politicians who betrayed the American people. President Trump hasn't weighed in on Musk's comments, but the White House press secretary said, Trump already knows Musk's stance on the bill, and he's still sticking with it. A source familiar with the relationship between Musk and President Trump tells NBC News several factors are likely, but yeah, I can think of one really big factor behind his venting, including that the spending bill doesn't contain EV tax credits, and it gets rid of a lot of the green subsidies from the Biden administration.

5:53That's what Speaker Johnson said yesterday. I don't know if that's the case or if this is the case. They're gone. I don't know if that's why he's mad, though. I think he's probably mad because this is Doge. He spent all this time there. They're going to do the recession bill for the$9 billion they got. They're going to try and do it. I can understand Elon Musk being ticked off that he was in there doing Doge for months of his daily. I don't know why you're suddenly turning on Elon Musk. I'm not turning on him. I'm not turning on him. It sort of sounds like it. Did you read his quotes? There is no change to tax incentives for oil and gas, just EV and solar, and people are going to die.

6:25Slashing solar energy credits is unjust. He spent how many months in the White House trying to cut away? And this is like the hydrant. Every profit that almost every dime in profit that Tesla has posted recently has been selling energy tax credits to other companies. So it's not about the pork you think? He's lying when he says that, that this is just about his pork being died? If you don't, what's in this bill is at least you avoid four and a half trillion. It's back to the good versus the perfect. You're also back to most places scoring this as saying you are going to be spending much more money.

6:58You are, but it's still if you don't if you don't if you don't pass it, you don't get one point five trillion in cuts and you don't get you get a tax increase on everyone in the country. I would take Elon Musk at his word at this and probably being frustrated. I'm sure the personal pain that he has taken. You think I like that? I don't like they don't do anything. We're going to have Ron Johnson on. They don't do anything that they should have done for Medicaid. What this does is embolden Mike Lee and Ron Johnson and Rand Paul and any other senators who are saying, we want to see more cuts before this goes back.

7:32Well, you either don't want the pork or you do want the pork. And he can't just pick and choose. This pork is good. The pork that benefits him is good. The pork that benefits us. Maybe he wants the other pork that benefits his competitors. Nothing is done to, yeah, I'm sure. Nothing is done to oil and gas, he says. And all oil and gas is getting is the same depreciation all managers are getting. Yeah. I mean, we'll talk to Ron Johnson. I'm ready to go along with what Ron Johnson said. I wish, but in terms of more cuts, but you've got people like Susan Collins. You've got people in the House that can't do it.

8:09And even Josh Howley and Mr. Murkowski in the Senate, too. Do you remember what Biden wanted to do in the, what was it called? the New Green Deal or whatever the hell it was? Yeah. If they had gotten, this is the way it is on both sides. Without Joe Manchin and Kyrsten Sinema, it would have been, no, it just would have been 10 times the size. Now the Republicans are in it. And you've got the same problem. This party, both parties, you have far left and far right. But you have people that are not going to agree with you intra-party. Yeah. And that's why nothing ever gets done. It's also very close margins.

8:44And so you can't lose more than a vote or two in the House. People would say that's what they had planned when they put it out. Big things are hard to get done. And then you've got two years for the House. So the minute you get in to do something, then you're basically handcuffed by trying to get reelected. But look, this is not just an extension of the 2017 tax cuts. President Trump has expanded it in lots of populist ways to try and make sure that people who are, you know, are getting tax cuts on everything from tips to overtime to Social Security payments. So this is not just plenty of things that you could get rid of some of that stuff.

9:24You could get rid of the salt cap. You could get rid of that. You could get rid of it's not it's not perfect, obviously. But if you don't do it, it's not good. And I don't know, just to be carping about pork. And then in the next sentence to say, but my pork is, I need it. But to hear what he said, I can understand his frustration, right? He's in there looking for$100 billion to cut here,$100 billion to cut there. It's supposed to be a trillion, and we're down, what, it's$9 billion? Right, and every time you slice something off, it's like the hydra and the head group. Well, you don't want to slice anything.

9:54Every time they slice it. I do think they need to. Look, I think we need a Simpson-Bowles. Absolutely. But anything with research, you think that every dime that they need needs to be in. Not every dime, but does it need to be cut 50 %? I'm not sure what needs to do. I'm not sure how you cut anything, but just like anything else, everybody's got their own sacred cows that they don't want to touch. I think you can look through this, and I think there's a lot of stuff you could cut out of. Honestly, I think a Simpson-Bowl style sit-down, and by the way, President Obama did not take the vote on the Simpson-Bowls.

10:22It was not mandatory for what went through with that. That was a huge problem with it. You have people like Bono and Bill Gates saying that the slight cuts in USAID are going to kill millions of people and have already killed millions of people. That's what you're dealing with in terms of hyperbole and just... But that's not what is getting stuck in the Senate or the House. Nobody in the Senate or the House can hear about that. It's an example of how tough... What you need to look at is every senator... An example of the rhetoric you're going to hear. You hear the rhetoric, but what matters is what's happening in every congressional district and what they are voting to support.

10:55And they aren't voting to support anything that hurts them. Correct. Right. And that's why... That's why if you get... If you get 50 percent of what you want in this bill, the counter, the other thing is to not pass anything. And that can't happen for Republicans. Well, this was the this was the gamble that the administration took when it decided to take on one big, beautiful bill instead of saying, OK, we're going to just solidify the cuts that were there. We're going to do this. And the argument from the House, which may very well be accurate, is that you would not be able to get the House through unless you crammed it all into one big thing.

11:31So everybody has to take something that they don't like. Under reconciliation, which we learned all that. That's how Obamacare, that's how things are done to get around the realities of a divided. All I'm saying is I don't completely question Musk's motives for being angry with this. I wish, I've been saying good versus perfect. And if you get 80%, they don't do anything about able-bodied people getting more reimbursement than pregnant women and disabled people. They've just moved it out. No, that's that. They don't. The work requirements they brought in from 29 to 26. But it still doesn't do anything with the core problems with Medicaid.

12:11It doesn't do anything with the expansion of Medicaid that was done under under Obamacare, too, which has turned it into the fastest growing entitlement that we have in the main problem. Cheese will be next. Coming up next on Squawk Pod, Senator Ron Johnson is a key player in the future of President Trump's one big, beautiful bill. But he has some big qualms with the legislation as it stands today. No American family, if they had an illness, had to borrow$50 ,000 to pay for medical bills. If that family member got well, would keep borrowing$50 ,000 and spend on that level. That's what the federal government has done.

12:47Why Senator Johnson is pushing for a two-part bill right after this.

12:59Welcome back to Squawk Pod. I'm producer Katie Kramer. President Trump's key legislative agenda, the so-called Big Beautiful Bill, a mix of tax cuts, reductions to entitlement spending, and increased border security, is winding its way through the U.S. Senate. And it's not an easy road. Kentucky Senator Rand Paul joined us yesterday. Check out that podcast. he's challenged the spending in the bill and the amount it could add to the federal deficit. His colleague from Wisconsin, Ron Johnson, agrees, and both men have caught President Trump's attention. On the big, beautiful bill, you said recently that it is, quote, blatantly wrong to say that it adds to the deficit.

13:35You essentially said that an estimate from the Congressional Budget Office and other scorekeepers you believe are wrong. But Republicans like Ron Johnson and Rand Paul disagree. They are saying that it will add to the deficit. That is their concern. Is the White House's position that those two Republican senators are, quote, blatantly wrong? It is. Those senators, it's not news that they disagree with this president on policy. And the president has vocally called them out for it and for them not having their facts together. Senator Johnson joined our TV broadcast this morning. Here's that interview.

14:07Our next guest has proposed a two-part bill. Joining us now is Senator Ron Johnson of Wisconsin. Senator, it's good to have you on. I know the president really has always been pushing for one. That's why it's called One Big Beautiful Bill. What would how would that help your case or your cause by splitting it into two? How would you do it? Good morning. Well, first of all, we'd actually have time to do the work to forensically audit every line in the federal budget, every program. You know, there are over twenty six hundred programs in the federal budget. We haven't taken the time. You know, Doe showed us how to do this, so we ought to follow their example.

14:47But, you know, the bottom line is this is a budget reconciliation process pretty well devoid of actually talking about numbers. About the only number we heard out of the House was$1.5 trillion, which sounds like a lot until you put it in context of the CBO's 10-year projection of$89 trillion being spent,$22 trillion of projected deficit over the next 10 years. That's a$2.2 trillion deficit per year, completely unsustainable, not even coming close to returning to a reasonable pre-pandemic level spending. So, again, we're just not taking the time to actually debate this. And by the way, I heard earlier discussions of AI.

15:24I'm using AI. For example, this morning, again, using that basic CBO projection, 1.8 % growth is what they're projecting, 2 % inflation. I said, well, what if we grow at 3 % with 2 % inflation? What's that going to do in terms of revenue? Over 10 years, about$500 billion. We lose revenue the first four years during the Trump administration, probably gain revenue in the last six years. So again, that's the kind of analysis I'm doing. That's what I want to put into report. I want to issue here within a week or so, just laying out the basic numbers, which we have not looked at. We haven't looked at the most relevant piece of information.

16:00The fact that our deficit is out of control, it's on an upward trajectory, when what we should be doing is bending the curve of deficits down in this reconciliation process. We're not even coming close. Senator, during President Trump's first term, before COVID, we were under a trillion dollars. And that's still a lot in the deficit. And then the pandemic hit. Now, suddenly we're at two trillion. We just seem to be locked in there. I know that there's some, you know, there's interest and there's other factors that are going against this. But your idea to get back to pre-pandemic spending levels, can you just I wish you could just flip a switch, but you can't.

16:41And every single thing that you take away, there's going to be some constituency that it's going to be the end of the world. Or that's what they're going to say. What would it what would it entail to get back to pre-pandemic spending levels? Where are those cuts? So, again, let's look at the numbers. 2019, we spent$4.4 trillion. This year, over seven. Next year, projected to be about$7.3 trillion. So again, that's a massive 58 % increase in just six years. So rather than basically leave most programs untouched, only focus on a couple, you need to go line by line, program by program. And I have to believe in$7 ,000 billion worth of spending,$7 trillion, dollars.

17:24You will literally find hundreds of billions of dollars that if you don't spend it, nobody would even notice except the grifters who are sucking down the waste and the pork. But you have to do the work. That's going to take time. It's going to be a massive effort. We haven't done the work. We haven't taken the time. But again, in proof is I've laid out these options for pre-pandemic spending going back to Clinton, Obama and Trump, 1998, 2014, 2019. You grow all outlays except for Social Security, Medicare and interest. Leave those as is and then grow all of their outlays by population growth and inflation, you're under the baseline budget somewhere between$5.5 and$6.5 trillion.

17:59That's where you start. But you have to do the work. You have to do the analysis. I know the numbers. I've been forcing the numbers on my colleagues. In the Senate, we're going to look at the numbers. Senator, you said you're using AI to kind of run through some different scenarios. That's interesting because that's sort of what Jamie Amy Diamond was suggesting the government do last week when he was speaking at the Reagan Library, except for he was suggesting that you stress test it for much worse times, kind of like the banks have to do these stress tests. Did you stress test it to find out if GDP dropped to 1 % or if it dropped to negative levels, what that would mean?

18:35I could literally do that in about 10 minutes. So, yeah, that's what I want to lay out in my report. We'll stress test it. I just did the first one on the rosy scenario, 3 % growth, which we haven't achieved. By the way, the last 20 years, we've averaged 2 % growth. So Reinhardt and Rogoff talked about in their book, you know, this time it's not different or whatever the title was. Once you're at 80 % of GDP of debt held by the public, you harm economic growth. We may be at that point right now. We're way beyond 8 % or 80%. So, again, we have to look at this. And my latest chart just shows what you said, Joe.

19:09Obama, his last term, he averaged deficits of$550 billion. Trump's first three years,$810 billion. Then, of course, he had COVID,$3.1 trillion. Reasonable leadership would have brought it back down to under a trillion. Joe Biden averaged deficits of$1.9 trillion. And that's where it starts. We're going to have a$1.9 trillion deficit rising to about 2.5 over the next 10 years. Again, it's completely unsustainable. This is insane what we're doing. No American family, if they had an illness, had to borrow$50 ,000 to pay for medical bills. if that family member got well, would keep borrowing$50 ,000 and spend at that level.

19:44That's what the federal government has done. It's completely unjustified. But we need the time to do the work. And I'm sorry, the one big, beautiful bill, we haven't taken the time. So, Senator, it's been said that if there was like a fairly small bill that just extended the 2017 tax cuts, Do you think you could get both sides? You know, you got people in the Senate. There's some like you. There's others that that are in have a totally different situation with the states that they represent. Same within the House. So you can see the Freedom Caucus and then you see, you know, on the other side, it's impossible to please everyone all the time.

20:24That's why this isn't going to get done. I guess that's your that's your point. It's not going to get done in one big bill. Right. If you try and throw everything in there. What would it look like? Would you do President Trump's tax on tips and on overtime? Which part of the bill would that be in? How would you split it up? So I would focus on the areas of greatest agreement, funding for the border and border security. Defense, I guess we have to do that. I would take whatever spending cuts. The House done pretty good work on their limited number of spending cuts. I'd bank those. I would extend current tax law, take an automatic tax increase off the table.

21:02I would extend the debt ceiling for a year. And I'd leave everything else for a second bite at the apple here where there's the pressure to do it. We can't do this in one bite at the apple. It's obvious we can't. And you can do both with reconciliation? Elon Musk is absolutely right. You can do both? You can do it twice? Absolutely. We've got fiscal year 2025. That's what this reconciliation bill is. We should be debating a 2026 budget right now. So we've got that reconciliation. You can do three bills in each reconciliation package. We're bundling up just one bill in this reconciliation. So we have all kinds of bites of the apple.

21:34We should use that. And President Trump has to realize the debt ceiling is leveraged for him to accomplish what he said he wanted to accomplish in the State of the Union, balance the federal budget. We're not even coming close. We're not even turning the deficit trajectory downward. It's skyrocketing. Senator Johnson, you're often mentioned in the same breath with Senator Rand Paul. He agrees with you on a lot of these different issues. We had him on the program yesterday. And last night, he put something out on X in response to Elon Musk's statement on this. Elon had tweeted or had put on X, I'm sorry, but I just can't stand it anymore.

22:10This massive, outrageous, pork-filled congressional spending bill is a disgusting abomination. Rand Paul put up this tweet. He said, I agree with Elon. We have both seen the massive waste in government spending. We know another$5 trillion in debt is a huge mistake. Do you agree with Rand Paul on this? Well, again, I'm going to be focusing on the numbers. Use CBO's 10-year base as our baseline. Their projection is a baseline. And then let's start honestly discussing where we're at. And, you know, again, my lightest chart just shows the unsustainable nature of this, how deficits are going to continue to skyrocket.

22:42You know, we're not even coming close to even having a possibility of balancing the budget. So I'm going to focus on the numbers. I'm not going to be insulting anybody. Does what Elon said give you additional kind of help in your quest on this? Yeah, it certainly bolsters our case. He was in the inside. He showed us with President Trump how to do this, you know, contract by contract, line by line. We have to do that forensic audit. We don't take the time. Again, we exempt most programs, focus on a couple, tweak and get a CBO score. That's really out of context. I mean, the context is all about$22 trillion in expected deficit.

23:18And by the way, that counts about$4 trillion of tax increase, which I don't want to incur. But if we don't incur that, you got to make up for about$4 trillion in revenue. How do you do that? That's why I'm starting to do these AI sensitivity analysis. And by the way, mindful that AI is often confidently wrong. You got to check your work. So I haven't checked this work. But again, that's how you approach this. You actually look at the numbers, take the personalities out of it, take the invective out of it, take the insults out of it. look at the cold, hard facts. If you do that, you get depressed really fast and hopefully it'll cause all of us to act.