Dave’s Hot Chicken & The Reconciliation Bill’s Next Stop 6/2/25

0:00Bring in show music please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. In the U.S. Senate, it's go time on the big, beautiful bill. Oklahoma Republican Mark Wayne Mullen on this massive reconciliation package heading his chamber's way. We're not going to tear down the frame of the House bill. We're going to maybe repaint the interior walls and redecorate a few rooms. But overall, the bill and the structure of the bill is going to stay intact. And Dave's hot chicken has a winning recipe for private equity. Dave's CEO Bill Phelps recounts the chain's journey from folding tables to a billion-dollar deal.

0:41We timed it really well. The product is insane. But then we have a team that built these other businesses, Wetzel's Pretzels and Blaze Pizza, and we have built a great team. And then the franchisees are just phenomenal. Plus, Monday morning tariff policy. Our Rick Santelli gets a starring turn in the Oval Office. When we do the data, we do it straight. The numbers are the numbers. And when hot-button issues of campus speech hit graduation day. This is where it gets very interesting. Hit the road, Jack. Don't come back. No more, no more, no more. It's Monday, June 2nd, 2025. Squawk Pod begins right now.

1:20Stand Becky by in three, two, one. Cue, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the Nasdaq market site in Times Square. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. Happy Monday. Several developments on the tariff and trade front. China refuting Washington's claims that it violated an agreement that was negotiated last month in Geneva, Switzerland, instead now accusing the U.S. of breaching the terms of the deal. The Chinese Commerce Ministry spokesperson saying that the U.S. export restrictions on software increased and that the U.S.

1:56announcing it would revoke Chinese student visas both undermine the deal. This follows President Trump's social media post last Friday, which he accused China of violating the agreement with the U.S. And we talked to Jameson Greer about what exactly that meant. Speaking yesterday on ABC News, National Economic Council Director Kevin Hassett suggested that President Trump and Chinese President Xi could speak soon about a trade deal, as soon as this week, potentially, though no specific date has been set. I think this next story is one of the reasons the markets aren't too happy, because, you know, are we de-escalating or are we escalating?

2:33President Trump weighing in on tariffs over the weekend, saying in a post on True Social yesterday afternoon, if the courts somehow rule against us on tariffs, which is not expected, that that would allow other countries to hold our nation hostage with their anti-American tariffs that they would use against us. This would mean the economic ruination of the United States as follows the ruling last Wednesday from the U.S. Court of International Trade that blocked the president's tariffs. The Federal Appeals Court stayed that, reinstated the most sweeping tariffs a day later with a stay. And we were sort of grasping at whether there was executive power precedent for using tariffs.

3:10And there definitely is. And if you're interested, I'm working through this now. I haven't had a chance to read all of it yet. But a gentleman that used to be on the U.S. Court of International Trade says where that decision went wrong and that there is ample precedent for using presidential powers, emergency powers, to address trade imbalances. But I guess, what's the emergency? Is it fentanyl? Is it something else? No, just using trade deficit. Just using it. Yeah, just using it, which was weird because it went to 80 last Friday, which was crazy. And I don't know if that lasts, but I thought it was going to be the month where everyone was getting as much stuff as they could before the tariffs went in.

3:54So it was very odd. The numbers were weird on Friday. They were too good. A lot of personal income was way up. But personal income in part was because of a Social Security adjustment, a one-time Social Security adjustment. OK, I want to know all those details. I actually went to perplexity and Grock to try and figure out some of the reasons on some of those numbers. Which, yeah, which works all the time now. Now, the market didn't go up based on all those great numbers, really. And then today it's down. I think you're right, the de-escalation factor. Yeah, so we're back on with the steel tariffs and doubling those.

4:27But Waller, one of the Fed guys, is saying, and I had to realize it's June, he was saying some of those numbers opened the path for multiple rate cuts this year. On the inflation front. He said these would be the potential for what he called good rate cuts, which is the opposite of bad rate cuts, which is because of a slowing economy. Right. If the economy drops, that's terrible. That's not why we want to see rate cuts. If you can cut rates because the inflation numbers are better than expected, that's a different story. But I thought it was weird if, you know, and Jay Powell getting yelled at, or at least there was a discussion last week with Trump about it again.

5:05And then Waller comes out. Do they coordinate things? I don't know if they coordinate things. But now saying that if inflation was cooler than expected, multiple rate cuts, it's already June. How would that? That would be the next time and the time after. Well, there's a lot of questions whether they would start before September, because you either cut by July or there's the August, there's not the meeting. So it would have to happen pretty quickly, or you're talking about consecutive ones at the end of the year. There is some additional news on tariffs this morning as well. The European Commission saying that it is prepared to retaliate against President Trump's plans to double tariffs on steel and aluminum imported into the U.S.

5:49The commission said that the move from the White House, in their words, undermines ongoing efforts to reach a negotiated solution. President Trump announced those heightened tariffs on Friday just outside of Pittsburgh, where he was taking up a nearly$15 billion deal, talking up that deal between U.S. Steel and Japan's Nippon Steel. House Speaker Mike Johnson tried to address concerns among some of his Republican colleagues that President Trump's tax and spending bill will add to the U.S. debt. that Johnson spoke on Meet the Press yesterday. He called himself a fiscal hawk. Mr. Speaker, if the big, beautiful bill does add to the debt, will President Trump own that?

6:32It's not going to add to the debt. Mr. Speaker, the Joint Committee on Taxation, the Committee for a Responsible Federal Budget, the Tax Foundation, the Penn-Wharton budget model all say this will add trillions of dollars to the deficit. Are you really telling the American people this will not add one penny to the debt and deficit? You can guarantee that? I am telling you this is going to reduce the deficit. Johnson also trying to calm fears that President Trump's bill would hurt Medicaid, saying the legislation contains no cuts and would actually strengthen the program, which I thought was a bit surprising.

7:07Just a cut in the growth that's been that way all along, but not enough. I still don't think it does nearly enough. And troubling, this was an attack in Boulder, which I know so well, Boulder, Colorado, being investigated as an act of terrorism. Officials say a man shouted, free Palestine, and used a makeshift flamethrower to attack a group of peaceful protesters that were marching to bring awareness of Israeli hostages still held by Hamas. The suspect was taken into custody at the scene. officials say he's an Egyptian national who at least it looks like acted alone. Six people who were at or near the demonstration were injured.

7:49At least one is in a critical condition, but fortunately no lives were lost at this point. We're going to talk about MIT? Hated it. Hated it. Yeah. What am I going to do? Well, do you think that you think MIT gets money from the government? Do you think that the government should go after your alma mater? It's sort of not a total. Is it the graduate degree? Do I still call it that? Colorado is my alma mater. You've been talking about MIT for a very long time. I talk about Colorado all the time. How it turned me into what I am. It was so crazy in the late 70s. It was just like it is now. You have no view on MIT.

8:30It was just like it is now. About whether they should give money or not. The valedictorian gives an entire speech about free Palestine. I'm still with, did you see what I said? And I thought that the president who came after her did not do anything. I thought I didn't even understand what was happening. You sent that to me. In response to you sending that to me, you saw what I sent back to you. Or did you not read it? Maybe you didn't read it. I think I read your texts. It will never not be fascinating how Western progressives were intellectually captured en masse. at the time by an imperialistic Islamic movement which stands opposed to every progressive value they espouse.

9:10So my question is... That's what I'm saying. So my question is, what do you do? They got to do that to MIT, go for it. I don't have any elite... Okay, so you're saying go for it. Absolutely. What would you do to them? I'd pull another Harvard on MIT. They're right next to each other. Might as well. I would. Unless they're willing to really open up in terms of... What would you do to her? to the valedictorian well i mean she's allowed to say what she wants to say so that's very interesting i actually agree with you i think she is allowed to say what she's allowed to say what she wants to say it's just we got to try to find the root cause of the what i think is is a outrageous to come to that conclusion given what we saw on october 7th and if that's what you finally arrive at something's wrong okay do you think nobody should employ her well that's a that's So, you know, that's up to the, obviously that's up to the corporations can do whatever they want.

10:03No, I know. But I'm saying now that she's done this publicly and you have a view that you, and this is, no, this is where it gets very interesting. Okay. Somebody does what does it. If she comes in here and Ann tells me, look, we got a new application for someone to be a news associate. You would say no way. Say no. Is that okay? Yeah, no, it is okay. I'm just curious how you think about it. Hit the road, Jack. Don't you come back. No more, no more, no more. I mention that because her LinkedIn page or one of these pages. It says Squawk Box? No, but was being passed around online, I think, in the context of, I don't know if it was a LinkedIn page.

10:39I think it was some other kind of profile page that seemed to be passed around in the context of jobs. You saw Scott Pelley. I mean, if I had someone start giving a commencement, I'd walk out. I'd walk out and just say. By the way, no, no, I will say this. You can disagree with me. I do. You do. If you're going to say something positive about that. About Scott Pelley? I will. Okay. Because I think that Scott Pelley actually was doing it. Oh, he's up below hard. He's always been such a progressive. Oh, goodness. I think that he is. I want to hear what Andrew says on this. Well, no. I think that he is doing something very important, speaking out at a time when most people will not, about our industry.

11:1260 Minutes is the reason that the mainstream media is in the position they are right now with about 5 % approval, because of the slanted, ridiculous bias that was so pervasive at 60 Minutes for years and years and years. I disagree so much. Oh, my God. You were fine with laptops and all this other stuff that was happening. We were going to have a ministry of disinformation, just like 1984. They had it ready to go. It was ready to go. And thank God that woman never got that job. But they were ready after telling Facebook you can't put that. We're not in a commercial break. Why don't we talk about this afterwards?

11:51God bless you, Scott. Oh, my God. My hair is on fire. Thank you, Scott. Throw Leslie Stahl in there, too. Oh, my. Cheese will be next. Coming up, Senator Mark Wayne Mullen is the liaison between the White House, the Senate, and the House of Representatives for this reconciliation bill we keep talking about. And the Senate dives in this week. He is confident in the bones of the bill so far, even if Elon Musk isn't. It's extremely frustrating when you see something that's so black and white in front of you and you can't fix it. And Elon's coming from a business perspective, and which we need, but unfortunately, Congress doesn't always work like a business.

12:29The big, beautiful bills next stop, right after this on Squawk Pod.

12:37This is Squawk Pod. Stand by Joe, his mic, Q. In case you missed it, President Trump reacting to Friday's economic data reacted by playing a clip from this show in the Oval Office. The numbers have just come out which are rather extraordinary and I thought I'd play a tape of one of the people who I've respected over the years from you know Joe Kiernan and Rick Santelli this just came out and we'll just play that for a second. Personal income is up eight tenths of eight tenths of a percent that is almost triple the expectations. The income the income numbers really for the first four months of the year, they're stellar.

13:21To cut it in half, that's crazy. So there wasn't a lot of front loading of things that they needed before the tariffs hit? Yeah, I'll tell you what, it really does call into question some of the conventional wisdom. Not bad. Not bad. Come on, guys.

13:39All right, Rick Santelli joins us now. At least you got to hand it to him that he knew all the mainstream media cameras. He had them like all held hostage. And if they weren't going to talk about those numbers, it was surreal. Was it not that the cabinet was surrounding him? And for for about two minutes, people were just listening mostly to you just talk about those numbers. It was a little bit weird. You heard. Did anyone see that? You heard from some people, I guess. Yeah, I did. I heard from some people. But that's the first time I've seen at least that portion of the clip. I've only seen bits and pieces.

14:13But listen, the data is the data, Joe. And the one thing that I'm always very happy about when you and I and Becky and Andrew are together in the mornings is that when we do the data, we do it straight. The numbers are the numbers. I'm a quant guy. OK, I quote numbers up eight tenths of a percent triple expectations. These are hard to argue with. And when I go back in time, when was the last time we're at these levels or how did they stack up next expectations? We try to bring the audience an unvarnished, unpoliticized view of what's going on. And there are some positive things going on within the economy.

14:53Many were calling for recession. And you know what, Joe? Jamie Dimon now has been talking about debt. That's a good thing. I mean, you know, maybe his alarm clock was a little slow and going off. This has been developing for years, if not decades. and the current plan in place that you've been discussing, you know, it adds, what, 2.7 to 3 trillion over 10 years. Not good, but it really isn't changing the trajectory that's taking us into the 50s and potentially$60 trillion deficit areas. Those are baseline numbers that changed in 2020. Okay. So everybody who's now talking about avoiding long bonds and, oh my God, look at what's going on with the debt.

15:35You know, this has been developing for a long time. But I welcome, and I'm sure you do too, Joe, everybody jumping in here. I think that's why I mean, I think he ran it for a reason, too, that I mean, maybe there's other networks that maybe don't have the same amount of, you know, it's going to it is going to be straight when we give it. Here's the thing, though, the market didn't you would have thought that and I asked you about that trade deficit number, which was crazy to be cut in half. The markets did not go up on Friday. Now they've been going up a lot. Today, there's no there's no really upward momentum.

16:12So as good as they were, it's not in the markets yet. And I'm still thinking that people think it's a stop along the way and that maybe we'll get something on Friday that gives us an idea that maybe there is something, there are some headwinds from a lot of these policies, or maybe not. And then I also wanted to ask you about Waller, because it seems like Waller might have been listening to some of us talk about inflation. You never want to cut rates. He said that there's cut rates. Why wouldn't you want to cut rates at this point for good reasons if inflation was low? No, I find it very difficult to disagree with that.

16:53However, however, having said that, I don't have an issue with the Fed being stingy with the eases. But I do believe things are now in place that they are closer to doing it. I would offer a couple of issues that we need to take care of at some point. You know, some of these subsidies that are in these bills or this bill talking about, for example, you and I and taxpayers subsidizing EVs to the tune of 7 ,500. There's a lot. There's salt. You know, Joe, salt really gets me. And I know that maybe you have different feelings than I do. I get ensnared by this. I don't want any cap. Don't even, you know, the 30.

17:34Right. Or leave it the way it is. I don't mind paying my fair share, okay? I think some of these states, like Illinois, where I live, like New Jersey, like New York, If we allow this salt issue to go from$10 ,000 to$40 ,000 or$50 ,000, even with the income caveats, that just keeps the cycle of high-tax states continually doing that. And I'm not sure that's a good thing. But in the end, listen, I thought that clip was really fun. I enjoyed the attention, obviously. But the attention I enjoyed is that you want to know what's going on in the economy. Tune in to CNBC. Right. That's what I that's what I took from it, too.

18:16If you think it's credible. I mean, you can run people that, you know, somewhere else. Every single thing Trump has ever done is like the greatest thing in the world. We know who we're talking about. And that's not what you get. So when it really does come something like that, you know, it's credible. Thanks. Appreciate it.

18:36The Senate's getting ready to take on the House passed big, beautiful reconciliation bill. But people are saying there might be a fight ahead within the Republican Party and within between the Senate and the House. Joining us now, Republican Senator Mark Wayne Mullen. He's the liaison for the reconciliation bill between the Senate, the House and the White House. I think of all the different dynamics, Senator, it's good to have you on. You guys you guys get six years. Those guys, those poor souls in the House, man. The minute they get in, election season starts for the next two years. And that's why it just seems so maybe our forefathers were smart.

19:17It's really hard to get anything done, isn't it? Well, that's how our federalist papers are wrote. If you read them, they wanted Congress to work slow. So negotiations is part of it. I mean, we're going to bicker back and forth. Both chambers work differently. I have a love-hate relationship with the House because I absolutely loved my time in the House. But, man, it was so frustrating, too, because you're right. Joe, as soon as you finish winning your election, you start running again. So it's kind of always on your mind, especially when you're negotiating one big, beautiful bill that isn't going to be perfect, but it's going to be good.

19:54Exactly. I don't know how many times I've used that expression, the good for the don't sacrifice it, trying to be perfect. But what are your colleagues, the ones that will be in the decision making process on this? And is it going to be fast? Is it going to be July when it happens? And what are the people that you respect there? It's not all not everyone's like Rand Paul, I don't think, but there's people like Ron Johnson and and others. How much are they going to ask for in terms of additional cuts? Well, all of us are going to shoot for the moon, right? We want the bill to be as good as possible.

20:29but truth is we've been negotiating this since November. At the end of the day, everybody's idea is going to be considered, but it's your idea. So since it's your idea, as every member knows, it's your job to get the votes for it. So Ron John or Rand Paul or Mike Lee or Lindsey Graham or whoever else you want to put out there, their deal is they have to find 51 votes for their idea. If not, then we've got to move on. So everybody's going to have their fingerprints on it. Everybody's going to be working together. They're just two hard stops that we really can't mess with and that we can't go below$1.6 trillion in cuts.

21:11In fact, Leader Thune says he wants to actually do better than$1.6 trillion. So that's actually more deficit spending cuts than what the House did. And we can't really touch SALT, even though in the Senate, we really don't have any SALT members in the Senate on the Republican side. But we also know that's very important to the majority makers in the House. And that was a sticking point, hard point to get over. Other than that, we're going to, as I say, we're not going to tear down the frame of the House bill. We're going to maybe repaint the interior walls and redecorate a few rooms. But overall, the bill and the structure of the bill is going to stay intact.

21:52We're just negotiating with them right now. In fact, I was just texting Speaker Johnson before we went on the air here. In terms of that, you mean you're basically going to do what they want, which is to not touch it significantly enough that it has to go back through a vote in the House? No, it'll have to go back for a vote because we're going to leave the frame of it together. But we're going to have to. I mean, if we change the bill at all, it's got to go back for a vote. So we're going to amend the bill. We're just going to take our amendments and put on top of it. There was some talk about some people in the Senate that literally wanted to shelf their bill and and try to rewrite a different bill.

22:30There's no way to do that by July 4th. Leader Thune has made it very clear we want to have this done by July 4th. We will deliver for what he wants to get done. There's going to be a lot of negotiations. I was on the phone with the president this weekend about making sure we're in lockstep with the White House and with the House and with the Senate. But we're going to have to do some amendments. there are some things in this that you know aren't going to make the the the bird rules i like to say the bird bath because it's going through the scrubbing right now once it gets done with a bird bath then it's going to look different anyways and then we've got to uh then we've got to put our our own personal touch on it every senator just like every house member has has ideas where is it going to be it does the senate want to actually deal more with with the the abuses that are with the way Medicaid is set up right now.

23:19And is that where the problem is in the House? You've got some members that are worried. They might be in more blue areas where the president didn't do quite as well. Will they not be on board with some actual real reform of Medicaid if you do that? Is that where you'd lose them? No. I mean, you have Susan Collins, who's in a very unique situation in Maine. I say this all the time. She's the only Republican that can carry Maine. I mean, she doesn't vote with us all the time, but she's votes with us a heck, a heck a lot more than if we had a Democrat senator up there. And so we've got to give her a little bit of leeway.

23:59We have Lisa that's got a little bit of leeway that she's got to work with Dan Sullivan. Medicaid is a huge issue in Alaska. Josh Hawley in Missouri has made this very clear about him with with Medicaid. So we got the same problems. You got the same problems. And then you go back to the House where you got this. But then you guys, we got guys like, you know, Chip Roy on the other side. It's tough to watch. And, you know, Senator Ron John is a surf shop. So I don't think you can use that for Ron Johnson. Right. But, you know, Medicaid, though, there's a lot of confusion that the Democrats have lied about.

24:33They went out there, Joe, and said that, you know, we're cutting Medicaid benefits. We're not cutting Medicaid benefits. No one believes that. No one serious believes that. Senator, how much do you focus on what might be described as the bond vigilantes, this idea that the bond market is a little nervous, maybe a lot nervous, about what this bill may do to the long-run fiscal situation and economic situation in the country longer term? Well, speculation is what always drives the market. We know this. And, in fact, I think the bond market is going to respond well once this bill is passed because it brings certainty, right?