How DC Sausage is Made: Ted Cruz & Musk Author Walter Isaacson 6/5/25

0:00Bring in show music please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. Kill the bill? Elon Musk taking a public stand against massive spending legislation the president supports. Today's Thursday? That was Friday of last week when that glowing send-off occurred in the Oval Office. It was such a love fest. Biographer Walter Isaacson on the bad blood now between the world's richest man and Washington. And if you look at what happened with Biden not being invited to the EV summit, but also the whole crackdowns and the regulatory thing of the Biden administration. So I think you're seeing the same thing with the Trump administration.

0:44But Senator Ted Cruz says while the details are messy, this legislation is happening. We're going to get it done. It is going to be ugly. It's going to be bumpy. It always is. Plus, the rest of today's news that got us squawking. And with what you said yesterday, I'm ready to just let it all hang out. Oh, as opposed to your usual button-down self. It's Thursday, June 5th, 2025. Squawk Pod begins right now. Stand Becky by in 3, 2, 1. Cue it, please. Good morning, everybody, and 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.

1:24Andrew is off today. Elon Musk escalating his campaign against President Trump's tax and spending bill. In a post on X, Musk told his followers to call their local members of Congress to, in his words, kill the bill. There's been speculation that Musk has come out against the bill because it cuts EV tax credits. He was also a little irritated that his pick for NASA was not given into going through. They waited till he was gone. He was gone to say, no, we're not going to do that. He supposedly told associates, I gave hundreds of millions of dollars to help get Trump elected, and now this. This is what I get in return.

1:59And then he also, this was over the weekend he was saying this apparently, also saying, by the way, posting on Doge, or posting on X, that these people at Doge really put a lot of effort into this, took a lot of pain and arrows that were kind of slung their way as a result, and it feels like maybe nothing was accomplished by that. $9 billion. that they won't vote on. And you can't even barely get that to CODEFLA. It's supposed to be$2 trillion. Then it was supposed to be$1 trillion. And now we're talking about$9 billion. I mean, I'm not blaming Doge. It's impossible. That's what DeSantis said.

2:35You know, Doge took on the swamp, and the scores, swamp won, Doge nothing. I mean, I wouldn't be surprised if some of it was frustration for Elon Musk. I'm sure. To do that, to take on all of those efforts, to, and I think it's the hundreds of millions of dollars, but it's also the months of his time. And to watch his businesses being attacked in the meantime, and then have to go back. What he went through, what's amazing to me is today's Thursday, that was Friday of last week when that glowing send-off occurred in the Oval Office, when the president said the greatest things in the world, and it was such a love fest.

3:14They also played the tape of CNBC, which was also funny. But people say, you know, Trump is very forgiving at times because, you know, you've seen him say things that we've got Ted Cruz. You've seen things happen, lying Ted. He does forgive. People do come back in the fold. But then they say, but when it's this much that this is going to be a tough one. We'll have Walter Isaacson on, too. It's weird, I think, that now you're hearing Elon Musk in more favorable light with some liberals and Democrats. But what he's really asking for is even more cuts. It's an aspect to them. Right. It's even more cuts.

3:58But because it would scuttle the bill, now they're kind of on his side. Yeah, but again, if he is successful, the Democrats are not going to be happy with what he pulls off. You know what's frustrating? I would do this. 2017, okay. Right, just extend the tax. I don't know if I'd do all those other ones, but the tax on tips, did you see what the Senate vote was? It was 99 to 1. It was 100 to 0. Yeah, 100 to 0. So it's like both sides are part of the problem. It's really hard to stand up in Washington when the other party, when whatever party is trying to give money away, and look, usually it's the Democrats that are doing this, but whenever somebody is giving money away, other people's money away, It's really hard to stand up and say no to that.

4:40But none of this has made a whole lot of sense. John Thune was the one that didn't want to do one huge bill, ram it all together. John Thune wanted to say. Yesterday he was, I felt bad for him. I mean, first we had Ron Johnson, who was so strident about what he was saying. Yesterday on Squawk. Right, on Squawk Box. And Mike Johnson was kind of trying to say, oh, we'll still get it done. Then Thune was talking in front of a gaggle, and it was like erupted, and Barrasso, Senator Barrasso was behind him. They both were like this. Why do you think Elon Musk is trying to kill Ms. Bill? Well, I can't speak to his reasons other than what he stated, and I think that what he stated was that he thought it was something that would add to the deficit, and we believe the opposite.

5:28The questions being fired about whether this, you know, it was almost like piranha because the bill looks like in the current form could be in trouble. I don't know how they rein it in. I was you've mentioned Josh Hawley a couple of times. He doesn't want to cut anything out of Medicaid. You can put him in the camp with Susan Collins. And all politics really are local. Yeah. Look, I don't know when Hawley is up for election. Because of the state, because they're on the Medicaid, you know, they're, I was going to use some press analogy, but they're on the, they are, they're suckling at the, yeah, they're on, can you say, so you can say that word, T-E-A, but you can't really say.

6:08Yeah, T is. Is okay. Okay. All right. And I did say T-E-A-T. Yeah, you did. And with what you said yesterday, I'm ready to just let it all hang out. Oh, as opposed to your usual button down song. My usual, my usual, right. President Trump, people might know I've been watching yesterday, but we don't need to go into it. I won't repeat it. No. Unless you want me to. No. No. If you do, I'll talk about Jardians' side effects. Never mind. Let's move on. President Trump says he's going to deny visas for foreign students trying to come to the U.S. to attend Harvard. It's the White House's latest attack on the institution, which the administration claims has not done enough to combat anti-Semitism on campus.

6:54In a statement, a Harvard spokesperson said this is yet another illegal retaliatory step taken by the administration in violation of Harvard's First Amendment rights. Harvard will continue to protect its international students. This is actually playing into some of the China negotiations. They're not happy about that. I don't know why they want to send students over here so badly. Because it's an excellent education. I know, but then they bring them back to undermine the United States. Meanwhile, the White House says it notified the accreditor for Columbia University that it thinks that the school violated federal anti-discrimination laws.

7:30In a statement, a Columbia spokesperson said it was deeply committed to combating anti-Semitism on our campus, said it had addressed the Department of Education's concerns with its accreditor. We have Lankford on today, too, getting back to Senator Lankford. I think he's with Thune and the others that are still... Trying to hold it together. You know what the moral of the story is? We should both be glad we never ran for office or are in politics. It's impossible. It's like everybody... I don't see how you put all these differing constituencies. I don't see how you get it done. there's going to be a lot of whipping but right but when you have such thin majorities it's going to be like the more you try and bite off when you have a thin majority the tougher it is you see supposedly there's not a single senator that cares about salt yeah not a single one that's the first thing i don't remember if we said this on air yesterday but we were at least talking off camera salt's going to be the first thing to go i bet some of that other stuff if you it was hard enough to extend the existing tax.

8:39That's where it made it difficult. To pile on so many things on top of it. When you're not willing to... Now, I'm not willing to write this bill off or to say that they're not going to get something passed because I think it would be a political suicide to push those sort of tax increases through. $4.5 trillion next year. Right. Something will get done. I don't know what the final result is going to look like. Something will get done. The general point is$4.5 trillion, add in the tariff effects, and you're almost guaranteed, $4.5 trillion in tax increases, tariff effects, you're guaranteeing a recession.

9:11Tariffs are taxes. Right, so you're almost guaranteeing a recession if it doesn't pass. Right. The new report in the Wall Street Journal says that the Bureau of Labor Statistics told outside economists this week that a hiring freeze at the agency was forcing it to cut back on the number of businesses it's able to survey for price checks. To examine April inflation data, The Bureau had to use a less precise method for estimating price changes. It has also cut back on the cities in which it actually collects consumer inflation data, eliminating collection from Lincoln, Nebraska, Provo, Utah, and Buffalo, New York.

9:53The agency said it makes reductions when resources can no longer support the collection effort. Economists worry that the staffing shortage will impact the quality of recent incoming inflation reports. The story, I read through it. It did go out of its way to say they're not suggesting that there's any manipulation of the numbers that are taking place. But these are really important numbers. If you get inflation wrong, it affects things like Social Security benefit increases. It affects tips and obviously questions about the Federal Reserve's decisions, too. And, you know, I didn't even realize exactly how they conducted this number.

10:29They literally send hundreds of people out there to go price check. And it's like channel checks, going into stores and checking to see prices on some of these things. They'll make substitutions if they can't find the exact thing. If you're supposed to be talking about slacks, they may do the substitution with cargo pants or something. Is the margin for error the same on either overstating or understating it? Is it just standard, the delta just gets bigger and you could be wrong either way? Or does it favor underestimating or overestimating? I would say in a situation where you're worried about prices going up, it may favor underinflation at this point just because you're looking at a change in the delta.

11:04But it's an inaccuracy no matter what. The standard deviation just widens on both sides. Right, right. All right. Reddit filing a lawsuit against Anthropic claiming that the AI company is illegally scrapping its data to train its clawed chatbot. Reddit says that Anthropic is accessing its content despite being asked not to do so and has trained on users' personal data without ever getting permission from them. Reddit has more than 100 million daily users who update the site with the kind of material frequently sought by AI companies for training their models. It's seen as really valuable stuff.

11:40The site has a licensing agreement in place with Google, also with OpenAI. For its part, Anthropic said that it disagreed with Reddit's claims and that it will defend itself. half my lawn. No, but the cesspools on those chat rooms and Reddit, I mean, that's where they get a lot of their info. It's like rock with X. What else are you going to do? I know, I guess. You need more information from these constant places. It does give you a leg up with it. Who were we talking up to yesterday? If you've got, if your view of the world is based on what's going on on Reddit in those chat rooms, you've got serious problems.

12:18Cheese will be next. Coming up, a flurry of late-night developments from the White House, a travel ban on citizens from 12 countries, the latest from our reporter Eamon Javers in Washington. And Elon Musk biographer Walter Isaacson unpacks the Tesla CEO's frustration with the big, beautiful, expensive spending and tax cut bill and the end of Musk's time in the public sector. Elon Musk has never shown himself able to be a collegial player with many other people. Well, he's always kind of owned the joint, and he was probably not the person who was going to make this happen. But I actually thought he could have done a lot more.

12:57We'll be right back.

13:03You're listening to Squawk Pod from CNBC. Here's Joe Kernan. President Trump says he's going to deny visas for foreign students trying to come to the U.S. to attend Harvard University. He also announced a travel ban on 12 countries. Eamon Javers joins us now with more. Hey, Eamon. Hey, good morning, Joe. Yeah, the president with a flurry of activity yesterday at the White House, a number of proclamations and executive orders. The first one is this travel ban. And take a look at the countries that are impacted. He's talking about 12 countries here that will have suspended travel to the U.S. for citizens.

13:40That's Afghanistan, Burma, Chad, Republic of the Congo, Equatorial Guinea, Eritrea, Haiti, Iran, Libya, Somalia, Sudan, and Yemen. There's also partial restrictions here for seven other countries. And the president says all of this is going to take place Monday at 12.01 a.m. So there will be a flurry of activity at the border here as well. And then on Harvard, a similar issue in the back and forth with Harvard University and this administration. The president saying that he's going to deny visas to Harvard's international students in this proclamation that the president signed yesterday. Trump said Harvard failed to present sufficient information about its foreign students to the federal government.

14:23In fact, the administration said that Harvard only presented data about three students who'd been disciplined. They said that that number indicated that Harvard was not being serious about discipline and security. Harvard University responding with their statement saying this is yet another illegal retaliatory step taken by the administration in violation of Harvard's First Amendment rights. Harvard will continue to protect its international students. So, guys, I think on the Harvard front here, you can expect that university to continue to fight the administration in court. I would imagine that at some point you'll see lawsuits around this and we'll see where it goes in the courts.

15:01You remember on the travel ban issue, you remember back in Trump's first term, he had what he called a Muslim ban of travel from certain nations that were majority Islamic. That one was initially struck down. There was resistance in the courts. They reformulated it in the end. They were able to preserve that travel ban in the first in the first term. And President Biden struck it down, calling it a stain on the nation during Biden's term. Now that travel restriction is back. The president says this is necessary for safety because these countries don't sufficiently vet people because they're hotbeds of terrorism in some cases.

15:39And they're not cooperating with U.S. immigration forces. Guys, back over to you. There's a lot of obviously, as you said, a lot of litigation that we can expect from Harvard. But, you know, Eamon, the executive branch has a lot of power and it's almost like fighting City Hall. You might win some court cases, you might. But he can do some of this stuff. And Alan Garber, I don't know whether it's good or bad, but, you know, now he's kind of been set up as the lead of the resistance. I don't know of the resistance to what I guess the resistance to curbing anti-Semitism. I don't know why you'd want to be the face of not knuckling under to curbing anti-Semitism.

16:21But that's the position he finds himself in. I don't know how it plays out. But Harvard, you know, Harvard, the argument is. Yeah, go ahead. Yep. I mean, the argument is that, you know, there is anti-Semitism and then there's free expression, right? And criticizing the government of Israel, military actions taken by Israel, that sort of thing is simply free expression and not anti-Semitic on its face. And so the question is, you know, where in that continuum does it shift over the line? And what Harvard has said is we're going to defend free expression and free academic inquiry by our professors.

16:57If Jewish students still aren't safe, Jewish students still aren't safe. Everybody likes peaceful demonstrations. No one's trying to stop peaceful demonstrations. I don't know if I want them screaming death to the Jews and genocide to the Jews and from the river to the sea. I'm not sure that just seems to spawn the violence against the Jewish students so you can't feel safe. It is not. It hasn't been fixed. It has not been fixed. And they should get together, figure out a way to fix it. And that's what I mean. I think he's emboldened now because the left is holding him up as some type of, you know, the leader of the resistance.

17:35The resistance to what? The resistance to curbing anti-Semitism. Who wants to be the leader of that resistance? Amen. But this is just me. And look, politically, politically, Joe, this works for Trump. Right. Because it's both immigration, it's also anti it's also anti-elites. Right. Right. I mean, yeah. Going after Harvard and Columbia, the very top. That's the bonus. Schools on the coast. The bonus. This is Trump's message. Right. Politically, this is a win for Trump because it fits the message of we're taking on the elites. I'm part of you, the MAGA voters. Right. And this is part of Trump reframing the Republican Party as a populist, working class, anti elite party.

18:14And that, you know, for corporate folks, that has some rebound effects because this is also a party now that doesn't see itself as totally aligned with corporate elites as well, sees them as sort of in the bag with some of those academic elites. And so this is a reframing of American politics in a way that we really haven't seen. And so this is a morphing of a political party into something that's new. And we'll see, you know, sort of in the courts where the fight comes out and then also politically, whether this ends up being popular nationwide. And this ends up being something that people run on in 28.

18:49And there is a question how long it lasts and does it outlast Donald Trump? And I saw. I saw George Clooney, who was actually from my hometown, but I saw him say, oh, you know, Trump's very charismatic and he is, you know, a celebrity. And once he's gone, it's the entire movement will be we dead, which I think totally misses sort of what sentiment in the country kind of spawned something like like MAGA. So I don't I don't know if it ends when Donald Trump. I mean, if you ask my opinion, not that it's worth anything, but can you have Trumpism without Trump is a really fascinating question. I think ultimately all those factors are in the country.

19:34They were in the country before Trump, but Trump harnessed them in a way that's sort of sui generis. His personality, his ability to proceed amongst enormous criticism, his disregard for the traditional rules of politics and sort of remaking politics in his own image. That's something that very few people can do. And so, you know, could a J.D. Vance do that? Could a Josh Hawley do that? You know, Marco Rubio, maybe. Are there are there people out there who could carry the Trump torch forward in 28? You know, I don't know that they have the same personal swagger that Donald Trump has. Well, if they're up against AOC, if they're up against the party's leader, AOC, it might not be that tough of a battle.

20:18So, Eamon, Democrats got their own problems with trying to find someone that anyone would vote for. I mean, the top spokesperson, the top spokesperson for Joe Biden just resigned from the Democratic Party yesterday. Exactly. Bizarre. I mean, that party has some significant challenges. But there's a couple of years left and probably not a good. We'll see what happens. They're wrapping us up, Eamon. We're having this heart to heart. Things are not trending right. Having this heart to heart and they're wrapping us up. I don't get it. We've got to do a chart of a stock, I think, to make everyone happy.

20:49All right, Eamon. Eamon, come visit us in studio. Harder to shut us up. Elon Musk ramping up his campaign against President Trump's tax and spending bill. Musk calling on lawmakers, in his words, to kill the bill. By the way, he also called that bill an abomination. Joining us right now with his Elon Musk wisdom is CNBC contributor Walter Isaacson, who is a Perella Weinberg advisory partner, Tulane University professor, and, of course, the author of Elon Musk. And, boy, it's been a quick turn. Well, you know, one of the things about Elon is when he goes all in, he goes all in. You know. Or when he goes all out, he goes all in.

21:25And all out, et cetera. He is somebody who's not exactly calibrated in his things, and he is seriously upset. Yeah, what's he mad about? Because we've heard a lot of different speculations about whether it's him. You know, he's always been on this strong kick for a long time about the deficit. He just thinks the deficit is horrible, and now it's kicked in on him. One of the smaller things, but that's really nettling him, is the way they treated Jared Isaacman, who was the person who was going to run NASA. Right. Somebody who was close to Elon and flew on to SpaceX. A great choice for NASA administration.

22:00On Friday, when Elon Musk is in the Oval Office, getting that rinky-dink little box, wooden box with a key in it, which was, I think, a little bit insulting from Trump. Trump told him he was going to get rid of Isaacman and then told Isaacman then, too. And that, to Musk, was just infuriating because they were going after Jared Isaacman to get at Musk. Who's they? The Office of Personnel, the people who run that. There are a few people in the White House that at least Musk thinks did it. Well, it was interesting because the reason they gave behind it or that's been reported as the reason behind it is because he had given the Democrats in the party.

22:40Just like Howard Lutnick, just like Donald Trump. Just like Donald Trump. And he had told Trump right at the beginning, he said, hey, I've donated Democrats. It's all public. That was not the reason. It was just a way to get at Musk. And he, you know, Musk, if you look at this, this is this infighting within the administration. This is this infighting within the administration. Yeah, I mean, part of it, but also it's the main thing is that Musk has always been fixated on the deficit. And if you look at what happened with Biden, it was a lot of things, some big, some small, not being invited to the EV summit, but also the whole crackdowns and the regulatory thing of the Biden administration.

23:21So I think you're seeing the same thing with the Trump administration. I mean, to me, it felt a little like just this frustration boiling over. We'd heard reports that, hey, I've given hundreds of millions of dollars to this. Not to mention he took months of his time away from his companies, poured it into these efforts in the government, and probably feels like all of that was for naught. And he took some serious errors in the process. Yeah, and Joe made a very good point, which is that he went up against an entrenched Washington way of doing things and found it wasn't like companies that you actually own yourself where you can say, yeah, hey, let's get rid of this heat shield.

23:56Once he realized that, Walter, and I don't like this bill. I don't like it either. But, you know, the journal and the journal has been has not been MAGA or the editorial page. Editorial page. They make Trump mad all the time. And they've even talked about how this bill doesn't do nearly enough with Medicaid and with a lot of different things. But yesterday, I did say to have Elon almost make it impossible to pass it at this point, or at least to weigh in that vociferously when there's four and a half trillion dollars in tax increases that will happen. And if it, you know, remember the good versus the perfect?

24:41Ronald Reagan said, if I get 80 percent, this might only be 51 percent worth doing. But not doing anything is even worse than doing this bill. That's not exactly a resounding endorsement. It's not at all. I would cut so much more. I don't think I don't know if I put these new tax cuts in. I wouldn't do salt. But how bad will two to three trillion dollars in deficit be? Musk probably disagrees with you, thinks it's just crushing to the country. But let me get the Susan Collins, Rand Paul, Thomas Massey. Ron Johnson. Ron, but I'm even going either side. You can find people in the House that are over here and over here because they're in blue districts.

25:23People in the Senate that are over here and over here. It has to be what's within the realm of what you're actually doing. And Elon found that out. That was my point. He found that out. You know, one of the disappointments I had on the must going into government was that he kind of shot fish in a barrel, the easy things. Like, let's get rid of the USAID play in Pakistan or whatever. And that doesn't add up to real money. Here's somebody who could have taken on the procurement processes in government, could have taken on the F-35. That's probably impossible to do, too. Well, I think maybe that's what hit him, is that this is so entrenched in Washington that the big stuff.