Paying for the American Dream & Financial Literacy 4/1/25

0:00Bring in show music please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. Things are so expensive that we just keep borrowing. Senator Bill Cassidy on the chance to lower the national debt. If we don't live within our means, we're going to destroy the American dream. The American dream will become a nightmare. And as chair of the Senate Health Committee, Cassidy weighs in on the dramatic fight over health care federal funding. We don't want innovation not coming to market. an innovation that can actually save lives. Then from the nation's pocketbook to our own, Operation Hope entrepreneur John Hope Bryant on Financial Literacy Month.

0:4070 % of Americans are living from paycheck to paycheck. Everybody, not poor people. Half of those making$100 ,000 a year are living from paycheck to paycheck. Plus, open AI with the biggest private funding deal ever. Our Kate Rooney reports. It's almost three times bigger than the prior record, which was Ant Group raising about$14 billion. And one day more, President Trump's April 2nd tariff day quickly approaching. We still have a lot to find out over the next 24 hours. I clearly don't think he knows exactly what he wants to do at this point. He just said that he's known the whole time. It's Tuesday, April 1st, 2025.

1:19No fooling. Squawk Pod begins right now. Stand Becky by in three, two, one. Fuel, please. All right. 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. Pretty eventful day yesterday. It started out looking pretty bad in the morning. You had the futures off sharply. And then when the market did open, I think those were the worst levels of the day. Right after the open, you saw the Dow sell off very sharply, the Nasdaq too, and the S &P 500. But things turned around relatively quickly in that session.

1:56If you were looking to buy. You missed your opportunity if you didn't move quickly in the morning. You did see the S &P. I saw it down by 75 points at one moment through the course of the morning. The Dow was down by about 400. So was the NASDAQ, I think. The NASDAQ was down pretty sharply and it stayed down. It ended the day down just 24 points. Yeah, but it was down like 400 or 500. The NASDAQ was down 10 % in the quarter. So that's pain. 10.4%. 10.4%. The S &P was off by 4.5%. The Dow was down by 1.25%. Gold actually seeing its best quarter since 1986. That is a blast from the past, and it's sitting at another all-time high this morning,$3 ,158.50 an ounce.

2:38And again, we'll continue to watch this because it's surprising to see those turns. The VIX was up yesterday, but it's surprising to see this turn before we get the news tomorrow about tariffs. That's what's had the market on edge. Let's talk about it because President Trump says he has now settled on the tariff announcements that he's going to be making tomorrow. But details so far, at least, are scarce. Speaking to reporters in the Oval Office, Trump saying he decided a long time ago what he's going to do. So I guess we've just all been waiting for the surprise. Secretary Caroline Levitt saying Trump will announce his plans tomorrow in the White House's Rose Garden.

3:12And the goal is to announce, quote, country-based tariffs. Here's President Trump yesterday. We are going to be very nice by comparison to what they were. the numbers will be lower than what they've been charging us. And in some cases, maybe substantially lower, but we sort of have a world obligation, perhaps. But we're going to be very nice. Relatively speaking, we're going to be very kind. Other developments on the tariff front to bring you this morning. Bloomberg are reporting that Ford, GM and Stellantis attempting a last ditch effort to try to get some car parts excluded from the tariffs.

3:48Some GOP lawmakers have also been seeking last-minute carve-outs to help farmers in their states. Reuters also just reporting that drug makers, as you might imagine, lobbying the Trump administration to phase in tariffs on imported pharmaceutical products. Meantime, a social media account affiliated with Chinese state media saying that China, Japan, and South Korea agreed to respond jointly. This is interesting when you talk about retaliation to U.S. tariffs, but South Korea called that, quote, somewhat exaggerated. I don't know what somewhat means. It means they must be talking to each other in some way.

4:21Japan's saying that no discussions, though, have been taking place on that front. So a lot of information, misinformation, who knows what, just floating, and we still have a lot to find out over the next 24 hours. I clearly don't think he knows exactly what he wants to do at this point. He just said that he's known the whole time. That's what I'm saying. That's what I said. Clearly, he doesn't. I don't think that's true. Navarro, obviously, was bragging about$600 billion a year that's going to be raised with tariffs. But then Hassett, over the weekend, would not really confirm that. I don't know.

4:55I think that's going to sink in. That is a$6 trillion. Over 10 years, it would raise$6 trillion. But whether it's tariffs or taxes, that's money. But tariffs are taxes. It doesn't stay in the private sector. It goes and it's gone from from if you had a six trillion dollar tax cut somewhere else, it'd be more palatable. But it'll bring it might. I mean, they're talking about using it to pay for things like no taxes. They're not going to offset tips and different. A little bit. But that that would bring us up to 19 percent of what we spend on tariffs or taxes. Somebody's got to pay them. And we'll see.

5:34I'm not convinced. I don't know. The president himself said over the weekend that he would like to see automakers raise their prices so that you get more made in America. And he couldn't care less about the price of your cars. I think he'll care eventually, probably, considering that the whole. Especially if it's every car that uses parts that are brought in, even if they're compliant with the USMCA. Remember that? Who was that? I think that was that chicken guy, Purdue. But parts. If it's more than just the luxury cars. When you win an election. because the cudgel was 40-year highs in inflation.

6:07I don't think you really want to go back to 40-year highs in inflation. I think it eventually will occur to someone. All right, Johnson & Johnson is changing gears on its strategy for handling talc lawsuits that were brought by women who claimed they got cancer by using the company's baby powder products. It had planned to settle a mass tort lawsuit by settling up through a trust fund through a bankruptcy of its Red River talc subsidiary. That proposal would have set aside$9 billion for victims as part of the strategy that was known as the Texas Two-Step. But a U.S. bankruptcy judge dismissed that proposal, finding that a vote by the cancer victims on the proposal was flawed.

6:48He said the voting time for thousands of creditors was unreasonably short. It was 90 days. This was something that we watched very closely last year as they were going through it. They did receive in their voting more than 85 percent of the plaintiffs who agreed to go along with this deal. J &J is accusing lawyers opposed to the bankruptcy settlement of being motivated by their own financial interests to defeat the deal and keep the lawsuits rolling. The company now says that it will return to fighting talc cancer claims in court and is reversing seven billion dollars of the money that it had previously reserved for compensation.

7:24J &J says that it has no intent to settle or pay plaintiff's lawyers on what it is calling meritless claims. J &J denies that the powder is harmful, but it stopped selling talc-based baby powder back in the U.S. in 2020. Now, I just spoke with the company about some of these issues, and I will tell you they are coming out swinging on this. Here's what they're talking about. They say, this is from Johnson & Johnson, the company, this was our best and final offer, and they feel confident in going ahead and reversing that$7 billion that they had set aside in their coffers for payments on these. They point out that they have won 16 out of 17 lawsuits over the last 11 years on this.

8:01And based on the number of lawsuits that are out there, it would take 2 ,500 years to adjudicate each and every one. They say that was part of the reason that they were trying to move ahead with this. Also saying that sovereign wealth funds got involved with the plaintiff's lawyers to actually fund them to go ahead with it. And as a result, they said at some points there were 113 ads an hour running to not sign on with the settlement that, again, they say more than 85 percent of the plaintiffs took. They also are pointing out that there are new federal standards involved that would put the burden of proof on the plaintiffs.

8:35That's different than the burden that existed in the past, where basically it was on the company to prove that they didn't do harm. And the judge in this case who's involved with these, Judge Shift, who's in the Third Circuit in New Jersey, has already said that the judge will be applying that new federal standard to it. So they feel very confident in what they were doing with this. And they say that they've been talking to people on Capitol Hill, including Jim Jordan, to look at tort reform, trying to fix what they are calling a broken system. That's this morning because it was up$2 yesterday to$165.

9:04So that's a trade that's happening today. I can't believe it was still around in 2020. You know, I've railed about this. You've stopped using it for years. 25 years ago. Because of that, just because of the chemical structure was not similar to asbestos, but it looked like it could be carcinogenic. And I remember we were in the old, we were out in Fort Lee. And I asked one of the CEOs at least, and I said, I wouldn't go near that stuff. for my wife. You said you started using cornstarchers. Because I wouldn't put it on myself, even if it could be transmitted to my wife some way. God knows how.

9:42But, you know, and I don't use any of it anymore. But, yeah, you had to be crazy to be using that in 2020. You had to just... The company has a call with investors coming up. They're not admitting there's anything. They've never admitted there's a problem with talc. They've never admitted there's a problem at all. No. And it's still in Gold Bond, and it's still in some other things. Maybe it's not. It used to be. You could still get talc in a men's locker room it wasn't cornstarch. I don't know anymore. Check out the shares of Newsmax. I was like watching it yesterday. I thought it was up 10 at 83 or something, but no, that's not what happened.

10:18Oh my God. It was like, it came, it was at 10 and I think it closed at 83. So it was up 73 at 83. Shares rose 735 % in the stock market for the conservative cable channel yesterday. Andrew, it almost seemed like too social. Some bankers should get in trouble. I think they're happy, though. Chris Ruddy's a billionaire, the guy suddenly into the ranks. I think where the stock is right now. When you think about all the money that you ostensibly could have or should have raised. Theoretically, maybe. Well, theoretically, this is real money. They're real human beings who put money behind it. We've argued about this before because they only sold a small part of the company.

10:58So now the entire company is valued at that. So I would do it that way. I would do it so that you sell, you know, 1 percent or sell 1 percent. Suddenly it's valued at 11 or 12 billion dollars. If Dris were to try to sell it right now. No way. The whole thing would get punctured. If he can. First came at 10, opened at 14, closed above 83. And now you can see it at 93 dollars. On Friday, the company said it raised 75 million dollars for the class of 7 for the sale. 7.5 million class B shares. Newsmax has grown its audience in recent years as President Trump has come to dominate Republican politics and is now offered through most major TV, paid TV providers.

11:41I was kidding about Newsmax last week when Trump went on with Greg Kelly, who's fantastic, but I was kidding. Where do you go next? He's, you know, the friendly or safe places are running out. And I'm not saying that he doesn't get a tough interview on Newsmax, but I mean, he's been on every hour of Fox. at this point. And his minions, every single eight, nine, ten, they're on completely. So for the first six months of 2024, Newsmax revenue was up about 33 percent. So it surged to about four biggest cable. But it's a loss widened to fifty five and a half dollars versus the point eight million they've lost in this.

12:21So what was that yesterday? Is that GameStop? What was what's today? I let's see. Let's see where the stock is in a week or two or three. OK, Mr. Big Sam, let's then short it. No, I'm just saying I'm not I'm not shorting anything. I'm just saying let's see what let's see what it is. Well, that was something to behold. And I'm I mentioned off camera. I'm not going to mention it on camera that it's worth more than The New York Times right now. I know that probably. But can you believe that in one one day, 11 or 12? What's New York Times? I think is eight. Is that eight? You know, you follow closely.

12:53You want me to look? What do you think it's going to be compared to Spinco? I'm a fraction. I think a fraction of what's being. That's our upcoming company. And we're going to, we have great assets in there. What do we have? About$8 billion in revenues, probably. Golf Channel, CNBC, MSNBC. Is USA? We can only hope that we get this kind of valuation. That was my point yesterday. Honestly, my point. Content is worth, if it's streaming, I don't know. Is it cable? I don't know, but content is worse. Wasn't this content more valuable than people thought Newsmax content? I don't know. We'll see. Cheese will be next.

13:36Coming up next on Squawk Pod, Republican Senator Bill Cassidy of Louisiana. April 2nd. Tomorrow is tariff day. What levies actually make sense? I've been promoting what I call a foreign pollution fee. So if China ignores environmental laws, it lowers their cost of manufacturing by 20 percent. My fee, if you will, would put a tariff on goods coming from a country like China roughly equal to what they're not spending to control inflation. Plus, the senator doctor hyphen it weighs in on Health and Human Services Secretary RFK Jr. and the turnover at the FDA. We'll be right back.

14:17This is Squawk Pod. Up on Andrew, Q. You're watching Squawk Box right here on CNBC. I'm Andrew Osorkin, along with Joe Kernan and Becky Quick. We've got a lot going on. Congress remains split on a reconciliation bill, but our next guest says that the government must first address its out-of-control spending and debt. Joining us right now is Senator Bill Cassidy. He's a member of the Finance Committee, and he chairs the Health, Education, Labor, and Pension Committee. Senator, thank you for being with us this morning. You've got concerns about our debt. How do you think that should be dealt with with our upcoming budget plans?

14:54Well, first, let's explain the concerns. Right now, we have$36 trillion in debt. Right now, if we do nothing, if you stay on autopilot, we'll add another$21 trillion over the next 10 years. And if we're not careful with the reconciliation bill and other spending programs, we'll add$8 to$11 trillion on top of that. We may in 10 years have$65 trillion in kind of like net present value in debt. Now, that's going to drive up the 10-year treasuries. That's going to destroy the American dream. You want a mortgage? It's going to be too expensive. You want to finance a car? Too expensive. Credit card debt?

15:35Way. You better pay that balance every month. Student loans? I can keep going. Anything with a variable interest is going to be much higher than now. Destroys the American dream. We need to kind of take care of the debt to keep that from happening. Senator, I don't disagree with you on that, but let's lay out what the president has said he would like to see passed. He wants to extend the 2017 tax cuts. He wants to expand the SALT deduction, enact tax breaks for goods that are made in America, cut taxes on tips, overtime pay, social security benefits, eliminate tax breaks for carried interest and stadium owners.

16:10Maybe that offsets it some. But if you add all that up, the Committee for a Responsible Federal Budget said that that would cut revenue by somewhere between$5 and$11.2 trillion over the next 10 years. It would boost debt to between 132 to 149 percent of GDP by 2035 versus almost 100 percent today and 118 percent under current law. So which of those things would you take out and say this is not going to be allowed or accepted? Or how do you make how do you pay for all of those things that are in it? President has said, for example, that he doesn't want to touch Medicare and Medicaid. What he means is not don't go after things which was inappropriate spending.

16:48He's saying don't cut benefits to beneficiaries. And so anyone who thinks that we can't find savings in the federal government, I mean, the federal government's got savings all over the place. And so if we can't go to the federal government and say we can do something more efficient, then mind you're just not looking. DOGE, which has some excesses, but some of what DOGE is doing is quite on point, is an example of taking three agencies with similar functions and trying to combine them to one agency that kind of spans the breadth, saving the taxpayer lots of money. Let's bring that approach not to just what DOGE is doing, discretionary spending, but let's look at Medicare.

17:29Is there some way that we can cut Medicare so that it's, excuse me, reform Medicare so that benefits stay the same, but that is less expensive, more efficient? I would say that there is. And that's where our opportunity lies. So you agree with all of those tax cuts and tax plans and you think it can all be paid for just with efficiency that we find in other areas of the government? I'm going to say I agree with them all. If we're going to extend present policy as current baseline just to go into procedures, I want to pay for that. Figure out how to pay for it. It's really good to make things permanent, but you've got to be able to live within your means.

18:04And so I'm all about that. Because if we don't live within our means, we're going to destroy the American dream. The American dream will become a nightmare. Expensive rates that are too high and people unable to afford mortgages, car notes, etc. There was an idea floated by Axios this week. They were reporting that it's being discussed in the White House at this point to allow taxes on the wealthiest Americans to go up, allow that to go back up to 39.6 percent from the 37 percent it was under the 2017 agreement and using that to then pay for no taxes on tips. Would you agree with that? I'd rather see everything as part.

18:42If you give me an isolated something, it's hard to judge. Whatever is in the final package has got to be part of a package. So if the president says, wait a second, I want to give a little extra dollar for the person who's at the lower end of the spectrum and ask people at the upper end of the spectrum to pay for it, that obviously reflects the president's kind of instinct. So that needs to be part of a package brought before us. My point, though, is that we've got to pay for whatever we do, live within our means, because if we don't live within our means, the American dream becomes a nightmare.

19:16Senator, if we did the tariffs and Navarro says 600 billion in tariffs a year, do you believe that that could be used to pay for some of this stuff? Is that the same as raising taxes? I mean, it is the same as raising taxes, but do you believe that money could actually be used to offset some of the other things the president wants to do? Is that the real world? Could that happen? So, yeah, so a couple of things. Just to go into process, if the executive branch puts a tariff on, then we cannot claim it for an offset in reconciliation. If the congressional branch puts a fee or tariff on incoming goods, we can use it.

20:01I've been promoting what I call a farm pollution fee, which is so if China ignores environmental laws, it lowers their cost of manufacturing by 20 percent. My fee, if you will, would put a tariff on goods coming from a country like China roughly equal to what they're not spending to control inflation. That would level the playing field and encourage them to clean up their act literally, but also encourage, in the meantime, companies to reshore here. So that would be a congressionally instituted fee, and that could count towards reconciliation. Now, if the president does something, I'm almost agnostic.

20:39I just want to make sure that we pay for it. And if technically we can't use it because it's in the executive, but no, it's actually bringing revenue to our government and the president can pull it off. I'm all for it. Senator, you're a doctor as well as a senator. And we've listened to you for a long time, asked you about questions about things on medical issues. You were looking like you were going to be the lone holdout to confirm RFK Jr. to HHS. You went ahead and went along with it. And we have seen some big changes that have taken place there, including Peter Marks stepping down. The Wall Street Journal editorial page yesterday had an opinion piece or an op ed piece that basically said RFK Jr.

21:24is already vindicating his critics because of Peter Marks stepping down and other changes they see there in terms of who's being put in. David Geyer, an anti-vaccine crusader, being put in charge there. Do you have any concerns about what you've seen? Well, first, let me say if Marty Macari, the doctor who's now in charge of FDA, it's his responsibility to make sure that Peter Marks is replaced by somebody with a similar credentials scientifically and medically. If he does that, then this will blow over. So I think the test is in who replaces Dr. Marks. As regards David Geyer, RFK tells me that he's merely going to help look at the data.

22:03I don't think Dr. Guy or Mr. Guy is not a doctor, is qualified. But we'll see what the administration decides to do with that. And there's a lot at stake. If we see the kind of continued increase of measles cases, and God forbid another child dying from a vaccine-preventable disease, that's going to be a problem. It's going to be a tragedy, but it'll be a political problem for the administration. I'm sure they're aware of that. And so stop the tragedy and never have to worry about the political problem. But I'm trusting Dr. McCary to pull this off. And by the way, Joe, I hope your reflex is doing better.

22:38You don't want to get me started. I don't have it. I had a gallbladder. I had a, you're a doctor. I had a gangrenous cholecystitis, which is necrosis of my entire gallbladder. It's gone now, and the GERD is gone. You lost weight, too? It wasn't GERD. You've lost a lot of weight. I lost 15 pounds, but I don't think it was ever GERD. It's really unbelievable. It's crazy. But it got bad. I didn't know it. I was misdiagnosed. I should sue. No, I'm sorry. But you probably endured. Senator, very quickly, you said that Peter Marks should be replaced by someone with his same ilk. We had Dr. Scott Gottlieb on with us yesterday.

23:19Obviously, he was the head of the FDA in the last Trump administration. And he said the big concern about Marks leaving isn't just what he was dealing with with vaccines, but with innovation writ large, that he had been responsible for moving a lot of therapies forward for children and for other areas and really pushing the FDA to do some new things. He was concerned about the message this sends to innovators everywhere. And we did see biotech stocks off sharply yesterday. So all I can say is who replaces him? Is he replaced with someone who similarly emphasizes innovation and rapidity of getting things through?

23:55if he's replaced with that person, then I think we can kind of relax. And if not, that'll be a bad signal. It'll be a terrible signal because we don't want innovation not coming to market, innovation that can actually save lives. We want that coming sooner, not later. And that's the promise of this administration. Okay. Senator Cassidy, thank you. Thank you. Next on Squawk Pod, OpenAI's massive funding deal and April is financial literacy. month. And the stats around Americans and money can be troubling. Operation Hope's John Hope Bryant joins us. You need the average American to have confidence.

24:33And that's why I think financial literacy needs to become a civil rights issue in this country. We need to teach it K through 12, if not K through college.