WASHINGTON—Today, United States Senator Bill Hagerty (R-TN), a member of the Senate Appropriations, Banking, and Foreign Relations Committees and former U.S. Ambassador to Japan, joined Balance of Power on BloombergTV to discuss the budget reconciliation package, along with the GENIUS Act.
Partial Transcript
Hagerty on the need to pass the budget reconciliation package: “I think the most critical thing to keep in mind is the fact that if we don’t get this done, Americans are looking at a north of $4 trillion tax increase. I was talking with Kevin Hassett at the White House yesterday. His projections are that that would yield a 6 percent decrease in our nation’s GDP. That would be terrible for America, frankly, be terrible for the world economy. We can’t let that happen. The main interest I have is making certain that we stimulate more capital investment in America because more capital investment will beget more jobs, more economic activity. This will have a very positive impact on the economy and frankly, it’s something that the Congressional Budget Office completely misses in their analysis. They missed it at an incredible level back after the 2017 Tax Cuts and Jobs Act was passed. In fact, they missed it by north of a trillion dollars’ worth of revenues. So, I think that my colleagues need to certainly take into account the fact that this is a pro-growth bill. This tax package is going to stimulate more economic activity here in America. We will see growth that’s not captured in these CBO estimates, but will have a material impact on our economy, on our wellbeing, and frankly, in terms of going the right direction to reducing the deficit.”
Hagerty on inaccuracies of CBO scores: “In the first case, what they do is static analysis. They don’t take into account the dynamic of investment in the economy that will yield growth. So, I think that’s patently wrong. And the second, with regard to tariff revenue, it’s possible, but we’re not nearly to the end of our trade negotiations. Jamieson Greer, our trade rep, is working his heart out to try to bring together a significant sea change in the way America’s treated on the global stage. I think we’re going to make great progress, but it’s very hard for me to say right now, and I don’t know how the CBO is able to say this, where we’re going to land on tariff revenues as well.”
Hagerty on Senate Republicans’ desire for more spending cuts: “I think there’s always risk in any situation like this where you have a complex bill. We’re going to have a conference meeting right after I’m on with you now to begin the process of talking through where the Senate is going to land here. And I do expect that there’ll be improvements. It will be different. There’ll be deeper cuts, and we’ll start to see texts coming out on Friday. What I don’t want to do is try to get ahead of those who are negotiating. As you know, the [Senate] Finance Committee is going to the White House right now to meet with President [Donald] Trump. This is a process that’s underway, but I can say this: at a very high level, my colleagues in the Senate want to see more cuts, more deficit reduction. But at the same time, I’ve been encouraging everyone to move expediently to make certain that this happens extremely quickly because the United States economy needs certainty. And with that certainty, we’re going to see more capital investment. The longer this takes, again, the less certainty we’ve got, and that’s going to have a negative impact on capital investment here in America.”
Hagerty on making tax cuts permanent: “I agree with the premise [of making tax cuts permanent] completely. [Senator] Steve Daines is a businessperson just like me. We understand the importance of being able to make long-term plans with respect to capital investments. That’s what’s driving Steve’s position; I think he is exactly right. And we need to extend these as far as we possibly can. Permanent is the best possible answer we could achieve.”
Hagerty on the GENIUS Act: “Conversations are underway. I certainly respect the process that we’re addressing, but right now, this really isn’t about policy, nor is it process. We’re just trying to get floor time right now to get this processed. We have broad agreement, with respect to the content of this stablecoin legislation. My GENIUS Act, and this is going to, I think, take us into the 21st century, in terms of upgrading our payment systems. It’s going to have very desirable effects taking the U.S. economy into the digital assets arena, keeping innovation here, lowering risk here in America, and putting in place guardrails that will protect consumers. Because every one of these stablecoins will be backed up dollar for dollar with U.S. treasuries. [It is a] very positive outcome here; we’ve got very strong support.”
Hagerty on the timeline of passing the GENIUS Act: “The timeline is the key issue right now. The window is closing on us to get this done because we’ve got to turn our attention to reconciliation. As I mentioned, we’re going to a conference meeting, our first broad conference meeting to talk about the reconciliation bill. We need to get the GENIUS Act passed. We need to get it on the floor. And that’s where my discussions have been with the leader and with my colleagues, is getting that time on the floor as soon as possible. I’d like to start it today, tomorrow, but I’d like to get that time on the floor as soon as possible, so then we can turn our attention to dealing with the reconciliation and getting more confirmations across the floor.”
Hagerty on future market structure legislation: “There’s been a great deal of good work that’s been done in the House. A lot of questions have come up in the process of building the stablecoin legislation that have been more appropriate to market structure. We’re focused on it. We’ve already begun the process of building it here in the Senate. Again, as I mentioned, a lot of it’s a natural outgrowth of the stablecoin legislation that we’ve been pushing forward. So we’re going to turn our attention immediately to that. But I think the most immediate thing that will happen is the reconciliation bill coming to the floor of the Senate. In the meantime, I pledged to President Trump I would get this done in the first 100 days if I possibly could. We’ve exceeded that by a bit, but President Trump wants to see this legislation on his desk. [Vice President] JD Vance was at the Bitcoin conference in Las Vegas just last week, saying he wants to see a clean bill in front of him—on stablecoin legislation—in front of President Trump. And I think we can get there.”
Hagerty on the reconciliation process: “We’re in the process of reviewing all the texts that just came over in the past couple of days. But again, we’re moving on it. The Finance Committee is at the White House negotiating it right now. The text is in process, and it’s an item that’s in motion. I understand that there may be items here that not everyone is happy with, but at the end of the day, we’re going to have to compromise and get it done. I’ll come back to the original point. The American economy needs this certainty, and I’m going to be working my heart out to make certain that we deliver the best possible product we can here. But I’ll remind you as well, this isn’t the last bite at the apple. We’ll have the opportunity to have another reconciliation process coming up fairly soon. So, we’re going to find a number of other opportunities to improve the situation here in the American economy, achieve some of the other objectives of our legislators, and we can, if we don’t solve it all here, we’ll have another opportunity to do that.”
Hagerty on the shift in banking regulation under the Trump admin: “Michael Barr took us in exactly the wrong direction, and I’m very glad to see someone with the sensibilities of Miki [Bowman] coming into this position. She’s going to do a great job. What we need to do is return to the overarching mission of making certain that our capital markets are as competitive and safe as they possibly can be, get out of policy issues, whether it regards climate or other sorts of issues that essentially make the U.S. economy less competitive. And the gold plating that Michael Barr attempted to do, making us subject to even more regulations than the Europeans, only hampers American capital formation. Miki has a very different point of view, and I’m very excited to see her come into this role.”
Hagerty on the document requests from Wells Fargo: “I’m all for transparency, and I’m all for having committee members have access to the information that they need. But I’m not about to respond to something that [Senator] Elizabeth Warren has said, just based on what she probably doesn’t have. She doesn’t have access to the documents at this point, so I don’t understand her leveling these accusations, but she wants to do that.”
Hagerty on President Trump’s conversation with Putin about Iran: “The previous administration removed all of the maximum pressure campaign that we had imposed on Iran. We had Iran to a point where they were ready to deal. Their reserves were below $10 billion. As soon as the Biden administration came in, they stopped enforcing the sanctions. They put Iran into position to fund terror. We saw what happened with Hamas. We saw what happened with Hezbollah. We saw what happened with the Houthis. We’re bringing that situation back under control. We’re putting back in place maximum sanctions, and we also have the opportunity to get the world behind us. And I think the world should be behind us to ensure that Iran does not have the capability to threaten the rest of the world as they seem to want to do. President Trump has every right to seek out other world leaders to find allies wherever he may. But at the end of the day, it’s going to be up to us to take the leadership position to deal with Iran and to make certain that they don’t have the capability nor the capacity to threaten the rest of the world as they have in the past. And understand this: they’re behind all of the terror and all the disruption of the Middle East. It’s got to come to an end.”
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