Sen. Mike Braun, R-Ind., joins the podcast to explain the downsides of the new spending bill and how his MAP Act would boost the economy. The CEO-turned-senator, a newcomer to Washington, D.C., also shares why it seems so hard to get any kind of spending control to occur in Congress. Read the exclusive interview, posted below, or listen on the podcast:
Rachel del Guidice: We’re joined on The Daily Signal Podcast today by Sen. Mike Braun of Indiana.
Senator, thank you so much for being with us today.
Sen. Mike Braun: Good to be on.
del Guidice: You are introducing legislation with Congressman Kevin Brady of Texas that pertains to spending and debt. Can you tell us a little bit about your legislation?
Braun: Well, how could it be more applicable than right now? I’m very disappointed with the kumbaya moment that occurred between the president and leader [Nancy] Pelosi. I think that the whole system basically has evolved to where that’s what we do.
Being on the Budget Committee and knowing that we haven’t done a budget that we’ve appropriated to in 20 years should tell everyone out there that can’t live by those rules, to where in business, in state governments, local governments, school boards, that’s the reason you have through the marketplace in business.
Imagine that. Running 20% losses on your P&L and just being able to throw it on a credit card and the credit card gets paid off by your kids and grandkids.
I’m very disappointed. Especially when the president, back when I was running, and I think it was in the spring of 2018, did have the high road on that because defense was emaciated to a dangerous point.
I think that got knocked down under Obama to about $590 billion a year. It was brought back close to $700 billion and I think … that’s the last time. We’re not going to do it again. I think it’s part of being here. The system just drags you down, even when you’ve made those kinds of statements, you end up doing otherwise.
I can guarantee you that I won’t do that ever because I’ve come from the world of full accountability. I’ve been on school boards, been in a functional state government like Indiana’s government to where we not only had statutory guardrails, we … passed a balanced budget amendment.
And in places where there is accountability, that you have to do it, this place lacks any accountability and we are now just getting closer to the day of reckoning.
del Guidice: Annual deficits are projected to hit $1 trillion by 2022 and the national debt is now over $22 trillion. What do you think is the solution to all of this?
Braun: I’ve actually, with Congressman Brady [introduced] the Maximize America’s Prosperity Act, which I think is probably going to be a little better. I’ve heard some bipartisan interest in a general guideline—we did sequestration, we did budget caps.
What I found my cohorts to be most resourceful at is how you breach anything that you put in place to get back to business as usual.
The reason we’re able to do it, and my MAP Act, which is basically targeting a percentage of potential GDP, using potential so that in years where you don’t hit it, you can spend up to potential GDP in terms of a guideline.
In years, like in any other business, any other government, when things are going well, you have a rainy day fund, which would then [keep] you from not spending how we do it here, it’s common sense. It targets it at the average of what revenues have been over the last 50 years.
So you can’t get the big spenders to say, “Hey, this has austere.” This is just taking revenue that’s been around there as an average, a potential GDP, for all those years.
So I still think that the things senators and congressmen and women are most good at would be breaching whatever they put in place to discipline themselves because when it’s only a legislative guideline, you know what can happen with the next Congress. It can all be overturned. That’s why we need a balanced budget amendment.
del Guidice: That’s true. You mentioned that your legislation would have the potential to grow the GDP. Can you drill down a little bit more into that? How you foresee that happening when it does hit those numbers?
Braun: Potential GDP, sometimes we’ll hit it like we are now because we’ve got the Tax and Jobs Act of 2017. … For anyone wondering, “Is it working?” It is working and working well. We haven’t even really seen the cumulative effect from it.
Many of the forecasters think it’ll be a sugar high that’ll disappear. I don’t agree with that.
I think whenever you’re letting enterprisers keep more of their own money and invest it in a much smarter way than what the federal government does, it’ll keep our potential GDP to where it can grow year after year from 2.5% to 3.5%.
The Obama economy was clear. It was an economy of mediocrity and when you come out of such a deep recession, the rule of numbers say you should have big percentage increases.
We can never get that to where over that time span it averaged above 2% and that is sad. And that shows you why something like my bill, on the MAP Act, at least enables an economy to do what it’s doing now and to what potential GDP would be.
But if you miss it, then you could start to do things like we do now every year, spend some money to gin up the economy or have a tax cut. However you would view to use government to get closer to potential GDP.
But when you exceed potential GDP, meaning you’re at full employment and everything’s going well, you salt that away for the rainy day, which we do none of that here.
del Guidice: We need to start doing it. So your legislation, another element of it provides a pathway to save and then later pay for emergencies. How does that work?
Braun: Currently, I have a voted against some things that I really think need to be done.
I voted against the Defense Reauthorization Act. I think defense is the most important thing the federal government should do, along with maybe infrastructure and trying to keep our entitlement programs from completely running into the ditch. Which, they will sooner than later, it’s not snuck up on us. We’ve known it a long time, actuarily.
I think that here we’ve got the benefit of when you plan for disasters, you create a rainy day fund, we at least are acknowledging that that’s part of what we should do.
Currently, we do all of that and the word “offset” is like a bad word. It ought to be there to where we’ve got plenty of spending to offset. No one has the political will here to do it.
Sen. Chris Van Hollen, in a Budget Committee meeting, basically said that and I’d agree with my Democratic friend that he is right. Nobody has the political will or backbone to do these kinds of things.
del Guidice: You mentioned that you were disappointed in the spending agreement that Trump and Congress reached that increases spending by about $2 trillion over the next decade and provides only about $77 billion in offsets. Where do you think Republicans could have done better here?
Braun: Everywhere. To me it really begs the question, what’s the difference between Democrats who believe in the federal government?
They’re at least honest. They’ve got other crazy ideas out there that would even take our government from an institution that doesn’t pay for 20% of itself, already borrows from the kids and grandkids, and wants to double or maybe triple the size through the Green New Deal, “Medicare for All,” and free college tuition.
That is crazy. Especially when there is no real credible argument.
Remember what I did, I talked about it awhile ago, average revenue over 50 years, through thick and thin Democrat, Republican administrations, 17.5%. So there’s no real credible way to do that.
It disappoints me that we only had 22 Republicans vote for the Pennies Plan, which is nothing more than a way to stake out where you’re really coming from.
So that means that there were 31 other Republicans that didn’t vote for that simple concept, freezing, cutting back a percent or 2%.
It’d be a walk in the park, it’d be a chip shot for any CEO, any school board president or school board, any state government, other than a handful of them that choose to operate more like the federal government than they do most other sane states.
del Guidice: Other than passing your legislation, which is the top priority for you, what are some other ways that you think Congress can help curb this runaway spending?
Braun: To be honest, and I knew it before I got here and I’m almost certain of it now six months into it, this will be resolved by, if we’re lucky, a series of crises that are smaller in magnitude to where you don’t get the full two-by-four across the head.
Or it could be a calamity that would make 2008 pale in comparison and, sadly, it would impact retirees, elderly on health care that depend on the government, poor people that depend on Medicaid, pensioners, and all the other folks that benefit from the federal government but don’t speak out that, “Hey, it’s going to go broke and it’s going to run into the ditch.” And that sadly looks like how we solved things here in D.C.
del Guidice: And why is it so important to keep this in the national conversation, and for people who might be distracted by other things, what are the consequences if we don’t address this?
Braun: The consequences are going to come sooner rather than later. I’ll give you a couple of particulars. The Medicare trust fund that we’ve been paying into since its beginning, that we’ve lent to the rest of government to actually pay for our largess where we don’t balance our budgets each year, we are not only not going to be able to lend it to the rest of the government, we will deplete it in roughly six years. Automatic benefit cuts take place.
Social Security is a little farther down the trail. Probably around 2033 … that’s gone. That would even be a bigger abomination.
None of this stuff has snuck up on us. It’s sad that we’ve been aware of it and we do nothing about it because that’s the modus operandi here and that’s why I think it’ll end up in a series of calamities that take us to the brink. And then like everything, you do it even though you know you should’ve done it a long time ago.
del Guidice: During the height of the tea party, there was a lot of energy, as you talked about, on the right about cutting spending, which seems to have really sputtered out. … Why is there a distraction from this issue?
Braun: Because all other organizations, entities pay the price for behavior like this. And even though we may have moments of determination, like when we were talking about sequesters, budget caps, or like the MAP Act, that’s got less of a chance to get through now and probably budget caps and sequestration did.
I think that we’d been doing it so long, and that lack of accountability—who’s really lost their job? We only sent three more business people to the Senate in 2018 and the sad thing is we only had three basically here before.
I guess, percentage-wise, we doubled it. But we still have the same board of directors, which is a bunch of folks that have nestled in, got comfortable with this, smart people that have never run anything, done a budget, or a payroll that lead this biggest business through a bureaucracy that has no real skin in the game and that’s why we end up doing that here at this level.
No other entity can get by with it. You’d get laughed out of your loan officer’s office if you came in even with a 5% loss in a given year, let alone a 20%, and expected to get financed year after year, which you can do here.
del Guidice: Speaking of having skin in the game, what are your thoughs on millennials and Generation X? Some are working. I’m a millennial. I have a job, I work, I pay bills. But I have friends who don’t. They don’t necessarily get it.
Do you think we’re losing millennials and Generation X on the importance of addressing our over $22 trillion in debt and deficits? And how can we do better?
Braun: Definitely think we do. I have four millennials myself and thank goodness they were raised in a way that I think they appreciate that things aren’t free.
Don’t look to the federal government, the most distant institution, that has kind of beguiled many people over time, leading us to the brand care to where it can all fall apart. Everybody is so dependent on it. Pay the consequence.
But millennials I think will learn all of this. I think in too many cases, there’s been just the insulation from, or maybe the naivety that goes along with the fact that you don’t remember things like the Depression, World War II, and some of these other times when you had to have great sacrifice to get through it.
Or most deeply in debt. Coming out of World War II, it was over 100% of our GDP. We paid it off and then built the infrastructure system that we all love.
That was not done through the ethic that many that are millennials adhere to. I think, regrettably, they’re buying more into what we’ve got more of now. When you look at the Green New Deal—and by the way, all the issues that the Democrats bring up, I believe there’s validity to them.
I think Republicans are foot-draggers on most of the problems that beset us, including health care. I’m the only Republican out there blaming the health care industry because most are apologists to the health care industry and the industry ought to fix itself. Why should we be having to legislate them into doing what they should be doing anyway?
So I believe millennials, as they age, they’re going to shoulder all of this and it’s going to be a mess that they never imagined because we—even though there are some of us, I think, being truthful with the American public—are going to probably hand off to them something that will need a crisis to actually put us through the catharsis that’ll be necessary to fix it.
del Guidice: Well, Sen. Mike Braun, thank you so much for joining us today. Where can our listeners follow your work if they want to follow your legislation or other things that you’re doing?
Braun: Just get on my a website and you can find all this stuff. We have an ability, we call it “Weekly Updates.” See this, listen to this, and see all the other stuff I’m doing.
As sad as it is, the biggest thing I’ve got is the microphone because you can see that nothing gets done here in the way it should work and I’ll keep speaking the truth and talking about these issues. And please get onto my website, sign up for my “Weekly Updates.”
del Guidice: Thank you again for being with us.
Braun: You’re welcome.