US Senator Bill Hagerty of Tennessee Talks 'Big Beautiful Bill'
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Bloomberg Audio Studios. Podcasts, radio, news. We turn to Republican Senator Bill Hagerty of Tennessee, who is back with us on the program. Senator, we appreciate your time. As we just heard our colleague Tyler there outlining that various portions of your body have demands as to what it will take to get them to a yes vote on this legislation. What's yours? What change do you need to see for you to vote for this package?

I think the most critical thing to keep in mind, Kayleigh, 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% 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 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 were 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 well-being, and frankly, in terms of going the right direction to reducing the deficit.

Well, Senator, we've got a lot of questions about what's inside, and it's great to have you back on Bloomberg. You mentioned the CBO, so I do have to ask you about that. Two big headlines today coming out of the Congressional Budget Office. First, the Republican tax bill that cleared the House, they say, would add $2.4 trillion to

to US deficits. But that same Congressional Budget Office, which I know Republicans criticize a lot, is now projecting that Trump tariffs will cut the budget gap by $2.8 trillion. Do you buy that number? And if so, is this bill paid for? Well, 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. Jameson Greer, our trade rep, working his heart out to try to bring together a significant sea change in the way America is 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.

Well, yeah, it is worth pointing out the CBO was only scoring tariff revenues through where tariffs stood as of May 13th. And we already know changes have been made since then. There's still some legal questions around whether or not AIPA is going to stand, Senator. So we have to bear that in mind. We've heard from the Senate Majority Leader, John Thune, that there's going to have to be some adjustments made.

to the salt cap, something that House Republicans from those salt districts say would essentially mean that the deal dies when it returns back to the House. Knowing that the debt ceiling lift is also attached to this legislation, do you see risk around making changes like that? Could that bring the U.S. closer to the brink of default?

- Well, I think there's always risk in any situation like this where you have a complex bill, Kayleigh. We're gonna have a conference meeting right after I'm on with you now to begin the process of talking through where the Senate is gonna 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 Finance Committee is going to the White House right now to meet with President 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 expeditiously, 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. With that in mind, Senator, I'd love to explore the idea of permanence with you, because we're hearing about this a lot more now. The likes of Steve Daines and others who say, no, we need to make permanent certain business tax breaks, specifically the full research and development deduction, bonus depreciation and interest expensing. Are you on board with making them permanent?

Certainly I am. I agree with the premise completely. And Steve Daines is a business person 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's exactly right. And we need to extend these as far as we possibly can. Permanent is the best possible answer we could achieve.

Senator, of course, while you and your colleagues are working on reconciliation, there is also actively underway an effort to advance the stablecoin legislation, the Genius Act. Last time you were on with us, we talked about some of the various amendments that were being put forward, which you said are being worked through. Have you had direct conversations more recently with either the majority leader or Senator Roger Marshall about whether or not the Credit Card Competition Act is going to become a real factor here?

Yes, those 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, Kayleigh, with respect to the content of the 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 stable coins will be backed up dollar for dollar with U.S. treasuries. Very positive outcome here. We've got very strong support. So, okay, what's the timeline, Senator, and what does it mean for the Clarity Act coming out of the House?

Joe, 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 Act and getting more confirmations across the floor. And when will your attention, Senator, turn to market structure? And when the time comes to actually look at a market structure, Bill, how akin do you expect it will be to the Clarity Act that was just introduced in the House last week?

Well, 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. J.D. 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.

Interesting as you bear down on reconciliation tax and spend legislation here, Senator, I know it's going to be an important day and you're walking into this meeting after we're done with our conversation to begin hearing from Republican members of the House.

who apparently didn't have enough time to read the whole bill. Congresswoman Marjorie Taylor Greene says she's a no, having not read a section banning states from passing their own AI regulations. Mike Flood, Republican from Nebraska, doesn't like this idea, making it harder for judges to hold officials in contempt of court. They both didn't see it in the first pass. Have you had a chance to read that bill? I haven't gone through the entirety of the bill. 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 if we don't solve it all here, we'll have another opportunity to do that.

Well, Senator, you will have an opportunity as soon as tonight to vote for the confirmation of Mickey Bowman to be the Fed's new vice chair of supervision after the cloture vote passed earlier today. This comes just a day after the Fed officially lifted the asset cap on Wells Fargo. Starting today, is this a new era of banking regulation in the United States?

I certainly think so. Michael Barr took us in exactly the wrong direction, and I'm very glad to see someone with the sensibilities of Mickey 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 the business of these extraneous policy issues, whether it regards climate or other sorts of issues that essentially make the U.S. economy better.

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. Mickey has a very different point of view, and I'm very excited to see her come into this role.

Well, it is interesting seeing this asset cap lifted on Wells Fargo today, Senator. Your colleague, Elizabeth Warren, who's going to be with us a bit later this hour, is asking for five years of exam reports from the bank as a member of the banking committee, having suggested that they have not gone a year without breaking the law. Her statement says it's stunning the Fed could not wait till the company went a full year without breaking the law before wiping its slate clean. Should she get those documents? Should the committee see them?

I'm all for transparency, Joe, 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 Elizabeth Warren has said just based on what she probably doesn't have. You know, she doesn't have access to the documents at this point, so I don't understand her leveling these accusations, but she's wont to do that.

Well, I wonder, Senator, if you'd like to respond to something President Trump has just said, as he shared with us on True Social, that he spent an hour and 15 minutes on the phone today with Russian President Vladimir Putin. He suggested that phone call will not lead to an immediate peace with Ukraine, but went on to say that Putin believes or suggested he could participate in discussions with Iran. And of course, the U.S. approach to Iran is something I know you feel quite passionately

passionately about. Is it appropriate for Russia to be stepping in here? Well, I think you understand well the fact that 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 in a 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 in the Middle East. It's got to come to an end. A deep dive with Republican Senator Bill Hagerty of Tennessee. Senator, it's good to see you. And we appreciate all of your time today on Bloomberg TV and radio.

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