An “Abomination” & Calls for a Breakup: The Trump Agenda Bill 6/4/25
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Hi, I'm CNBC producer Katie Kramer. Today on our big, beautiful Squawk Pod. The reconciliation bill's fate in the Senate. Wisconsin Republican Ron Johnson has some major edits, like crunching the numbers on the deficit and chopping it in half. Very respectfully, we just have to say, Mr. President, I'm sorry. One big, beautiful bill was not the best idea. We should have done what John Thune always wanted to do, split this up into multiple parts.

And making the most of saving pre-tax dollars for your health, Scott Cutler, a former technology executive, now leading health equity. One in four Americans cannot actually afford a $400 unexpected medical expense.

Plus, from the bromance to an abomination, the world's richest man sours on the spending of the Trump administration. I don't completely question Musk's motives for being angry with us. It's Wednesday, June 4th, 2025. Squawk Pod begins right now. Stand back, you buy in three, two, one. Cue, please.

good morning everybody welcome to squawk box right here on cnbc we are live from the nasdaq market site in times square i'm becky quick along with joe kernan andrew is out today we are now looking at uh four days in a row of gains for the dow two days in a row of gains for the s p 500 and the nasdaq and by the way the s p at this point uh less than three percent from the all-time high 2.8 2.88 i think if you carry it out 61 44 i think and

To get back there, you need 3%, and it's down 2.8. Well, you need 2.9 to get back. So that's like if something comes out. Or it could go down. Or it could go down pretty significantly, too. President Trump weighing in on trade earlier this morning on his social media network at about 2.15 Eastern time. The president posted, I like President Xi of China, always have and always will, but he's very tough and extremely hard to make a deal with, exclamation points.

The White House has said that Trump and Xi would likely speak about trade this week. We'll see. Trump has accused China of violating an agreement to soften tariffs and trade restrictions and a development plan

Just a short time ago, which is noteworthy, probably we'll see if the futures respond about European trade. The EU's trade chief posting on X had what he called productive talks with Jameson Greer, the U.S. trade rep. He said the talks are moving in the right direction. The White House is reportedly pushing for countries to give their best trade offers by today. The back to the China piece. There's interesting, you know, once again, Wall Street Journal weighing in on.

And apparently it's going to be different this time. They settled according to sources in China. And it'd be different this time. How from last they rolled over too easily in their view in the first Trump presidency. And it's this gentleman. It's not he. Is it? Don't we pronounce it? Huh? Or something like that? Yeah. Yeah. And he's supposedly taking a much more strident tone. And then back to the markets. Yeah.

I think everyone who comes on and says we're going to retest the lows, and we just had another guy the other day saying, oh, yeah, anytime we go back down, 6,000 is going to be the high. This market is definitely doing weird things in terms of shrugging everything off. And when it does this, a lot of times it's best just to say, I don't know.

And to say, oh, but something could happen. The market knows something could happen all the time. Maybe it will be China. Maybe it will be that we get nowhere with them and we go back to, you know, all these respites eventually lapse. So we can be back. Right, July 9th, are we talking now at this point? And look, the situation with China is that President Trump has been saying for decades

I think three or four times now at least, that he'd be talking with China any day. I think President Xi does not want to have a direct conversation with them. The Chinese like to do this by kind of going from lower levels where they can get in what they would like done and make sure that they are getting their demands met. President Trump likes to look at this and just deal directly with President Xi or whoever's at the top of the pyramid. And this looks like a little bit of a stiff arm, like, no, we're not going to be talking with you immediately.

If we get through those old S&P highs, then it's really going to get interesting. And they could be, if we saw some weak economic data, that could change things because all we've seen is like low inflation and pretty good labor. We'll get the jobs report this week. We'll get that Friday, and we'll see.

Then there's this. Expect Elon Musk to very quickly get back on the Democrats' good side. They're going to be talking about what a great man he is saving the planet because he's blasting.

Trump's signature tax and spending bill that was recently passed by the House in a post on his ex social media network must set. I'm sorry, but I just can't stand it anymore. This massive, outrageous, pork filled congressional spending bill is a disgusting abomination. Shame on those who voted for it. You know what you did is wrong. You know it since that message must has also posted online.

or reposted a number of comments criticizing big government spending. At one point, he said...

In November next year, refire all politicians who betrayed the American people. President Trump hasn't weighed in on Musk's comments, but the White House press secretary said Trump already knows Musk's stance on the bill, and he's still sticking with it. A source familiar with the relationship between Musk and President Trump tells NBC News, several factors are likely, but yeah, I can think of one really big factor behind his venting.

including that the spending bill doesn't contain EV tax credits and it gets rid of a lot of the green subsidies from the Biden administration. That's what Speaker Johnson said yesterday. I don't know if that's the case or if this is the case. No, it is the case. They're gone.

I don't know if that's why he's mad, though. I think he's probably mad because this is Doge. He spent all his time there. They're going to do the rescission bill for the nine billion they got. They're going to try and do it. I can understand Elon Musk being ticked off that he was in there doing Doge for months of his daily. This is I don't know why you're suddenly turning on. I'm not turning on him. I'm not turning on him. Sounds like it. Did you read? Did you read his quotes?

There is no change to tax incentives for oil and gas, just EV and solar, and people are going to die. Slashing solar energy credits is unjust. He spent how many months in the White House trying to cut away, and this is like the hydrant. Every profit, almost every dime in profit that Tesla has posted recently has been selling energy tax credits to other companies. So it's not about the pork you think? He's lying when he says that, that this is just about his pork? Okay. If you don't...

What's in this bill is at least you avoid $4.5 trillion. It's back to the good versus the perfect. You're also back to most places scoring this as saying you are going to be spending much more money. You are, but it's still... If you don't pass it, you don't get $1.5 trillion in cuts and you don't get...

You get a tax increase on everyone in the country. I would take Elon Musk at his word at this and probably being frustrated at the personal pain that he has taken on. You think I like that? I don't like they don't do anything. We're going to have Ron Johnson on. They don't do anything that they should have done for Medicaid. What this what this does is embolden Mike Lee and

And Ron Johnson and Rand Paul and any other senators who are saying we want to see more cuts before this goes back. Well, you either don't you either don't want the pork or you do want the pork. And he can't just pick and choose. This pork is good. The pork that benefits him is good. The pork that benefits. I mean, he goes on to say that it's his competitor. Nothing is done. Yeah, I'm sure nothing is done to oil and gas, he says. And all oil and gas is getting is the same depreciation all managers are getting.

Yeah. I mean, we'll talk to Ron Johnson. I'm ready to go along with what Ron Johnson said. I wish. But in terms of more cuts. But you've got people like Susan Collins. You've got people in the House that can't do it. Do you remember what Biden wanted to do in the what was it called? The new green deal or whatever the hell it was. Yeah.

If they had gotten it, this is the way it is on both sides. Without Joe Manchin and Kyrsten Sinema, it would have been. No, it just would have been 10 times the size. Now the Republicans are in it and you've got the same problem. This party, both parties, you have far left and far right. But you have people that are not going to agree with you. Intra party. Yeah. And that's why nothing ever gets done. It's also very close margins right now. Can't lose more than a vote or two in the House.

People would say that's what they had planned when they put it out. Big things are hard to get done. And then you've got two years for the House. So the minute you get in to do something, then you're basically handcuffed by trying to get reelected. But look, this is not just an extension of the 2017 tax cuts. President Trump has expanded it in lots of populist ways to try and make sure that people who are getting tax cuts on everything from tips...

to overtime, to Social Security payments. So this is not just an extension of what we thought it was. There's plenty of things that you could get rid of some of that stuff. You could get rid of the salt cap at $40,000. You could get rid of that. It's not perfect, obviously. But if you don't do it, it's not good. And...

I don't know, just to be carping about pork when and then in the next sentence to say, but my pork is. But to hear what he said, I can understand his frustration. Right. He's in there looking for a hundred billion to cut here, a hundred billion to be a trillion. And we're down. What? It's nine million. And every time you slice something off, it's like the hydra in the head.

Well, you don't want to slice anything. Every time they slice. I do think they need to look. I think we need to send some bowls. Absolutely. But you immediately anything with research, you're ready. You think that every dime that they need. Not every dime. It doesn't need to be cut 50 percent. I'm not sure what needs. I'm not sure how you cut anything. But just like anything else, everybody's got their own sacred cows that they don't want to touch. I think you can look through this and I think there's a lot of stuff you could cut out of.

I honestly I think a Simpson Bowl style sit down and and by the way President Obama did not take the vote on the Simpson Bowls it was not mandatory for what went through with that that was a huge problem with it you have people like Bono and Bill Gates

saying that the slight cuts in USAID are going to kill millions of people and have already killed millions of people. That's what you're dealing with in terms of hyperbole and just. But that's not what is getting stuck in the Senate or the House. Nobody in the Senate or the House is an example of how tough it's an example of what you have the rhetoric you're going to hear. You hear the rhetoric. But what matters is what's happening in every congressional district and what they are voting to support.

and they aren't voting to support anything that hurts them. Correct. And that's why if you get 50% of what you want in this bill,

The counter, the other thing is to not pass anything. And that that's that can't happen for Republicans. Well, this was the this was the gamble that the administration took when it decided to take on one big, beautiful bill instead of saying, OK, we're going to just solidify the cuts that were there. We're going to do this. And the argument from the House, which may very well be accurate, is that you would not be able to get the House through unless you crammed it all into one big thing. So everybody has to do that under reconciliation, which we learned all that. That's how.

Obamacare, that's how things are done to get around the realities of a-- All I'm saying is I don't completely question Musk's motives for being angry with this.

I wish... I've been saying good versus perfect, and if you get 80%, they don't do anything about able-bodied people getting more reimbursement than pregnant women and disabled people. Well, they do it. They've just moved it out. No, that's... They don't... The work requirements, they brought in from 29 to 26, but it still doesn't do anything with the core problems with Medicaid, and it doesn't do anything with the other... Well, the expansion of Medicaid that was done under Obamacare, too. Which is...

Turned it into the fastest growing entitlement that we have and the main problem. Cheese will be next.

Coming up next on Squawk Pod, Senator Ron Johnson is a key player in the future of President Trump's one big, beautiful bill. But he has some big qualms with the legislation as it stands today. No American family, if they had an illness, had to borrow $50,000 to pay for medical bills. If that family member got well, would keep borrowing $50,000 and spending that level. That's what the federal government has done. Why Senator Johnson is pushing for a two-part bill right after this.

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Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same premium wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today.

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President Trump's key legislative agenda, the so-called Big Beautiful Bill, a mix of tax cuts, reductions to entitlement spending, and increased border security, is winding its way through the U.S. Senate. And it's not an easy road. Kentucky Senator Rand Paul joined us yesterday. Check out that podcast. He's challenged the spending in the bill and the amount it could add to the federal deficit. His colleague from Wisconsin, Ron Johnson, agrees, and both men have caught President Trump's attention. Cheers.

- As well, on the big beautiful bill, you said recently that it is quote blatantly wrong to say that it adds to the deficit. You essentially said that an estimate from the Congressional Budget Office and other scorekeepers you believe are wrong. But Republicans like Ron Johnson and Rand Paul disagree. They are saying that it will add to the deficit. That is their concern.

Is the White House's position that those two Republican senators are, quote, blatantly wrong? It is. Those senators, it's not news that they disagree with this president on policy. And the president has vocally called them out for it and for them not having their facts together. Senator Johnson joined our TV broadcast this morning. Here's that interview.

Our next guest has proposed a two-part bill. Joining us now, Senator Ron Johnson of Wisconsin. Senator, it's good to have you on. I know the president really has always been pushing for one. That's why it's called One Big Beautiful Bill. How would that help your case or your cause by splitting it into two? How would you do it?

Good morning. Well, first of all, we'd actually have time to do the work to forensically audit every line in the federal budget, every program. You know, there are over 2,600 programs in the federal budget. We haven't taken the time. You know, DOE showed us how to do this, so we ought to follow their example. But, you know, the bottom line is this is a budget reconciliation process pretty well devoid of actually talking about numbers. About the only number we heard out of the House was $1.5 trillion, which sounds like a lot.

until you put it in context of the CBO's 10-year projection of $89 trillion being spent, $22 trillion of projected deficit over the next 10 years. That's a $2.2 trillion deficit

per year, completely unsustainable, not even coming close to returning to a reasonable pre-pandemic level of spending. So, again, we're just not taking the time to actually debate this. And by the way, I heard earlier discussions at AI. I'm using AI. For example, this morning, again, using that basic CBO projection, 1.8% growth is what they're projecting, 2% inflation. I said, well, what if we grow at 3%

with two percent inflation what's that going to do in terms of revenue over 10 years about 500 billion dollars we lose revenue the first four years during the trump administration

probably gained revenue in the last six years. So again, that's the kind of analysis I'm doing. That's what I want to put into report. I want to issue here within a week or so, just laying out the basic numbers, which we have not looked at. We haven't looked at the most relevant piece of information. The fact that our deficit is out of control, it's on an upward trajectory, when what we should be doing is

bending the curve of deficits down in this reconciliation process. We're not even coming close. Senator, during President Trump's first term, before COVID, we were under a trillion dollars. And that's still a lot in the deficit. And then the pandemic hit. Now, suddenly we're at two trillion. We just seem to be locked in there. I know that there's some, you know, there's interest and there's other factors that are going against us.

But your idea to get back to pre-pandemic spending levels, can you just, I wish you could just flip a switch, but you can't. And every single thing that you take away, there's going to be some constituency that it's going to be the end of the world, or that's what they're going to say. What would it entail to get back to pre-pandemic spending levels? Where are those cuts?

So again, let's look at the numbers. 2019, we spent $4.4 trillion. This year, over seven. Next year, projected to be about $7.3 trillion. So again, that's a massive 58% increase in just six years. So rather than basically leave most programs untouched, only focus on a couple, you need to go line by line, program by program. And I have to believe in $7,000 billion worth of spending, $7 trillion.

You will literally find hundreds of billions of dollars that if you don't spend it, nobody would even notice except the grifters who are sucking down the waste and the pork. But you have to do the work. That's going to take time. It's going to be a massive effort. We haven't done the work. We haven't taken the time. But again, in proof, I've laid out these options for pre-pandemic spending going back to Clinton, Obama, and Trump, 1998, 2014, 2019. You grow all outlays except for Social Security, Medicare, and interest. Leave those as is.

and then grow all their outlays by population growth and inflation, you're going to put the baseline budget somewhere between $5.5 and $6.5 trillion. That's where you start. But you have to do the work. You have to do the analysis. I know the numbers. I've been forcing the numbers on my colleagues. In the Senate, we're going to look at the numbers.

Senator, you said you're using AI to kind of run through some different scenarios. That's interesting because that's sort of what Jamie Dimon was suggesting the government do last week when he was speaking at the Reagan Library, except for he was suggesting that you stress test it for much worse times, kind of like the banks have to do these stress tests. Did you stress test it to find out if GDP dropped to 1% or if it dropped to negative levels, what that would mean? I don't know.

I could literally do that in about 10 minutes. So, yeah, that's what I want to lay out in my report. We'll stress Tesla. I just did the first one on the Rosie scenario. 3% growth, which we haven't achieved. By the way, the last 20 years, we've averaged 2% growth. So Reinhart and Rogoff talked about in their book, you know, this time it's not different or whatever the title was. Once you hit 80% of GDP of development,

debt held by the public, you harm economic growth. We may be at that point right now. We're way beyond 80%. So again, we have to look at this. And my latest chart just

just shows what you said, Joe. Obama, his last term, he averaged deficits of $550 billion. Trump's first three years, $810 billion. Then, of course, he had COVID, $3.1 trillion. Reasonable leadership would have brought it back down to under a trillion. Joe Biden averaged deficits of $1.9 trillion. And that's where it starts. We're going to have a $1.9 trillion deficit rising to about $2.5 over the next 10 years.

Again, it's completely unsustainable. This is insane what we're doing. No American family, if they had an illness, had to borrow $50,000 to pay for medical bills. If that family member got well, would keep borrowing $50,000 and spend at that level. That's what the federal government has done. It's completely unjustified, but we need the time to do the work. And I'm sorry, the one big beautiful bill, we haven't taken the time. So, Senator, it's been said that if there was like a fairly...

small bill that just extended the 2017 tax cuts. Do you think you could get both sides, you know, you got people in the Senate, there's some like you, there's others that have a totally different situation with the states that they represent. Same within the House. You can see the Freedom Caucus and then you see, you know, on the other side, it's impossible to please everyone

All the time. That's why this isn't going to get done. I guess that's your that's your point. It's not going to get done in one big bill. Right. If you try and throw everything in there. What would it what would it look like? Where would you would you do President Trump's tax on tips and on overtime? And which which part of the bill would that be in? How would you split it up?

So I would focus on the areas of greatest agreement, supplying funding for the border and border security. Defense, I guess we have to do that. I would take whatever spending cuts, and the House has done pretty good work on their limited number of spending cuts. I'd bank those. I would extend current tax law, take an automatic tax increase off the table. I would extend the debt ceiling for a year.

And I leave everything else for a second bite at the apple here where there's the pressure to do it. We can't do this in one bite at the apple. It's obvious we can't. You can do both with reconciliation. Elon Musk is absolutely right. You can do both. You can do it twice. Yeah, we use...

Absolutely. We've got fiscal year 2025. That's what this reconciliation bill is. We're already in, we're going to be, we should be debating a 2026 budget right now. So we've got that reconciliation. You can do three bills in each reconciliation package. We're bundling up just one bill in this reconciliation. So we have all kinds of bites of the apple. We should use that. And President Trump has to realize the debt ceiling is leverage for him to accomplish what he said he wanted to accomplish in the State of the Union, balance the federal budget. We're not even coming close. We're not even turning the

deficit trajectory downward. It's skyrocketing.

Senator Johnson, you're often mentioned in the same breath with Senator Rand Paul. He agrees with you on a lot of these different issues. We had him on the program yesterday, and last night he put something out on X in response to Elon Musk's statement on this. Elon had tweeted or had put on X, I'm sorry, but I just can't stand it anymore. This massive, outrageous, pork-filled congressional spending bill is a disgusting abomination. Rand Paul put up this tweet. He said, I agree with Elon.

We have both seen the massive waste in government spending. We know another $5 trillion in debt is a huge mistake. Do you agree with Rand Paul on this?

Well, again, I'm going to be focusing on the numbers. You, CBOs, 10-year is our baseline. Their projection is a baseline. And then let's start honestly discussing where we're at. And, you know, again, my latest chart just shows the unsustainable nature of this, how deficits are going to continue to skyrocket. You know, we're not even coming close to even having a possibility of balancing the budget. So I'm going to focus on the numbers. I'm not going to be insulting anybody. Does what Elon said give you – does what Elon said give you –

additional kind of help in your quest on this. Yeah, it certainly bolsters our case. He was in the inside. He showed us with President Trump how to do this.

you know, contract by contract, line by line, we have to do that forensic audit. We don't take the time. Again, we exempt most programs, focus on a couple, tweak them, get a CBO score. This really out of context. I mean, the context is all about $22 trillion in expected deficit. And by the way, that counts about $4 trillion of tax increase, which I don't want to incur. But if we don't incur that,

You got to make up for about $4 trillion in revenue. How do you do that? That's why I'm starting to do these AI sensitivity analysis. And by the way, mindful that AI is often confidently wrong. You got to check your work. So I haven't checked this work. But again, that's how you approach this. You actually look at the numbers, take the personalities out of it, take the invective out of it, take the insults out of it. Look at the cold, hard facts. If you do that, you get depressed really fast.

and hopefully it will cause all of us to act. This is our one chance. This is our once-in-a-lifetime opportunity to reset government spending at a reasonable pre-pandemic level. We can't blow it. We can't count on winning another election, having another shot in 2027. This is our time. We have to take this seriously. So let's say that, you know, you stick to your guns here, but at this point,

If I characterize what you want to do as a long shot, is that overstating it? I mean, I can see Senator Thune, Majority Leader Thune. It's not a long shot.

No, it's not a long shot because we have enough of us who are going to say no. Listen, we all support the president. What's your count? Yes, we want to see him succeed. But again, my loyalty is to our kids and grandkids. We're mortgages of their future. So there's enough of us who have that attitude that very respectfully we just have to say, Mr. President, I'm sorry. One big beautiful bill was not the best idea. We should have done what John Thune always wanted to do, split this up into multiple parts. I always said three parts. He said two.

Times crunched. Now it's back down to two parts. Uses a two budget reconciliations. But you need to keep enough on the table to force us to come back here and do the do the work, take the time to actually reduce spending to a reasonable level. I mean, the Senate is going to look at the House version and the Senate is going to do its own version. It's it's it just seems like it's in motion already. And again, so so.

So the president and Senate leadership has to understand that we're serious. They all say, oh, we can pressure these guys. No, you can't. Okay, again, we're being very respectful.

I ran in 2010 as part of the Tea Party movement. We were a mortgage on children's future. We were $14 trillion in debt then. Now we're over $37 trillion. We're serious about this. They need to take us seriously. Don't insult us. Work with us. Lay out the numbers. If you can say that our numbers are wrong, fine, let's work through it. But again, every analysis I have, there's greater upside risk today.

to that deficit. Interest rates are moving up. If we go increase interest rates 1%, that's another $4 trillion over 10 years in terms of deficit. If we don't replace the $4 trillion, that's $4 trillion of lost revenue. Again, and growing the economy 3%, it adds to it a little bit, but mostly in the out years. So again, come to the table, let's look at the numbers. If I'm wrong, prove that I'm wrong, but let's do it with respect

but mainly respect for our children and grandchildren. This is immoral what us old farts are doing to our young people. This is grotesque what we're doing. We need to own up to that. This is our moment. I can't accept this scenario. I can't accept it, so I won't vote for it unless we are serious about fixing it. And who do you think, okay, Rand Paul, you, that would still pass? Who else are you talking about? Mike Lee.

Again, I don't want to speak for others, but yeah, Mike Lee, Rick Scott, we've been... I think there are a lot of people that aren't as vocal as we are that support what we're doing. And again, they can't dispute the numbers. Again, we didn't talk about numbers in the House process. If the White House just comes and starts insulting us, I'm sorry, I got the numbers to back myself up. Again, if my numbers are wrong, fine, prove me wrong.

But I think I have the numbers, which is, I think, one of the reasons they probably won't insult me, and that's good. Let's say we don't split it, and it's going to still be one big bill. What could the Senate put in the bill? There's nothing that can be done. It won't pass. Not in such a short period of time. Maybe we can make a couple tweaks. Yeah.

So if it were something with Medi-- I know Medicaid, you think we're missing the opportunity to reform that as well. But if they did-- No, no, no, Joe, we need

We need to eliminate the Obamacare portion of Medicaid, which puts at risk the Medicaid for vulnerable children. Again, we didn't have time to make that argument. So we just get attacked and we cower in our little corners. No, Obamacare is grotesque what it's doing in terms of risking the Medicaid for the vulnerable. For every dollar the federal government spends on traditional Medicaid for a disabled child,

the state spend on that, the federal government kicks in $1.33. For every dollar the state spend on a single, able-bodied, working-age, childless adult, the federal government kicks in nine, which has allowed the states to game the system and basically legally steal from the federal government and federal taxpayers. So we need to make those arguments. They're not necessarily easy to make, but it is grotesque what Obamacare has done to Medicaid.

The downside, I guess, and the journal kind of... And the journal points out, you know, Elon, you know, make me chase, just don't touch my subsidies. But they're saying that really he's joining...

uh the rest of the naysayers to try to sink the big beautiful bill which really doesn't if that were to happen without something else happening it you would admit you wouldn't get the 1.5 trillion in cost cut you wouldn't get the the extension of the of the trump tax that's the alternative if you get nothing it is pretty bad and you know i i yeah getting getting nothing is not acceptable it's not acceptable again

It was just the wrong strategy to try and bundle it all into one big, complicated, difficult to pass bill. Focus on the areas of agreement. Do that now. Literally, I think we could get that done by July 4th. Focus on that. Again, take an automatic tax increase off the table. Extend the debt ceiling into next year.

to put key pressure on the process. I mean, the president has to understand the debt ceiling gives him leverage to do what he said he wanted to do, balance the budget. Leave that out there. We're not going to default on our debt. We'll never default on our debt. We have more than enough revenue coming in to service our debt. We'll never default. This shouldn't freak anybody out. This is the scaremongering of the big spenders.

So again, let's focus on reality. Let's discuss the numbers and let's focus on our children and grandchildren whose futures are being mortgaged. Their prospects are being diminished by what we are doing to them and the fact that we're ignoring it. We're just simply ignoring it based on rhetoric and slogans. I'm interested in reality and substance.

I want to know what happens over the next couple of hours. You got your phone on mute right now? I don't, you may be getting, I don't know. Where will the calls be coming from after this interview, you think, Senator?

Well, we're going to be meeting with the president in the White House, the Senate Finance Committee. So I'll be in that meeting. I had a very nice conversation with him on Monday. So I support him. I want to see him succeed. I know we all do. We all do. And I mean, a lot of people are nodding, but it seems like the train may have already left the station in the view of.

Speaker Johnson and Majority Leader Thune and the president himself. No? No, they always told me that that ship has sailed. I said, we'll call it back to port.

because because the ship that the one that then we build builds on that's the titanic toothpaste in a tube no way humpty dumpty uh-uh cannon scramble and i mean i have a lot of expressions for you so uh you can bring it back and call it back get the horse back in the barn okay you can do that come here flicka okay very good uh senator thanks for all your time

Next on SquawkPod, the CEO of HealthEquity, which manages health and flexible savings accounts for many American workers. My biggest problem with HSAs in general is just how complicated it is to get reimbursed. The challenges, the technology. It's a delicate balance to make sure that we can deliver on our members' expectations and to be able to do that more efficiently. And yeah, the personal. They questioned whether my episiotomy was for cosmetic purposes. Oh my God. We'll be right back.

Yeah.

Yes, indeed. And it doesn't stop there. We have got a lot to say. So join our group chat, Come to Life. Follow and listen to Vibe Check wherever you get your podcasts.

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Early direct deposit availability depends on payer type, timing, payment instructions, and bank fraud prevention measure. No monthly fees with eligible direct deposit, otherwise $5 per month. This is SquawkPod. I'm Becky. Thank you. You're watching SquawkBox right here on CNBC. I'm Becky Quick along with Joe Kernan. Andrew is off today. FinTech company HealthEquity is up in the pre-market after beating analysts' expectations on the top and bottom lines.

It's a custodian for health savings accounts. And the company has its finger on the pulse of health care in America. Joining us now, first on Squawk Box, Scott Cutler, CEO of Health Equity. This is his first TV interview since taking over the top job at the company on my birthday. And it's January 6th, right? Absolutely.

Okay, I'll take it as a birthday present. Actually, shareholders are doing pretty well. Solid numbers that you reported this time. Stocks up, even in a market that maybe hasn't been getting better, but it hasn't been that great. And what's in this new bill would be a boon for you.

We had a great start to the year, and I think it's just backed by growth in this industry. We're the leader in the space of health savings accounts, which is an industry that's grown from $10 billion to $135 billion over the last decade, and yet we have an affordability crisis for Americans in the United States.

one in four Americans cannot actually afford a $400 unexpected medical expense. And so we have this savings vehicle that helps prepare people for those types of events. - 60 million Americans have one. I think CNBC, I think we have with your company, we have one. What does the new bill do? It could expand access to 20 million more Americans. How? By changing what?

So it's changing the eligibility of those that were previously excluded from the opportunity to invest in HSAs. Older Americans? So Medicare A, which would be retirees that are entering into the market, if you'd signed up for Medicare Advantage and you had an employer-sponsored plan, you could not contribute to an HSA. So that was one area of expansion. Other areas of expansion provided more flexibility for people to use Medicare.

for example, in preventative wellness opportunities to be able to use your HSA dollars, for example, in a gym membership or for a primary care doctor. - Gym memberships, that's new. - Yeah. - Look, I have to say my biggest problem with HSAs in general, and this has been a while for me, is just how complicated it is to get reimbursed. It's your money that you've set aside and

the hurdles you have to jump through make it pretty complicated. Can you make that easier? - So we're really trying to prepare Americans to be able to save, invest, and to spend. And what previously was the challenge is that a lot of those reimbursements came through paper-based processes, forms. - When you're sick, by the way, trying to get reimbursed when you are already sick or you've just had a baby or something along those lines, it's pretty complicated. The reason I've never put any money in an HSA again was because of some of the paperwork, the red tape,

while I was on maternity leave. - And now you can take a picture of that receipt on your phone. We'll process that automatically, reimburse that instantaneously. It's seamlessly integrated into your digital wallet, Apple Pay, use it on a marketplace like Amazon for HSA qualified expenditures. So we're trying to make that process seamless to again, help people prepare for their medical and health expenditures.

I mean, articles point out how attractive it is in terms of tax breaks. If you use it properly, almost to the extent that it could become as common as a 401k or as useful as a 401k, why aren't you hearing any backlash from

in this bill that there's too many tax breaks here for HSA accounts. - Well, the regulatory regime for HSAs has been around for a couple of decades and it's the most tax efficient savings vehicle for healthcare. And so how it works is that you can contribute pre-tax, it can grow tax free, just like a 401k, and then you have to spend it on healthcare related expenditures. - Not right away though.

Yeah, it can grow over time. But you could even incur costs and not even take it out until years later. As long as you have proof of a receipt for a medical expenditure. And so it's very tax efficient. It's not just a medical procedure. It's also that it has to be for a mandatory nature. And that's where I got into trouble with them. They were arguing back and forth about me, about whether I needed some of these medical procedures. And when you're sick, it's really hard to deal with that.

- Yeah, it's frustrating when you're denied coverage. But again, I think what we're trying to prepare for is just the reality for retirees as an example, which is a big part of this legislative expansion.

A retiree couple needs about $400,000 in savings for health care related expenditures. And one in five are going to outlive their savings. And so you need actually a vehicle to help prepare for that. And then obviously, to your point, seamlessly integrated when you need it. Well, get some good AI type tools.

uh help on this and you ought to be able to streamline it and i guess that's the other frustration like i it ai would be great if you can process things more quickly and get it there but if i get turned down by an ai agent instead of a person i'm going to be even madder we have to it's a delicate balance to make sure that we can deliver on our members expectations and to be able to do that more efficiently and

AI again is-- Can I talk to a person? Like you can get the AI to do all the easy stuff and push it through quickly. If I have a problem with that, can I still talk to a person? Absolutely. We still have phone-based support. And we're really trying to, again, make that process that you're going through that's previously form-based and frustrating to be seamless, efficient.

transparent, and again, help you at that point in time in real time. And that's where technology and automation can vastly improve the consumer experience. Has the IRS gotten more complicated? I know they did around 2011. That's when I had an issue with them when they really tightened some of the...

hurdles you had to jump over. Has it gotten easier since then? It is. And the burden is on the taxpayer to show that the expenditure was related to health care. Can I just tell you, you said January 6th is your birthday, so I'll show some personal stuff too. They questioned whether my episiotomy was for cosmetic purposes.

That's why I've never put another dime. Saying the insurrection day is my birthday is a long way from what you just said. But I will just say, I did not open it. I'm not taking the rap for this. I did not open the floodgates for that. But that is my problem with it. Like the idea that when I was sick and trying to keep a, a, a,

new baby alive to be arguing with them about some ridiculous, stupid questions like that and not be able to get my money that I had set aside for this. That's why I have been turned off to HSAs ever since. Has it gotten better? Well, there's also a difference between HSAs and FSAs. So FSAs would be a user to lose it

type of vehicle, which we also administer. And HSA, again, we have all of our platform integrated with the plan and the providers. And so, again, when you go to a procedure, when you have a health care expense, it's integrated into our platform and it's seamlessly and in real time reimbursed. That wasn't a planned procedure. That's an on-the-moment procedure, which happens a lot. Yeah. There's a lot more we could talk about because we've got, I mean, this is just another

part of our very complex and interconnected healthcare system in this country. And I'm just like, is there fraud? Does this help prevent fraud? Does it help hold down costs? I mean, these are all things we need to, I mean, look at this whole bill. It's all about Medicaid and Medicare and everything else. We have to remember that we do have an affordability crisis in America. So healthcare is increasingly out of touch for most Americans. And we need things to be able to help them prepare for those events.

And what we believe is that we have this opportunity, you know, despite things that you're talking about, to really help educate Americans on this opportunity, but also to be prepared for these unexpected events that we all have in our lives.

and to make sure that we're thinking about an HSA as an example, much like you would as a 401k, that you're preparing for retirement, in this case, preparing for a future healthcare need or medical crisis. - That makes sense. I mean, it is the proper way to plan for things. And if you can make it easier, particularly with AI, that would be great. - Yeah. - Scott, thank you. - Appreciate it.

That's the podcast for today. Thanks for listening. Squawk Box is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern. Get the best of our show every day for free right here at Squawk Pod. And we have just started an extra podcast. On Mondays, Wednesdays, and Fridays, we'll be pushing out an early pre-market pod of the five things to know before the stock market opens.

Be sure to follow SquawkPod wherever you like to listen, and you'll get that podcast as well. We'll meet you right back here tomorrow. We are clear. Thanks, guys.

Yeah.

Yes, indeed. And it doesn't stop there. We have got a lot to say. So join our group chat, Come to Life. Follow and listen to Vibe Check wherever you get your podcasts. ♪♪♪