Ted Cruz CONFRONTED by Becky Quick on CNBC.

you know Joe Biden started off with a

position he wouldn't talk at all he

wouldn't compromise he was unwilling to

consider anything that was obviously

unreasonable and and he had to fold from

that because it that didn't withstand

scrutiny

where we are now I don't know if the

White House is willing to be reasonable

I I'll tell you what I've encouraged

President Joe Biden to do which is

listen to Vice President Joe Biden in

2011 the last big debt ceiling Showdown

we had

where Republicans held a line and said

we need to rein in spending it was Vice

President Joe Biden who negotiated what

was called the budget Control Act

designed to cut 2.3 trillion in spending

and he sat down with with Mitch

McConnell and and with with the house

speaker and they negotiated that deal

I hope Joe Biden as president has at

least some modicum of the same

willingness to do that I'm worried that

he doesn't have the ability to do it

anymore and and look I will say honestly

this is going to be a negotiation that

plays out Kevin McCarthy definitely has

a stronger hand because he passed the

bill in the house that gives him a

stronger negotiating power he is not

going to take something to the floor

that he can't get at least a majority of

his caucus to sign off on so hopefully

the two of them can work some sort of a

deal out look I think we both agree that

it's not a good scenario any way shape

or form if we default on our debt we

should absolutely not default on the

debt and and I will tell you I'm I am

more worried now that we might default

than I ever have been really and the

reason is I don't think Biden is is up

to the task I don't think he's engaged

in the negotiations personally and

directly

yeah they literally met yesterday what

are you talking about Ted his mental

capacities are markedly diminished from

from even a few years ago and don't make

me go through this and what what makes

me worry is yeah I think the decision

making in the White House is being done

by a bunch of 20-something and 30

something little marxists who don't have

an appreciation for reality I told you I

didn't want to dig into this we're going

to get stuck digging into this I mean I

will say the same argument there have

been people who questioned the last

president's ability to be able to have

rational conversations and do these

things there were people who were

talking about having him removed with

the 25th Amendment but look he's in the

room he's making the talks hopefully so

I can tell you the reality all right

when the Senate is in session every

Republican senator we have lunch

together

we sit around and talk about how

virtually none of us have spoken to the

president even once he doesn't talk to

Republican Senators and that's weird we

all know Joe I was sworn into office by

Vice President Joe Biden he was a man of

the Senate this White House hides him

and and it's unfortunate Donald just

meet with him

McConnell had met with him briefly but

it is I used to talk to Trump every week

sometimes every day I spoke with Obama I

spoke with Obama regularly it is weird

Lindsey Graham has flown all over the

world with Joe Biden for 20 years

Lindsay hadn't talked with Joe they keep

him hidden that's not disputed like no

but nobody denies that they keep him

he's not doing media he doesn't do media

he doesn't just sit down with McConnell

and McCarthy is talking to him every day

he also just went to the G7 it's not

like this guy

I don't want to be in the corner of um

on on things great if he is then he

ought to do what he did in 2011. I I

don't think he is and I'm worried

because I think the young extreme

staffers in the White House have no

appreciation for just how damaging a

default would be and so I think they are

quite willing Force the default because

they think the media will blame it on

Republicans and I think that would be

wildly responsible the talking points I

hear all the time is that this would be

much worse for the president to go into

a default because he's the president who

would get blamed in the next election

cycle which is why Donald Trump is

urging anyone in the house to say no so

I I don't think that's what the White

House believes I think the White House

believes whatever happens

the media will blame it on Republicans

whether that's true or not I think

that's what the White House believes and

and one thing to be clear Joe Biden

today could take the chances of a

default to zero here's what I think a

responsible president would say he would

stand up and say under no circumstances

will we ever ever default on the debt no

matter what the United States honors our

commitments now how could he do that he

could do that by claiming the 14th

Amendment

I know except that would be patiently

unconstitutional but but he could do it

in a very simple way that is clearly

legal which is that every month federal

tax revenues coming into the federal

government

significantly exceed interest on the

debt and he could say we're going to pay

interest on the debt we're not going to

default everything else that's what's

called prioritization he could do that

and then they they're very well may get

to that situation they may get to that

situation but the reason that he hasn't

said that which he could say he could

take the chances of default to zero the

reason he hasn't is is I think the White

House is trying to scare Monger on this

they're trying to threaten to fall not

paying the rest of our bills would not

be great either well but but let's stop

paying the veterans do you stop paying

the defense department about paying the

salaries of people in Congress okay not

paying the salaries of people in

Congress would actually be a pretty good

step so so that that actually those

should be the first bills they don't pay

actually to be clear everyone agreed

that the death ceiling needs to be

raised but if you look historically it

has been the only leverage that has been

effective in reigning in out of control

spending look it's a negotiating tool I

get it and it's the only thing that

works and you know given squawk bucks

get it gets into the numbers I think

it's worth pausing for a second and

reflecting at how different this is from

the past so 2017

total federal spending was about four

trillion dollars

total federal tax revenue was about 3.3

trillion dollars now quick math that

means we had about a 700 billion dollar

deficit that was 2017.

fast forward to today

total spending has gone from 4 trillion

up to six and a half trillion dollars

six point four trillion dollars tax

revenues have exploded tax revenues have

gone from 3.3 trillion

to 4.8 trillion now quick pause to note

when we signed the 2017 tax cuts that I

fought very hard to pass

every Democrat went on TV and said this

is going to slash Federal revenues and

blow up the deficit turns out they were

entirely wrong on that every year

federal tax revenues have gone up and

they've gone up from 3.3 trillion

to 4.8 trillion the problem isn't

tax revenues the problem is we had a

spending binge from the Democrats that

has caused the national debt to go from

20 billion to 30 to 20 trillion rather

to 32 trillion reasons infrastructure

Bill a chip spill the ridiculously named

inflation reduction act yeah look I

voted against those bills those were

mistakes you voted against the

infrastructure Bill too yes

okay so there are people who who would

say even once we get through that you

got to cut the spending back because

those are long-term projects that maybe

even if they were in need of spending

and by the way if the infrastructure

Bill had focused on actual roads and

bridges and infrastructure that we need

I would have happily voted for it the

problem was it was filled with with all

sorts of goodies for special interest

that had nothing to do with real

infrastructure so you said

the numbers so CNBC so the S P 500 is at

4200 there seems to be a firm belief in

the market that a deal will be reached

it sounds like you you're saying to

Market participants brace yourself

because we could actually go to default

that's a scenario that we are not

pricing into the markets right now I

agree and listen I think a deal will be

reached I think at the end even though

you're saying Joe Biden's not going to

be the vice president of 2011 you think

a deal is going to be I think a deal

will be reached but I worry that the

chances of a default are greater than

they ever have been that I worry that

this White House is reckless enough to

force a default I don't think that'll

happen I think that's less likely than

not but the odds are higher than than we

should be happy with

let's switch to technology we were just

having a well the the discussion about

what happened yes we'll respond to some

of these things as well in just a moment

sure of the Pentagon being bombed

what what else can you imagine under the

scenario how do you stop it how do you

make sure that this is not going to be

something that we have to be worried

about every day oh look it's it's a

Brave New World we're in and and it is

frightening between technology the

technology of deep fakes between where

AI is going

um it's just going to be a very

dangerous environment for the

foreseeable future and

we're going to have to have real

skepticism to almost anything you see to

make sure it is real and accurate it's

not going to be that hard to suddenly

have video of some politician saying

something they never said uh or somebody

you know people doing things that never

happened and and so it's going to be

incumbent

on it's actually why I'm a big believer

in in free speech that if you have lots

of people engaged uh you can have

real-time fact checking you remember one

of the first big instances of this was

Dan Rather back in I guess it was 2004

where he had 60 Minutes this Brig big

expose on George W bush with these

documents and you know it's one of the

first instances of I guess there's a

bunch of you know bloggers in their

pajamas who noticed the documents that

he claimed to have appeared to be

fraudulent and it ended up within a

couple of days revealing that they were

faking fraudulent documents that was one

of the first real illustrations to me of

the power of the community of folks

online being able to point to facts and

correct them and and with new technology

we're going to need to do that it's

easier to do that when you have a

limited number of news sources and a

bunch of people

when everybody is a news service which

is essentially what you have on a lot of

these social media apps you know that

that becomes it's how something can get

faked and spread instantaneously and

before you have the time to fact check

it yeah

there's questions about security

something along those lines

say yes and no

um

I worry about what has happened to much

of the media there's a reason I like

coming on squat box because because you

all actually talk about substance and

you get into it and and you guys are

much much less partisan than most of the

other media Outlets out there

um one of the really unfortunate

consequences I think of the age of trump

is that much of the media Trump broke

the media that that stations like CNN

MSNBC

they hate Trump so much

that they've stopped practicing

journalism and and I don't think that's

good for America when

when people who are supposed to be

journalists view their role as advocates

pushing a point of view particularly in

that context I think it's important to

have lots and lots of people where

everyone can be a publisher and can

press back so the media is broken but

back to the question is there anything

Congress can do about AI because

misinformation can spread and it's like

shouting fire in a crowded movie theater

and and in this case it could be

billions of dollars in market cap shaved

off the stock market a single stock so

many different ramifications here well

it's it's not like Congress is going to

be able to waive a magic wand and make

ai go away

um it's not like Congress is going to be

able to stop uh criminal activity and

make suddenly criminals go away either

but you stand up on an amicus brief

against section 230 and I think that's a

good start yeah absolutely yeah look

section 230 was passed at a time when

the internet barely existed and it was

designed to protect a Nason industry and

to enable it to grow we now have big

Tech is are these massive behemoths the

largest companies in the world and the

power they exercise the Monopoly control

they exercise and in particular 230

when it was passed Congress assumed that

big Tech would be a neutral Public

Square in other words it wouldn't be

putting it some on the scale it wouldn't

be silencing some voices and not others

but it would let everyone speak and and

the reasoning was it's not fair to sue

Facebook because of a comment you make

or I make because if you make it or I

make it it's not Facebook's fault now

now that's true if they're an open

Public Square for everyone

what's happened is that big Tech in

recent years has decided to actively and

aggressively censor speech

and silence views they disagree with and

I gotta say Elon musk's buying Twitter

and making the Twitter files public was

an absolute Game Changer if that is your

view though about big Tack and their

ability to control speech Etc then that

should be even more of a concern when it

comes to AI yeah they are the leaders in

AI right now they're the ones that have

accrued billions of Market billions of

dollars in market cap because of the

notion they are in the lead on AI so is

that a much bigger concern and how does

it factor in also because there's a

thinking that if you if you constrain

the development of AI in this country

that you're going to actually allow

other countries particularly China right

to take the lead in this technology look

I think you make a very good point and I

am quite nervous about constraining the

development of AI and are there very

real dangers coming from AI across the

board yes I I chaired the very first

congressional hearing ever on artificial

intelligence

the problem is and and is there a need

for congressional action on some point

almost surely there is but the problem

is most people in Congress don't

understand this at all look we don't do

intelligence very well much less

artificial intelligence

um and you know the Senate I think the

median age is about 142.

um you know one of my colleagues on

Judiciary referred to the internet as a

system of tubes

we should be careful asking folks who

don't really understand it to regulate

it I think Congress needs to get smarter

I think we need to have hearings I think

we need to consider testimony but I

think we should proceed slowly so that

we don't go in and break things the last

thing I want is for China to get way way

ahead of us on AI because government

Regulators have gotten in the way

so it is reasonable to be worried about

where AI is taking us but I don't think

Congress is going to fix the problem

overnight

Crews want to thank you for coming in

today always a pleasure good to see you

this was actually surprisingly a really

good piece like that's one of the

reasons I like this five to uh you know

six o'clock hour even though this began

a little bit before that with CNBC is is

they they have really good guests on

around this time uh and uh it really

better than than what you see or closer

to Bell time on CNBC or or earlier in

the morning uh just my take you know

anyway so uh I'll go backwards here a

little bit and just address a few things

uh first of all a lot of people are

talking about investing in Chinese AI uh

I actually think there's a reason to be

cautious about that specifically because

with uh Chinese AI you're running into

severe risks of U.S sanctions basically

destroying Chinese AI companies I know

that sounds extreme like how could

America destroy a company oh a vacant uh

even just limiting China's access to

some of the most powerful or Advanced

microchips could sandbag saw

social intelligence race and I think

that's probably exactly why America is

sanctioning China's ability to get their

hands on Advanced lithography machines

to to make uh uh you know uh smaller uh

transistors uh you know or reduce the

spacing between them down to you know

that five to three nanometer uh level uh

or below that mostly because

one of the best weapons we have is just

having better chips than China I still

refer to China as the uh a teenager of

the global stage where China is kind of

coming into its uh discovery of its sort

of like power like ah you know I'm a I'm

a big you know uh he had like I went to

the zoo last week I went to San Diego

with uh my kids Lauren and I and uh

they're they're teaching the kids about

uh you know the gorillas and and it's

kind of like the gorilla teenagers they

uh they get really aggressive because

they're just coming to realize how

strong they are but they don't know what

they're doing so they're constantly like

hurting themselves and stumbling over

each other and they have to kind of like

realize how strong they are and to some

extent it maybe a little bit feels like

China is kind of like that and so

personally I I can't invest in China uh

because a I don't understand like it's a

totally different culture so I don't

understand how to even analyze what

companies would do well with Chinese

consumers so this is why I've always

stayed away from from China but also I

think that the United States and Europe

will probably make it their mission to

continue to sort of keep a boot uh or on

on the neck or or maybe more appropriate

like keep the the gorilla of China caged

a little bit basically limit their

ability to really explode with

artificial intelligence relative to what

I think American companies will be able

to do uh keep in mind as well you know

just sort of on the the uh a topic of

China Joe Biden's suggested potentially

some softening relations coming with

China I really believe this is because

they have to you know China's GDP is

coming in uh or is expected to come in

substantially lower than what they've

been growing at the last like two

decades and they've been growing at

somewhere around 8.9 percent now their

GDP will grow somewhere around five

percent and they're trying to stimulate

their economy to grow more because they

want that growth uh the United States

has way more Partnerships around the

world than China does and and their

their potentially way stronger I mean

think about American alliances are not

just trade Partnerships but they're

defense Partnerships uh sure China's got

their Belt Road initiative and they've

got some friends in Pakistan and North

Korea and maybe Iran now after their

negotiations with the Saudis but I mean

when you look at and then maybe you

could say Russia but I mean what kind of

friend is that I mean that's you know

that's the Loose Cannon friend you're

like you know just just leave us alone

but maybe uh settle down you know China

really ought to condemn Russia but I

don't want to go like super deep here on

China but but really if if you think

about it

it's it's tough It's it's tough to argue

that investing in Chinese chips or AI is

the best move when you know the

International Community is good to do

everything they can to limit uh Chinese

growth now then you wonder like okay

well how much of that is already priced

in I I I don't know you have to figure

that one out but then again trying to

underwrite Chinese stocks with with

their public filings relative to what we

have and I'm not saying in companies

with public filings over here are not

shysters there are plenty of reasons to

think that companies with public filings

are are you know shysters uh like just

look at uh not to mention any names not

possible uh but um but yeah so so going

back to Ted Cruz's argument

I'm not terribly worried about Chinese

AI

uh as an individual mostly because I

actually think that

Congress uh we'll give them credit there

and the International Community will

already cage in China so uh that that

leaves me less worried about that uh and

uh it will be interesting to see how

regulation evolves for for AI here but

uh you know that that'll all come in

time probably too late as it usually

does uh there's already research now

that AI is getting more attention than

Bitcoin has been getting over the past

three to four to five years I find it

very interesting because the stock

market's been trending up but Bitcoin

really has that I mean Bitcoin had a

really nice run there so yeah we're at

27 3 right now uh so it's done very well

because it's nearly doubled right I mean

we're at 15 something so so maybe it's

just on its uh natural break so to speak

you know you go to the one year yeah

we're about to the same level as the one

year on BTC right now but uh at the

start of the year we were at 16 nine so

I think it's Bitcoin just fine because

if you think about it it's outperformed

the other indices 16 9 yeah it's up 61

it's way outperformed you know it's

basically performed like a tech stock

not not the NASDAQ though nasdaq's only

up like 27 but anyway

uh this uh this debt ceiling just to

sort of finish that

it's interesting that Ted Cruz argues

that Joe Biden should come out and

declare that America will not default

when and this is what I just so much

hate about politics

it's literally what Joe Biden has done

and I'm not here to like shell a party

or Joe Biden or whatever but you know

of course if you're Joe Biden you're

like we will not default and then the

Republicans are like man if only Joe

Biden would come out and say we will not

default you know it's Gotta suck being

the president because you're just like

dude I literally just said that man if

only he would just say it it's like ah

uh but uh but I I think that Ted is you

know the talk was good but I think it's

there's a little bit of extremeness in

this idea that uh you know the the

quote-unquote 20 year olds in the White

House are willing to let the uh

government default I uh I'm not that

skeptical do I think that uh Joe Biden

is at a hundred percent in that mental

capacity Department no uh but I do do I

think that like somehow uh woke left

this uh 20 year old staffers are running

the White House

I mean hopefully not I mean nobody knows

but but I I don't think that would lead

to a default I think that's a really

weak argument to say that oh yeah woke

leftists who are 20 years old they're

gonna be willing to gamble uh you know

our entire economy on this debt ceiling

negotiation it actually it doesn't sound

like the negotiations are going that

badly and this is what you know earlier

we started on the Dead Sea land like

this is just so annoying but really I

mean every day it's like uh you'll get

the oh Republicans walked out and then

like a day later things are better or

like Kevin McCarthy on Sunday Joe Biden

should be here instead of at the G7 it's

like dude the presidents are always at

the G7 meeting the United States

president has never missed a meeting of

the G7 because if they did it would be

G6

okay well has never been a gsign no uh

so

the United States president has never

missed that meeting and then over the

weekend you get Kevin McCarthy well Joe

Biden should be here instead of over

there it's like that's a popular thing

to say but like

you can't all of a sudden stop the the

global calendar of events uh you know

because you want to sit down and Duke

things out and sure enough they end up

sitting down and and you know had

Progressive talks uh so I I I don't know

I I uh I think Becky quick really held

uh held a good discussion here with with

Ted uh you know I obviously uh it's a

lot of it's party talk but uh none of

this was particularly scary and uh

I don't know what to say other than that

not not scared uh maybe uh the lead are

we able to say that though because I

feel like the stock market is slightly

uh taken to continue red today after

yesterday's rally but then again you

would kind of expect a little bit of a

get a give back so uh that's uh that's

pretty typical now I want you to know

this when it comes to AI time is what's

going to make you money and if you can

prove that value to an employer you'll

always be able to be employed so this is

another way of making sure that you

don't get replaced

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