Senator Ron Johnson on the Senate showdown over Trump's Big Beautiful Bill | All-In Interview

Watch on YouTube ↗ | May 25, 2025 at 07:49 | 1:01:39 | All-In Podcast

Speakers

David Friedberg — CEO, The Production Board

Chamath Palihapitiya — CEO, Social Capital

Ron Johnson — U.S. Senator (R-WI), Senate Homeland Security and Finance Committees

Summary

All-In hosts David Friedberg and Chamath Palihapitiya interview Republican Senator Ron Johnson in an emergency pod about the House-passed One Big Beautiful Bill and the US fiscal picture. Johnson argues the reconciliation process cannot control spending, that CBO already projects roughly $22 trillion of additional deficits over a decade and the real figure is worse, and that he will withhold his vote unless Congress commits to pre-pandemic spending near $6.5 trillion in 2026 plus a DOGE-style line-by-line budget review. The market-relevant discussion centres on the federal cost of debt, with the 30-year above 5% against a CBO assumption near 3.6%, a resulting debt spiral, credit default protection costs back near their highs, and inflation eroding the dollar. On energy, Johnson favours nuclear, opposes closing coal plants and wants energy subsidies phased out, while Chamath warns of a near-term electricity deficit with gas turbines unavailable until 2032.

Senator Ron Johnson explains budget reconciliation and argues it has never been able to control federal spending.
CBO projects about $22 trillion of additional deficits over ten years; Johnson expects three to four trillion more.
CBO assumes roughly a 3.6% average interest cost while the 30-year trades above 5%, implying about $5 trillion of extra interest expense.
Johnson wants a return to pre-pandemic spending of about $6.5 trillion in 2026 and a line-by-line forensic budget review.
Chamath says credit default protection costs are back near highs, signalling private industry reprices risk before the government does.
Johnson favours nuclear, calls shutting coal-fired generation insane, and wants energy subsidies including green credits phased out.
Chamath warns of an energy deficit: he cannot get a natural gas turbine for his Arizona data centre until 2032.
The recap closes on bond market pressure and inflation steadily destroying the purchasing power of the dollar.

Ideas

David Friedberg CEO, The Production Board 9:20

Rates above CBO assumptions compound debt

Friedberg points out that the CBO debt projection assumes an average interest rate on federal debt of about 3.6% while the 30-year already trades above 5%. If the government's cost of debt resets to 5%, that is roughly $5 trillion of incremental interest expense over the decade, about half a trillion dollars a year. He frames the arithmetic explicitly as a debt death spiral: climbing deficits force more borrowing, borrowing pushes interest rates up, higher rates raise interest expense and widen the deficit again, which makes long-dated Treasuries an unattractive thing to own.

Chamath Palihapitiya CEO, Social Capital 14:42

Bond market punishes rising US debt

Chamath argues that if the debt compounds toward roughly $65 trillion by 2035 the bond market will have a negative reaction, and that the 5% borrowing cost Friedberg described is probably the low side rather than the ceiling, which is exactly what powers the debt spiral. He returns to it in the closing recap, saying his conclusion is that the bond market is not going to take this bill well, that it puts pressure on America and then on private industry, and that there is no clear dividing line between public and private credit risk.

Ron Johnson U.S. Senator (R-WI), Senate Homeland Security and Finance Committees 15:25

Debt spiral lifts US borrowing costs

Johnson says the reconciliation bill does nothing to stop a fiscal death spiral: CBO already projects about $22 trillion of additional deficits over ten years, an average of $2.2 trillion a year, and he believes the real number is another three or four trillion worse, taking federal debt toward $62-63 trillion. He notes the average interest rate on government debt over the last 50 years is about 5.8% versus roughly 3% today and a CBO assumption near 3.6%, and that because Washington is the one borrowing the money it crowds private borrowers out of the capital pool, drives rates up and compounds interest costs. He says bond markets would only rejoice, and the ramp in interest costs would stop, if Congress committed to returning to pre-pandemic spending, which he does not expect from this bill.

Chamath Palihapitiya CEO, Social Capital 24:55

Electricity deficit makes power supply scarce

Chamath says the US could be on the precipice of an energy deficit starting next year and that an electron surplus is the threshold issue between the country and any form of abundance, from robotics to AI, and the thing that decides whether the US or China wins. He supplies first-hand evidence of the bottleneck: he is funding a 1 gigawatt data center in Arizona and cannot get a natural gas turbine until 2032, nuclear is available from Arizona but not broadly and cannot be waited on into the mid-2030s, and a report showed 81% of incremental US generation was backed by some form of tax credit. His conclusion is that every form of power possible is needed and that financial capital simply will not be deployed where power cannot be delivered.

Ron Johnson U.S. Senator (R-WI), Senate Homeland Security and Finance Committees 25:17

Push nuclear, stop closing coal plants

Johnson calls it insane that the US has been shutting down coal-fired electrical generation and says the country needs a lot of it, while nuclear is the technology policymakers ought to be pushing. He explicitly sets climate concerns aside, saying we will adapt, and points to Germany and Europe artificially driving up the cost of power as a self-inflicted wound; his preferred end state is a marketplace that supplies as much energy as cheaply as possible, with nuclear as the build-out priority.

Ron Johnson U.S. Senator (R-WI), Senate Homeland Security and Finance Committees 25:39

End subsidies propping up renewable energy

Johnson says he does not want to subsidize energy production, or anything else, and that the green new energy push misallocates capital: roughly five or six trillion dollars has been spent globally on climate with no needle moved, and European power prices are the visible result. He would not pull the rug out from investors who already committed capital under existing credits, but his stated long-term solution is to stop subsidizing and let the marketplace provide cheap energy, which removes the incentive base that subsidy-dependent renewable generation was built on.

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This All-In Podcast video, published May 25, 2025, features David Friedberg, Chamath Palihapitiya, Ron Johnson discussing TLT, Power infrastructure, URA, Coal sector, SOLAR. 6 trade ideas extracted by AI with direction and confidence scoring.

Speakers: David Friedberg, Chamath Palihapitiya, Ron Johnson · Tickers: TLT, Power infrastructure, URA, Coal sector, SOLAR