US Senator Ted Cruz (R - Texas) Talks Strait of Hormuz, War Timeline, Spirit Airlines |...

0:02 Bloomberg Audio Studios, podcasts, radio, news.

0:07 Now, we do want to talk a little bit more about politics.

0:10 Joining us right now,

0:11 fresh from his milk and panel on economic mobility is US Senator Ted Cruz.

0:16 He's chairman of the Senate Commerce Committee,

0:18 who actually controls the legislative agenda on AI,

0:21 tech, regulations, space, transportation,

0:23 consumer protection, just about everything else.

0:25 Great to have you here, Senator.

0:26 It is great to be with you.

0:27 Thank you for having me.

0:27 Before we get to economic mo mobility,

0:29 before we get to your role uh as chairman,

0:31 I do want to ask you about the situation in Iran.

0:33 Yeah.

0:34 And about the potential for some sort of resolution,

0:36 some sort of closure to what is now a more than two monthlong war.

0:40 What happens?

0:41 Look, we will see this wrap up and we will see it wrap up in time.

0:45 In 2 months, we've already had extraordinary success.

0:48 If you look at the military objectives that President

0:51 Trump laid out right at the front end,

0:53 Iran's air defenses have been utterly destroyed.

0:56 Their ballistic missiles and the ballistic

0:58 missile manufacturing capability completely gone.

1:00 Their drones and drone manufacturing capability destroyed.

1:05 Their air force in complete rubble and their navy sunk on the bottom of the sea.

1:10 The Ayatollah is dead.

1:12 The Mullers are dead.

1:13 Just about every senior military leader is dead.

1:17 In terms of military successes, it took Iran 40 years to build up

1:22 a military that we systematically dismantled in 39 days.

1:26 That is extraordinary success.

1:27 Now, phase two.

1:29 President Trump has laid out a series of red

1:31 lines that Iran can have no enriched uranium.

1:35 Iran must hand over the enriched uranium they already have.

1:39 Iran must stop funding terrorism and they need to open the straight of Hormuz.

1:44 Well, when does that happen?

1:45 and and particularly with the straight over moose

1:47 and look I mean you represent a state that is basically the heart of our energy

1:50 sector and they're all affected by this even if

1:52 they're domestic producers we're all affected by this global

1:55 market here what are those executives in your state

1:57 what are they asking you or at least

1:59 asking from Congress and the government to do

2:01 listen what I'm hearing from Texans is is that we're seeing real success in Iran

2:06 and and in if you look right now we're not today in a major shooting war

2:10 with Iran there are not active hostilities what

2:13 the president has done is he shifted to do

2:15 a different phase which is the United States

2:17 is blockading Iran in the Straight of Hormuz.

2:20 That is imposing over $500 million of economic loss on Iran every single day.

2:26 And here's the real kicker.

2:27 But no one else is getting through either.

2:28 It's not just Iranian.

2:29 Well, but look look if you look at the Iranian oil where it goes,

2:33 it goes predominantly to China.

2:35 So, it's also imposing cost on China.

2:37 But here here's the the enormous economic leverage.

2:41 Iran is just a couple of days away from running out of oil storage capacity.

2:46 When that happens, they will have no choice but to shut in their wells.

2:51 When you shut in a well,

2:52 inevitably what happens is water seeps in to the reserves.

2:56 And when you restart production, it drops.

2:59 If they shut in their wells, Iran will see their production permanently drop

3:03 anywhere from 500,000 to 800,000 barrels a day.

3:07 That is massive economic leverage that the president is

3:10 imposing on them and and it is very disproportionate.

3:14 The United States is the world's leading producer of oil

3:17 and gas and so we're able to absorb this impact.

3:20 Iran I think America is much safer today with the Ayatollah no longer with us

3:26 with their military weakened and and my objective

3:29 I want to see this regime collapse.

3:32 Now, I I don't have a dog in the fight of who the next leader is,

3:35 as long as it's not an Islamist who chants death to America

3:39 and is actively murdering Americans because that's

3:42 what the current regime has been doing.

3:43 Well, Senator, I want to talk a little bit more about the effects

3:45 that this is having on the US economy because you mentioned, you know,

3:49 where the US sits as a net oil producer

3:51 has insulated us from what's going on in Asia,

3:54 in Europe, but it hasn't completely shielded us from that.

3:58 You think about g average average gas prices

4:01 across the country well above $4 a barrel,

4:04 let alone what's what it is in California where where we are right now.

4:07 I mean, those are costs that people need to pay.

4:10 You think about filling up your car.

4:12 You think about heating your home.

4:14 So, I wonder how the Republican party

4:16 plans on communicating that to voters ahead

4:19 of a very consequential midterm elections where

4:21 the cost of living just continues to go higher.

4:24 Well, look, I'll say in terms of gas prices,

4:26 you go back a couple of years under Joe

4:27 Biden and gas prices were about six bucks a gallon.

4:31 President Trump and the Republicans in Congress came in and we

4:33 dropped it in half to about three bucks a gallon.

4:35 That was a massive savings.

4:37 Now, anytime you have a military conflict in the Middle East,

4:40 that's going to have an upward pressure on gas prices.

4:43 So, gas prices have risen to about 4 1/2 bucks a gallon.

4:46 So, about it it's gone up about halfway from the distance it fell.

4:51 That being said, this conflict will be over.

4:55 It will be over in a matter of months.

4:56 And when it is over, if we can have anything like a stable regime in Iran,

5:02 that will have a long-term major downward pressure on gas prices.

5:07 But more importantly, look,

5:08 the Iranian regime is the world's leading state sponsor of terrorism.

5:12 They've killed nearly a thousand Americans.

5:15 The president is acting to keep people safe.

5:17 And by the way, you noted California.

5:19 California, people are paying seven bucks a gallon.

5:21 That is not because of Iran.

5:23 That is because Gavin Newsome and the Democrats

5:25 tax and regulate the heck out of gas.

5:27 They made the decision that they want it

5:29 to be really expensive to live in California,

5:32 which which is a big part of the reason so many people are leaving California.

5:35 I hear what you're saying,

5:36 but the trajectory of course follows that of the national average.

5:39 I do want to talk about the impact on jet fuel prices.

5:42 as we saw the demise of Spirit over the weekend

5:45 and I know that you were particularly vocal about being

5:47 against a potential government bailout of that airline and you

5:52 know where we sit here on Monday with Spirit ceasing operations.

5:55 Do you still stand by that?

5:57 Listen, Spirit did not have to go under and and in fact

6:00 Spirit just two years ago had a plan to save themselves.

6:02 They had a merger with JetBlue.

6:04 They were the two ultra- lowcost carriers they wanted to merge.

6:08 JetBlue was ready to infuse $3.8 8

6:10 billion into Spirit and Joe Biden and Elizabeth

6:14 Warren and Pete Buddhajed went in and blocked

6:17 the merger and they killed Spirit Airlines.

6:19 Spirit Airlines said at the time, "If we don't merge, we will go bankrupt.

6:23 We cannot survive unless we merge

6:26 with JetBlue." And Biden and Warren and Buddhajge, they beat their chest.

6:32 They defeated the merger and and as a result,

6:35 17,000 people this week lost their jobs.

6:37 Not only that, consumer prices are going up.

6:40 Yeah.

6:40 Uh, but was it were you involved in any

6:42 of the discussions potentially for a bailout?

6:44 I mean, I know the Trump administration was considering.

6:46 So, what happened?

6:47 So, I was actively involved.

6:48 I think a government bailout was a terrible idea.

6:50 I was very vocal saying we should

6:52 not be bailing out corporations across the board

6:56 and and the federal government doesn't know

6:58 a damn thing about running a budget airline.

7:01 And so, I said that publicly and very vocally.

7:03 Last week, I had dinner with Howard Lutnik, the the commerce secretary.

7:07 Howard is a good friend.

7:07 He and I worked together very closely.

7:09 Was he advocating for a bailout?

7:11 He was the leading advocate of the bailout.

7:12 I will tell you in the course of the dinner we spent probably half

7:15 the time at dinner with me making the case vigorously this is a really bad idea.

7:20 The analogy I drew I said look you the idea the plan

7:24 was $500 million in exchange for 90% of the the shares in spirit.

7:28 I said look you it'd be better if you took $500 million put it

7:31 in a pile on the floor poured gasoline on it lit it on fire.

7:35 That sounds expensive too.

7:36 But but there you'd at least get some heat.

7:37 You could roast some marshmallows.

7:38 You'd get something positive.

7:40 My my case was if we pour it into the airline, we'll lose the money.

7:44 And the federal government has zero expertise.

7:47 Who thinks the federal government knows how to schedule flight attendance?

7:51 Who thinks the federal government knows how

7:53 to get a a suitcase from Pittsburgh to Cleveland?

7:56 I mean I mean just the mechanics of running an airline.

7:59 There is no expertise in the federal government.

8:01 I'm very glad the president made the right decision.

8:04 We're not going down this road.

8:06 It would have been a serious mistake if if we had.

8:08 All right, Senator, we have to leave it there.

8:10 Really appreciate your time.

8:11 And that is Senator Ted Cruz of