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The Legal Basis for Retaking the Panama Canal, plus No Taxes on Tips is Happening

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January 29, 2025

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In this thought-provoking podcast episode, hosts Senator Ted Cruz and Ben Ferguson dive into the intricate issues surrounding the Panama Canal, including recent Senate hearings on its controversial management by Panama. They also discuss the ongoing efforts to eliminate taxes on tips, a significant campaign promise from Donald Trump.

Key Points Discussed in the Episode:

The Panama Canal Dispute

  • Historical Context: The Panama Canal, a monumental achievement undertaken by the United States, cost over $15 billion (in today’s dollars) and resulted in the loss of 30,000 lives during its construction. Despite its strategic importance, the U.S. ceded control to Panama under President Jimmy Carter's administration, causing widespread backlash.

  • Treaty Violations: Senator Cruz chaired a hearing examining allegations that Panama is violating its neutrality treaty, which was meant to ensure fair treatment and access for U.S. vessels. According to expert testimonies:

    • Chinese Influence: There are claims that China has gained significant control over the canal operations and related ports, posing risks to U.S. national security.
    • Exorbitant Fees: Panama has been accused of charging U.S. ships excessive transit fees, directly contradicting the terms of the treaty.
  • Bipartisan Concerns: Interestingly, Cruz mentions that even Democrats at the hearing expressed concern over China's growing control of the canal and acknowledged the problem of excessive fees imposed on American businesses.

The Path Forward for U.S. Control

  • Options for Recovery: While complete reclaiming of the canal seems unrealistic, there are discussions on negotiating lower transit fees and diminishing Chinese influence. The treaty arguments presented during the hearing may bolster the case for more significant U.S. intervention or renegotiation of the treaty terms.

  • The Risks of Inaction: The conversation also highlighted the danger of allowing Panama to act beyond treaty obligations, especially as Chinese companies build infrastructure that could threaten U.S. shipping and military operations.

Moving Toward Tax-Free Tips

  • Legislation Initiatives: Senator Cruz is actively pushing for legislation to eliminate taxes on tips, a topic that has garnered bipartisan support since its inception.

    • Campaign Origins: Cruz recounts a moment where Trump, inspired by a waitress’s plight, proposed the idea at a rally, which resonated well with the audience.
    • Bipartisan Backing: Key senators from Nevada, where a large portion of the workforce relies on tips, have co-sponsored the bill.
  • Political Strategy: Cruz believes that passing this bill is not only crucial for the working class but also strategically beneficial for the Republican Party, as it aligns them closely with blue-collar workers. He envisions it being passed with bipartisan support, emphasizing the importance of contacting representatives to voice support for this initiative.

Conclusion

This episode encapsulates pivotal discussions around significant national issues— the future of the Panama Canal under potential treaty violations and the urgent need for tax reform impacting millions of American workers. Cruz’s insights inform listeners about the complexities at play and the avenues available for legislative action. Stay engaged with these discussions to understand better the implications for U.S. commerce and everyday workers' lives.

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