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Smerconish

The Origins Of Our $40 Trillion National Debt; Dems Abandon Sen. Races In Deep-Red States, Boosting Independents. Prince Harry And Meghan Move Back To The U.K. Aired 9-10a ET

Aired August 22, 2026 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[09:00:22]

MICHAEL SMERCONISH, CNN ANCHOR: Just try envisioning $40 trillion. I'm Michael Smerconish in the Philly burbs. Sometime Tuesday afternoon, a clerk at the Treasury Department published a routine document. It's called the Daily Treasury Statement. It comes out every business day.

Almost nobody pays attention to it. On it, there's a line that says total public debt outstanding. And on Tuesday, for the first time in the history of the United States, that line read more than $40 trillion. There was no announcement, no press conference, no bell rang. The number just turned over, the way an odometer turns over.

And the country kept on driving. Maybe that's because it's hard to wrap our heads around the size of that number and harder still to apply its significance to our daily lives. But that's exactly what the Peterson Foundation exists to do. And here are some of their illustrations. Forty trillion dollars is roughly the value of the economies of China, Germany, Japan, the United Kingdom and India combined.

Forty trillion amounts to $297,000 per American household and $117,000 per American individual. Our national debt growing at the rate of $4.8 million per minute, 285 million per hour and $6.8 billion per day. Forty trillion. Enough to cover a public four-year degree for every graduating U.S. high school student for 119 years. And we're spending $3 billion a day on interest payments on the debt.

When I last dedicated time to this issue, it was January of 2023. Just three and a half years ago, I hosted Michael Peterson, the chairman and CEO of the Peterson Foundation. At that time, the debt was $31.4 trillion. We've added nearly $9 trillion in the 43 months since. When I asked Peterson why it was so hard to get Americans to focus on this, he put it plainly, he said the money is going out of the country.

It's money that could otherwise be spent here and we cannot spend it because it's owed in interest. And he told me the trajectory ahead worried him more than the current number. He's been proven correct.

Peterson's concern for fiscal prudence runs in his family, and it has its origins in a diner in the middle of Nebraska. Kearney, Nebraska. It was called the Central Cafe and it opened in 1923. It belonged to a man named Georgios Petropolis. He had come from southern Greece when he was 17 years old, alone, no English. The job they gave you if you were Greek and 17, had just gotten off the boat, was washing dishes for the Union Pacific Railroad.

And that's what he did. And he saved. And in 1923, he opened his own place. And he Americanized his name to George Peterson. Because that's what one did.

The Central Cafe did not close ever. Twenty-four hours a day, seven days a week. Nobody in that family had much use for the lock on the front door.

George had a son named Pete. And starting at the age of eight, Pete Peterson worked the cash register at his father's diner.

Here's the thing about Pete. He was brilliant. And he was at least once a screw up. Got himself into MIT and in his freshman year was thrown out. Expelled.

He plagiarized a term paper. For most people, that would be where the story ends. But not his story. He went to Northwestern instead. Graduated summa cum laude in 1947, then earned a business degree from the University of Chicago.

He was just getting started. By his mid-30s, he was running Bell and Howell, one of the youngest men ever to run a major American corporation. In 1971, Richard Nixon brought him to the White House to handle international economic affairs and the next year made him Secretary of Commerce. When he left Washington, he took over Lehman Brothers. Ran it for 11 years.

In 1985, he and a partner named Steve Schwarzman started a little outfit called Blackstone. And Blackstone became one of the most powerful investment firms on the face of the earth. He chaired the Federal Reserve Bank of New York.

And along the way he married Joan Ganz Cooney, who happens to be the woman who co-created "Sesame Street." So one American household gave us Big Bird and something else that I'll get to in just a minute. Five children, nine grandchildren, six books. A life that begins behind a cash register in Nebraska at the age of eight and ends in the boardroom of the New York Fed.

And then in 2007, Blackstone went public. And Pete Peterson, the son of the Greek dishwasher, sold part of his stake. The checklist for about $1 billion 850 million. One transaction. He was 81 years old.

[09:05:03]

And his philanthropy was extraordinary. He took $1 billion, a billion out of the 1.85. And in 2008, he set up a foundation. Not to cure a disease, not to build anything, in the words of the foundation, its mission is to increase public awareness of the fiscal challenges threatening America's future and to accelerate action on them. Said in plain English, to warn us about the debt and to get somebody to do something about it.

He wrote down why two years later, when he signed the Giving Pledge, he was talking about his own grandchildren when he said, "On our current path, I fear that we're imperiling the future of passing on massive hidden debts and unthinkable taxes." He died in 2018. He was 91 years old. And the day that Pete Peterson put that billion dollars on the table, the national debt of the United States was about $10 trillion.

So how do we get from 10 to 40? You can think in recent terms the federal government had to refund more than $160 billion after the Supreme Court invalidated a big part of President Trump's tariffs. Add in the cost of the war with Iran. Throw in the 2025 tax bill, which lets companies immediately write off the entire cost of new factories or equipment. The Joint Committee on Taxation says that single provision could cost $100 billion this year alone.

But let's be honest about what those things are. They explain why we crossed 40 trillion months ahead of schedule. They don't explain the 30 trillion. The escalation spans many presidents and many Congresses. So go back further.

Go back to 2001. The Peterson Foundation was would sort it into four buckets. I want to start with the largest, Social Security, Medicare, Medicaid, and the interest on all of it. That's where most of every federal dollar actually goes. Social Security alone is 22 percent of the budget.

Medicare, 15. Other health programs, 13. Interest, another 15. That's about two thirds of the federal budget right there. And it grows every single year on autopilot.

And then come the decisions that we actually made. Tax cuts, seven separate rounds of them since the early 2000s, signed by presidents of both parties. About $8.7 trillion in revenue we chose not to collect. Spending increases, Iraq, Afghanistan, the Medicare prescription drug expansion, another 7.6 trillion. Crisis response, the 2008 financial collapse, and then COVID 6.8 trillion more.

And notice who's not on that list or what's not on that list, the Pentagon. Defense is about 13 percent of the budget today, a smaller share than it was the year that Pete Peterson wrote his check. You can argue about whether we spend it wisely, but you can't argue that it's the military alone that's driving this.

And here's the trick that both parties play with the numbers. You can blame any one of them and you can be right. If the tax cuts had not happened, the money would be there. If the wars had not happened, the money would be there. If anybody had ever touched the entitlements, the money would be there.

And every one of those sentences is true, which is exactly why nothing ever gets done. Everybody gets to point at somebody else's line item. So don't tell me that this is any one party's fault and we're already paying for it. This year we're going to spend over $1 trillion on interest. Just interest. That's more than the entire Medicare program costs. And the Congressional Budget Office says interest stays above Medicare every year for the next decade. The CBO also says that a permanent increase in the deficit of just 1 percent of GDP takes somewhere between $300 and $1,250 a year out of the average household's purchasing power. The yield on the 30-year treasury this week hit its highest level in almost 20 years, which hits our mortgages, our car loans and our credit cards. No wonder that we've been downgraded three times.

Standard & Poor's in 2011, Fitch in 2023, and in May of last year, Moody's took away the last triple a rating that we had. The reason they put it in writing, inability of the nation to address large and growing deficits. About half of everything we're borrowing this year is going to pay the interest on what we already borrowed. In other words, we are financing our financing.

And despite all of this, it's been 16 years since Washington had a serious conversation about the debt. It was called Simpson-Bowles. They put a plan in front of 18 commissioners, a plan that spread the pain and made sure that nobody was exempt. It actually lowered tax rates all the way down to three brackets. But it wiped out the deductions that we liked the most.

The mortgage interest deduction, the charitable deduction, the break on our health insurance. So on net, it raised revenue, it raised the retirement age, it trimmed the cost of living adjustment, it capped spending, including defense.

[09:10:13]

The spreading of the pain, that was by design, that was the whole idea. They needed 14 of those 18 votes to send it to Congress. They got only 11. And Simpson-Bowles failed.

Pete Peterson stood at a cash register at his father's diner in Kearney, Nebraska when he was eight years old. And he learned something there that this country has forgotten. At the end of the night, somebody counts the drawer. He put a billion dollars of his own money behind that idea. At the time, the debt was 10 trillion.

And when he died a decade later, it had doubled to over 20 trillion. And in the eight years since, it's doubled again. It's now $40 trillion and nobody even rang a bell.

I want to know what you think. Go to my website at Smerconish.com and answer today's poll question, which is more to blame for the 40 trillion national debt, taxing too little or spending too much?

Here to discuss how we got to this point and worse what might be coming next is the Thomas L. Rhodes Fellow at National Review. That would be John Puri.

John, thank you for being here. You point out that in 2001 the CBO projected that under the then current law, the nation was going to pay off its entire public debt by 2009. So what happened? JOHN R. PURI, THOMAS L. RHODES FELLOW AT NATIONAL BANK: Yes, thank you, Michael, for having me. Well, that figure comes from the Committee for a Responsible Federal Budget, a great think-tank in addition to the Peterson Foundation. And they found that the increase in the debt, basically our entire debt that now exists is due to three broad categories. The first being recession responses such as those to the financial crisis in 2008 and the COVID-19 pandemic. The second being broad tax cuts, those passed under the Bush administration and the Trump administration, but the Bush tax cuts were extended by President Obama during his term.

And finally, increases in other discretionary spending, such as you mentioned, the creation of the Part D Medicare program and other spending increases in both defense and non-defense programs under President Bush in the wars in Iraq and Afghanistan, Presidents Trump and President Biden.

SMERCONISH: Something that you wrote that I highlighted. I'm going to put on the screen right now for everybody to see. It was really informative. You write this, "In sum, both changes in spending and revenue are to blame for the current debt levels." That's my poll question today.

But I'm not letting people off the hook with a both answer. But here's the key part. You say, "As are both parties, almost 80 percent of debt is from laws enacted by bipartisan majorities." Expand on that.

PURI: Yes. Well, we tend to think when the parties are pointing out each other's fiscal mistakes, you know, Democrats will point to Republican tax cuts passed on a partisan basis. Republicans will point to Democratic spending. But the biggest items were passed by those bipartisan majorities. If you remember, the Iraq war spending was approved by both parties, both Republicans and Democrats in Congress.

All of -- almost all of the stimulus spending in response to COVID was passed by huge bipartisan majorities under President Trump in 2020. You have the creation of Part D, which was a bipartisan achievement. So all of this -- all of these big ticket items, including the extension of Republican tax cuts under President Obama, which Democrats effectively signed off on during his presidency, are bipartisan accomplishments. And sure, you can justify any particular one of them, but the pattern together is calamitous.

SMERCONISH: And finally, John, is there any reason to believe that this week, with this new milestone, this is going to be the wake-up call that will finally cause something to be done about it in the long term?

PURI: Unfortunately, I don't think so. This will not be the wake-up call precisely because the choices to get to a -- to get to a better fiscal situation have gotten so much harder. In the 1990s, you could get to a balanced budget by 2001 by shaving defense spending after the fall of the Soviet Union, by raising taxes a bit. You had a booming economy. It was a -- it was a pretty easy task to get there.

Now all of our deficit spending is caused by, as you mentioned, big entitlements that are overwhelmingly popular, Medicare, Medicaid, Social Security, these are growing. And the lack of revenue because of very popular tax cuts that were mostly for the middle class rather than the rich.

SMERCONISH: John Puri from National Review, thank you for all of that. What are your thoughts at home? Hit me up on social media. I'll read some responses throughout the course of the program. Follow me on X, Facebook, YouTube.

[0915:02]

Jamie Dimon said something prior to the 2024 election to the extent that the debt is all that we should be talking about, yet neither party is willing to bring it up.

I agree with you, Fielding, and I think part of the reason that it hasn't been more of a potent political issue is that it's hard for us to understand. Well, what is it -- what does it mean to me? Which is why in the course of the commentary today, I wanted to rely on those depictions from the Peterson Foundation. Because when you put it in -- here, here's a way of looking at it. I think by my watch, my commentary was 11 minutes long today, 11 minute long commentary.

In the span of those 11 minutes, we added about 55 million to the debt. Think about that. That brings it home, right?

Reminder, go to my website at smercanish.com and answer today's poll question. And by the way, I know the answer to this is both. I'm just not offering that. I'm not -- I'm making it binary. I want to know which do you blame more for the 40 trillion in national debt, taxing too little or spending too much.

I'll give you results as they exist at the end of the hour.

Up ahead, the Democrats have got a remarkable new strategy for the midterms. It's called quitting. Their candidates in some races are dropping out red states, hoping that'll allow independent candidates left behind to do better. Could that be a winning move?

And after all that, the Duke and Duchess of Sussex are planning to move back to the U.K. Princess Diana's private secretary and chief of staff is here, Patrick Jephson, to describe and analyze.

Don't forget, sign up for my newsletter when you're voting on the poll question, you're going to get the work of illustrators like Eric Allie.

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[09:20:54]

SMERCONISH: With the Senate hanging in the balance this election, some Democrats are attempting a surprising strategy. They're quitting. In Idaho, Nebraska and South Dakota, the Democratic candidate has left the field so that the Republicans can go head to head with an independent opponent. The thinking is these very red states don't offer much hope for a Democrat. Not that long ago, voters were more willing to split their ticket.

Look at somebody like Jon Tester, who served three terms as the Democratic senator from a Republican state, Montana, but he lost in 2024. The feeling among many Democrats today is that voters in such states might still go for an independent, and an independent who won might be more willing to work with Democrats in D.C. maybe even caucus with them. Further, an independent winning in a red state is not a pipe dream.

In recent years, there have been independent candidacies in two person Senate races in red states that were very close. Think Greg Orman in Kansas, Evan McMullin in Utah, Dan Osborn in Nebraska. Yes, they all lost, but they lost in closer races than a Democrat might have fared.

For instance, Dan Osborn's 2024 race in Nebraska was surprisingly competitive, with him getting 46 and a half percent of the vote. Perhaps in 2026, with the GOP bottoming out in some polls, an independent can actually win. And even if they don't, a competitive race will at least drain money from the Republican coffers. At least that's what the Democratic thinking is. Not that every Democrat is dropping out in red states, you might think that Montana would be an ideal place for this strategy.

Indeed, there was pressure for Democrat Alani Bankhead to step aside and let independent Seth Bodnar, a Green Beret Rhodes Scholar and the former president of the University of Montana, move forward, face the Republican head on. But all three will be on the ballot come November.

There's been criticism of this dropout strategy on both sides of the aisle. Some Republicans say the candidate left behind to face the GOP, that they're simply Democrats in independent clothing and the people can see through it. And Democrats, some of them say that you don't win by giving up, you win by rebuilding the brand in places where you're not popular. The independent candidates in red states then to claim that they've got problems with both parties and they're often military veterans.

One of the most fascinating of these candidates is our guest, Todd Achilles. He was a tank commander and armor officer who was deployed to the Persian Gulf. He'd been a registered Republican, but served in the Idaho House of Representatives as a Democrat. As an independent, he'll be facing Republican incumbent Jim Risch. Idaho redder than red.

So it's an uphill battle.

Todd, thanks for being here. The Democrat in your race did drop out, left you a clean shot. Same in Nebraska, same in South Dakota. Some say, well, that now makes you the Democrat. What's your response?

TODD ACHILLES, INDEPENDENT CANDIDATE FOR U.S. SENATE IN IDAHO: Yes, you know, it was up to the Democratic Party to make that decision for their, their candidates step out. You know, we're running an independent race here. And I mean, this is -- this is all about Idaho values which are center right, real western conservative values that don't fit well in the party labels anymore. SMERCONISH: So the caucus question, everybody says, well, you're going to have to pick sides when you get there. But you've signed a pledge that says, no, I'm going to maintain my independent status. Why does being an independent matter to you so much that you're willing to put at risk committee assignments and leverage?

ACHILLES: Well, Michael, I mean, I think we've got to look at the reality of what the Senate is. The Senate is going to be closely divided. Caucusing as an independent is the way to do the best work for Idaho because both parties are going to need my vote. You know, you look -- you look at others, what Joe Manchin did when he was in the Senate, you know, just by being straight down the middle and willing to work with both sides of the aisle, which is exactly what I did when I was in the Idaho House. You know, I served as a Democrat, you know, I worked incredibly well with Republicans, had a reputation as one of the most bipartisan, and we got a ton done in Idaho, all on a bipartisan basis.

And that's exactly what we need in the Senate. We got to break the grip of the two party system, get this country back on track and tackle the debt. I mean, it's outrageous, Michael,

[09:25:06]

SMERCONISH: Give me something that you disapprove of on each side of the aisle so that people understand why Todd Achilles, who had been a Republican and had been a Democrat, is no longer comfortable with either.

ACHILLES: Well, listen, I think -- I think one of the biggest mistakes out of the Biden administration was the open borders, right? We don't have a country unless we have secure borders. But we need to fix the visa, the immigration system, and with the Democrats or with the Republicans right now, right?

I mean, just look at the national debt. The one Big Beautiful Bill has a disproportionate impact on cutting funding to Idaho's rural hospitals. We're now passing 40 trillion in terms of the national debt. And that happened under the Republican watch.

SMERCONISH: It doesn't get much redder than Idaho, right? So when you're -- when you're out there on the campaign trail and you introduce yourself and people here that you're not an R, what does that conversation sound like? What's the elevator pitch that you make?

ACHILLES: I think, Michael, you need to pull back the layers on the political affiliation in Idaho. We're center right state, we're a conservative state, Western state, Western values, right? And you know, what our legislature looks like as a result of closed primaries doesn't match what the population is.

There are a lot of really angry Republicans in this state right now. Young Republicans still can't afford a house and afford to have a family. You know, our AG industry is suffering from these tariffs and fuel and fertilizer. You know, people are not happy with the status quo. People on the right, people on the left. And you know, there's twice as many independents in Idaho as there are Democrats. And those folks are fired up because they finally have a real race that they can excited -- get excited about for the first time in decades.

SMERCONISH: Do you feel that you owe the Democratic Party anything? Some look at this and they say, well, the D's here are hoping that Todd Achilles wins, knocks off Senator Risch, and then he'll be likely to caucus with the D's and not with the R's, or to just sit it out, you know, ala Bernie who runs as an independent and then caucuses with the Ds or Angus King, who's an independent, but caucuses likewise. What's your answer?

ACHILLES: No, again, I will not caucus with the Democrats. I mean, folks like Chuck Schumer are the reason why national Dems have abandoned Idaho, Wyoming, the Dakotas, this whole part of the country, right? And then the Republicans take this part of the country for granted. So we need to reestablish these western values in the Senate and put -- get the nation back on track, right?

You know Michael, we're -- we can't get anything done. We can't -- we can't solve the debt. You look at what's happening with the Iran war and my opponent, 83-year-old Jim Risch has rubber stamped the White House every step of the way. And that's counter to his constitutional duties. And Idaho see that and they're ready for change.

SMERCONISH: Interesting to think what the Senate would be like if there were two or three, just two or three Joe Manchins because now the concentration of power, right, wouldn't be at the polar extremes, I guess -- I guess I'm kind of wearing it on my own sleeve now, but it would all be vested among those independents.

ACHILLES: Yes.

SMERCONISH: So fun to watch. Good luck. Thank you.

Let's see what people are saying on social media at home. Follow me on X and all the usual places.

The belief that 40 percent of Americans are politically independent is a fantasy. I like stop you right there. I'm one of them. It's no fantasy. Half of that 40 percent have voted for one party or only voting for the other party as a pro -- it's a stylish claim to say -- you know what, I'm sure that there are some who are looking for the panache of saying no, I'm not an R, no I'm not a D.

But I believe, and those Gallup numbers are like 45 percent. I think it's 45 percent I, 27 percent D, 27 percent who are R. And I believe that by and large they are people fed up with both ends of the political spectrum yearning for qualified candidates like that guy to step forward and take on the responsibility and take a shot. We'll see what happens. We'll see what happens.

I just believe that when we have more people voting and more independent representation, we are watering down the fringes and that's important. I want to remind you, go to my website at smerconish.com and answer today's poll question, which is more to blame -- no, you can't say both. Which is more to blame for the 40 trillion of national debt, taxing too little or spending too much?

And still to come, your social media reaction to the program so far, including my opening commentary. And why now Harry and Meghan headed back to the U.K. the author of the "Meghan Factor." I'm talking about. Princess Diana's private secretary and chief of staff, Patrick Jephson, is here to discuss. Sign up for a newsletter at smerconish.com when you vote on the poll question, you'll get the work of illustrators like Steve Breen.

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SMERCONISH: X, Facebook, YouTube, that's where to follow me if you want me to respond to you live on CNN.

Real Estate Man says, I would support Congress actually doing its job. Stopping waste, fraud and abuse and balancing the budget are first priorities.

Right. Sounds great in the abstract. OK. I mean, that's why I bought into to doge initially. Let's -- let's see what Elon can come up with. But nobody wants to touch those sacrosanct programs.

[09:35:02]

I thought one of the more interesting revelations of today's program so far was my guest in the A block who said that 80 percent of the debt, those things voted on that led to debt were from bipartisan bills. So, you just can't, you know, blame the other side. They all have culpability. More social media reaction.

They don't refer to them as tax and spend Democrats for nothing. They've never seen other people's money that they didn't want to spend.

OK, so there's somebody who says, hey, it's all their fault. Give me -- give me another one. I'll bet -- I'll bet we've got more social media that's going to point in the other direction. Maybe I'm wrong.

Of course, you neglect to mention the Trump and George W. Bush tax cuts for the rich. I didn't neglect to mention that at all. I mentioned each of the administrations since 2001, and I blamed all of them. And I think I said that there were seven different tax increases.

Hey, I have a question for everybody at home. I want to show you yesterday's poll result at Smerconish.com. The poll exists seven days a week, not just Saturdays when I'm on T.V.

I found this to be really problematic, 35,000 and change voted yesterday. And look at the question and the answer. Would you accept both higher taxes on yourself and reduced Social Security and Medicare benefits in order to reduce the $40 trillion national debt? Why did I frame the question that way? Because that was Simpson- Bowles. So, I'm not talking about Congress now. I'm talking about you and 78 percent -- let's just say eight in 10 said no. So when we stop complaining about the Congress, you know, Congress is us.

And now we say, well, what are you prepared to absorb? Are you prepared to be taxed more and see that which you can draw from those programs, Social Security and Medicare be reduced? And people 80 percent -- no, I'm not going to do that.

Lanny Davis, my buddy Lanny, he has an expression. He quotes Senator Russell Long in saying, don't tax you, don't tax me, tax that fellow behind the tree. And it's true.

Make sure you're answering today's poll question at Smerconish.com. Going to be very interesting to see which way this turns out. Which is more to blame for the 40 trillion national debt, taxing too little, or spending too much?

Still to come, Harry and Meghan, they dropped yet another bombshell unexpectedly announcing their plan to return to the U.K. after all the drama, after the Oprah tell-all, the Netflix documentary, and Harry's best-seller "Spare." So, why now?

The author of "The Meghan Factor," Princess Diana's private secretary and chief of staff, Patrick Jephson is back with us.

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[09:42:01]

SMERCONISH: Hey, more social media reaction to today's program. This one concerning our next subject, Harry and Meghan.

Can you hyenas just leave them alone?

You know what? I'm for them. I think -- I think it's a good outcome, I really do.

No, it's not me saying good riddance. I wish them well, I really do. I just don't know how the tabloids, what's left of Fleet Street, are going to react to the return of Harry and Meghan.

And the other thing that I'm interested to see is that, if you recall, for those of us who are close observers, the queen didn't want to have a half in, half out arrangement, because I think that that's what Harry proposed, and she wouldn't go along with it. So, what I most want to ask Patrick Jephson is whether there will be any resumption of royal duties.

And my additional thought is that I hope it's not a sign or a reflection of the king's health. I wish him Godspeed, no pun intended. I wish him -- wish him all good things. But Harry, going back -- but I'm for them. I'm for them. And I'm -- I'm for them educating their kids in that system. I think it sounds pretty cool. So, we'll come back in just a moment. Patrick Jephson will be my guest. He knows better than anyone. He watched the boys grow up. He was Princess Diana's chief of staff and private secretary. We'll do that right after this.

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[09:47:32]

SMERCONISH: Six years ago, Prince Harry and Meghan Markle, they pulled up stakes. They moved to the United States over family tensions, media scrutiny, what they claimed were racist attacks against them, and security concerns which led to a tell-all with Oprah, a Netflix documentary, and Harry's international best-seller "Spare." Now, lingering questions over why the royal couple is hauling their family back to the U.K.

Joining me now is Patrick Jephson. He served as private secretary and chief of staff for the late Princess Diana from 1990 through 1996. He's the author of the books "Shadows of a Princess" and "The Meghan Factor."

Thanks so much, Patrick, for being here. I remember you, of course, remember the queen rejected the sort of half in, half out that Harry had proposed. Do you think they're going to resume any royal responsibilities?

PATRICK JEPHSON, PRIVATE SECRETARY AND CHIEF OF STAFF FOR PRINCESS DIANA (1990-1996): That's a great question, Michael. And as you well know what we're talking about here is a lot more than just celebrity tittle-tattle. The role of the monarchy in the U.K. and indeed in the realms around the world has never been more important.

You think about the U.K., they've had seven prime ministers in the last 10 years. This is a country in need of clear, direct, firm leadership. The monarchy is there to provide it. It's there to provide unity, continuity, duty, all about politics.

And that works when you have one court. It sort of works when you have two courts. That's to say the monarch and the heir.

But the idea of having three courts, which is the risk here, really suggests the possibility of some very profound historical and constitutional issues that are going to have to be dealt with.

SMERCONISH: Patrick, is he still in the line of succession? I recognize that it's William who's next in line. And help me with this. Then I guess Kate and William's children, three of them. And then is it Harry?

JEPHSON: Yes, it is. And here's the point, Harry and Meghan decided six years ago, as you said, they upped sticks from England. They came to California in search of a new life. They were not given the option of the half in, half out proposal, which they tried. And their reappearance back in the U.K. begs a whole load of questions, and nobody has yet properly answered them, why are they here? [09:50:05]

The purpose of members of the royal family is to support the monarch in those duties that I just mentioned. If they're not here to support the monarch, why are they back in the U.K.? Is it for some personal reason? Is it a selfish reason? Are they really here to offer themselves for the kind of public service they turn their backs on before?

These are the sort of questions that have to be answered. And right now, in palace corridors, and I know what this is like because I was there when Prince Charles, then Prince Charles, and Princess Diana split up. These are legitimate, very pressing and indeed practical questions. How does this new arrangement work? Because if it doesn't work, the threat is to the entire monarchy.

SMERCONISH: You watch these boys -- we all watch these boys, but not like Patrick Jephson. You had a front row seat to watch these boys grow up. What's your interpretation of the relationship now between the brothers, and how do you think this sits with William that Harry is coming back?

JEPHSON: William is, of course, the king in waiting, and in a way that didn't happen with Queen Elizabeth II, a lot of people are already turning their eyes towards the reign of King William. There's a lot of hope riding on it.

The fact that Harry has now reappeared just complicates things for William. And it seems to me that unless there is a heroic amount of brotherly love, unless there is a quite unprecedented amount of paternal love and direction, we're running for a train wreck here when the two brothers end up competing over the same amount of public attention.

SMERCONISH: Harry has had his battles with the tabloids, Patrick. How welcoming will Fleet Street be of Meghan and Harry's return? I assume there are already indications in the last 48 hours.

JEPHSON: Fleet Street and the U.S. supermarket tabloids will be thrilled with Harry and Meghan's return to the U.K. This is a dream for royal correspondents, royal influencers, for social media gurus.

There's a huge ecosystem here, Michael, that feeds on this stuff. And Harry and Meghan have just given them a giant new helping of stuff to pick through.

SMERCONISH: OK, am I -- am I being too liberal with my thinking that this is akin to Edward VIII coming back from Paris with Wallis Simpson?

JEPHSON: Well, interestingly, I mean, this parallel is a perfectly legitimate one. When King George VI, Queen Elizabeth's father, was sick with lung cancer, which eventually killed him, Edward VIII from Paris helpfully offered himself as a regent to guide the steps of the very young Queen Elizabeth. He was told to get lost. And there is no way in which, I think, Harry or Meghan will be entrusted with guiding the footsteps of future kings and queens of the U.K.

SMERCONISH: I'm chuckling -- I'm chuckling, Patrick, only because I'm part -- I'm part of this, you say like everybody feeds on this. I get a kick out of it. I pay attention to it. I'm calling British Air when the program is over and taking a look at rates for a fall trip.

Thank you. Always enjoy your expertise, Patrick Jephson, who was private secretary and chief of staff for Princess Diana.

Social media reaction to today's program. What do we have, Catherine?

They came back after realizing they weren't accepted to the L.A. celebrity level clicks and now back with their tail tucked between their knees. I don't think William will embrace them after all the trash they generated about the family.

I got to tell you, Bikerbear, I have softened. I have -- I have softened on the whole thing. I hope it works out. I hope they're happy. I hope the U.K. is welcoming. And we'll see what the next chapter might bring. That's not something you expected me to say, is it?

One more social media and then well get to the poll result. One more social media.

Paying off the debt would require massive sacrifices from the American people. We're too selfish to get it done.

C.J., yesterday's poll result proved that because more than 35,000 people voted and 80 percent of them said, I'm not doing anything. No, I'm not going to pay more in taxes. I want all that's due me for Social Security and everything I'm entitled to for Medicare. So, we can blame the Congress and we can also blame ourselves.

Here's the result of today's poll question at Smerconish.com, 35,208, that's a lot of votes for this time of day. Which is more to blame for the $40 trillion national debt, taxing too little, or spending too much? Sixty-forty, 60-40, the result says, spending too much.

[09:55:02]

I know -- I know that the answer is to say that it's a combination of both. I was being very deliberate because I wanted to make -- I wanted to make you select as between them. Interesting that you say that it's Congress -- that it's the spending. Yes, it's the Congress spending too much rather than taxing too little.

The fact that 80 percent -- that 80 percent of the legislation that has put us in this position specifically now the tax cuts and the spending bills were passed with bipartisan majorities, I think, is one of the most telling things that we've drawn from today's program. You can't just say, oh, it's the -- it's the liberal spending Democrats. You can't just say, oh, it's the Republicans with their tax cuts.

It's not only a combination of both, but it's also when they work together on each of those initiatives that has put us in this position. Fingers crossed that 40 trillion is really a wake-up call. We'll find out.

If you missed any of today's program, you can always listen anywhere you get your podcasts. We thank you for watching and we will see you next week.

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