WEBVTT - Senator Thom Tillis Talks Fed, China, and US Relations with Europe

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Let's keep it on

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<v Speaker 1>the geopolitics. Global leaders gathering at the Munich Security Conference,

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<v Speaker 1>the US Secretary of State Marco Rubio leading a delegation

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<v Speaker 1>as the Trump administration pushes Transatlantic ties potentially to their limits.

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<v Speaker 1>The Republican Senator Tom Tillis is on the ground in

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<v Speaker 1>Munich and he joined us now for more. Senator, welcome

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<v Speaker 1>back to the program. Forgive me for doing this life

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<v Speaker 1>in the moment. But the news just crossed. This is

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<v Speaker 1>on Ali Baba reporting from Reuters. So the Trump administration

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<v Speaker 1>is expected to add Ali Baba to a list of

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<v Speaker 1>firms that allegedly help China's military. This according to reports

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<v Speaker 1>sur just moments ago. Senator, Clearly the US administration and

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<v Speaker 1>Congress for that matter, is looking to put a bit

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<v Speaker 1>of a squeeze on China. Landing in Europe and Munich, Germany.

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<v Speaker 1>Do you believe that you have the Europeans on side

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<v Speaker 1>in this effort.

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<v Speaker 2>I think we do.

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<v Speaker 3>But let's go back to Alli Bob and honestly, any

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<v Speaker 3>business that's homo solid in China, just anybody really believe

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<v Speaker 3>that there's separation between the CCCP and the state owned

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<v Speaker 3>enterprises and other supposedly independent businesses.

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<v Speaker 2>I think the President is on.

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<v Speaker 3>The right track to make sure that we're starting to

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<v Speaker 3>hold China accountable. We need a good relationship with them,

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<v Speaker 3>but it needs to be one that's founded on trust.

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<v Speaker 3>And quite honestly, there are moves in China that I

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<v Speaker 3>don't trust.

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<v Speaker 1>So, Senator, with that in mind, should US base investors

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<v Speaker 1>be able to have access to investing in these companies.

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<v Speaker 3>Well, look, I've got a real problem with We've had

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<v Speaker 3>a Banking Committee com meeting yesterday with Adkins before from

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<v Speaker 3>the SEC, and I've got a real problem with the

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<v Speaker 3>US getting into a trend of buying into some of

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<v Speaker 3>our companies. I feel like we should let the free

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<v Speaker 3>market really drive innovation. And also, back to the segment

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<v Speaker 3>before I watched your prior segment, we've also got to

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<v Speaker 3>unleash AI.

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<v Speaker 2>We can't be afraid of it.

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<v Speaker 3>We have to embrace it, we have to leverage it,

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<v Speaker 3>and we have to be the leader in innovating at it.

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<v Speaker 1>Well, Senator, let's talk about that. Creative destruction is a

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<v Speaker 1>feature of the US economy and American dynamism is something

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<v Speaker 1>Leasa was talking about earlier on this morning Senator, I

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<v Speaker 1>feel like there's an aversion to that these days, and

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<v Speaker 1>a fear associated with some of the headlines we've all

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<v Speaker 1>seen over the past week, the prospect of white color

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<v Speaker 1>jobs being wiped out. How do we prepare for a

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<v Speaker 1>moment like that and ensure that what globalization did to

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<v Speaker 1>manufacturing doesn't happen to services with AI?

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<v Speaker 3>Well, we have to be ever watchful, But the bell

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<v Speaker 3>has been wrong. We could either decide to be the

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<v Speaker 3>innovation leader and work with our partners in our lives,

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<v Speaker 3>the nations that we have military alliances worth to make

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<v Speaker 3>sure that the Western world is still in the front

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<v Speaker 3>of it. But I'm reminded of books that I read

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<v Speaker 3>about the Industrial Revolution, and anytime that we've had a

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<v Speaker 3>major leap in technology, we can't pretend like it didn't happen.

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<v Speaker 3>Have to figure out how to master it and the

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<v Speaker 3>best practice and executing it and dealing with all the

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<v Speaker 3>potential negative consequences and job displacement. I think the jury

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<v Speaker 3>is still out on what the job displacement's going to be.

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<v Speaker 3>Does it mean that we've got to put more money

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<v Speaker 3>in education and retooling expertise around the needs of the

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<v Speaker 3>AI future? Probably almost certainly, but we should resist it.

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<v Speaker 3>We should make sure that we get rid of the

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<v Speaker 3>patchwork of laws that are being implemented at the state

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<v Speaker 3>level that are impediments to our own indigenous innovation and AI,

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<v Speaker 3>come up with rules of the road at a federal level,

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<v Speaker 3>and just unleash the power of the US innovation economy

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<v Speaker 3>to lead the world to get into right.

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<v Speaker 4>Senator, do you feel like internationally there's the same skepticism

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<v Speaker 4>you're in Europe, it's known for regulating their experts in it,

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<v Speaker 4>and it seems like a growing number of people feel

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<v Speaker 4>like that is hampering some of the progress. I mean,

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<v Speaker 4>is there the same kind of enthusiasm. What's the mood

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<v Speaker 4>like around some of the AI story that's causing a

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<v Speaker 4>lot of a lot of volatility, certainly here in the

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<v Speaker 4>United States.

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<v Speaker 3>For years, I've been trying to remind everyone of how

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<v Speaker 3>critical we were of the GDPR data privacy, data breach

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<v Speaker 3>policies of the EU implement it.

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<v Speaker 2>They made mistakes, they corrected.

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<v Speaker 3>Some of them, but then states started gold plating some

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<v Speaker 3>of those policies California and other ones that are again impediments.

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<v Speaker 2>To our tech sector.

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<v Speaker 3>What we need are national rule. This is clearly interstate commerce.

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<v Speaker 3>We need to preempt these laws, make them better if

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<v Speaker 3>we find the best practice, be.

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<v Speaker 2>Instructed by that at some state level.

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<v Speaker 3>But we need to set that platform right or the

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<v Speaker 3>maligne users of AI are going to outpace our ability

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<v Speaker 3>to stay up with them.

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<v Speaker 2>That's why I think it's so important.

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<v Speaker 3>I was the one, the only one actually nine and

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<v Speaker 3>nine members voted against that. There was an amendment last

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<v Speaker 3>year to try and preempt the AI laws at the

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<v Speaker 3>state level come up with a national standard. I think

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<v Speaker 3>that we need to do that very quickly, and we

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<v Speaker 3>should road data, privacy data breach it there so that

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<v Speaker 3>we get it right and maybe we have a gold

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<v Speaker 3>plate of state or that Europe can be instructed by.

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<v Speaker 4>In the meantime, as people are concerned about this leave

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<v Speaker 4>of market transition and the pain that could come alongside it,

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<v Speaker 4>it's one reason why there's been so much focus on

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<v Speaker 4>the FED to reserve. It's one reason why people are

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<v Speaker 4>saying it might behoove the FED to cut rates more

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<v Speaker 4>aggressively in order to ease the pain for a number

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<v Speaker 4>of individuals that otherwise might be losing their job. I mean,

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<v Speaker 4>how much are you feeling satisfied in the process that

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<v Speaker 4>you could get a hearing for the nominee Kevin worsh

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<v Speaker 4>in the not so distant future. Do you think that

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<v Speaker 4>that's feasible.

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<v Speaker 3>Well, we could have a hearing all we want, but

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<v Speaker 3>until the investigation is done, I still believe that the

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<v Speaker 3>initial inquiry and the investigation was a flex to try

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<v Speaker 3>and get the current chair to step aside. Chair Pale

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<v Speaker 3>has a term as chair that expires in May. He

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<v Speaker 3>also has a term that could extend for two more years.

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<v Speaker 3>I have no intention allowing any FED Board nominee to

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<v Speaker 3>move forward out.

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<v Speaker 2>Of committee and to be confirmed until this matter is subtle.

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<v Speaker 3>But this is foundational to FED independence, and I, for one,

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<v Speaker 3>I'm going to stand on the side of certainty and

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<v Speaker 3>better independence is what delivers certainty in our markets.

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<v Speaker 1>So Senator is intriguing because we heard from the Treasury

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<v Speaker 1>Secretary earlier on this morning speaking to the American press,

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<v Speaker 1>and he said the following that I spoke with Republican

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<v Speaker 1>senators early this week and I think we have agreement

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<v Speaker 1>to go ahead with the Wash hearing. Do you have

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<v Speaker 1>an understanding of where he's getting that impression from.

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<v Speaker 3>Well, you know, I've said that if they shouldn't confuse

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<v Speaker 3>or conflate two issues. The suggestion that we should have

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<v Speaker 3>an oversight hearing to see how well this building project

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<v Speaker 3>which the FED has gone, it's fine with me. In fact,

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<v Speaker 3>I think we should have that kind of oversight for

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<v Speaker 3>the East Wing construction, the upfit of the Air Force

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<v Speaker 3>one that's kind of a mini Air Force one because

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<v Speaker 3>it can't fly out of US boarders.

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<v Speaker 2>All of that is just good governance oversight.

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<v Speaker 3>None of that has anything to do with an investigation

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<v Speaker 3>that I believe was dead on arrival. We are talking

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<v Speaker 3>about two minutes of testimony that seven members of the

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<v Speaker 3>Banking Committee, Republican members, including the Chair, have all said

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<v Speaker 3>did not constitute a crime. We've got a prosecutor who's

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<v Speaker 3>not listening to the eyewitnesses and continuing that's not productive.

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<v Speaker 2>And I'm not going to I'm not going to allow it.

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<v Speaker 3>Maybe they can commence the Democrats to vote with them,

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<v Speaker 3>but as long as I'm the deciding vote. We can

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<v Speaker 3>have mister Warsh, who I would love to be the

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<v Speaker 3>next FED chair, but I'm not going to confirm the

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<v Speaker 3>next FED chair until I can be absolutely certain that

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<v Speaker 3>these sorts of flexes do not always.

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<v Speaker 2>Have members of the Federal Reserve Board or the chair

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<v Speaker 2>looking over.

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<v Speaker 3>Their shoulder, wondering when they get the call from some

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<v Speaker 3>US attorney with a dream.

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<v Speaker 1>The Senator, if you had the call from Treasury or

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<v Speaker 1>from the White House about this, when was the last

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<v Speaker 1>time you had the conversation on the issue.

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<v Speaker 3>Well, I've had a conversation with the American people c

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<v Speaker 3>Span yesterday on the floor, and I don't think I

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<v Speaker 3>was mincing words.

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<v Speaker 2>I'm not really known for that.

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<v Speaker 3>But if I need to make it very clear this

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<v Speaker 3>is about an end are a resolution, I'll give the

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<v Speaker 3>prosecutor the benefit of the doubt. Provide me with evidence

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<v Speaker 3>beyond the two minutes of testimony and the committing that

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<v Speaker 3>that seven Republican members said it was not criminal, it

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<v Speaker 3>was not misleading, and that there was no criminal intent.

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<v Speaker 2>It's it's it's like an indictment looking.

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<v Speaker 3>For a crime, and to me, it just it's at

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<v Speaker 3>the edge of absurdity that I can't accept. And the

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<v Speaker 3>only thing I know that I can do is exercise

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<v Speaker 3>my right as an individual Senator to hold up future.

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<v Speaker 2>Nominations until this investigation is done.

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<v Speaker 3>But to the to the to the assistant US Attorney,

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<v Speaker 3>bring me evidence beyond the two minutes has been rejected

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<v Speaker 3>out of hand by members by the majority of Republican

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<v Speaker 3>members on the committee, or proved to me that there's

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<v Speaker 3>been an instance where a referral. What's really odd about this?

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<v Speaker 2>And I spoke about this on the Senate for you yesterday.

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<v Speaker 3>This is the first time that I can find where

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<v Speaker 3>a prosecutor moves forward with an investigation without a referral

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<v Speaker 3>from the chair.

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<v Speaker 2>Or a member of the committee. Maybe somebody can prove

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<v Speaker 2>me wrong.

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<v Speaker 3>But if that prosecutor has compelling information, either the way

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<v Speaker 3>they read that two minutes or something else that no one's.

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<v Speaker 1>Aware of, let me see it, Senator, before you go,

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<v Speaker 1>time for one final question. You're in Munich. Let's finish

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<v Speaker 1>where we started. Chancell Emerge just spoke moments ago and

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<v Speaker 1>said the Transatlantic partnership is no longer self evident. Senator,

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<v Speaker 1>how received? How well received was your delegation in Munich?

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<v Speaker 3>Well, you know we're going to have I think we're

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<v Speaker 3>going to have a lively discussion here.

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<v Speaker 2>I had someone ask me about JD.

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<v Speaker 3>Vansa's vice president of Vance's speech last year. I said

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<v Speaker 3>that I wouldn't have given that speech, but I would

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<v Speaker 3>not have missed the opportunity to let my family of

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<v Speaker 3>nations in NATO know that one of the reasons we're

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<v Speaker 3>here is because of the two trillion dollar deficit over

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<v Speaker 3>twel years. Jonathan, Can you imagine how much more ready

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<v Speaker 3>we could be if all the demand signals that would

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<v Speaker 3>have come from two trillion dollars in weapons and our

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<v Speaker 3>mutual defense had actually been purchased by the countries of

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<v Speaker 3>NATO who have failed even meet their minimum requirement.

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<v Speaker 2>So I think there's frustration there that we need to

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<v Speaker 2>get passed. But I am speaking well. I believe for

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<v Speaker 2>the majority of Congress who.

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<v Speaker 3>Knows that the NATO Alliance is the most profound and

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<v Speaker 3>impactful alliance in the history of mankind, and we stand

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<v Speaker 3>behind it, and we will as we go through this

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<v Speaker 3>discussion to get things back to Norman.

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<v Speaker 1>Senator, appreciate your time. I know it's loud over there.

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<v Speaker 1>Enjoy Europe. Thank you very much, sir. Senator Tom tillis

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<v Speaker 1>there on the Federal Reserve on China and the relationship

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<v Speaker 1>with the Europeans.