1 00:00:02,520 --> 00:00:10,119 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,119 Speaker 1: noon and five pm Eastern on Apple, Cocklay and Android 4 00:00:17,160 --> 00:00:20,560 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:25,080 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,239 --> 00:00:28,160 Speaker 2: Non farm payrolls growth in January just one hundred and 7 00:00:28,240 --> 00:00:30,880 Speaker 2: forty three thousand, lower than the one hundred and seventy 8 00:00:30,880 --> 00:00:33,839 Speaker 2: five thousand estimate, but an unemployment rate lower than the 9 00:00:33,960 --> 00:00:37,280 Speaker 2: estimate as well, at four percent. Then you have wage 10 00:00:37,280 --> 00:00:39,440 Speaker 2: growth which was hotter than expected on both a month 11 00:00:39,440 --> 00:00:42,120 Speaker 2: on month and year on your basis those figures at 12 00:00:42,200 --> 00:00:44,760 Speaker 2: zero point five percent and four point one percent on 13 00:00:44,800 --> 00:00:47,920 Speaker 2: average hourly earnings growth, respectively. So when you put it 14 00:00:47,960 --> 00:00:50,879 Speaker 2: all together, there is some sign of a little bit 15 00:00:50,880 --> 00:00:53,320 Speaker 2: of weakness here in the new White House. The Trump 16 00:00:53,320 --> 00:00:56,840 Speaker 2: administration is casting blame on the old one. We spoke 17 00:00:56,880 --> 00:00:59,720 Speaker 2: with Kevin Hassett, the director of the National Economic Council 18 00:01:00,040 --> 00:01:02,080 Speaker 2: here on Bloomberg about the data earlier today. 19 00:01:02,880 --> 00:01:06,119 Speaker 3: The Biden jobs market was way worse than market slot, 20 00:01:06,480 --> 00:01:08,160 Speaker 3: and that's sort of consistent with the rest of our 21 00:01:08,240 --> 00:01:11,600 Speaker 3: views that their policies were unwise and there's a lot 22 00:01:11,600 --> 00:01:13,959 Speaker 3: of cleaning up to do. And I think that if 23 00:01:13,959 --> 00:01:17,199 Speaker 3: you look at ism that just came out, the people 24 00:01:17,319 --> 00:01:19,920 Speaker 3: market participants believe that President Trump is going to be 25 00:01:19,959 --> 00:01:22,800 Speaker 3: able to turn things around. And with these big downward divisions, 26 00:01:22,840 --> 00:01:24,200 Speaker 3: we can see that there's actually a lot of work 27 00:01:24,240 --> 00:01:24,440 Speaker 3: to do. 28 00:01:26,360 --> 00:01:29,360 Speaker 2: We want to get more insight now into the work ahead. 29 00:01:29,360 --> 00:01:31,360 Speaker 2: And just frankly, where we are with a former chief 30 00:01:31,360 --> 00:01:34,440 Speaker 2: economist at the Department of Labor, Diana Firschcott Roth, is 31 00:01:34,480 --> 00:01:36,600 Speaker 2: with me here in our Washington, d C. Studio. She's 32 00:01:36,640 --> 00:01:39,560 Speaker 2: now director of the Center for Energy, Climate and Environment 33 00:01:39,920 --> 00:01:42,640 Speaker 2: at the Heritage Foundation. Diana, thank you so much for 34 00:01:42,680 --> 00:01:44,160 Speaker 2: being here on Jobs Day. 35 00:01:44,319 --> 00:01:46,440 Speaker 4: It's great to be with you. Katy, Well, it's. 36 00:01:46,319 --> 00:01:48,080 Speaker 2: Lovely to have you. As the White House is framing 37 00:01:48,120 --> 00:01:52,000 Speaker 2: these figures of a worse buy an economy than previously thought. 38 00:01:52,000 --> 00:01:54,240 Speaker 2: But what we're talking about here is an unemployment rate 39 00:01:54,560 --> 00:01:58,680 Speaker 2: of four percent, which is still historically pretty low. Is 40 00:01:58,680 --> 00:02:00,000 Speaker 2: that too? How you see this data? 41 00:02:00,840 --> 00:02:04,920 Speaker 4: Well, I think that there's two surveys. There's the unemployment rate, 42 00:02:05,120 --> 00:02:08,560 Speaker 4: then there's the establishment data, which is jobs created and 43 00:02:08,600 --> 00:02:11,400 Speaker 4: the unemployment rate. Those data have just been revised because 44 00:02:11,400 --> 00:02:14,560 Speaker 4: they revised the population totals. But what's really important to 45 00:02:14,600 --> 00:02:17,560 Speaker 4: focus on is the establishment data and the jobs created. 46 00:02:17,880 --> 00:02:20,440 Speaker 4: There was one hundred and forty three thousand jobs created, 47 00:02:20,639 --> 00:02:22,680 Speaker 4: which is why the market is looking down on this. 48 00:02:22,960 --> 00:02:25,040 Speaker 4: But it's not so much the number of jobs. It's 49 00:02:25,040 --> 00:02:27,600 Speaker 4: that they were all in low paying or government sectors. 50 00:02:27,800 --> 00:02:31,960 Speaker 4: So if you look at manufacturing, tiny gains, losses in oil, 51 00:02:32,200 --> 00:02:36,240 Speaker 4: losses in mining and logging, in motor vehicles and parts. 52 00:02:36,240 --> 00:02:38,600 Speaker 4: When other countries want to buy our oil, and you 53 00:02:38,639 --> 00:02:41,680 Speaker 4: have President Trump who says he wants to sweep away regulations, 54 00:02:41,880 --> 00:02:45,400 Speaker 4: have lower electricity prices, have first to permitting to allow 55 00:02:45,440 --> 00:02:48,640 Speaker 4: those high paying jobs to come back to the United States, 56 00:02:48,800 --> 00:02:51,919 Speaker 4: and that's what's important that American workers have the upward 57 00:02:51,960 --> 00:02:55,200 Speaker 4: mobility they need through these higher wage jobs. 58 00:02:55,680 --> 00:02:57,720 Speaker 2: Well, when we consider those some of these lower wage 59 00:02:57,800 --> 00:03:00,320 Speaker 2: jobs and different sectors of the labor market in which 60 00:03:00,360 --> 00:03:03,320 Speaker 2: migrant labor specifically is relied on, how are you thinking 61 00:03:03,360 --> 00:03:07,320 Speaker 2: through the deportation effort that is underway and has been 62 00:03:07,360 --> 00:03:09,799 Speaker 2: accelerating in the last few weeks, and how ultimately that's 63 00:03:09,840 --> 00:03:11,480 Speaker 2: going to trickle into the labor market. 64 00:03:11,760 --> 00:03:14,080 Speaker 4: Well, we see that the labor force participation rate is 65 00:03:14,120 --> 00:03:17,720 Speaker 4: still lower than it was during before the pandemic. It 66 00:03:17,760 --> 00:03:21,160 Speaker 4: has not regained its pre pandemic levels. So there are 67 00:03:21,320 --> 00:03:24,720 Speaker 4: plenty of American workers who want to do many of 68 00:03:24,760 --> 00:03:28,000 Speaker 4: these high wage manufacturing jobs that we're focusing on. The 69 00:03:28,040 --> 00:03:30,880 Speaker 4: point is to bring these high wage jobs back to America. 70 00:03:31,040 --> 00:03:33,120 Speaker 4: There are plenty of American workers who want to do. 71 00:03:33,120 --> 00:03:36,560 Speaker 2: Them, so there won't be any labor shortages with those 72 00:03:36,800 --> 00:03:39,920 Speaker 2: roles that American workers may not be so eager to fill. 73 00:03:40,560 --> 00:03:44,600 Speaker 4: There's paths for legal migration, and President Trump has always 74 00:03:44,600 --> 00:03:47,920 Speaker 4: said he wants legal migrants. So if there are job openings, 75 00:03:47,920 --> 00:03:50,440 Speaker 4: if there are gaps in the labor force, there's plenty 76 00:03:50,480 --> 00:03:53,280 Speaker 4: of scope to bring in workers who want to come legally, 77 00:03:53,440 --> 00:03:55,840 Speaker 4: who have been waiting for years and years Kayleie to 78 00:03:55,880 --> 00:03:58,800 Speaker 4: come into the country. Why shouldn't those workers come and 79 00:03:58,800 --> 00:04:00,920 Speaker 4: do those jobs that are needed rather than people who 80 00:04:01,000 --> 00:04:02,120 Speaker 4: just walk across the border. 81 00:04:02,640 --> 00:04:04,840 Speaker 2: Well, something else President Trump wants to see is a 82 00:04:04,880 --> 00:04:08,080 Speaker 2: smaller federal workforce, which is why we've seen this administration 83 00:04:08,160 --> 00:04:11,600 Speaker 2: offering buyouts that tens of thousands of people, we understand, 84 00:04:11,640 --> 00:04:14,200 Speaker 2: have signed up for to leave the government by the 85 00:04:14,320 --> 00:04:17,120 Speaker 2: end of this month. That deadline now obviously extended until Monday. 86 00:04:17,120 --> 00:04:19,600 Speaker 2: But even if not enough people take it, the administration 87 00:04:19,640 --> 00:04:22,039 Speaker 2: has suggested they're still going to be trimming down a 88 00:04:22,080 --> 00:04:25,279 Speaker 2: lot of these federal agencies. What ultimately will that do 89 00:04:25,520 --> 00:04:27,800 Speaker 2: to the labor market, As you mentioned government jobs and 90 00:04:27,880 --> 00:04:29,080 Speaker 2: your very first answer. 91 00:04:29,760 --> 00:04:34,240 Speaker 4: Right, Well, I have the utmost admiration for anybody who 92 00:04:34,320 --> 00:04:37,559 Speaker 4: wants to take President Trump's deal and have nine months 93 00:04:37,560 --> 00:04:41,320 Speaker 4: of vacation and move to a different kind of job afterwards. 94 00:04:41,360 --> 00:04:45,160 Speaker 4: And there's a lot of opportunities to do that and 95 00:04:45,520 --> 00:04:49,039 Speaker 4: the federal workforce, as everybody knows, it's very difficult to 96 00:04:49,240 --> 00:04:53,680 Speaker 4: trim the federal workforce. And so President Trump is offering 97 00:04:53,720 --> 00:04:56,760 Speaker 4: this buyout opportunity, and he wants to make it more efficient. 98 00:04:57,120 --> 00:04:59,039 Speaker 4: I mean, if you have a private sector company that 99 00:04:59,080 --> 00:05:01,240 Speaker 4: doesn't do a good job, it goes out of business 100 00:05:01,279 --> 00:05:04,360 Speaker 4: and those workers find other positions to go to. That's 101 00:05:04,480 --> 00:05:07,280 Speaker 4: not the same in the government, where people just keep 102 00:05:07,440 --> 00:05:10,159 Speaker 4: jobs even if they're not doing a good job. And 103 00:05:10,200 --> 00:05:12,040 Speaker 4: I have to say most government workers are doing a 104 00:05:12,080 --> 00:05:14,760 Speaker 4: great job, but for those that are not, it's very 105 00:05:14,760 --> 00:05:15,880 Speaker 4: difficult to get rid of them. 106 00:05:16,320 --> 00:05:18,479 Speaker 2: Well, and we do understand that might be the next 107 00:05:18,480 --> 00:05:20,279 Speaker 2: stage of this that they've asked for a list of 108 00:05:20,360 --> 00:05:22,479 Speaker 2: low performing employees, and that may be where some of 109 00:05:22,480 --> 00:05:25,279 Speaker 2: this calling happens from here. But I just the notion 110 00:05:25,360 --> 00:05:27,640 Speaker 2: of a smaller federal workforce overall. Is that going to 111 00:05:27,720 --> 00:05:30,080 Speaker 2: lead to some messiness in the economic data that we 112 00:05:30,120 --> 00:05:32,279 Speaker 2: could receive in the next several months. 113 00:05:32,760 --> 00:05:35,160 Speaker 4: I think this is going to be swamped by low 114 00:05:35,200 --> 00:05:40,039 Speaker 4: electricity prices leading to more manufacturing coming from Europe. I 115 00:05:40,080 --> 00:05:41,840 Speaker 4: mean here, we're going to get rid of net zero. 116 00:05:42,040 --> 00:05:44,560 Speaker 4: They have net zero in Europe and in the United Kingdom, 117 00:05:45,000 --> 00:05:49,440 Speaker 4: driving prices higher, deindustrializing. So if we could reindustrialize to 118 00:05:49,480 --> 00:05:52,800 Speaker 4: pick up some of those jobs from these European companies, 119 00:05:52,920 --> 00:05:54,039 Speaker 4: we're going to be doing great. 120 00:05:54,880 --> 00:05:56,719 Speaker 2: We got other data today as well, in the form 121 00:05:56,720 --> 00:05:59,479 Speaker 2: of University of Michigan consumer sentiment, which actually hit a 122 00:05:59,520 --> 00:06:02,800 Speaker 2: seven month low, in part because inflation expectations for the 123 00:06:02,800 --> 00:06:05,400 Speaker 2: next year picked up to more than four percent. There's 124 00:06:05,400 --> 00:06:09,440 Speaker 2: concern around tariffs here, specifically on the part of American consumers. 125 00:06:09,480 --> 00:06:11,839 Speaker 2: It seems we've heard from plenty of people close to 126 00:06:11,839 --> 00:06:14,599 Speaker 2: Trump were aligned with his kind of economic thinking that tariffs, 127 00:06:14,720 --> 00:06:17,560 Speaker 2: if anything, would be a one time price increase versus 128 00:06:17,560 --> 00:06:22,240 Speaker 2: something persistently inflationary. But if people expect inflation and inflation 129 00:06:22,400 --> 00:06:26,080 Speaker 2: expectations start to run away, will not not have the 130 00:06:26,120 --> 00:06:29,000 Speaker 2: same effect. Ultimately, will they not start then demanding things 131 00:06:29,080 --> 00:06:31,000 Speaker 2: like higher wages? And we see this trickle back into 132 00:06:31,040 --> 00:06:32,800 Speaker 2: the labor market as well well. 133 00:06:32,839 --> 00:06:35,160 Speaker 4: President Trump has shown that he wants to use tariffs 134 00:06:35,200 --> 00:06:38,080 Speaker 4: as a negotiating tool, so he put the tariffs on 135 00:06:38,160 --> 00:06:41,760 Speaker 4: Canada and Mexico. Then Canada and Mexico said they would 136 00:06:41,800 --> 00:06:45,000 Speaker 4: increase Borda security, so he took off the tariffs. China, 137 00:06:45,080 --> 00:06:47,680 Speaker 4: he left the tariffs on at ten percent. But China 138 00:06:47,760 --> 00:06:51,159 Speaker 4: is very much dependent on its exports to the United 139 00:06:51,160 --> 00:06:54,159 Speaker 4: States for its economic growth, it might very well swallow 140 00:06:54,200 --> 00:06:58,040 Speaker 4: some of these tariffs. And in China, China subsidizes energy 141 00:06:58,480 --> 00:07:02,880 Speaker 4: labor with slave labs, burn forced labor in Shinjog, capital 142 00:07:02,960 --> 00:07:05,719 Speaker 4: with low interest rate loans. I mean, Kaylee, did you 143 00:07:05,760 --> 00:07:08,680 Speaker 4: know that China is selling a car for thirteen thousand 144 00:07:08,760 --> 00:07:13,600 Speaker 4: dollars in Europe byd the major auto company Explorer for 145 00:07:13,680 --> 00:07:17,720 Speaker 4: thirteen thousand dollars in Europe. China is subsidizing and undercutting 146 00:07:18,040 --> 00:07:21,520 Speaker 4: its industries. We spend money on providing Medicare and Medicaid, 147 00:07:21,600 --> 00:07:27,280 Speaker 4: social security, housing vouchers. We keep people living well. They 148 00:07:27,360 --> 00:07:30,920 Speaker 4: take their government money and they subsidize their companies to 149 00:07:31,080 --> 00:07:36,200 Speaker 4: undercut ours and European companies. Volkswagen layoffs in three plants 150 00:07:36,480 --> 00:07:38,880 Speaker 4: partly because of these cheap Chinese vehicles. 151 00:07:38,920 --> 00:07:41,440 Speaker 2: We don't want that here, all right, Diana, thank you 152 00:07:41,480 --> 00:07:44,840 Speaker 2: so much for joining us for these important Jobs Day conversations. 153 00:07:44,920 --> 00:07:47,640 Speaker 2: Diana fir Scott Rotha's director for Climate, Energy and the 154 00:07:47,720 --> 00:07:51,240 Speaker 2: Environment at the Heritage Foundation, also former chief economist at 155 00:07:51,280 --> 00:07:52,440 Speaker 2: the Department of Labor. 156 00:07:54,600 --> 00:07:58,080 Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catch 157 00:07:58,160 --> 00:08:02,120 Speaker 1: us live weekdays at noon and den on Apple, Cockley 158 00:08:02,120 --> 00:08:04,880 Speaker 1: and Android Auto with the Bloomberg Business App. You can 159 00:08:04,920 --> 00:08:08,400 Speaker 1: also listen live on Amazon Alexa from our flagship New 160 00:08:08,480 --> 00:08:13,880 Speaker 1: York station Just Say Alexa played Bloomberg eleven thirty. 161 00:08:13,760 --> 00:08:16,000 Speaker 2: And as we end our conversation on tariffs, we of 162 00:08:16,040 --> 00:08:18,520 Speaker 2: course got some news on tariffs from the President in 163 00:08:18,560 --> 00:08:20,720 Speaker 2: the Oval Office earlier today when he said that he 164 00:08:20,760 --> 00:08:25,080 Speaker 2: would announce next week reciprocal tariffs on our trading partners. 165 00:08:25,120 --> 00:08:26,840 Speaker 2: Will have to await the details on that, But he 166 00:08:26,880 --> 00:08:30,040 Speaker 2: also didn't rule out tariffs on Japan, as he said, 167 00:08:30,080 --> 00:08:32,160 Speaker 2: he is looking for an end to the trade deficit 168 00:08:32,559 --> 00:08:35,120 Speaker 2: with that country. All of this happening as he meets 169 00:08:35,120 --> 00:08:37,680 Speaker 2: at the White House with the Prime Minister of Japan, 170 00:08:39,040 --> 00:08:41,280 Speaker 2: which is underway as we speak. Shigu or Aeshiba is 171 00:08:41,280 --> 00:08:43,280 Speaker 2: sitting down with him. We expect a press conference to 172 00:08:43,320 --> 00:08:46,440 Speaker 2: take place at some point this hour, and as we 173 00:08:46,480 --> 00:08:48,400 Speaker 2: consider what is on the agenda for this meeting, we 174 00:08:48,400 --> 00:08:51,200 Speaker 2: turn now to an important voice, the former US Ambassador 175 00:08:51,240 --> 00:08:54,240 Speaker 2: to Japan, having just wrapped up several years serving in 176 00:08:54,320 --> 00:08:56,400 Speaker 2: that role. Rama Manuel is with me now. He of 177 00:08:56,440 --> 00:09:01,160 Speaker 2: course also served as chief of staff to President Barack Obama. Ambassador, 178 00:09:01,200 --> 00:09:03,520 Speaker 2: thank you for being here. When we consider what the 179 00:09:03,559 --> 00:09:06,400 Speaker 2: Trump administration specifically might want to get out of this 180 00:09:06,480 --> 00:09:09,280 Speaker 2: meeting and what Japan is hoping to get in return. 181 00:09:09,440 --> 00:09:10,280 Speaker 2: What are you looking for? 182 00:09:11,400 --> 00:09:15,800 Speaker 5: Well, it's across a broad range of issues. One, Japan 183 00:09:15,880 --> 00:09:18,360 Speaker 5: is our number one foreign direct investor for the last 184 00:09:18,480 --> 00:09:21,120 Speaker 5: four years, about a million Americans work for them, So 185 00:09:21,480 --> 00:09:24,920 Speaker 5: ensuring there's a stability in that economic relationship, it's a 186 00:09:24,960 --> 00:09:27,920 Speaker 5: principal not only trading partner, but then that kind of 187 00:09:28,000 --> 00:09:31,120 Speaker 5: ripples into the next period. For the United States, which 188 00:09:31,160 --> 00:09:34,960 Speaker 5: is Japan's a long pole in the Indo Pacific for 189 00:09:35,000 --> 00:09:39,760 Speaker 5: the United States. Indo Pacific is a home game for China, 190 00:09:39,840 --> 00:09:42,280 Speaker 5: it's an away game for the United States. You level 191 00:09:42,280 --> 00:09:45,960 Speaker 5: the playing field with your allies. Our largest military footprint 192 00:09:45,960 --> 00:09:49,520 Speaker 5: outside of the United States, in any single country is 193 00:09:49,559 --> 00:09:54,280 Speaker 5: in Japan, well over fifty plus thousand American servicemen and women. 194 00:09:54,600 --> 00:09:56,000 Speaker 5: It's the only place in the world we have a 195 00:09:56,040 --> 00:10:00,800 Speaker 5: permanent aircraft terrier permanently based there. In addition to that, 196 00:10:00,880 --> 00:10:03,360 Speaker 5: whether you're looking at the quad with India, Australia, Japan, 197 00:10:03,400 --> 00:10:06,880 Speaker 5: the United States, the Tryla, or relationships from the United 198 00:10:06,880 --> 00:10:09,760 Speaker 5: States Japan, the Philippines, United States, Japan, and career, the 199 00:10:09,840 --> 00:10:12,480 Speaker 5: constant there alongside the United States is Japan on the 200 00:10:12,480 --> 00:10:15,800 Speaker 5: diplomatic front, and it's key and essential when you looked 201 00:10:15,800 --> 00:10:18,880 Speaker 5: at some of the export controls that the United States 202 00:10:18,880 --> 00:10:23,040 Speaker 5: put on and dealt with from China on semiconductors and 203 00:10:23,080 --> 00:10:26,440 Speaker 5: other high technology. Who's the other partner that walks walk 204 00:10:26,480 --> 00:10:29,120 Speaker 5: with the United States Japan. So when you look at 205 00:10:29,160 --> 00:10:32,960 Speaker 5: that composure, there's a lot to work with both on economic, 206 00:10:32,960 --> 00:10:36,400 Speaker 5: state craft, national security, and also on the diplomatic to 207 00:10:36,600 --> 00:10:37,720 Speaker 5: slack political arena. 208 00:10:39,240 --> 00:10:41,200 Speaker 2: Well when it comes to economic state craft, though, when 209 00:10:41,240 --> 00:10:44,720 Speaker 2: Donald Trump is suggesting that tariffs on Japan potentially would 210 00:10:44,760 --> 00:10:48,120 Speaker 2: be on the table, what would that do to potentially 211 00:10:48,160 --> 00:10:51,080 Speaker 2: this relationship which you've just just been described as being 212 00:10:51,280 --> 00:10:53,200 Speaker 2: incredibly key in the endosement Pacific. 213 00:10:54,040 --> 00:10:56,560 Speaker 5: Not only is not only for the last four years 214 00:10:56,559 --> 00:10:58,959 Speaker 5: has Japan been the number one direct FORIGN investor in 215 00:10:58,960 --> 00:11:03,000 Speaker 5: the United States. A million of Americans work for Japanese companies. 216 00:11:03,600 --> 00:11:06,520 Speaker 5: About forty three percent is the back of the envelope, 217 00:11:06,559 --> 00:11:09,240 Speaker 5: so it's not for peer review, but about forty three 218 00:11:09,280 --> 00:11:12,160 Speaker 5: percent of that investment is in the manufacturing industrial place. 219 00:11:12,520 --> 00:11:15,439 Speaker 5: You put tariffs on, you're going to affect a lot 220 00:11:15,480 --> 00:11:18,960 Speaker 5: of that investment in the industrial area. Second, the United 221 00:11:19,000 --> 00:11:23,200 Speaker 5: States represents about nine ten percent of Japan's LNG. 222 00:11:24,280 --> 00:11:25,720 Speaker 6: There's clearly a place. 223 00:11:26,200 --> 00:11:29,600 Speaker 5: To improve on that or Japan can turn to other markets. 224 00:11:30,080 --> 00:11:33,079 Speaker 5: I think we're the fifth largest United States LNG exporter 225 00:11:33,960 --> 00:11:36,360 Speaker 5: to Japan. There's a place to be worked on from 226 00:11:36,400 --> 00:11:40,400 Speaker 5: a nuclear SMR capacity, So there's a lot more economic 227 00:11:40,440 --> 00:11:44,240 Speaker 5: engagement to be happened rather than just tariffs. And I 228 00:11:44,280 --> 00:11:47,080 Speaker 5: think in fact, when I was there as Inbassador, we 229 00:11:47,160 --> 00:11:51,920 Speaker 5: improved Japan's involvement with the United States on ethanol and 230 00:11:52,000 --> 00:11:56,599 Speaker 5: other soybeans and beef, a whole host of areas agriculturally, 231 00:11:56,840 --> 00:11:57,960 Speaker 5: let alone industrially. 232 00:11:58,679 --> 00:12:02,600 Speaker 6: We're the largest foreign directrofessor in Japan. So engagement is 233 00:12:02,600 --> 00:12:03,000 Speaker 6: where I. 234 00:12:02,920 --> 00:12:06,200 Speaker 5: Would start rather than tariffs, because there's more to be 235 00:12:06,280 --> 00:12:09,200 Speaker 5: gained giving you have a willing partner on a whole 236 00:12:09,240 --> 00:12:11,840 Speaker 5: host a front. And again you're right to say, okay, 237 00:12:11,920 --> 00:12:14,920 Speaker 5: let's talk about economics. But it ripples and it doesn't 238 00:12:14,920 --> 00:12:15,959 Speaker 5: stay within a lane. 239 00:12:16,160 --> 00:12:18,079 Speaker 6: It affects. Then what are we doing on national straity? 240 00:12:18,120 --> 00:12:21,640 Speaker 5: I mean before there was a single tank on the 241 00:12:21,720 --> 00:12:27,040 Speaker 5: Ukrainian border. Japan agreed to go to two percent defense 242 00:12:27,120 --> 00:12:29,840 Speaker 5: budget two percent of GDP for the defense budget. They 243 00:12:29,840 --> 00:12:33,200 Speaker 5: are the largest acquired of US weapons. They're going to 244 00:12:33,200 --> 00:12:37,920 Speaker 5: become the third largest defense budget. The entire investment gained 245 00:12:38,040 --> 00:12:40,520 Speaker 5: in Japan on the defense side is not in personnel 246 00:12:40,679 --> 00:12:43,080 Speaker 5: but in the equipment, and we're the largest export of 247 00:12:43,080 --> 00:12:45,760 Speaker 5: that area. So there's a lot of leverage points here 248 00:12:46,280 --> 00:12:50,840 Speaker 5: for a more engaged partnership rather than. 249 00:12:52,440 --> 00:12:54,520 Speaker 6: Kind of hostile. Let me also then take this to 250 00:12:54,559 --> 00:12:57,520 Speaker 6: a separate place. If I can't. You can have a 251 00:12:57,760 --> 00:13:00,800 Speaker 6: conflict or confrontational. 252 00:13:00,000 --> 00:13:04,000 Speaker 5: Approach to your adversaries, but if you treat your allies 253 00:13:04,040 --> 00:13:07,040 Speaker 5: in the same way, you then become isolated. One of 254 00:13:07,080 --> 00:13:09,080 Speaker 5: the unique things we did over the last four years 255 00:13:09,160 --> 00:13:13,040 Speaker 5: is isolate China in its own backyard, isolated more and 256 00:13:13,080 --> 00:13:17,000 Speaker 5: more in the and around the area. If you constantly 257 00:13:17,120 --> 00:13:22,079 Speaker 5: are confronting allies in the same venue which you're confronting adversaries, 258 00:13:22,480 --> 00:13:25,600 Speaker 5: you become isolated. And that doesn't play on America's strength. 259 00:13:25,640 --> 00:13:29,800 Speaker 5: America's strength is not replicating mirroring China's might through right, 260 00:13:30,160 --> 00:13:34,520 Speaker 5: right through might. China strategy United States strategy is to 261 00:13:34,600 --> 00:13:39,360 Speaker 5: replicate its strengths, alliances, values, economic integration. 262 00:13:39,559 --> 00:13:43,719 Speaker 6: That's where we excel. And if you do a cheap. 263 00:13:43,520 --> 00:13:47,200 Speaker 5: Version of China's wolf warrier and economic coorsion, you're going 264 00:13:47,280 --> 00:13:49,319 Speaker 5: to end up in the same place where China's economy 265 00:13:49,640 --> 00:13:52,160 Speaker 5: is a mess right now, the political sport at home 266 00:13:52,320 --> 00:13:55,679 Speaker 5: is a mess right now, and doing that will end 267 00:13:55,760 --> 00:13:58,560 Speaker 5: up with the consequences. We were able in the last 268 00:13:58,559 --> 00:14:01,920 Speaker 5: four years to isolate China because of their own actions. 269 00:14:02,559 --> 00:14:05,320 Speaker 5: Doing the same thing China does and a poor version 270 00:14:05,360 --> 00:14:09,480 Speaker 5: of it will only isolate the United States well. 271 00:14:09,520 --> 00:14:12,079 Speaker 2: As we talk about Japan as being an ally, the 272 00:14:12,200 --> 00:14:14,160 Speaker 2: very fact that it is such an important ally was 273 00:14:14,200 --> 00:14:16,520 Speaker 2: what led to a lot of confusion when the last 274 00:14:16,559 --> 00:14:20,720 Speaker 2: administration moved to block the takeover from a Nipon Steel 275 00:14:20,760 --> 00:14:22,840 Speaker 2: of US Steel. We learned from the President in the 276 00:14:22,840 --> 00:14:25,720 Speaker 2: Oval Office today that he hasn't changed his mind on 277 00:14:25,840 --> 00:14:28,080 Speaker 2: the idea that that deal should not go through. Now 278 00:14:28,080 --> 00:14:31,080 Speaker 2: that you're out of the administration, looking back with hindsight, 279 00:14:31,160 --> 00:14:33,280 Speaker 2: do you still stand by that call or should this 280 00:14:33,360 --> 00:14:34,040 Speaker 2: be revisited? 281 00:14:34,920 --> 00:14:37,480 Speaker 5: As I said then, I believe said then, and I 282 00:14:37,520 --> 00:14:39,760 Speaker 5: believed it then, I believe it now. One of the 283 00:14:39,840 --> 00:14:42,800 Speaker 5: United States Japan relationship is deeper, stronger than a single 284 00:14:42,840 --> 00:14:47,240 Speaker 5: economic transaction. Second five years ago with the United States, 285 00:14:47,240 --> 00:14:50,640 Speaker 5: when US companies were looking at Tushiba, Japan put up 286 00:14:50,640 --> 00:14:53,320 Speaker 5: the same barriers that the United States talked about as 287 00:14:53,400 --> 00:14:58,680 Speaker 5: relates to Nippon Steele and US steal. Third, about four weeks, 288 00:14:58,680 --> 00:15:01,200 Speaker 5: five weeks, maybe a little long longer. Prior to the 289 00:15:01,680 --> 00:15:07,240 Speaker 5: Nikon engagement, the United States granted a Japanese company a 290 00:15:07,320 --> 00:15:10,760 Speaker 5: twenty billion dollar contract to replace all of China's cranes 291 00:15:10,800 --> 00:15:14,320 Speaker 5: in every American port. Now I can't speak to what 292 00:15:14,440 --> 00:15:18,320 Speaker 5: says trusted ally greater than a twenty billion dollar contract 293 00:15:18,320 --> 00:15:21,600 Speaker 5: to replace Chinese cranes as Japanese built manufactured cranes. They 294 00:15:21,640 --> 00:15:24,760 Speaker 5: would be manufactured in the United States because we trust 295 00:15:24,880 --> 00:15:27,840 Speaker 5: Japan not to use that technology and data to spy 296 00:15:27,920 --> 00:15:31,200 Speaker 5: on us and to engage in intellectual and economic espionage. 297 00:15:31,840 --> 00:15:36,520 Speaker 6: That is a deep relationship. Will you have disagreement sover issues, Yeah, 298 00:15:37,200 --> 00:15:39,200 Speaker 6: but they're the largest. They are one of the largest 299 00:15:39,200 --> 00:15:40,600 Speaker 6: purchases of American weapons. 300 00:15:40,800 --> 00:15:43,240 Speaker 5: They're a big purchaser of American agriculture trucks, They're a 301 00:15:43,240 --> 00:15:46,880 Speaker 5: big purchaser of American LNG. I'm not here to kind 302 00:15:46,920 --> 00:15:49,960 Speaker 5: of advocate for Japan, but I'm saying engaging an ally, 303 00:15:50,160 --> 00:15:52,480 Speaker 5: saying here's what we've got to see is a better 304 00:15:52,520 --> 00:15:55,240 Speaker 5: strategy than to treat that ally as it's if that 305 00:15:55,480 --> 00:15:58,600 Speaker 5: as if it's the same as an adversary. We have 306 00:15:58,640 --> 00:16:03,760 Speaker 5: a technological channel with China. This is not a cold 307 00:16:03,800 --> 00:16:07,120 Speaker 5: war of the ideological like Russia. It is a technological 308 00:16:08,320 --> 00:16:14,600 Speaker 5: challenge with China. Japan is a major technological country. From semiconductors, 309 00:16:14,600 --> 00:16:17,920 Speaker 5: there's about eighteen companies that produce anywhere close to eighty 310 00:16:17,960 --> 00:16:20,520 Speaker 5: percent of market share. You want them on your side 311 00:16:20,560 --> 00:16:22,120 Speaker 5: in this technological warfare? 312 00:16:23,520 --> 00:16:23,880 Speaker 3: All right? 313 00:16:23,920 --> 00:16:26,920 Speaker 2: The former Ambassador to Japan, Rama Manuel, joining us here 314 00:16:26,920 --> 00:16:29,000 Speaker 2: on Balance of Power. Sir, thank you very much for 315 00:16:29,120 --> 00:16:29,720 Speaker 2: your time. 316 00:16:32,800 --> 00:16:36,280 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 317 00:16:36,360 --> 00:16:39,800 Speaker 1: us live weekdays at noon and five pm Eastern on Apple, 318 00:16:39,840 --> 00:16:43,200 Speaker 1: Cocklay and Android Auto with the Bloomberg Business App. Listen 319 00:16:43,280 --> 00:16:46,400 Speaker 1: on demand wherever you get your podcasts, or watch us 320 00:16:46,440 --> 00:16:48,720 Speaker 1: live on YouTube. 321 00:16:49,040 --> 00:16:51,600 Speaker 2: I am d Kaylee Lines in Washington. We're at the 322 00:16:51,600 --> 00:16:54,200 Speaker 2: White House as we speak. A meeting is underway between 323 00:16:54,240 --> 00:16:58,440 Speaker 2: President Trump and Prime Minister Ishidaba of Japan. We are 324 00:16:58,480 --> 00:17:00,960 Speaker 2: expecting a joint press conference from the two was slated 325 00:17:00,960 --> 00:17:04,560 Speaker 2: to begin actually about thirteen minutes ago. It seems we're 326 00:17:04,600 --> 00:17:07,240 Speaker 2: running a little bit behind schedule after some extended remarks 327 00:17:07,280 --> 00:17:09,480 Speaker 2: in the Oval Office from earlier. But when that joey 328 00:17:09,520 --> 00:17:11,480 Speaker 2: press conference begins in the East Room of the White House, 329 00:17:11,520 --> 00:17:13,800 Speaker 2: we will of course bring it to you, and I'm 330 00:17:13,800 --> 00:17:15,479 Speaker 2: sure the President and his team are eager to get 331 00:17:15,520 --> 00:17:17,680 Speaker 2: that underway. Is he has a pretty jam packed schedule 332 00:17:18,160 --> 00:17:20,000 Speaker 2: for the rest of the day. Expected to sign some 333 00:17:20,119 --> 00:17:23,840 Speaker 2: executive orders later this afternoon. Before heading to joint Bass 334 00:17:23,880 --> 00:17:26,280 Speaker 2: Andrews and then getting on Air Force One to go 335 00:17:26,320 --> 00:17:29,480 Speaker 2: down to mar A Lago where a dinner will take 336 00:17:29,480 --> 00:17:33,760 Speaker 2: place this evening with the President and with Senate Republicans 337 00:17:33,800 --> 00:17:36,320 Speaker 2: and their spouses. The question is going to be is 338 00:17:36,440 --> 00:17:39,760 Speaker 2: an opportunity for those Senate Republicans to convince the President 339 00:17:39,840 --> 00:17:43,879 Speaker 2: to go with their plan on budget reconciliation. Remember, the 340 00:17:43,920 --> 00:17:47,879 Speaker 2: Senate idea is to split things up, do two different bills, 341 00:17:47,920 --> 00:17:52,200 Speaker 2: reconciliation bills, one focusing on border and energy and defense first. 342 00:17:52,200 --> 00:17:55,080 Speaker 2: We actually just got that resolution outline from the Senate 343 00:17:55,080 --> 00:17:58,880 Speaker 2: Budget Chair Lindsay Graham, then deal with tax policy later. 344 00:17:59,600 --> 00:18:01,560 Speaker 2: This run counter to what the House wants to do, 345 00:18:02,040 --> 00:18:04,719 Speaker 2: one big, beautiful bill, roll it all into one, and 346 00:18:04,760 --> 00:18:07,040 Speaker 2: that is what they spent hours working on at the 347 00:18:07,080 --> 00:18:09,320 Speaker 2: White House yesterday. The House Speaker Mike Johnson, as of 348 00:18:09,440 --> 00:18:12,359 Speaker 2: yesterday evening, was suggesting they could have a framework and 349 00:18:12,440 --> 00:18:15,760 Speaker 2: details out by today, but today he's saying it's going 350 00:18:15,800 --> 00:18:17,240 Speaker 2: to have to wait until the end of the weekend 351 00:18:17,880 --> 00:18:21,360 Speaker 2: or perhaps Monday. So things are squashy here, to say 352 00:18:21,400 --> 00:18:22,880 Speaker 2: the least, and we want to get into it now 353 00:18:23,160 --> 00:18:25,879 Speaker 2: with our political panel today Jeanie Shanzeno is with me, 354 00:18:26,000 --> 00:18:28,600 Speaker 2: democratic analyst and senior Democracy Fellow at the Center for 355 00:18:28,640 --> 00:18:32,560 Speaker 2: the Study of the Presidency in Congress, alongside Republican strategist Leinster. 356 00:18:33,280 --> 00:18:36,080 Speaker 2: Lester Munson has been a long week, y'all. He's head 357 00:18:36,080 --> 00:18:39,399 Speaker 2: of the international practice at BGR Group. So, Lester, when 358 00:18:39,440 --> 00:18:41,120 Speaker 2: we consider here, and you spent a lot of time, 359 00:18:41,160 --> 00:18:43,760 Speaker 2: of course, in the Senate, this notion that the Senate 360 00:18:43,800 --> 00:18:46,159 Speaker 2: is essentially trying to front run the House. They're losing 361 00:18:46,200 --> 00:18:49,080 Speaker 2: patients here and want to move first. Is this likely 362 00:18:49,119 --> 00:18:51,000 Speaker 2: to happen or does President Trump put his foot down 363 00:18:51,040 --> 00:18:51,640 Speaker 2: at dinner tonight? 364 00:18:53,320 --> 00:18:53,480 Speaker 5: Uh? 365 00:18:53,600 --> 00:18:57,040 Speaker 7: Great, wonderful mystery to have, Kaylee. I don't pretend to 366 00:18:57,080 --> 00:18:58,680 Speaker 7: know the answer. How this is going to shake out. 367 00:18:59,119 --> 00:19:01,560 Speaker 7: The Senate's been sticking to its plan. The House has 368 00:19:01,560 --> 00:19:03,800 Speaker 7: been sticking to its plan. It's a great lesson in 369 00:19:03,840 --> 00:19:07,800 Speaker 7: civics and the differences between the two houses. The Senate 370 00:19:08,119 --> 00:19:10,879 Speaker 7: is a little more able to resist the enthusiasms of 371 00:19:10,920 --> 00:19:15,480 Speaker 7: the President and the people, and so their definite views 372 00:19:15,800 --> 00:19:19,440 Speaker 7: on these issues are a little more kind of solid, 373 00:19:19,520 --> 00:19:22,520 Speaker 7: whereas in the House you can see the Speaker and 374 00:19:22,560 --> 00:19:24,080 Speaker 7: the President want to kind of build up a lot 375 00:19:24,119 --> 00:19:28,280 Speaker 7: of momentum behind all of these wonderful Trump policies, put 376 00:19:28,280 --> 00:19:30,439 Speaker 7: them in one bill, and then Yahoo, get all the 377 00:19:30,480 --> 00:19:32,960 Speaker 7: Republicans to vote for it. Because the House is a 378 00:19:32,960 --> 00:19:35,359 Speaker 7: little more subject to kind of the emotions of the time. 379 00:19:35,440 --> 00:19:37,600 Speaker 7: So it's I don't know how it plays out, but 380 00:19:37,640 --> 00:19:38,880 Speaker 7: it's a great lesson in civics. 381 00:19:40,200 --> 00:19:43,440 Speaker 2: Yeahoo, Genie, Well, when we consider the House specifically, of course, 382 00:19:43,480 --> 00:19:46,679 Speaker 2: their whole idea of one big bill is essentially because 383 00:19:46,680 --> 00:19:48,520 Speaker 2: they need sweeteners for people who are going to be 384 00:19:48,600 --> 00:19:51,040 Speaker 2: unhappy with parts of it, and that's why they want 385 00:19:51,040 --> 00:19:54,480 Speaker 2: everything included. The hardline conservatives who may not be happy 386 00:19:54,520 --> 00:19:56,720 Speaker 2: with the level of spending cuts for example, or things 387 00:19:56,760 --> 00:19:58,800 Speaker 2: like the salt cap being raised, at least getting what 388 00:19:58,840 --> 00:20:01,520 Speaker 2: they want when it comes to the b or and energy. 389 00:20:01,600 --> 00:20:04,439 Speaker 2: If you split these things and you do the border 390 00:20:04,440 --> 00:20:07,000 Speaker 2: and energy incentives first and then the tax policy, the 391 00:20:07,040 --> 00:20:09,280 Speaker 2: salt people don't get what they want, it becomes less 392 00:20:09,359 --> 00:20:12,400 Speaker 2: likely that both both of those reconciliation packages can get 393 00:20:12,400 --> 00:20:12,880 Speaker 2: through the House. 394 00:20:12,960 --> 00:20:17,560 Speaker 8: Right, That's absolutely right. You know, I'm getting a sense 395 00:20:17,600 --> 00:20:20,960 Speaker 8: that the Senators don't feel for Mike Johnson the way 396 00:20:21,080 --> 00:20:23,960 Speaker 8: I feel for him, thinking about how he's gonna thread 397 00:20:24,040 --> 00:20:28,400 Speaker 8: this needle. You're absolutely right. They want the big bill 398 00:20:28,440 --> 00:20:30,919 Speaker 8: because they want to put sweeteners in there, because he 399 00:20:31,040 --> 00:20:33,879 Speaker 8: has a one vote two votes depending on when these 400 00:20:33,880 --> 00:20:38,320 Speaker 8: specials occur majority. And this is the challenging part of it. 401 00:20:38,440 --> 00:20:41,240 Speaker 8: Usually it's the Senate because they have to meet a filibuster. 402 00:20:41,680 --> 00:20:44,320 Speaker 8: Not in this case, it's the House that has the 403 00:20:44,400 --> 00:20:47,359 Speaker 8: uphill battle. And so you'd think the Senators would have 404 00:20:47,440 --> 00:20:50,159 Speaker 8: mercy on Johnson, let him try to push through his 405 00:20:50,280 --> 00:20:53,359 Speaker 8: one big, beautiful bill, but they're not. And I was 406 00:20:53,400 --> 00:20:57,200 Speaker 8: fascinated to hear Jody Errington say, we still want essentially 407 00:20:57,240 --> 00:21:00,160 Speaker 8: the one big bill, but if Donald Trump wants to 408 00:21:00,160 --> 00:21:02,879 Speaker 8: go with the Senate's plan, we'll go with that. So 409 00:21:03,280 --> 00:21:06,439 Speaker 8: maybe there's an opening there, and maybe it's going to 410 00:21:06,520 --> 00:21:10,480 Speaker 8: depend really on where Donald Trump lands on this. And 411 00:21:10,560 --> 00:21:13,919 Speaker 8: of course he seems not to care so much the process, 412 00:21:14,280 --> 00:21:17,199 Speaker 8: but he wants what he wants in these bills, and 413 00:21:17,240 --> 00:21:20,280 Speaker 8: that includes, you know, no tax on tips, no tax 414 00:21:20,320 --> 00:21:23,119 Speaker 8: on social Security, all of those things that he wants 415 00:21:23,160 --> 00:21:25,680 Speaker 8: to include in there. He seems to say that if 416 00:21:25,680 --> 00:21:27,720 Speaker 8: he can get all those, he doesn't quite care how 417 00:21:27,760 --> 00:21:30,520 Speaker 8: this moves forward. So it may be up to Donald 418 00:21:30,560 --> 00:21:31,360 Speaker 8: Trump in the end. 419 00:21:32,920 --> 00:21:35,679 Speaker 2: Well, and add to that list that Gene began lester 420 00:21:36,200 --> 00:21:38,680 Speaker 2: obviously the salt cap which we mentioned, but apparently also 421 00:21:38,800 --> 00:21:41,720 Speaker 2: ending the carried interest tax break, ending tax breaks for 422 00:21:41,760 --> 00:21:45,960 Speaker 2: billionaire owners of sports teams. Interesting to introduce that idea 423 00:21:46,000 --> 00:21:48,280 Speaker 2: as he gets ready to have travel to New Orleans 424 00:21:48,280 --> 00:21:50,800 Speaker 2: for the super Bowl this weekend. But when we consider 425 00:21:50,880 --> 00:21:53,320 Speaker 2: all of these disparate ideas, is it likely that he 426 00:21:53,400 --> 00:21:55,800 Speaker 2: actually is going to get all of it, whether it's 427 00:21:55,840 --> 00:21:57,520 Speaker 2: one piece of legislation or two. 428 00:21:59,119 --> 00:22:05,119 Speaker 7: No, but these are all great negotiating tools and items. 429 00:22:05,440 --> 00:22:07,280 Speaker 7: I think what the President really cares about is this 430 00:22:07,359 --> 00:22:10,320 Speaker 7: no taxes on tips idea, which has proven to be 431 00:22:10,600 --> 00:22:16,480 Speaker 7: enormously popular. I recall President Trump's opponent in the last 432 00:22:16,480 --> 00:22:19,520 Speaker 7: campaign immediately adopting the same issue as a great idea. 433 00:22:19,600 --> 00:22:22,720 Speaker 7: So I think this a lot of what we're seeing 434 00:22:22,800 --> 00:22:26,800 Speaker 7: is still kind of shaping the negotiation to come. We've 435 00:22:26,800 --> 00:22:29,040 Speaker 7: got a long way to go before anything gets passed. 436 00:22:29,080 --> 00:22:33,000 Speaker 2: I think, well, we don't have that much longer to 437 00:22:33,080 --> 00:22:36,680 Speaker 2: go though, before some government funding bills or continuing resolution 438 00:22:36,840 --> 00:22:38,760 Speaker 2: needs to get passed, because yes, we still have to 439 00:22:38,800 --> 00:22:41,199 Speaker 2: deal with that. By mid March, and we got some 440 00:22:41,240 --> 00:22:44,119 Speaker 2: conflicting messaging today Genie from the Speaker of the House 441 00:22:44,400 --> 00:22:47,960 Speaker 2: and others, with Mike Johnson warning talks over the immediate 442 00:22:47,960 --> 00:22:51,880 Speaker 2: spending had stalled on government funding. The House Minority Leader 443 00:22:51,920 --> 00:22:55,920 Speaker 2: Haking Jeffries saying that Johnson's comment was just projection since 444 00:22:56,000 --> 00:22:58,920 Speaker 2: Republicans hold all the power. But does this portend over 445 00:22:58,920 --> 00:23:02,200 Speaker 2: the coming weeks Democrats, it's not being willing to play 446 00:23:02,240 --> 00:23:04,720 Speaker 2: ball on these must pass measures as they have been 447 00:23:04,720 --> 00:23:05,800 Speaker 2: for the last several years. 448 00:23:07,040 --> 00:23:10,359 Speaker 8: I think that's exactly what we're hearing. You listen to 449 00:23:10,560 --> 00:23:15,280 Speaker 8: Democrats on the ground, they are incredibly frustrated given the 450 00:23:15,320 --> 00:23:18,119 Speaker 8: first two to three weeks of Donald Trump's administration and 451 00:23:18,200 --> 00:23:21,679 Speaker 8: the way he is plowed ahead with They feel little 452 00:23:21,720 --> 00:23:24,760 Speaker 8: respect for the separation of powers and the right of 453 00:23:24,800 --> 00:23:28,120 Speaker 8: Congress to control the purse and many other things. They 454 00:23:28,200 --> 00:23:32,280 Speaker 8: feel that it is the height of insanity for their 455 00:23:32,320 --> 00:23:37,360 Speaker 8: elected officials in Congress to agree to anything with Republicans 456 00:23:37,359 --> 00:23:40,119 Speaker 8: at this point. So there is a big debate on 457 00:23:40,160 --> 00:23:44,280 Speaker 8: the Democratic side. Do we go ahead sort of agreeing, say, 458 00:23:44,320 --> 00:23:47,119 Speaker 8: with his nominations, and we saw yesterday with vote the 459 00:23:47,160 --> 00:23:51,880 Speaker 8: answer is no. And so I think it's it's going 460 00:23:51,920 --> 00:23:54,560 Speaker 8: to become excuse me, Kaylee, It's right, it's going to 461 00:23:54,600 --> 00:23:58,720 Speaker 8: become increasingly difficult for them in the face of their 462 00:23:58,720 --> 00:24:02,000 Speaker 8: own base if you will, to negotiate with Republicans on 463 00:24:02,080 --> 00:24:06,000 Speaker 8: many of these things unless they get very big assurances 464 00:24:06,119 --> 00:24:09,440 Speaker 8: on things like say USAID and so many other things 465 00:24:09,480 --> 00:24:12,000 Speaker 8: that are critical to Trump. So you know, the reality 466 00:24:12,080 --> 00:24:15,320 Speaker 8: is Republicans own it, and Democrats are saying, you want 467 00:24:15,359 --> 00:24:17,600 Speaker 8: to plow ahead like this, you have to bring your 468 00:24:17,600 --> 00:24:20,040 Speaker 8: own people along, and of course on things like the 469 00:24:20,080 --> 00:24:23,640 Speaker 8: debt ceiling, that is a non starter for conservative Republicans. 470 00:24:23,640 --> 00:24:26,359 Speaker 8: So it is a going to be a real battle 471 00:24:26,359 --> 00:24:27,119 Speaker 8: in the Congress. 472 00:24:28,640 --> 00:24:30,760 Speaker 2: So with all that said, Lester, what odds do you 473 00:24:30,760 --> 00:24:32,480 Speaker 2: put on a mid March government shutdown. 474 00:24:33,840 --> 00:24:37,919 Speaker 7: I still think it's low. I think I know it 475 00:24:37,920 --> 00:24:42,440 Speaker 7: seems like it's imminent. I think it's still four or 476 00:24:42,480 --> 00:24:45,560 Speaker 7: five weeks away, plenty of time for Republicans to sort 477 00:24:45,600 --> 00:24:47,520 Speaker 7: out these trivial differences. 478 00:24:49,480 --> 00:24:52,760 Speaker 2: Trivial, Okay, Well, and your point is well taken. Four 479 00:24:52,760 --> 00:24:55,240 Speaker 2: to five weeks can be a long time, as it's 480 00:24:55,280 --> 00:24:57,440 Speaker 2: been less than three weeks since Donald Trump took office, 481 00:24:57,440 --> 00:24:59,640 Speaker 2: and I think we all know how long these last 482 00:24:59,720 --> 00:25:02,359 Speaker 2: several weeks have felt this week included, just given the 483 00:25:02,400 --> 00:25:05,080 Speaker 2: pace of news that we've been receiving. But Lester, are 484 00:25:05,080 --> 00:25:06,800 Speaker 2: some of the things that Genie was alluding to here 485 00:25:06,800 --> 00:25:10,680 Speaker 2: that Democrats may be looking for, For example, assurances on Usaid, 486 00:25:10,840 --> 00:25:13,439 Speaker 2: which the President was talking about today as something that 487 00:25:13,480 --> 00:25:16,800 Speaker 2: needs to be closed down, the ongoing efforts of Elon 488 00:25:16,880 --> 00:25:20,760 Speaker 2: Musk in Doge, which we've obviously discussed at length at 489 00:25:20,760 --> 00:25:23,399 Speaker 2: this point. Are any of those things likely to change 490 00:25:23,400 --> 00:25:26,119 Speaker 2: in the immunate future given the political reality of Republican 491 00:25:26,160 --> 00:25:27,680 Speaker 2: control of Washington. 492 00:25:28,400 --> 00:25:30,399 Speaker 7: Well, my sense of the of the aid issue in 493 00:25:30,400 --> 00:25:35,720 Speaker 7: particular is that the kind of the destruction part of this, 494 00:25:36,000 --> 00:25:39,840 Speaker 7: of this this effort is coming to a close, and 495 00:25:39,880 --> 00:25:43,399 Speaker 7: the rebuilding part is kind of imminent. So I think, 496 00:25:43,840 --> 00:25:46,240 Speaker 7: you know, the administration still has a certain amount of 497 00:25:46,240 --> 00:25:49,040 Speaker 7: money from Congress that it's obliged by law to spend 498 00:25:49,240 --> 00:25:53,000 Speaker 7: on foreign assistance that is going to happen in some form, 499 00:25:53,040 --> 00:25:55,080 Speaker 7: and it looks like they're starting to put to put 500 00:25:55,119 --> 00:25:57,600 Speaker 7: together the pieces to actually spend that money. So I 501 00:25:57,600 --> 00:26:01,639 Speaker 7: think we'll know a lot more about this Usaid issue 502 00:26:01,640 --> 00:26:03,560 Speaker 7: in a week or two and what and how the 503 00:26:03,600 --> 00:26:07,160 Speaker 7: Trump administration actually plans to be positive on these issues 504 00:26:07,200 --> 00:26:09,600 Speaker 7: in some way instead of just destroying everything. So I think, 505 00:26:09,720 --> 00:26:11,800 Speaker 7: I think this thing's about to take a turn in 506 00:26:11,840 --> 00:26:14,879 Speaker 7: a different way, and that and what that looks like 507 00:26:15,080 --> 00:26:17,760 Speaker 7: and what the priorities are and how many people actually 508 00:26:17,840 --> 00:26:19,560 Speaker 7: end up being fired, and that kind of thing is 509 00:26:19,840 --> 00:26:21,800 Speaker 7: to is going to be the thing that's discussed, not 510 00:26:21,840 --> 00:26:23,040 Speaker 7: so much what's happening today. 511 00:26:24,560 --> 00:26:27,040 Speaker 2: Genie. Do you see this as a phoenix will rise 512 00:26:27,080 --> 00:26:29,000 Speaker 2: from the ashes kind of scenario. 513 00:26:30,240 --> 00:26:33,840 Speaker 8: No, you know, I really don't. And I'm listening to 514 00:26:33,920 --> 00:26:36,240 Speaker 8: Lester and he's saying, they have time, they have a 515 00:26:36,240 --> 00:26:39,560 Speaker 8: little bit of time to resolve their differences. But let's 516 00:26:39,640 --> 00:26:43,320 Speaker 8: just think back to December. There was no resolution of 517 00:26:43,359 --> 00:26:48,000 Speaker 8: those differences. That's why they pushed this until March. And 518 00:26:48,080 --> 00:26:51,160 Speaker 8: so I'm not quite sure what is changed. I mean, 519 00:26:51,520 --> 00:26:56,240 Speaker 8: you still have Republicans in the House who say, like 520 00:26:56,359 --> 00:26:59,720 Speaker 8: Chip Roy, there is nothing that is going to change 521 00:26:59,720 --> 00:27:03,119 Speaker 8: my mind. I'm lifting the debt ceiling. You have to 522 00:27:03,200 --> 00:27:06,520 Speaker 8: have pay for us. You have a president who wants 523 00:27:06,560 --> 00:27:10,480 Speaker 8: tremendous cuts. You know, the list just goes on and on. So, 524 00:27:10,880 --> 00:27:14,119 Speaker 8: you know, sure, if they can resolve these differences, with 525 00:27:14,520 --> 00:27:17,600 Speaker 8: you know, sticks or carrots. In some way, they may 526 00:27:17,640 --> 00:27:20,760 Speaker 8: get to a resolution, but I'm hard pressed to imagine 527 00:27:20,800 --> 00:27:23,360 Speaker 8: how they do it. You know, the reality has been 528 00:27:23,520 --> 00:27:27,240 Speaker 8: it is Democrats who have gotten Republicans across the line 529 00:27:27,600 --> 00:27:30,719 Speaker 8: in the last few years and kept the government open. 530 00:27:31,359 --> 00:27:34,000 Speaker 8: If Republicans have to do it on their own, which 531 00:27:34,040 --> 00:27:37,200 Speaker 8: is seeming likely at this point, how do they thread 532 00:27:37,280 --> 00:27:40,159 Speaker 8: that needle? When do the chip Roys of the world 533 00:27:40,200 --> 00:27:42,240 Speaker 8: come along? And what do they get in return for that? 534 00:27:44,200 --> 00:27:47,040 Speaker 2: All right, Geenie Shanzeno and Lester Munson are a political 535 00:27:47,080 --> 00:27:49,600 Speaker 2: panel on this Friday. Thank you both so much for 536 00:27:49,680 --> 00:27:51,199 Speaker 2: joining me. And I just want to point out, as 537 00:27:51,240 --> 00:27:54,879 Speaker 2: Genie brings us back to December. December fourteenth was actually 538 00:27:54,920 --> 00:27:58,159 Speaker 2: the Army Navy football game in which President Trump or 539 00:27:58,240 --> 00:28:02,040 Speaker 2: he was then president elect, and Republican leadership in Congress 540 00:28:02,040 --> 00:28:04,240 Speaker 2: all went to the Army Navy football game. They were 541 00:28:04,280 --> 00:28:07,840 Speaker 2: supposed to hash out reconciliation during that game. Now Here 542 00:28:07,880 --> 00:28:09,399 Speaker 2: we are on the eve of the Super Bowl, with 543 00:28:09,440 --> 00:28:11,760 Speaker 2: both the Speaker of the House and President Trump's slated 544 00:28:11,760 --> 00:28:15,679 Speaker 2: to attend. Still don't know what that reconciliation path forward 545 00:28:15,720 --> 00:28:17,679 Speaker 2: will look like, but maybe they'll figure it out in 546 00:28:17,720 --> 00:28:19,840 Speaker 2: New Orleans as they watch the Chiefs and Eagles. 547 00:28:25,920 --> 00:28:29,120 Speaker 8: Thanks for listening to the Balance of Power podcast. Make 548 00:28:29,160 --> 00:28:32,119 Speaker 8: sure to subscribe if you haven't already an Apple, Spotify, 549 00:28:32,200 --> 00:28:34,760 Speaker 8: or wherever you get your podcasts, and you can find 550 00:28:34,840 --> 00:28:38,080 Speaker 8: us live every weekday from Washington, DC at noontime Eastern 551 00:28:38,400 --> 00:28:39,800 Speaker 8: at Bloomberg dot com.