WEBVTT - USPS' Seaver Sees Cases for Autonomous and Drone Delivery 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm Pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:32.120 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. We 0:00:32.159 --> 0:00:35.720 are broadcasting live from Baltimore. We are at the National 0:00:35.840 --> 0:00:38.280 Postal Forum, which is a partner of the United States 0:00:38.479 --> 0:00:41.479 Postal Service. And I was looking at doing some research 0:00:41.520 --> 0:00:44.200 about the United States Postal Service, and I was surprised 0:00:44.200 --> 0:00:47.519 to find that if this were a private company last year, 0:00:47.560 --> 0:00:49.920 it would have been the thirty ninth biggest company in 0:00:49.920 --> 0:00:55.640 the Fortune five hundred corporations, which is impressive. And with 0:00:55.760 --> 0:00:57.440 us to give us a little bit of more perspective 0:00:57.760 --> 0:01:01.640 on both the company and the broader market for shipping 0:01:01.880 --> 0:01:05.600 and frankly, making mail relevant in an era where people 0:01:05.600 --> 0:01:08.200 are hooked to their phones, is Kristin Siever, chief Information 0:01:08.240 --> 0:01:12.080 Officer and executive vice president of the United States Postal Service, 0:01:12.080 --> 0:01:15.080 and she joins us uh here now, so you know, Kristin, 0:01:15.640 --> 0:01:17.440 one thing that we've been hearing a lot about is 0:01:17.480 --> 0:01:20.400 the importance to sort of transform, uh, the way people 0:01:20.400 --> 0:01:22.520 think about mail, the way that they track it, the 0:01:22.560 --> 0:01:25.080 way that they observe it and experience it. What do 0:01:25.120 --> 0:01:27.280 you think is going to be the biggest challenge in 0:01:27.319 --> 0:01:30.520 the year ahead as you sort of look out, try 0:01:30.560 --> 0:01:33.560 to make it modern but also catered to nostalgia and 0:01:33.959 --> 0:01:39.600 you know, also uh the amazonification of our world absolutely well, 0:01:39.640 --> 0:01:41.600 you know, I think one of our greatest challenges is 0:01:41.640 --> 0:01:43.479 going to be to keep pace. We've done a lot 0:01:43.480 --> 0:01:45.680 of work, as you'll see at the National Postal Forum, 0:01:46.120 --> 0:01:49.280 UH in building technologies and platforms to track mail, to 0:01:49.400 --> 0:01:52.640 provide value to mail UM. But our challenges to keep 0:01:52.680 --> 0:01:55.680 that mail relevant, to work with our customers to help 0:01:55.680 --> 0:02:00.000 them grow their businesses, and to work as every industry 0:02:00.040 --> 0:02:02.040 he has to do right now at an incredible pace 0:02:02.240 --> 0:02:06.040 to keep up and leverage these technologies to the best extent. 0:02:06.320 --> 0:02:09.240 How difficult is it? I was just looking at the 0:02:09.320 --> 0:02:14.560 US Post Services UH income statement recent income statement, UH, 0:02:14.560 --> 0:02:16.280 and there was a four hune seventy four million dollar 0:02:16.320 --> 0:02:18.760 year of your decline in the second quarter, and it 0:02:18.880 --> 0:02:22.880 was in large part due to having to pre fund 0:02:23.000 --> 0:02:26.280 seventy five years of retiree health benefits and how much 0:02:26.280 --> 0:02:29.440 of that is a pressure on being able to adapt 0:02:29.520 --> 0:02:33.320 to the changing environment. Yeah, the Postal Service faces significant 0:02:33.360 --> 0:02:36.600 pressure when it comes to our finances and and how 0:02:36.600 --> 0:02:38.960 we're run. And we really have three things that we're 0:02:38.960 --> 0:02:41.720 trying to focus on. The first is for the Postal 0:02:41.760 --> 0:02:45.240 Service to adapt quickly and to manage its operation. Uh, 0:02:45.280 --> 0:02:48.320 to react to declining volumes, but also to compete where 0:02:48.400 --> 0:02:51.839 volumes are increasing. Right, so that's quite a challenge. Are 0:02:51.880 --> 0:02:55.680 the two challenges are legislative and regulatory and uh, we 0:02:55.760 --> 0:02:58.000 have a positive bill that came out of committee for 0:02:58.120 --> 0:03:01.160 postal reform that's really important to us. What's the what's 0:03:01.160 --> 0:03:03.560 the substance of it. The substance of the Postal Reform 0:03:03.600 --> 0:03:07.440 bill is basically allows us to address our retiree health 0:03:07.440 --> 0:03:11.280 benefit There you go issue with integrating medicare, allows us 0:03:11.320 --> 0:03:14.959 to use postal service demographics instead of federal government demographics 0:03:14.960 --> 0:03:18.040 everythink about the postal Service. We have workers all over 0:03:18.080 --> 0:03:21.840 the United States in um varying income levels. It allows 0:03:21.919 --> 0:03:26.399 us to take back some of the exigent price increase, 0:03:26.600 --> 0:03:29.000 and it also gives us a little bit of flexibility 0:03:29.000 --> 0:03:31.799 for some new products and services. That we're excited about. Well, so, 0:03:31.840 --> 0:03:34.560 since we all talk about Amazon so much and Amazon 0:03:34.680 --> 0:03:37.240 is just decimating the entire retail sector. As what people 0:03:37.280 --> 0:03:41.600 have been saying, Um, do you find that the US 0:03:41.640 --> 0:03:44.480 Postal Service is able to keep up from a technological 0:03:44.520 --> 0:03:47.200 point of view and being able to deliver all of 0:03:47.240 --> 0:03:48.920 the boxes? And can you give us a sense of 0:03:49.000 --> 0:03:52.840 how much the just sheer volume of packages has increased 0:03:53.000 --> 0:03:56.400 over the past few years. Yeah, we've had double digit 0:03:56.440 --> 0:03:59.400 increase in package volume year over year for the last 0:03:59.400 --> 0:04:01.040 three years. But the thing that's been great about the 0:04:01.040 --> 0:04:04.120 postal services that we have the delivery muscle deflects that 0:04:04.200 --> 0:04:06.120 we go to every house, we go to every business, 0:04:06.440 --> 0:04:09.080 and it's really been an opportunity for us to showcase 0:04:09.280 --> 0:04:12.080 our strength what we've been doing for over two forty years. 0:04:12.120 --> 0:04:13.960 But aren't there a lot more competitors because people are 0:04:13.960 --> 0:04:16.520 looking and saying, wow, this is the future, right, this 0:04:16.600 --> 0:04:19.000 is the reality is that you're gonna be able to 0:04:19.120 --> 0:04:21.000 order something, pick something up, and then it's going to 0:04:21.080 --> 0:04:22.719 come to your home. And so they're going to be 0:04:22.760 --> 0:04:29.239 some probably shippers and delivery companies they're gonna try to compete. Absolutely. Um, 0:04:29.400 --> 0:04:31.480 So one of the advantages we have is we've already 0:04:31.520 --> 0:04:34.480 built out our network UH, and we leverage that network. 0:04:34.520 --> 0:04:37.600 The other thing is, even with competition, which is fierce, 0:04:37.640 --> 0:04:40.560 but we still deliver more e commerce packages than any 0:04:40.600 --> 0:04:43.120 of the provider in the country. UH. And we will 0:04:43.160 --> 0:04:46.360 continue to leverage our brand, our trusted presence, and everybody's 0:04:46.520 --> 0:04:50.120 business and community UH to compete and to win for 0:04:50.160 --> 0:04:53.400 that package delivery. We were talking earlier about drones. Are 0:04:53.400 --> 0:04:55.560 those on your radar? They have to as this chief 0:04:55.560 --> 0:04:58.800 information officer, absolutely and I get that question a lot. Okay, So, 0:04:58.920 --> 0:05:01.680 so how do you for see drones playing into the 0:05:01.760 --> 0:05:05.360 United States Postal Services business plan in the near future. Well, 0:05:05.400 --> 0:05:07.599 I think for us, what's important is we have many 0:05:07.720 --> 0:05:10.520 use cases for delivery. Right. We deliver in urban areas, 0:05:10.520 --> 0:05:13.560 we deliver in rural areas. We deliver in the Grand Canyon. 0:05:13.960 --> 0:05:17.800 So maybe there's maybe the dropdown packages into the into 0:05:17.800 --> 0:05:20.320 the Colorado River go down and we've had delivery on 0:05:20.400 --> 0:05:23.279 burrows into the Grand Canyons. That might be a possible 0:05:23.360 --> 0:05:26.000 use case of drone delivery for the Postal Service. Right. 0:05:26.000 --> 0:05:28.800 There are some places that are hard to get to UH, 0:05:28.839 --> 0:05:33.000 and we definitely foresee um uses like that but we 0:05:33.000 --> 0:05:35.680 can also use it to survey our own infrastructure. There's 0:05:35.680 --> 0:05:37.840 many different use cases. So what we're doing is staying 0:05:37.839 --> 0:05:40.279 in touch with the technology, staying in touch with the 0:05:40.279 --> 0:05:44.240 regulations UH, and really scrubbing our use cases to see 0:05:44.279 --> 0:05:46.400 where our best UH fit's gonna be. You know, we've 0:05:46.440 --> 0:05:51.039 talked about how German postals, the German Postal Service in 0:05:51.080 --> 0:05:55.880 particular has looked at autonomous driving vehicles to help reduce 0:05:56.000 --> 0:06:00.240 costs and increase the delivery predictability. Has that been on 0:06:00.279 --> 0:06:03.560 your radar at all? Absolutely? We we have some efforts 0:06:03.640 --> 0:06:07.880 with autonomous working with academic institutions UH as far as 0:06:07.920 --> 0:06:09.760 what would be the use case, how would we use 0:06:09.800 --> 0:06:13.520 it in the postal service UM? For us, you know, 0:06:13.560 --> 0:06:15.440 one of the things is we have such a significantly 0:06:15.520 --> 0:06:20.960 large fleet, so over two hundred and seventy thousand vehicles, 0:06:20.960 --> 0:06:24.400 so that have to be driven and maintained throughout throughout 0:06:24.440 --> 0:06:26.360 the country to deliver the mail every day, and now 0:06:26.360 --> 0:06:29.200 we deliver seven days a week. So we definitely foresee 0:06:29.200 --> 0:06:32.000 that we'll have use cases for autonomous vehicles, whether it's 0:06:32.000 --> 0:06:35.520 in actual delivery or we're also a huge logistics provider. 0:06:35.560 --> 0:06:37.719 We have to get the mail from across the country. 0:06:37.800 --> 0:06:40.240 So what how is much? How much has the ratio 0:06:40.400 --> 0:06:44.800 between UH letters and packages changed? I imagine that once 0:06:44.839 --> 0:06:48.000 upon a time there are more letters and fewer packages, 0:06:48.160 --> 0:06:51.560 and now it has reversed. Right, It hasn't fully reversed. 0:06:51.920 --> 0:06:55.120 Oh No, letters are still the predominant product that we have. 0:06:55.400 --> 0:07:00.360 But basically as letters are declining, packages are increa using. 0:07:00.720 --> 0:07:03.479 So we haven't crossed that great divide of where total 0:07:03.560 --> 0:07:06.520 letter volume is less than packages. But you know, the 0:07:06.560 --> 0:07:09.960 decline and letter volume is concerning UM and that's why 0:07:10.000 --> 0:07:12.200 we have to compete for the package business and and 0:07:12.240 --> 0:07:14.920 continue to deliver for the American public. What's going to 0:07:14.960 --> 0:07:17.920 be the number one technological advancement in the next year 0:07:18.040 --> 0:07:22.760 for USPS. I think the number one advancement that will 0:07:22.800 --> 0:07:26.560 be able to leverage is our advanced analytics platform UH 0:07:26.600 --> 0:07:29.960 to continue to provide value to the mail but also 0:07:30.040 --> 0:07:32.600 to find ways to enhance our own business UH and 0:07:32.600 --> 0:07:35.360 to find those opportunities that might allow us to reduce costs, 0:07:35.720 --> 0:07:39.120 might allow us to produce new products. We put a 0:07:39.160 --> 0:07:41.559 lot of investment into that over the last three years, 0:07:41.560 --> 0:07:43.720 and now that's finally coming to fruition. Kind of what 0:07:43.760 --> 0:07:46.840 we talked about before about being able to UH with 0:07:46.920 --> 0:07:49.960 preeminent amera, talking about how people can look and scan 0:07:50.040 --> 0:07:53.280 and see what's in their mailboxes without actually being there 0:07:53.280 --> 0:07:59.280 and possibly even use some of the UH advertisement flaws delivery. 0:07:59.320 --> 0:08:01.640 Today this year at the National Postal Forum, we have 0:08:01.720 --> 0:08:05.560 two major platforms that were leveraging and formed delivery and 0:08:05.600 --> 0:08:08.240 informed visibility, and they really go hand in hand. So 0:08:08.280 --> 0:08:11.200 Informed Delivery is exciting because every consumer has access to 0:08:11.280 --> 0:08:14.680 it and can sign up and and you know tomorrow 0:08:15.240 --> 0:08:17.560 be looking at those images of their mail. Thank you 0:08:17.600 --> 0:08:19.760 so much for joining us, Kristin sever It was really 0:08:19.800 --> 0:08:22.040 a pleasure to speak with you. Christin Siever is chief 0:08:22.080 --> 0:08:25.200 Information Officer and executive a vice president of the United 0:08:25.240 --> 0:08:29.280 States Postal Service here in Baltimore, Maryland, where we are 0:08:29.320 --> 0:08:44.840 broadcasting live from the National Postal for Forum right now, however, 0:08:44.880 --> 0:08:46.880 I want to bring in Jonathan Nicholson, senior reporter at 0:08:46.880 --> 0:08:49.720 Bloomberg b n A, to give us some perspective on 0:08:50.000 --> 0:08:54.240 what we've gleaned so far from President Trump's hoped budget 0:08:54.240 --> 0:08:56.360 anyway UH, and how likely it is that he is 0:08:56.400 --> 0:08:59.240 going to get through some of what he wants. Jonathan, 0:08:59.240 --> 0:09:01.800 Thank you so much for joining us Jonathan, Uh, what 0:09:01.960 --> 0:09:05.040 have we gleaned so far about what President Trump would 0:09:05.080 --> 0:09:08.160 like to see in the budget. Well, he goes through 0:09:08.200 --> 0:09:11.239 a lot of One could argue sort of fiscal gymnastics 0:09:11.320 --> 0:09:15.199 to try and um sort of square the circle of 0:09:15.200 --> 0:09:20.199 of doing tax reform, increasing defense, UM, but also trying 0:09:20.200 --> 0:09:23.679 to get to something close to balance by the end 0:09:23.679 --> 0:09:26.640 of ten years, which has been a long term Republican 0:09:26.960 --> 0:09:29.679 budget goal for a long time. So when doing so, 0:09:29.800 --> 0:09:34.680 basically they rely on some economic growth projections that people 0:09:35.000 --> 0:09:38.439 have some questions about, and they rely on some some 0:09:38.480 --> 0:09:43.160 deep cuts in both the non defensivescretionary and some mandatory 0:09:43.320 --> 0:09:46.599 entitlement spending programs. So I'll just go through some of 0:09:46.640 --> 0:09:48.840 the headlines that I've been looking at. Some of the information. 0:09:48.880 --> 0:09:51.000 People have said that it would hit uh, you know, 0:09:51.080 --> 0:09:53.960 all of the welfare and sort of entitlement programs other 0:09:54.000 --> 0:09:57.480 than Medicaid, for example. It would strip away a lot 0:09:57.520 --> 0:10:00.320 more there. It would make it tougher to at some 0:10:00.400 --> 0:10:05.080 of the tax breaks for lower income individuals. It would 0:10:05.120 --> 0:10:09.520 remove uh, money for some of the offices that have 0:10:10.120 --> 0:10:13.720 been expanded under under a former President Obama in favor 0:10:13.800 --> 0:10:18.040 of bolstering defense. Right, I mean is that basically the gist. 0:10:18.080 --> 0:10:20.280 I mean, what are sort of the areas that you 0:10:20.320 --> 0:10:24.240 think are going to stick and have staying power through 0:10:24.320 --> 0:10:28.560 all of the congressional negotiations that are inevitable. Well, it's 0:10:28.559 --> 0:10:33.080 it's actually kind of tough to see exactly, um, how 0:10:33.200 --> 0:10:37.600 much will stick and what specifically will stick. Um. Congressional 0:10:37.600 --> 0:10:41.960 Republicans are actually in many cases being very publicly neutral 0:10:42.640 --> 0:10:47.640 uh and privately, um, not very accepting of this, um 0:10:47.800 --> 0:10:52.120 real appropriate. Well, because you know, it's one thing to 0:10:52.240 --> 0:10:55.280 say that you want to balance the budget and so on, 0:10:55.360 --> 0:10:57.400 it's quite another one actually comes to actually to put 0:10:57.400 --> 0:11:00.640 the the you know, where the rubber beats the road. Um. 0:11:00.679 --> 0:11:02.280 And so one of the things that's basically just had 0:11:02.559 --> 0:11:05.959 the House chairman of the Appropriations Committee, the Freelinghouse and 0:11:06.000 --> 0:11:09.640 put out a very neutral, uh, neither for it nor 0:11:09.679 --> 0:11:12.200 against it kind of statement just a couple of minutes ago. 0:11:12.720 --> 0:11:15.559 Or he said, yeah, our job is appropriators is to 0:11:15.600 --> 0:11:18.520 exercise the power of the purse, which is not really 0:11:18.520 --> 0:11:21.400 that newsy because that is their job, all right. So 0:11:21.400 --> 0:11:23.600 it's basically a nonstatement. He doesn't really want to comment 0:11:23.600 --> 0:11:25.000 on it one way or another. Can we get a 0:11:25.040 --> 0:11:29.199 sense of history here with what past presidents have done 0:11:29.240 --> 0:11:32.719 when they've released their budgets or their proposed budgets. How 0:11:32.800 --> 0:11:36.439 much support do they generally get in advance from either 0:11:36.760 --> 0:11:40.439 congressmen of their same party or reach across the aisle. 0:11:40.480 --> 0:11:42.600 I mean, usually is their leg work that's done ahead 0:11:42.640 --> 0:11:46.680 of time or is this always the opening salvo? It's 0:11:46.679 --> 0:11:49.240 it's certainly an opening salvo. I mean, you know, there's 0:11:49.240 --> 0:11:53.320 the running joke, it's it's almost clichete even joke about it. Now, 0:11:53.880 --> 0:11:56.640 is that no matter what the party mixes of who 0:11:56.679 --> 0:11:59.600 holds the who holds the Congress, who holds the White House, 0:12:00.080 --> 0:12:02.040 that when the president sends up a budget, someone will 0:12:02.080 --> 0:12:04.800 always say, quote, it's dead on arrival, um. And that 0:12:04.920 --> 0:12:07.120 is the case with this one. The interesting thing here 0:12:07.160 --> 0:12:09.240 is that this is the first year budget that has 0:12:09.280 --> 0:12:13.000 taken this long to send it up UM, and it 0:12:13.120 --> 0:12:16.440 still is lacking the details of the tax reform proposal 0:12:16.520 --> 0:12:18.760 that they want to get to agreement on with the 0:12:18.760 --> 0:12:22.640 House and Senate Republicans. UM. And yet it's still is 0:12:22.720 --> 0:12:25.880 this's got this very The appropriators don't like the cuts 0:12:25.920 --> 0:12:30.400 to discretionary spending, The moderates don't like the cuts to 0:12:30.480 --> 0:12:33.199 some of the some of the entitlements, some of the 0:12:33.280 --> 0:12:36.080 some of the social net programs. UM. So it's kind 0:12:36.080 --> 0:12:37.880 of interesting that usually if you do have a budget 0:12:37.880 --> 0:12:41.680 that has some degree of momentum to it, it usually 0:12:41.760 --> 0:12:45.120 is the president's first year budget. And in that sense, 0:12:45.160 --> 0:12:47.760 what we're seeing here today, particularly even with Trump even 0:12:47.760 --> 0:12:49.480 out of out of the country, while this budget is 0:12:49.520 --> 0:12:53.760 being dropped, is not nearly I think historically what we 0:12:53.840 --> 0:12:56.559 usually see, um in terms of first year budget reaction. 0:12:57.240 --> 0:12:59.480 You know, it's funny that you mentioned that he's President 0:12:59.520 --> 0:13:01.360 Trump is at of the country, because that was my 0:13:01.440 --> 0:13:03.680 first comment to why is he doing it now while 0:13:03.679 --> 0:13:06.120 he's not here, to kind of do the rounds with 0:13:06.160 --> 0:13:09.240 it and give people an explanation of why he's so 0:13:09.360 --> 0:13:12.560 behind this particular plan, especially if people are coming out 0:13:12.559 --> 0:13:17.360 with pretty neutral expressions of you know, how they assess it. 0:13:17.960 --> 0:13:21.120 I mean, is that typical you're kind of implying, not 0:13:21.240 --> 0:13:24.240 so much. And if it's not typical, was this planned 0:13:24.280 --> 0:13:27.160 this way or did it just sort of happen this way? Well, 0:13:27.240 --> 0:13:32.440 he was They picked this budget release date maybe about 0:13:32.480 --> 0:13:34.440 two weeks ago or so. I think by then they 0:13:34.480 --> 0:13:36.760 probably already had I would suspect at least they already 0:13:36.760 --> 0:13:39.480 had the dates locked in for the international trip that 0:13:39.520 --> 0:13:43.040 he that he's on now. UM. I do not recall 0:13:43.160 --> 0:13:45.280 the last time a president was out of the country 0:13:45.280 --> 0:13:47.800 when his budget dropped. But I also haven't checked, so 0:13:47.840 --> 0:13:50.280 I wouldn't necessarily read too much in that. But you're right. 0:13:50.400 --> 0:13:53.400 Usually it is the day when the president says, you know, 0:13:53.559 --> 0:13:57.360 here's what we stand for fiscal fiscal policy wise. UM. 0:13:57.440 --> 0:14:01.280 And today that burden is being basically borne by mc mulvaney, 0:14:01.320 --> 0:14:03.160 who is you know, as a as a cabinet member, 0:14:03.160 --> 0:14:06.000 as an MB person, but is not, you know, not 0:14:06.120 --> 0:14:10.600 the president. UM. So so can you give me a sense, Jonathan, 0:14:10.760 --> 0:14:12.560 of what the next steps are sort of how this 0:14:12.600 --> 0:14:17.840 will move and be potentially implemented if at all. Uh. 0:14:17.880 --> 0:14:20.920 There's sort of a two two things to watch for. Basically, 0:14:20.960 --> 0:14:26.000 the House in Senate budget committees will take this under adversement, 0:14:26.280 --> 0:14:27.960 you know, and take a look at it. They will 0:14:28.000 --> 0:14:31.640 do their own budget resolutions, UM probably in June. UM 0:14:31.680 --> 0:14:36.040 they have to do a budget resolution. If Republicans hope 0:14:36.080 --> 0:14:38.560 to propiscate teen, if the Provolicans hope to do tax 0:14:38.560 --> 0:14:43.120 reform with Republican only votes as they plan, UM is 0:14:43.320 --> 0:14:45.760 so so what you look with for that is whether 0:14:45.880 --> 0:14:49.840 or not they set up some reconciliation structions for tax 0:14:49.840 --> 0:14:53.480 reform and for some of these spending cuts that that 0:14:53.560 --> 0:14:55.600 Trump is wanting. That's one measure of how much of 0:14:55.640 --> 0:14:58.680 this one get actually potentially enacted into law. The other 0:14:58.720 --> 0:15:02.520 aspect of the appropriations processes, well, the appropriators marked to 0:15:02.560 --> 0:15:07.400 the one point zero six five trillion of appropriated dollars 0:15:07.440 --> 0:15:10.640 that are set up in this in this budget UM, 0:15:10.720 --> 0:15:13.400 and that seems to be a little bit closer to 0:15:13.400 --> 0:15:17.080 to being UM to happening. I think there's still a 0:15:17.160 --> 0:15:20.200 question of how they do the defense non defense mix, 0:15:20.440 --> 0:15:23.360 which they probably will not do UM as much of 0:15:23.400 --> 0:15:27.720 a mix toward defense as Trump as proposed. UM. Jonathan, 0:15:27.760 --> 0:15:30.760 I'm looking at a headline on the Bloomberg. Trump's three 0:15:30.800 --> 0:15:35.200 point six trillion dollar budget cuts hit his own supporters hard. 0:15:35.200 --> 0:15:38.320 In other words, the people who are going to be 0:15:38.400 --> 0:15:42.600 the worst benefited to the least benefited from his current 0:15:42.600 --> 0:15:45.320 proposal are some of the people who supported him the most. 0:15:45.320 --> 0:15:48.800 Can you explain how that is? Oh, well, there's a 0:15:48.840 --> 0:15:52.760 there's a lot of political reporting about how much of 0:15:52.760 --> 0:15:58.560 his support UM was in sort of UM hard scrabble economically, UM, 0:15:59.160 --> 0:16:03.120 tough areas West Virginia, Kentucky, so on. Uh. And in 0:16:03.160 --> 0:16:06.440 those areas, many of those many that's probing one, but 0:16:07.000 --> 0:16:11.520 a certain proportion are on say, social Security disability, which 0:16:11.600 --> 0:16:14.120 is one of the things that is proposed to be 0:16:14.160 --> 0:16:19.000 cut on this. Another is UM uh snap what used 0:16:19.040 --> 0:16:22.720 to be called food stamps. UM. So this certainly looks 0:16:22.800 --> 0:16:27.120 at those at those areas UM and and and to 0:16:27.200 --> 0:16:33.000 the extent that those are concentrated among rural rural supporters 0:16:33.080 --> 0:16:35.920 of of Trump, UH, it would indeed be certain fighting 0:16:36.040 --> 0:16:38.920 fighting hand they want to bring in back. Jonathan Nicholson, 0:16:38.960 --> 0:16:41.320 senior reporter at Bloomberg b NA, to give us a 0:16:41.320 --> 0:16:43.960 little bit of perspective, Jonathan, what stood out to you 0:16:44.080 --> 0:16:47.160 as sort of the most important thing uh that mcmulhenney 0:16:47.240 --> 0:16:50.200 just said. There were two things that struck me. UM. 0:16:50.320 --> 0:16:53.480 One is he's kind of picked the three percent growth 0:16:53.560 --> 0:16:56.040 rate as his hill to die on UM, which I 0:16:56.080 --> 0:16:58.240 think is going to be a tough sell when he 0:16:58.280 --> 0:17:01.240 appears before the Budget Committee is uh tomorrow in the 0:17:01.320 --> 0:17:04.119 day after UM. A lot of mainstream economists think that 0:17:04.119 --> 0:17:07.800 that's just not credible UM and uh. And so that's 0:17:07.880 --> 0:17:10.080 the fact he stucked his guns on that seems that's 0:17:10.080 --> 0:17:12.800 gonna be an issue. The other thing was he changed 0:17:12.840 --> 0:17:18.720 his wording on on Social Security to say social Security retirement. UM. Now, 0:17:18.720 --> 0:17:20.359 in the past couple of days and the previous and 0:17:20.359 --> 0:17:21.800 so on, they've been talking about they haven't they don't 0:17:21.840 --> 0:17:25.080 touch social Security. UM. But I think when they talk 0:17:25.119 --> 0:17:27.680 when they're doing the disability insurance, which is part of 0:17:27.680 --> 0:17:30.200 the Social Security program and has included when you hear 0:17:30.200 --> 0:17:32.520 those dates about win social Security goes bankrupt and so on, 0:17:32.760 --> 0:17:34.239 it's a separate trust fund that they put the old 0:17:34.320 --> 0:17:37.720 dates Survivors Trust Fund and the Disability Insurance Trust Fund 0:17:37.720 --> 0:17:40.119 together called social Security and say it goes bankrupting X 0:17:40.240 --> 0:17:42.400 y Z year or so on. UM. I think it's 0:17:42.440 --> 0:17:44.560 interesting that he sort of walked that back to say 0:17:44.600 --> 0:17:49.479 social Security retirement UM as seemingly a tacit acknowledgement of 0:17:49.520 --> 0:17:51.920 that criticism that they were trying to be evasive there. 0:17:52.720 --> 0:17:54.600 You know. I thought it was also interesting that the 0:17:54.680 --> 0:17:58.040 way that the Trump administration is going to measure the 0:17:58.320 --> 0:18:01.320 success of programs in the passion of programs is not 0:18:01.359 --> 0:18:04.119 how many people they serve, but by how many people 0:18:04.160 --> 0:18:06.560 get off of some of the entitlement programs. So that 0:18:06.680 --> 0:18:09.360 stand out to you or what does that actually mean 0:18:09.400 --> 0:18:15.080 to you? That's a longstanding um rhetorical point that a 0:18:15.119 --> 0:18:20.160 lot of a lot of anti spending Republicans have, basically 0:18:20.160 --> 0:18:22.159 that you can't measure the success of programs by the 0:18:22.200 --> 0:18:25.400 amount of money spent um. Now, there's usually a path 0:18:25.480 --> 0:18:30.040 for this, given for defense, because defense, as his budget 0:18:30.080 --> 0:18:33.440 has been about doubled over the last seventeen years or so. Um. 0:18:33.480 --> 0:18:35.600 But now the other aspect of that is that he 0:18:35.600 --> 0:18:38.000 has a point in the sense that CBO does assume 0:18:38.640 --> 0:18:41.600 that if inflation is three percent, then for a program 0:18:41.640 --> 0:18:43.360 to do the same thing next year, is it needs 0:18:43.359 --> 0:18:46.639 at least a three percent increase. So in that sense 0:18:47.119 --> 0:18:52.360 there are sort of inflation expectations ratcheted into the CBO 0:18:53.080 --> 0:18:57.239 nonpartisan baseline. You know, I thought that it was also uh, 0:18:57.440 --> 0:18:58.840 you know, I want to go back to the wall 0:18:59.280 --> 0:19:02.120 comments pick as people have said that there really hasn't 0:19:02.160 --> 0:19:06.720 been uh much money put aside to finance this program 0:19:06.760 --> 0:19:10.119 to build a wall between the United States and Mexico. 0:19:10.280 --> 0:19:13.640 People question, perhaps President Trump doesn't really mean a physical wall, 0:19:13.720 --> 0:19:15.880 but something that's a little bit more I'm a mix 0:19:15.920 --> 0:19:20.040 between more surveillance and uh and some physical building. But 0:19:20.280 --> 0:19:23.240 but Mitmilviny said, we are dead serious about the border wall, 0:19:23.240 --> 0:19:25.080 and this is one of his top three priorities. What 0:19:25.240 --> 0:19:27.119 is that? What does that signifying? Where? Where? Where is 0:19:27.160 --> 0:19:30.119 the money going to come from? Well, in the in 0:19:30.160 --> 0:19:32.880 the budget, say they did one point six billion for 0:19:32.880 --> 0:19:35.560 for the wall, at least sort of start getting started. 0:19:36.240 --> 0:19:39.640 I think the significance of that is that when when 0:19:39.680 --> 0:19:42.560 it comes time in September, everyone here on the Hill 0:19:42.600 --> 0:19:45.240 seems resigned to the idea already that we're looking at 0:19:45.240 --> 0:19:48.240 a continuing resolution come September to keep the government open. 0:19:48.760 --> 0:19:50.560 And so that will mean that again there will need 0:19:50.560 --> 0:19:54.160 to be democratic support for doing so. And so that's 0:19:54.160 --> 0:19:56.000 where you set up this question whether we're going to 0:19:56.119 --> 0:19:59.359 have a shutdown showdown, whether Trump will follow through and 0:19:59.400 --> 0:20:01.159 what he said a couple weeks ago about you know, 0:20:01.240 --> 0:20:05.359 a good shutdown, things like that, UM, and so in 0:20:05.480 --> 0:20:08.480 that debate, should that happen in September as people seem 0:20:08.520 --> 0:20:11.560 to expect. Um this question of wall funding, which was 0:20:11.640 --> 0:20:15.880 sort of sort of worked through and sort of elited 0:20:16.200 --> 0:20:19.440 or sort of you know, kind of danced around in 0:20:19.600 --> 0:20:22.760 flashed omnibus. UM. If that it truly is one of 0:20:22.800 --> 0:20:26.840 the top three priorities for the administration, then that could 0:20:26.840 --> 0:20:29.520 be a very big sticking point come September. That would 0:20:29.520 --> 0:20:32.840 be that races of flag there seems to me, Um, 0:20:32.840 --> 0:20:34.560 And just going back to what you were saying about 0:20:34.560 --> 0:20:37.479 the three growth rate, you're you flagged and rightly so 0:20:37.560 --> 0:20:39.680 that a lot of economist say it that is not probable. 0:20:40.119 --> 0:20:43.240 In the New York term. You have people including Harvard 0:20:43.240 --> 0:20:45.479 professor Larry Summers, coming out and saying that just does 0:20:45.520 --> 0:20:48.080 not seem, uh in the cards, given the fact that 0:20:48.080 --> 0:20:50.879 you do have an aging population and just generally slower 0:20:50.920 --> 0:20:53.879 growth around the world. Do you expect there to be 0:20:54.000 --> 0:20:56.760 hearings where we have economists coming in and sort of 0:20:56.920 --> 0:20:59.760 throwing cold water on that three percent rate? Or is 0:20:59.760 --> 0:21:01.240 this is this it? I mean it is this going 0:21:01.320 --> 0:21:03.919 to be basically, uh, you either have to accept it 0:21:04.080 --> 0:21:05.880 or you aren't even going to debate on the same 0:21:05.960 --> 0:21:08.600 on the same playing field. With respect to this budget, 0:21:09.920 --> 0:21:12.000 I assume it'll be a little bit more of a 0:21:12.040 --> 0:21:15.800 he said. She said, I mean, I think the Republicans controls, 0:21:16.240 --> 0:21:19.479 you know, the both chambers, so that they can they 0:21:19.520 --> 0:21:22.479 can control what hearings are called. Um. I'm sure if 0:21:22.520 --> 0:21:24.520 Democrats control one of the chambers, they would love to 0:21:24.560 --> 0:21:27.800 have a hearing on what are realistic economic growth projections 0:21:28.240 --> 0:21:31.959 given the the aging and less productive workforce. Um. But 0:21:32.040 --> 0:21:34.520 that doesn't mean that the Democratic senators won't bring this 0:21:34.640 --> 0:21:37.920 up during the during the hearings tomorrow and the House 0:21:37.920 --> 0:21:41.760 Budget Committee, or the hearing tomorrow or the hearing Thursday 0:21:42.040 --> 0:21:44.919 at the Center Budget Committee. UM. This is uh, this 0:21:45.000 --> 0:21:47.040 has been something that people have been sort of zeroing 0:21:47.080 --> 0:21:50.200