Speaker 1: Now from our nation's capital. This is Bloomberg's sound on.
Speaker 1: We will not we say it again, we will not
Speaker 1: allow Ran to acquiring nuclear weapers. Words will not stopped it,
Speaker 1: Mr President, Diplomacy will not stop. President Biden is doing
Speaker 1: really the unthinkable. He's going to talk to Mohammed Ben
Speaker 1: Solomon Bloomberg sound on Politics, Policy and perspective from DC's
Speaker 1: top name. Our nation was richly blessed by the life
Speaker 1: of Body Williams. In vital link to our nation's greatest generation.
Speaker 1: Sloomberg Sound On with Joe Matthew on Bloomberg Radio. On
Speaker 1: the eve of his visit to Saudi Arabia, President Biden
Speaker 1: pledges to never allow Iran to get a nuclear weapon.
Speaker 1: Welcome to the fastest hour in politics, as we follow
Speaker 1: the President on the high wire act from Tel Aviv
Speaker 1: to Jetta with security, military alliances, and energy all on
Speaker 1: the line. Will be joined by Hillary Man Leverett, CEO
Speaker 1: of stratega consulting, former White House Middle East advisor for
Speaker 1: both the Clinton and Bush administrations. There's a new effort
Speaker 1: in Washington to save the Chip Acts. Just as demand
Speaker 1: for chips begins to pull back. We'll have the latest
Speaker 1: in a conversation with Bloomberg's Eric Wasson. Will be with
Speaker 1: us from the Halls of Congress. Analysis today from our
Speaker 1: signature panel. Bloomberg Politics contributors Rick Davis and g. D.
Speaker 1: Chanzano with us for the hour. President Biden takes aim
Speaker 1: at Iran at a news conference in Jerusalem today, saying
Speaker 1: that the US, as he put it, will not wait
Speaker 1: forever for Iran to agree to a new nuclear deal,
Speaker 1: adding this message as Israeli Prime Minister Lapide stood at
Speaker 1: his side, we mean what we say. They have an
Speaker 1: opportunity to accept disagreement has been laid down. If they don't,
Speaker 1: made it absolutely clear, we will not say it again.
Speaker 1: We will not allow Ran to acquire a nuclear weapon.
Speaker 1: Some tough talk on the eve of President Biden's visits,
Speaker 1: as I mentioned to Saudi Arabia, the Prime Minister Lapide
Speaker 1: made clear that controlling Iran requires more than talk. Words
Speaker 1: will not stop them, Mr President, Diplomacy will not stop them.
Speaker 1: The only thing that will stop Iran is knowing that
Speaker 1: if they continue to develop their nuclear program, the free
Speaker 1: world will use force. Some pretty interesting conversations happening on
Speaker 1: this trip that, of course many saw coming here with
Speaker 1: the headline on the terminal U S signals military backing
Speaker 1: to Israel with joint declaration the President committing to extending
Speaker 1: this agreement. It gives billions of dollars for the Israeli military.
Speaker 1: In the meeting today with Prime Minister Lapide a caretaker
Speaker 1: prime minister remembering that things were influxed their politically, which
Speaker 1: makes this all the more fascinating. Hillary Man Leverett is
Speaker 1: with US, the CEO of Strategic Consulting and former White
Speaker 1: House Middle East Advisor for the Clinton and w. Bush
Speaker 1: Administration's author of the landmark text on US Iran relations
Speaker 1: go into Tehran, Why America must accept the Islamic Republic
Speaker 1: of Iran. What do you make of the messaging for
Speaker 1: starters here, Hillary, That that we're hearing with so much
Speaker 1: talk about Iran as the President straddles his trip between
Speaker 1: Israel and Saudi Arabia, It's really fascinating. You know, Today
Speaker 1: is the seventh anniversary of the signing of the Iran
Speaker 1: Nuclear Deal, the famous Joint uh Joined joined UM the
Speaker 1: j c p o A with the Iran Nucular Deal
Speaker 1: seven years ago today. This was the signature achievement, signature
Speaker 1: foreign policy achievement of the Obama Biden administration. It was
Speaker 1: signed today, and that deal lifted sanctions on Iran, allowed
Speaker 1: Iranian oil to flow, all sorts of things that at
Speaker 1: the time Vice President Biden was very happy with. But
Speaker 1: here we are seven seven years later and he is
Speaker 1: going to Israel and signing a basically an official declaration
Speaker 1: with the Israelis to use force against Iran for something
Speaker 1: thing that when he was vice president he was happy
Speaker 1: to use diplomacy for it. He spoke on television in Israel.
Speaker 1: I'm sure you saw this, that he would not rule
Speaker 1: out military action to prevent Iran from getting a nuclear weapon.
Speaker 1: Is he sounding more like Donald Trump or Barack Obama?
Speaker 1: He's sounding more like Donald Trump. I mean, there's not
Speaker 1: much of a much difference between the policy at this
Speaker 1: point um that the Biden administration is pursuing. They I
Speaker 1: did not think that they want a war with Iran,
Speaker 1: as I don't think that that Trump and his maybe
Speaker 1: more more rational sounding moments didn't really want a war
Speaker 1: with Iran either. But both of them have this almost
Speaker 1: one could say, almost reckless disregard for that happening. And
Speaker 1: here too, the motivation for this trip to Israel and
Speaker 1: Saudi Arabia was not originally Iran. Iran comes up really
Speaker 1: as the rationale to make this trip palatable. This was
Speaker 1: supposed to be a trip to Saudi arabi Be a
Speaker 1: couple of months ago. Right then we had, of course
Speaker 1: an important additive here we put the the initial days
Speaker 1: of the journey into Israel, despite the fact that they're
Speaker 1: in the midst of solving their politics there. But I
Speaker 1: wonder if if you see this Hillary as a change
Speaker 1: in policy for this administration or Joe Biden trying to
Speaker 1: grease the skids on his way to Saudi Arabia to
Speaker 1: say things that they want to hear. Well, it's probably
Speaker 1: a little bit of both, and it's really part of
Speaker 1: a bigger picture or at this point larger concerns that
Speaker 1: the administration has had to grapple with over the past
Speaker 1: few months, and that that really comes from Russia's invasion
Speaker 1: of Ukraine and it's almost out of control um competition
Speaker 1: between the United States, Russia, and China, which the Biden
Speaker 1: administration just does not have a handle on. And why
Speaker 1: that's important to the Middle East is that from what
Speaker 1: I understand, folks within the Biden administration were shocked that
Speaker 1: when Russia invaded Ukraine and the United States wanted to
Speaker 1: impose sanctions or at least have rhetorical condom name of Russia.
Speaker 1: At the United Nations, our most are stalwart allies in
Speaker 1: the Middle East, Israel, Saudi Arabia, the U a E.
Speaker 1: All of them not only refused to join sanctions, but
Speaker 1: they refused to even condemn Russia's action. And what that
Speaker 1: told folks in the Body administration was we are losing
Speaker 1: influence in the Middle East rapidly in an uncontrollable way,
Speaker 1: and that must be stepped well. This trip takes on
Speaker 1: new urgency against that backdrop. With with that framing that
Speaker 1: you just gave us here, Hilary, and people have been
Speaker 1: talking a lot about oil, This sounds like a lot
Speaker 1: more than oil. This sounds like preventing a power vacuum
Speaker 1: for for for Russia, for China. But I also wonder,
Speaker 1: you know how much of this has to do with
Speaker 1: our military alliances and our military support for both Israel
Speaker 1: and Saudi Arabia. We're talking about billions of dollars in
Speaker 1: weapons that we're providing both nations, and we're going to
Speaker 1: be providing a lot more. Part of what was agreed
Speaker 1: in um in Jerusalem today and what will be agreed
Speaker 1: over the next day or so in Saudi Arabia are
Speaker 1: from what I understand, will be even more weapons sales
Speaker 1: and the lifting of the the embargo essentially on some
Speaker 1: kind of offensive weapon. Is that the big news offensive
Speaker 1: weapons from the United States as opposed to, Hey, I've
Speaker 1: got three million barrels of oil in the back of
Speaker 1: Air Force one. Yeah. I don't think that there's any
Speaker 1: real expectation that the Saudis are going to do anything
Speaker 1: so decisive on oil that's really going to help us,
Speaker 1: you know, s gasoline prices or the U s economy
Speaker 1: in the near future. And if that were really the
Speaker 1: priority of the Biding administration, they could go back into
Speaker 1: the Iran nuclear deal tomorrow and let a million barrows
Speaker 1: of oil out of Iran tomorrow. So they really wanted
Speaker 1: more oil on the market, There's a much easier way
Speaker 1: to do that than to press the Saudis, who may
Speaker 1: not even have the capacity to do this. Has this
Speaker 1: been a failure in messaging by the White House, because
Speaker 1: I mean half of America thinks he's going on over
Speaker 1: there to lower gas prices. It's a. It's a failure
Speaker 1: of messaging, and it really, I think in a deeper way,
Speaker 1: shows an incoherence in policy, incoherence and what the goals
Speaker 1: are um and an administration that's really struggling to catch
Speaker 1: up with with really important, almost seismic developments in geopolitics
Speaker 1: that either they didn't anticipate or just weren't prepared to
Speaker 1: deal with, including Russia's invasion of Ukraine, including China's continuing
Speaker 1: competition with the United States, and these pro Americans forwards
Speaker 1: Saudi Arabia, the UAE, Israel basically turning their back on
Speaker 1: the United States and saying, you know, we're happy to
Speaker 1: be you know, uh somewhat allies with you, but we're
Speaker 1: not going to put all of our eggs in your bathness. Right,
Speaker 1: we're spending time with Hillary Man Leverett, CEO of Strtiga Consulting.
Speaker 1: You were in your time as a White House Middle
Speaker 1: East advisor, you were a director for Iran, Afghanistan and
Speaker 1: Persian Gulf Affairs at the National Security Council. Hillary, at
Speaker 1: that time, what would you have thought as you projected
Speaker 1: and I know this was part of your job to
Speaker 1: project ten twenty years out here, we are in two.
Speaker 1: What did you think this region, this relationship between the
Speaker 1: US and this region would look like. One of the
Speaker 1: things that I learned uh in the Bush administration, particular,
Speaker 1: right after nine eleven, some of our most important allies,
Speaker 1: all of a sudden had a big question mark over them,
Speaker 1: Saudi Arabia with fifteen and the nineteen hijackers and nine
Speaker 1: eleven being from Saudi Arabia. Pakistan, our longtime ally was
Speaker 1: harboring m not only the Taliban, but Al Qayeda. At
Speaker 1: the time, there was this huge question mark all of
Speaker 1: a sudden, put over our long time allies, and a
Speaker 1: question mark put over some of our erstwhile enemies, like
Speaker 1: the Islamic Republic of Iran. After nine eleven, one of
Speaker 1: the most helpful countries to US was Iran, not Saudi Arabia,
Speaker 1: not Pakistan. And this doesn't mean that that Iran is
Speaker 1: a good country, that the government is good. What it
Speaker 1: showed me and others, even within the Bush administration, was
Speaker 1: that Iran, in some ways, like China, even if you
Speaker 1: don't like their policies, they are critically important civilizational states.
Speaker 1: They're not going anywhere. So this has been a reversal
Speaker 1: from where you were to whom do you how do
Speaker 1: you peg the blame is that the outcome of the
Speaker 1: Obama years the Trump years are both both. I mean,
Speaker 1: there's always What my book really was about going to
Speaker 1: Tehran is that there's an inevitability that the United States
Speaker 1: has to deal with Iran. Like with China. We're not there,
Speaker 1: we can't wish them away. There has to be diplomatic
Speaker 1: engagement with them. We have some common interests, we have
Speaker 1: some big differences, but there's always going to be engagement.
Speaker 1: And so both the Obama administration and the Trump administration
Speaker 1: understood that, but they try to really get to get everything,
Speaker 1: to have their cake and eat it too. They were
Speaker 1: not willing to really look at what are others interests,
Speaker 1: what are Iran's interests, and how can we work together
Speaker 1: on common interests in a sense bracket where we have
Speaker 1: the President do the right thing this week saying that
Speaker 1: he would keep the Iranian Revolutionary Guards on the terror lists. Essentially, uh,
Speaker 1: no matter what, even if it meant killing this deal. Again,
Speaker 1: this is another thing that makes no sense. The Revolutionary
Speaker 1: Guard are sanctioned fifty different ways in American law. If
Speaker 1: you take them off of one of the lists. It
Speaker 1: really makes no difference. It is a symbolic designation, but
Speaker 1: it just shows that the Biden administration is at this
Speaker 1: point willing to sacrifice a diplomatic a diplomatic deal with
Speaker 1: Iran that could bring more oil and gas onto the market.
Speaker 1: They just don't want that headline. Yeah, they just don't
Speaker 1: want that. It's bad politics for them, especially in the
Speaker 1: lead up to No FA. Fascinating conversation. Hillary, I'm so
Speaker 1: glad you could join us. Hillary Man Leverett, CEO of
Speaker 1: Strategic Consulting and clearly spent some time in the White
Speaker 1: House the Clinton and w Bush administrations as the White
Speaker 1: House Middle East Advisor. Today, she's your advisor here on
Speaker 1: sound on the Fastest hour in Politics. Will assemble the
Speaker 1: panel next. Rick Davis and Jennie Chanzana are up. This
Speaker 1: is Bloomberg. This is Bloomberg Sound on on Bloomberg Radio.
Speaker 1: Everyone thinks that President Biden is overseas just to get oil.
Speaker 1: Maybe he will get some oil. I'm sure he wants
Speaker 1: extra oil. But as you heard from our conversation with
Speaker 1: Hillary Man Leverett, there's so much more on the table here.
Speaker 1: So much of it has to do with not only security,
Speaker 1: in the region, but our stake in it, preventing the
Speaker 1: power vacuum for Russia and China to move in. Here
Speaker 1: in a fascinating day for Joe Biden as he made
Speaker 1: his way through Israel, as we mentioned, not only warning
Speaker 1: on the nuclear deal with Iran, but actually making some
Speaker 1: news here and signing this defense cooperation agreement with the Israelis,
Speaker 1: including billions into enside for Israel. We assembled our panel.
Speaker 1: Now Genie Chantano and Rick Davis are with us Bloomberg
Speaker 1: Politics contributors. I want you both to hear what Senator
Speaker 1: John Cornyn said today. This is basically proves the point
Speaker 1: that not not just half of America, probably more than that,
Speaker 1: think that Joe Biden is on a shopping trip to
Speaker 1: go to the oil store. Here's Senator Cornin of Texas.
Speaker 1: Rather than have domestic producers in places like Texas and
Speaker 1: elsewhere produced more oil and gas here in America, President
Speaker 1: Biden is doing really the unthinkable. He's going to talk
Speaker 1: to Mohammed Ben Solomon in Saudi Arabia. He is going
Speaker 1: to talk to him. Rick Davis. Uh. It sounds to
Speaker 1: me though, like there's a lot more than oil to
Speaker 1: talk about. Oh, there is a lot more than oil
Speaker 1: to talk about. And you know, this is pretty late
Speaker 1: in the game in his administration to be making this trip.
Speaker 1: He's traveled extensively all over the world, and this is
Speaker 1: his first visit to um, the Middle East and the Kingdom,
Speaker 1: and so, uh, it's a long time in coming. And
Speaker 1: in in that period of time, there is a vacuum,
Speaker 1: and we've seen it growing over time. Russian and Chinese
Speaker 1: are lobbying hard throughout the g c C to find
Speaker 1: friends and and extend their influence. I mean, remember it
Speaker 1: was only a few years ago we had to insist
Speaker 1: the U a E. Not allow China to build a
Speaker 1: strategic port in the region. I mean like this. You know,
Speaker 1: they were going to put a naval vessel in you know,
Speaker 1: not far from where we keep the fifth Fleet in Bahrain.
Speaker 1: So these are important places to consider. The security that
Speaker 1: region is important, and our leadership is tantamount to keeping
Speaker 1: things from boiling over. And so this is an important trip.
Speaker 1: It started well in in Israel and we'll see how
Speaker 1: it finishes up on Friday in Saudi Arabia. The way
Speaker 1: that Rick just put that you need to keep things
Speaker 1: from boiling over, you actually can connect that to energy prices.
Speaker 1: If there was a disruption, if there was let's say,
Speaker 1: a military incursion from either China or Russia, if the
Speaker 1: stakes changed, or even there was a whiff of that,
Speaker 1: the oil market would respond and things would likely be
Speaker 1: more expensive than they are now. How important is that
Speaker 1: part of this trip? That part of this trip is
Speaker 1: very important. It's critically important for domestic politics. But I
Speaker 1: think what we saw on display today for the for
Speaker 1: the Biden administration was all the niceties between the Biden
Speaker 1: and administration and Israel in terms of their approach to
Speaker 1: Iran went by the wayside because they became very clear
Speaker 1: how different their approaches are. And you know, I thought
Speaker 1: it was very interesting what Hillary was talking about, you know,
Speaker 1: us losing influence. Some people talked about it as us
Speaker 1: potentially if we don't get this deal on Iran, which
Speaker 1: it looks like we won't, subcontracting Middle Eastern security to Israel,
Speaker 1: and that is something Nixon did with the Shah of
Speaker 1: Iran in the nineteen seventies. Is a very dangerous game
Speaker 1: for the United States to play for the very reasons
Speaker 1: Rick was just talking about, which is the the real
Speaker 1: power vacuum that you create over there not to mention
Speaker 1: these security the security threats, So that I think is
Speaker 1: a real challenge that the Biden administration is trying to
Speaker 1: grapple with, and they don't seem to have many answers.
Speaker 1: If not a nuclear agreement which is not going to
Speaker 1: satisfy Israel, then what then? Why not in Iran deal? Here? Rick,
Speaker 1: if it does both put oil back on the market
Speaker 1: and prevent Iran from obtaining a nuclear weapon? Are we
Speaker 1: are we afraid to to upset Israel? And Nossaudis. I
Speaker 1: don't think it's a matter of upsetting Israel Nessaudis. Uh,
Speaker 1: they've been upset before with the original JP so Um.
Speaker 1: But Joe Biden wasn't the president then. I just I
Speaker 1: don't know how sensitive he's trying to be to these partners.
Speaker 1: He wasn't the president then. But but also what has
Speaker 1: changed is the pernicious influence of Russian China in the region. Remember,
Speaker 1: Russian scientists are the ones who helped build the nuclear
Speaker 1: program in Iran, and and so you know they've been
Speaker 1: Russia has been supplying Iran with materials and equipment in
Speaker 1: order to facilitate you know, their nuclear program. So it's
Speaker 1: not just Iran on its own doing this. Our enemies
Speaker 1: of our enemies are not our friends, and and and
Speaker 1: Russia and Iran have to be seen in a very
Speaker 1: similar picture now, and that changes a dynamic for for
Speaker 1: for the President Nited States, you know, while he's in
Speaker 1: Israel to sharpen his tongue a little bit on what
Speaker 1: he's prepared to accept out of Iran. But does that
Speaker 1: create a greater need for this deal, Rick, or does
Speaker 1: it make it more toxic for the US? Well? I
Speaker 1: think I think you have to remember there's a counterparty,
Speaker 1: and Iran is the one who's not dealing in a
Speaker 1: in a realistic fashion with a with a deal here. Now.
Speaker 1: You could argue that that's because they were kicked out
Speaker 1: of the agreement by Donald Trump and things like that,
Speaker 1: but if they wanted an agreement, they'd be at the
Speaker 1: table today. He says he's not gonna wait forever, Joe Biden, Jeannie,
Speaker 1: how long does that mean we have to figure this out? Well,
Speaker 1: you know, I'm not sure, and he didn't answer that question.
Speaker 1: And you know what it sounds like is again we
Speaker 1: are going to be turning over the security to Israel
Speaker 1: because if not an agreement then what is We have
Speaker 1: no answer to the what. And the other thing he's
Speaker 1: at the presser was about not committing when he meets
Speaker 1: with the Saudi Prince to bringing up the human rights record. Well,
Speaker 1: there's a big reason not to bring it up, because
Speaker 1: we need Saudi Arabia to help us isolate Russian China.
Speaker 1: If not, if they turned to somebody like a Pakistan,
Speaker 1: for instance, they too could be in the nuclear business.
Speaker 1: So there's a lot of challenges here, and I think
Speaker 1: Joe Biden is showcasing all of those in this in
Speaker 1: this very short presser today, and none of it left
Speaker 1: anybody feeling very comfortable. I wondered if the window for
Speaker 1: for a deal closes when Vladimir Putin shows up in
Speaker 1: Tehran next week, Rick, to you, you know, I think
Speaker 1: I think that this is the whole point I was
Speaker 1: trying to make earlier, is I don't think Vladimir Putin
Speaker 1: wants her to be a deal, and we'll know it'll
Speaker 1: only get worse, not better. So there it is. This
Speaker 1: might be over already. It sounds like it if I'm
Speaker 1: reading you, guys, Rick Davis, Jennie Schanzano, our panel, not
Speaker 1: just our panel, the signature panel and for the hour.
Speaker 1: They'll be back after we check in with Eric Wasson,
Speaker 1: Bloomberg's reporter on Capitol Hill. As now we're looking at
Speaker 1: a Chip Act that could pass. Will tell you what
Speaker 1: we mean. Come ing up. This is Bloomberg. It's been
Speaker 1: built as the golden ticket for computer chip makers, the
Speaker 1: Chip Act. Do I need to remind you fifty two
Speaker 1: billion dollars in incentives for chip makers to make chips
Speaker 1: here instead of there, to do it in the United
Speaker 1: States instead of somewhere like Taiwan. It's been locked up
Speaker 1: in a bigger piece of legislation named at better competing
Speaker 1: with China. They called it Yuseka. They chilled it to
Speaker 1: call it the China Competes Act. Has been about ten
Speaker 1: different names for this thing. But Bloomberg is reporting a
Speaker 1: break here. Senator Chuck Schumer is planning to move ahead
Speaker 1: with well a new plan to vote on a skinny
Speaker 1: Chip Act, if I can call it that without the
Speaker 1: broader bill. Now. Senator John Corn of Texas that we
Speaker 1: heard from earlier this hour on Energy says this is
Speaker 1: all a big bluff because Democrats know they don't have
Speaker 1: the votes. Remember this was gonna be like a slam
Speaker 1: dunk nine months ago. We're joined now by Eric Wasson,
Speaker 1: Bloomberg reporter on Capitol Hill, who shares the byline, and
Speaker 1: it's great to have you back. Eric. Does this actually
Speaker 1: end up seeing the light of day. I think it
Speaker 1: may well do so. I think a key break came
Speaker 1: yesterday when Junior Romando, the Commerce Secretary, came up to
Speaker 1: Capitol Hill and said the administration would support this, which
Speaker 1: is going a Chips plus bill the way chips Yeah.
Speaker 1: So Chips plus basically is looking like it's the Chip's Bill,
Speaker 1: which is grant some subsidies for chip makers sixty two
Speaker 1: billion dollars plus eight what's called the FABS Act, which
Speaker 1: is basically an investment tax credit for chip manufacturing, maybe
Speaker 1: about two billion dollars and five g rollout support and
Speaker 1: basically a couple other odds and them to just get
Speaker 1: that through. And the reason there's an impast now is
Speaker 1: because Mitch McConnell, he's trying to use this Chip's Bill,
Speaker 1: has leveraged to stop. Democrats are doing this wider bill, yes,
Speaker 1: which is a code word for a tax and climate
Speaker 1: and potentially Obamacare bill that they're working on. We have
Speaker 1: a separate story just out on the terminal now, but
Speaker 1: how that's been to it. They were going to try
Speaker 1: to release the tax and energy parts of that this week.
Speaker 1: It did not come out. Uh. You know, they're trying
Speaker 1: to get everything done by August, but this is this
Speaker 1: deadline is really in jeopardy now. Um, there really was
Speaker 1: McConnell who put the latest French and that they're trying
Speaker 1: to slim this down. I asked Nancy Pelosi to a
Speaker 1: press conference today, would she go along with this because
Speaker 1: the House has really been pushing a bunch of trade benefits,
Speaker 1: including payment the workers who were displaced by trade, and
Speaker 1: she seems open to it. So I think there are
Speaker 1: people that are signs. Now. Cornyn did come out and
Speaker 1: say he's not going to go along with it, but
Speaker 1: others like Capito, this is the Republican senator from West
Speaker 1: Virginia said she would vote to get on this chip's
Speaker 1: Skinney Chips spill. So I think there's some division over
Speaker 1: among Republicans. Maybe it will work. We could see a
Speaker 1: vote on Tuesday. Well you should know, and you'd be
Speaker 1: proud of us. Eric. We've been walking out hard on
Speaker 1: on the relationship between these two bills, and of course
Speaker 1: the lack of time that lawmakers have knowing that they're
Speaker 1: going to be out for the better part of August.
Speaker 1: What's realistic here? If this goes through, does that mean
Speaker 1: reconciliation is a non starter, because I can't imagine how
Speaker 1: that happens when they come back from August. Well, I mean,
Speaker 1: you know, I think the reconciliation could still happen. It's basically, uh,
Speaker 1: there's there's there's some technical reasons why they can't put
Speaker 1: it like let's say, mansion center Joe Manager West doing
Speaker 1: you on section deal with pump out legislation. You know
Speaker 1: at the beginning next week. They can't go right to
Speaker 1: the floor because there's a lot of Senate rules issues.
Speaker 1: They're trying to this very arcane process to get by Republicans.
Speaker 1: Basically Democrats alone can do a budget bill and what
Speaker 1: qualifies as a budget bill that's up to this obscure
Speaker 1: rules officials to Parliament and they do it in three weeks.
Speaker 1: Though they could, I'm told by the one of the
Speaker 1: foremost experts and reconciliation, if they got out the end
Speaker 1: of next week, they could still possibly make this August
Speaker 1: for a deadline but it would be very tight after that.
Speaker 1: We're really talking about either suspending August. Re says, working
Speaker 1: in September when they've got to try to fund the
Speaker 1: government by the end of the month. You know. And
Speaker 1: and plus there's tax increases in this now. They are
Speaker 1: designed to be taxes if on the wealthy and and
Speaker 1: you know, billionaire warriors and other businesses. But you know,
Speaker 1: if you do that right before election, is gonna be
Speaker 1: hard for those vulnerable Democrats to go out and explain
Speaker 1: these devoters, and easy for opponents to say, Look, they're
Speaker 1: raising taxes. They're making people who have to pay more
Speaker 1: for bread and gas pay more in taxes. You know,
Speaker 1: we've been, as I mentioned, talking about the chip back
Speaker 1: since the last calendar year. Uh and and Gina Romando
Speaker 1: has turned this into a full time job. We heard
Speaker 1: from Taiwan Semiconductor though, on the other side of the
Speaker 1: terminal here on the corporate side, Eric and they're talking
Speaker 1: about slowing demand because well, everything is slowing. We're going
Speaker 1: into an economic period here of slower growth, if not
Speaker 1: a recession. A lot of people are pulling back, a
Speaker 1: lot of companies are pulling back on things. Is this
Speaker 1: gonna end up passing just as we don't need it. Oh,
Speaker 1: I don't know. I think it's I think it's necessary
Speaker 1: for a bunch of reasons. We've had briefings here what's
Speaker 1: necessary for national security reasons to have domestic manufacture of
Speaker 1: this And what Mark Warner came out and when the
Speaker 1: senators from Virginia said, you know, look, the Intel and
Speaker 1: others are getting subside agreements from Britain, from Germany. They're
Speaker 1: gonna lure manufactured offshore. It's gonna lose jobs in the
Speaker 1: end of the day and threatened national security because we
Speaker 1: don't have control over So this has to happen for
Speaker 1: the long term. As the answer, that's the answer that
Speaker 1: I'm hearing now. You know, at the end of the day,
Speaker 1: even if there's this continues to be a Bileneck. Now,
Speaker 1: it could come back and do it in December on
Speaker 1: the National Defense Bill. But again what Warner said is
Speaker 1: you do a delay of months, could be a delay
Speaker 1: of years because Intel other manufactors will get subsidies and
Speaker 1: they'll go elsewhere. Well, we already know they delayed the
Speaker 1: groundbreaking on this massive campus in Ohio. Right We talked
Speaker 1: to the Senator Rob Portman about that, and I'm sure
Speaker 1: he didn't like getting that phone call. I don't know
Speaker 1: if they're talking to other countries, because I know there's
Speaker 1: there are a lot of incentives out there. It's quite
Speaker 1: a buffet for these chip makers here. But I suspect
Speaker 1: there will be more of those. Gina Romando told us
Speaker 1: there would be. Eric, if this fifty two billion dollars
Speaker 1: doesn't show up, they're going to go somewhere else. Well,
Speaker 1: that's that's the ironic thing is that they forecast that
Speaker 1: the Congress would do this, so other countries rushed out
Speaker 1: through their own program, and then we don't, and they
Speaker 1: beat us to it. We made the competition more fierce unbelievable.
Speaker 1: If that's the case, then you've got a busy three weeks,
Speaker 1: so chips in reconciliation could in fact pass through Congress
Speaker 1: before the August recesses. The takeaway from Eric Wasson is
Speaker 1: that fair? Eric? It could be, but it's always safety
Speaker 1: bet against because that's a man who's there every day.
Speaker 1: There is a chance, right that none of them happened,
Speaker 1: that this is it. Nothing else comes out of this
Speaker 1: Congress until it's appropriations. That's also true. Yes, Well that's
Speaker 1: why you're there, Eric, thank you, hasn't been with us
Speaker 1: for a while. And one of our best reporters on
Speaker 1: Capitol Hill, Bloomberg's Eric Wasson on the Fastest Hour in Politics,
Speaker 1: will add the panel to this because they know what's
Speaker 1: coming as well. Rick Davis, Genie Schanzano on the Chip Act.
Speaker 1: And by the way, something wonderful that happened today on
Speaker 1: Capitol Hill that you'll want to you're about I hope
Speaker 1: not only here. Well, let's hear it for Woody Williams.
Speaker 1: I'm Joe Matthew at World Headquarters in New York, and
Speaker 1: this is Bloomberg. This is Bloomberg sound on on Bloomberg Radio.
Speaker 1: People in Washington are talking about the skinny chips. Sounds
Speaker 1: like something in the diet foods aisle, but it's actually
Speaker 1: computer chips in a skinny version of the bill that
Speaker 1: Chuck Schumer thinks she might be able to get past.
Speaker 1: John Cornyn says it's all a big bluff. Let's reassemble
Speaker 1: our panel. Rick Davis and Jeanie Schanzano Bloomberg Politics contributors
Speaker 1: are with us to add some sense to this. Gennie,
Speaker 1: I feel almost ridiculous bringing this up because we've been
Speaker 1: talking about it for a year now, and uh, it's
Speaker 1: been locked up in this conference committee, well gosh, for months,
Speaker 1: and so I guess who can blame? Chuck Schumer? Just
Speaker 1: break this thing apart. The Chips Act is the piece
Speaker 1: that everybody seems to agree on. Right, that's right, And
Speaker 1: you know, I think this is sort of the path
Speaker 1: that they can pull together in the Senate, at least
Speaker 1: the sixty votes they need, and I do think that's
Speaker 1: more than possible. There is some resistance there, but they
Speaker 1: can pull that together. And the big question is, of
Speaker 1: course the House. But as you were just discussing, Pelosi
Speaker 1: seems open to it. So this is a way to
Speaker 1: break that stalemate that's been going on in the conference
Speaker 1: for so long, and the House is refusal to just
Speaker 1: pass the Senate bill, which is obviously a no go.
Speaker 1: After a year, I thought this is bipartisan, Wrick. What happened?
Speaker 1: You know, Look, it's more bipartisan than it that it
Speaker 1: appears today. I mean, you know, it got passed in
Speaker 1: a biparson fashion of the House and Senate, and it's
Speaker 1: in a in a conference. But this is a different
Speaker 1: bill than the skinny Chips bill you're discussed and and
Speaker 1: it's falling prey right now to a power struggle. It's
Speaker 1: got nothing to do with the legislation or who's voted
Speaker 1: for it in the pass. McConnell, I think smartly, So
Speaker 1: is trying to keep the Senate from passing a reconciliation bill,
Speaker 1: which will spend another trillion dollars in and have a
Speaker 1: bunch of talking points for Democrats to go into November with,
Speaker 1: and he sees the potential for that, and this is
Speaker 1: the one thing he's got a card to play now.
Speaker 1: We've seen him cave and negotiate in the past on
Speaker 1: similar items, and so that's a possibility. But the clock
Speaker 1: is ticking. I mean, you know, uh, Eric was saying
Speaker 1: that this all has to be wrapped up by August four,
Speaker 1: when recess started, and they take recess seriously in an
Speaker 1: election year. I mean, this is when they want to
Speaker 1: go back and see the constituents. So forget reconciliation Genie right,
Speaker 1: How how could that possibly happen? I know, Eric said
Speaker 1: they could figure this out in the next three weeks,
Speaker 1: but I mean that would that would end up in
Speaker 1: the Guinness Book. With this Congress. You know, I'm not
Speaker 1: predicting it will happen. I think the path forward would
Speaker 1: be something like the skinny Chips. You'd have a skinny
Speaker 1: reconciliation bill which you know is paired down enough that
Speaker 1: it focuses just say on Medicare you know something that
Speaker 1: you know most people, in particular Joe Mantion can agree on,
Speaker 1: and they can move that forward. I don't know if
Speaker 1: it will happen. You know, if we were to see
Speaker 1: and reconciliation, even skinny versions of both, that would be
Speaker 1: an astonishing summer. I can't imagine we'd see both, but
Speaker 1: you know, I guess it is possible at this point.
Speaker 1: I know the Chips Act is very popular, Rick, but
Speaker 1: is it in Mitch McConnell's best interest to make sure
Speaker 1: that that reconciliation bill does not pass? I mean, he
Speaker 1: could throw up a lot of other obstacles in the
Speaker 1: next three weeks. He could. I'm not sure he would
Speaker 1: agree with Eric's analysis that you know, these chip companies
Speaker 1: could potentially flee the United States for greener past years abroad.
Speaker 1: I don't think he would give up. McConnell on the
Speaker 1: idea that, um uh, that we're gonna at some point
Speaker 1: incentivize this industry. He just does want to do it
Speaker 1: between now and a reconciliation bill, and he's got a
Speaker 1: week to kill so um, I think he's playing a
Speaker 1: hard card. Uh, Schumer's not in the Senate right now
Speaker 1: to sort of personally lobby and and and Democrats are
Speaker 1: gonna have a hard time keeping their caucus together, worn
Speaker 1: and bluffing by calling this a big bluff though, Rick,
Speaker 1: where the votes on it? I think everybody right now
Speaker 1: is bluffing and the votes that you have enough votes
Speaker 1: for anything and no votes for everything. God, you must
Speaker 1: miss this stuff being in the throes of all of it. Uh.
Speaker 1: Jennie Rick made a great point. Everybody's got to get
Speaker 1: home for August, and that's going to change a lot
Speaker 1: of the conversations when when their campaigning, holding town hall meetings,
Speaker 1: you know, going out and shaking hands. Everybody gets in
Speaker 1: earful and they come back thinking a little bit differently
Speaker 1: about some things. What's this gonna feel like in September? Well? Absolutely,
Speaker 1: I mean, you know they are going to have an
Speaker 1: earful from their constituents and their voters, and you know,
Speaker 1: things like you know tain you know, tax increases are
Speaker 1: probably going to be a no go at this point. So, yeah,
Speaker 1: we heard this. You know the famous cases on the
Speaker 1: the Obamacare. You go home with one idea in mind,
Speaker 1: and you go to these town halls and you hear
Speaker 1: something else and they'll return. So you know, I do
Speaker 1: think there's a short calendar here. This has to be
Speaker 1: done in the next fourteen sixteen day ease. Otherwise it's
Speaker 1: hard to imagine they would have the energy and the
Speaker 1: votes importantly to do it. Then again, Rick either going
Speaker 1: to hear about inflation when they go home, and that
Speaker 1: was supposed to be the idea behind this chip backed right,
Speaker 1: so that could prompt chips to pass. I guess maybe,
Speaker 1: or or maybe they want to go home and say, hey,
Speaker 1: at least we got this done, but the reconciliation plan,
Speaker 1: uh could be out of reach. What do you think? Yeah,
Speaker 1: I think we're We've got a lot of time to go,
Speaker 1: even though it doesn't seem like it is. And and
Speaker 1: you could get a chip steal done if that's the
Speaker 1: only thing that they can agree to do, and it
Speaker 1: could go fast because again everyone's already voted on this.
Speaker 1: Every single component of what they would include in a
Speaker 1: slim down version has already been voted on and past.
Speaker 1: So it's just a manner of making something smaller that
Speaker 1: everybody agrees on that makes it more manageable. And they've
Speaker 1: got time left on the calendar to get that done.
Speaker 1: I see this happening in a lot of parallel tracks,
Speaker 1: and at the end of the day, it's like, you know,
Speaker 1: the sort of the Mexican standoff. I mean, who blinks
Speaker 1: first and who gets to vote? And if there's a reconciliation,
Speaker 1: you're not going to get a chips vote. If there's
Speaker 1: a chips vote, it means you've already cut a deal
Speaker 1: where there won't be reconciled. Is that a blessing in
Speaker 1: disguise for Democrats? Genie? So they don't have to answer
Speaker 1: for spending another trillion dollars on the eve of the election.
Speaker 1: It's a blessing for Democrats, particularly in purple districts. That's
Speaker 1: that's for sure. There's going to be some pushback on that,
Speaker 1: of course, but that may be the play here, right,
Speaker 1: is that they do the chips, they're able to deliver that.
Speaker 1: It's a win for Biden and then they don't have
Speaker 1: to take the hard vote and it wouldn't be the
Speaker 1: first time Congress has wanted to avoid a hard vote.
Speaker 1: Joe Biden taking phone calls on this from overseas, You think,
Speaker 1: Rick is, it does feel like we're getting to a
Speaker 1: bit of a crescendo here. Well, the question is is
Speaker 1: Joe Biden making phone calls because because no one really
Speaker 1: cares about him if they can't get a bill pass.
Speaker 1: And what he should care about is doing exactly what
Speaker 1: Genie was saying, which is, I've got to have that
Speaker 1: Chips Act before you guys, lady. And and by the way,
Speaker 1: I think the Democrats are in a tight bind because
Speaker 1: you know, they've got these subsidies on our but that
Speaker 1: you know, aren't you know in the m care that
Speaker 1: that they have promised the thirteen million people that they're
Speaker 1: going to fulfill and they don't have those deals done yet,
Speaker 1: And so it's gonna they're gonna have a lot of
Speaker 1: egg on their face if they don't get this reconciliation
Speaker 1: buil done before election day. We'll tell you Chuck Shumer
Speaker 1: must be burning the phones right now, reminding everyone listening
Speaker 1: that he's been out with COVID, which does not make
Speaker 1: any of this any easier. But I will tell you
Speaker 1: before we go away today about something that, something wonderful
Speaker 1: that happened in the Capitol today, and it had nothing
Speaker 1: to do with legislation. Bring us inside the Capitol rotunda, justin.
Speaker 1: Our nation was richly blessed by the life Boody Williams,
Speaker 1: and we trust he now rests with his father, from
Speaker 1: whom all blessings. What is passing? We have lost a
Speaker 1: deeply selfless American and a vital link to our nation's
Speaker 1: greatest generation. How about that Nancy Pelosi and Mitch McConnell
Speaker 1: agree on this, And of course, well couldn't they. Woody Williams.
Speaker 1: You might have seen a story about him in the
Speaker 1: last couple of weeks, the last surviving World War Two
Speaker 1: Medal of Honor recipient in honor today laying an honor
Speaker 1: in the U. S Capitol Rotunda. He died the end
Speaker 1: of June, June eight years old. Presented it was just
Speaker 1: an incredible story, presented with the Congressional Medal of Honor
Speaker 1: by President Truman in ve he had just gotten back,
Speaker 1: somehow survived the Battle of io Jima, where he took
Speaker 1: out a couple of Japanese pill boxes by putting his
Speaker 1: life on the line. He was one of these guys
Speaker 1: with a flame thrower. I used to hear about those
Speaker 1: guys from my grandfather, the late Joe Matthew, who also
Speaker 1: fought on Ewo Jima. He was in the fifth Marine Division,
Speaker 1: and I'd hear stories about those guys with the flamethrowers.
Speaker 1: Not to mention these guys who were taking out the
Speaker 1: pill boxes and putting their lives on the line, like Woody.
Speaker 1: He served as a member of the Marine Corps with
Speaker 1: the twenty first Marines, third Marine Division. And pretty great today,
Speaker 1: Rick to see this incredible at the same time, the
Speaker 1: last surviving World War Two Medal of Honor recipient as
Speaker 1: certainly the end of an era. It's an incredible story
Speaker 1: his life. Diminutive guy, I don't think you ever weighed
Speaker 1: more than about a hundred forty pounds. And and and
Speaker 1: yet he was a leader. Uh. He established himself early
Speaker 1: in his life as someone who's willing to give back
Speaker 1: to the community. Uh. He's just been a beacon of
Speaker 1: hope and and inspiration and and and it was wonderful
Speaker 1: to see, even though it's a solemn event at the Capitol,
Speaker 1: all the Republicans and Democrats together that's honoring this man
Speaker 1: who gave so much to his country. He spent a
Speaker 1: lot of time working with the Department of Veterans Affairs,
Speaker 1: thirty years of of giving back and traveling around talking
Speaker 1: to veterans and trying to make their lives better. Genie,
Speaker 1: to see all those d's and ours in that room today,
Speaker 1: it's a pretty major statement on what a wonderful contribution
Speaker 1: he made. It was in the Marine Corps band playing
Speaker 1: while they were walking around the casket. It was a
Speaker 1: beautiful picture and to see. And of course there is
Speaker 1: still a lot to be done for veterans in this country.
Speaker 1: There's been bills just this week that people have been
Speaker 1: talking about and so you know, Woody would probably be
Speaker 1: the first one to advocate on behalf of the veterans
Speaker 1: in that regard. His valor in combat enshrined, as Mitch
Speaker 1: McConnell reminded us today aboard the u S. S Hershall Williams,
Speaker 1: the Hershall Williams Armed Forces Reserve Center. His commitment to
Speaker 1: his fellow veterans inspires care givers and I wonder if
Speaker 1: they could do something to help the v A right
Speaker 1: now in his name, Rick, what is the v A
Speaker 1: need right now. You know, I think that it's this
Speaker 1: kind of inspiration that the VA should go out and
Speaker 1: be able to talk about how um, you know, the
Speaker 1: network of veterans, regardless of what war they served in,
Speaker 1: you know, as a tight knit community and one that
Speaker 1: holds together. Um, you know, they've been under a lot
Speaker 1: of pressure over the last decade and and you know, uh,
Speaker 1: Woody Williams, is is something that I think they should
Speaker 1: be talking about for the rest of our lives. Here here,
Speaker 1: Rick Davis and Jeannie Chanzano. Thanks so much to both
Speaker 1: of you for another great conversation. We dig into some
Speaker 1: pretty heavy stuff on this program, and that's why we
Speaker 1: need Rick and Jeanie to show us the way. Sometimes
Speaker 1: on the fastest hour in politics, I'm Joe Matthew at
Speaker 1: World Headquarters in New York. I'll meet you back here
Speaker 1: tomorrow and also meet you at high noon Wall Street
Speaker 1: time on Balance of Power. If you showed up late,
Speaker 1: subscribe to the podcast and I'll see you here on
Speaker 1: the Friday edition. I'm Joe Matthew, and this is Bloomberg