Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene. Daily
Speaker 1: we bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. Right now,
Speaker 1: Greg Vlli joins us with a f G O. Note
Speaker 1: that everybody in Washington reads each and every morning, and Greg,
Speaker 1: I do want to talk about something we've really avoided
Speaker 1: this morning is John Farrell mentions we get right to
Speaker 1: work and part of that work is impeachment. What will
Speaker 1: we see this Wednesday and Thursday on impeachment? Yeah, Hi, Tom,
Speaker 1: good morning. Everybody talks about unity, and I know it's
Speaker 1: going to be a big fame for Joe Biden, but
Speaker 1: we have a decent trial coming up that I think
Speaker 1: will be better at think it will drag on for
Speaker 1: two or three weeks. I think they probably will fail.
Speaker 1: I think it could make uh Donald Trump look like
Speaker 1: a martyr. I think it will complicate Joe Biden's agenda.
Speaker 1: So right away after talking about unity, week of that,
Speaker 1: and I would just also add to the Janet yell
Speaker 1: and hearing yesterday was not that unified. The Republicans pushed
Speaker 1: back hard on new spending. Yeah, well, that's exactly where
Speaker 1: I wanted to go, this idea that we talk about unity,
Speaker 1: and yet we have these divisions that are getting just deeper.
Speaker 1: Do you feel momentum behind this one point nine trillion
Speaker 1: dollar plan or do you think this is going to
Speaker 1: drag out for months, far longer than the market is
Speaker 1: pricing in. I think there's momentum behind a plan. I'm
Speaker 1: not sure if this plan that has a lot of
Speaker 1: money for state and local governments, minimum wage. I think
Speaker 1: we'll get something, but I don't think it will be
Speaker 1: one point nine trillion. I think we could get a
Speaker 1: deal by the end of February, but the Republicans really
Speaker 1: showed their hand yesterday that they don't want anything that's expensive.
Speaker 1: One point nine audience, the number, What do you think
Speaker 1: it comes down to? Greg, Well, I've been saying something
Speaker 1: around one five. I think maybe one four one five.
Speaker 1: I think that is is doable. The Democrats have to
Speaker 1: hold on to every one of their fifty senators, and
Speaker 1: I'm not convinced John that they've got all fifty. They
Speaker 1: might have forty eight, they might have forty nine. So
Speaker 1: that this will I think boiled out to negotiations between
Speaker 1: Joe Biden and Mitch McConnell. Great Valier with us with
Speaker 1: the GF, and he will stay with us at this moment, Greg,
Speaker 1: val so much of this And we just talked to
Speaker 1: with there's the post poster for conservative Republicans. Is Republicans
Speaker 1: acting fast to get ready for two thousand twenty two primaries?
Speaker 1: What would you expect to see from conservative southern Republicans? Well,
Speaker 1: it is amazing, isn't a ton that we're already talking
Speaker 1: about twenty twenty two? But that's Washington. So a couple
Speaker 1: of points I'd make. Number one, I do think that
Speaker 1: the Republicans will hit hard on the issue of taxes
Speaker 1: and ending. I think the country doesn't want big new taxes.
Speaker 1: I think that's going to be a potent argument for them.
Speaker 1: So I think that the other point I'd make is
Speaker 1: that historically a first term president in his first midterm
Speaker 1: election loses about five of House and Senate seats. If
Speaker 1: Biden were to lose five percent of House and Senate seats,
Speaker 1: he'd lose both houses. Greg, I want you to talk
Speaker 1: about the silence of Mr Hoover and Mr Roosevelt long
Speaker 1: ago and far away in the early days of the depression.
Speaker 1: Without question, the quietest car ride in the history of
Speaker 1: our presidents. With all your perspective, Greg Bellier, is Mr
Speaker 1: Trump setting precedents here that we may see in the
Speaker 1: future or in your opinion, is this a one off
Speaker 1: of discord. I think it's a one off. I think
Speaker 1: most politicians right or left respect tradition. You know, Trump doesn't.
Speaker 1: He stirred the pot. I mean, that's Donald Trump. He
Speaker 1: didn't respect a lot of the norms. But I think
Speaker 1: as we go into other elections that there will be
Speaker 1: more conciliation. Greg. When we talk about the presidency of Trump,
Speaker 1: it was one that was anti establishment, it was anti Washington.
Speaker 1: That was the goal of his taking out some of
Speaker 1: the career members of the cabinet, of the various departments
Speaker 1: and putting in his own people. What do you think
Speaker 1: the legacy of that will be as Joe Biden comes
Speaker 1: in and tries to reverse that. Well, you know, it's
Speaker 1: one thing to blow things up. I get it that
Speaker 1: there are certain institutions that haven't worked well and you
Speaker 1: want to blow them up, but you have to have
Speaker 1: something to replace them with. And he would blow things
Speaker 1: up without any alternative, and I think that got tires up.
Speaker 1: I also think the level of personal rancorps, the vindictiveness,
Speaker 1: the ugliness of his tweets really distinguished him and really
Speaker 1: diminished his cause. John, I think the British do this better.
Speaker 1: You lose the election, what do you are you leave
Speaker 1: in like three hours with the cardboard the next day.
Speaker 1: And I do think the events in the last few
Speaker 1: months Tom really exposed some vulnerability in that process. The process,
Speaker 1: of course established for good reason many years ago. But
Speaker 1: I wonder, Greg, just as a final question to you, sir,
Speaker 1: whether that's something that people will rethink, will need to rethink,
Speaker 1: whether you think we should rethink that well. I think
Speaker 1: there were things that Trump did that were positive. Getting
Speaker 1: tough with China I think everybody would agree on. I
Speaker 1: think having fewer regulations people would agree on. It was
Speaker 1: the way he did it. The way he did it
Speaker 1: was was so over the top and outrageous that it
Speaker 1: hurt his cause. Greg Bella, thank you so much for
Speaker 1: joining us on the day of inauguration, and all of
Speaker 1: us thank you for your perspective across this historic campaign.
Speaker 1: Right now, with futures up seventeen and futures up sixty.
Speaker 1: It is a market that is voting on prosperity for
Speaker 1: the halves, voting for the prosperity of those that participate
Speaker 1: in the markets. Alicia Levine is a wonderful student of this.
Speaker 1: She's a b and y melon with acute mathematics and
Speaker 1: a really really sharp set of critical thinking skills to
Speaker 1: get us through two thousand twenty one. Alicia, if you
Speaker 1: amended your view forward of the events of the last
Speaker 1: thirty days, Yeah, good morning, Good morning, dream team. Your
Speaker 1: coverage has been really wonderful this morning. Really enjoying it. Um, Yes,
Speaker 1: we have, so we The way we've amended it is
Speaker 1: to say that we think that for markets, the cyclical
Speaker 1: trade has legs, it's deepened, and that the name of
Speaker 1: the game is rotation here. And we think that because
Speaker 1: as you can see, the stimulus is going to be enormous.
Speaker 1: The initial proposal put forth by the incoming Biden administration
Speaker 1: is double the size that Wall Street was really a expecting,
Speaker 1: and direct checks to households are already being spent. We
Speaker 1: saw the December direct checks coming into households the first
Speaker 1: twelve days of the year on the order of a
Speaker 1: hundred and thirty billion dollars, and those people who received
Speaker 1: direct checks have already increased their credit card spending by
Speaker 1: in the first week of January alone. So what does
Speaker 1: that mean? This this economy is seventy consumption and whether
Speaker 1: their households are saving the checks or spending them, g
Speaker 1: d P will be going higher and with that the
Speaker 1: sectors that are levered to the cyclical recovery will move
Speaker 1: higher as well, and this trade will have legs Alicia,
Speaker 1: where is that money being spent? So it's interesting. So
Speaker 1: the households that are spending it tend to be households
Speaker 1: that earned fifty dollars or less, and it's being spent
Speaker 1: on things like clothing and food and and housing. Um.
Speaker 1: The household that are spending it tend to be the
Speaker 1: wealthier households. And that's why we think the second half
Speaker 1: of the year, when services can come back online in
Speaker 1: a more meaningful way, in a in a more regular
Speaker 1: way because of the dissemination of vaccine, those households right
Speaker 1: now have an extra one point for trillion dollars to
Speaker 1: spend in savings, and that pent up demands is going
Speaker 1: to meet that savings it's going to get higher with
Speaker 1: increased checks to households. It's gonna be enormous spending in
Speaker 1: this country. I think the boom is coming. So how
Speaker 1: quickly could that spending drop off if we don't get
Speaker 1: some sort of additional fiscal stimulus passed in the upcoming
Speaker 1: to three months. So the bill that was passed in
Speaker 1: December was really meant to get us through the end
Speaker 1: of March, because the unemployment benefits expired and the extra
Speaker 1: three dollars a week expires at the end of March,
Speaker 1: and the checks really are of the amount to get
Speaker 1: households through the end of March. So the Biden plan
Speaker 1: is is another bridge, right, and and that's really to
Speaker 1: look forward, get households um equalized here and how they
Speaker 1: can handle their other scourge of the pandemic getting us
Speaker 1: through into June and July. This is a lot of money, folks.
Speaker 1: It's very hard to overstate how much money is being
Speaker 1: spent on rescue here. And this is one reason why
Speaker 1: a lot of people are expecting inflation to pick up
Speaker 1: as the year goes on. This is one of the
Speaker 1: big conundrums, though, couldn't pick up quite a bit more
Speaker 1: than people had expected, pushing yields higher, pushing the Fed's
Speaker 1: hands and frankly, torpedoing some of the most popular calls
Speaker 1: in the equity market. Do you see a growing risk
Speaker 1: of that given the pent up demand that can pent
Speaker 1: up savings that you just talked about. Yeah, highly. So
Speaker 1: this is like the question for the markets this year,
Speaker 1: This is the defining question, and that's how quickly do
Speaker 1: yields rise and what does the FED do about it?
Speaker 1: So the biggest risk to markets here is the spiking yields,
Speaker 1: not so much the gently rolling higher, but the spike.
Speaker 1: And it's very clear that inflation will look hotter simply
Speaker 1: because of calendar effects, because of base effect into the spring.
Speaker 1: So no one should get too concerned about that. What
Speaker 1: we've heard from the FED is that they're willing um
Speaker 1: for higher inflation prints in to kind of pass by. However,
Speaker 1: base effects can still seep into forward looking inflation expectations,
Speaker 1: and so it's not just a wash, it's something to
Speaker 1: look out for. We think the risk for inflation is higher.
Speaker 1: I think the market will overlook what happens in the
Speaker 1: prints for the spring as we move through the rest
Speaker 1: of the year. I think the risk of that inflation
Speaker 1: is higher than markets are currently expecting. Alicia, there's definitely
Speaker 1: a lot of concern about this, and this is something
Speaker 1: that we keep hearing about, this idea of inflation and
Speaker 1: picking up. How do stocks respond if you do get
Speaker 1: what you expect, which is higher than expected inflation. So
Speaker 1: it's going to happen as as bond yields move higher,
Speaker 1: is that you're going to compress some of the pees,
Speaker 1: the preceding ratios, and that's going to really affect some
Speaker 1: of the tech trades because what we because those are
Speaker 1: long duration assets with high you know, high cash flowing assets,
Speaker 1: So higher yields will dent some of the pe exuberants
Speaker 1: on the tech trade, which is why we like cyclicals here.
Speaker 1: We think overall it's not going to be a dent
Speaker 1: in the market because the earnings power coming from the
Speaker 1: cyclicals should kind of overcome the lower pees that the
Speaker 1: market is willing to pay. Overall, we think earnings are
Speaker 1: going higher, particularly in the second half of the year,
Speaker 1: and that earnings of recovery is going to propel markets
Speaker 1: going forward, not so much the pees, it's the earnings recovery.
Speaker 1: Felicia Levine Withe this with b n Y Melon we'd
Speaker 1: like to bring in right now is Mr Biden tense
Speaker 1: church at St. Matthew's Cathedral from my own in college.
Speaker 1: Jena Zana joins us, and Rick Davis joins us. Some
Speaker 1: Stone Court as well. We now have the automobile leaving
Speaker 1: Blairhouse and this is of course, uh Mr and Mrs
Speaker 1: Biden moving off to church, Jennie. The symbolism here that
Speaker 1: we have this morning, the differences here of this visit
Speaker 1: to a church versus the visit by the President to
Speaker 1: a church in the Ride and storm of Black Lives
Speaker 1: Matter last summer. It's just as stark is anything in
Speaker 1: this nation. Yeah, absolutely, and and by design I think, um,
Speaker 1: you know, the Biden incoming administration has really been focused
Speaker 1: on making a case for bipartisanship. This is somebody who
Speaker 1: spent his life in the Senate. He understands. As he
Speaker 1: gets set to send a huge immigration bill to Congress,
Speaker 1: maybe as early as today, to sign over a dozen
Speaker 1: executive orders to try to combat the coronavirus. With this
Speaker 1: almost two trillion dollar bill, he understands he is going
Speaker 1: to need the support of Republicans. With this Senate so
Speaker 1: narrowly divided, and as he is trying. I agree with
Speaker 1: Kevin to use the trip to the church symbolically, and
Speaker 1: he's going to be accompanied by members of the leadership
Speaker 1: on the Republican side to make the case for bipartisanship,
Speaker 1: which we're going to hear an awful lot about unity
Speaker 1: today and a speech I suspect as well. Maybe there'll
Speaker 1: be some prayers in the Republican Party as they consider
Speaker 1: a new Senate and not a fracture, but a more
Speaker 1: fragile house. Rick Davis joins us now with his service
Speaker 1: to the gentleman from Arizona, Mr McCain over the years,
Speaker 1: Rick Davis, How does Senator McConnell pick up this pieces?
Speaker 1: What is the McConnell process is minority leader even in
Speaker 1: the next weeks and certainly in the next months. Well, Tom,
Speaker 1: it's it's hard to conceive of that term Mitch McConnell
Speaker 1: as minority leaders. Uh, but he's already sort of tipped
Speaker 1: his hat. He's speaking pretty freely these days, which is
Speaker 1: somewhat unusual about his plans as minority leader. And he
Speaker 1: he did talk about the fact that in a divided Senate,
Speaker 1: you're going to need to compromise and I thought I
Speaker 1: would never live to hear the word compromise come out
Speaker 1: of Mitch McConnell's mouth. But I think this is the
Speaker 1: new Mitch McConnell, and I think he'll use opportunities to
Speaker 1: ensure that legislation that does get through the United States
Speaker 1: Senate has his work on it. He knows he can't
Speaker 1: control the agenda now, but he can impact the outcome
Speaker 1: of this legislation, and so I think that will be
Speaker 1: his top priority, is just make sure that things don't
Speaker 1: get through the Senate that cause irreparable harm to the
Speaker 1: economy and to the policies of our nation. When Rick
Speaker 1: what Rick? When Tom talks about unity and the fractures
Speaker 1: that we've seen in the Republican Party, it raises a
Speaker 1: question of who Mitch McConnell is representing right now. Given
Speaker 1: the fact that a majority of Republicans polled according to
Speaker 1: a number of different polls, still support President Trump, do
Speaker 1: not think that he should have been, uh but impeached
Speaker 1: or that he should resign. What do you make of
Speaker 1: that in terms of how it influences Mitch McConnell and
Speaker 1: his Republican Party as he charts his path forward. Well
Speaker 1: Mitch mconnell still has office and office matters in these
Speaker 1: kinds of cases. So regardless of the public popularity within
Speaker 1: the Republican Party that Donald Trump has, Mitch McConnell actually
Speaker 1: gets to go to work tomorrow morning and do the
Speaker 1: nation's business. And so he will be one of a
Speaker 1: couple of national leaders who are going to form the
Speaker 1: Republican Party outlook on policy and politics between now and
Speaker 1: the midterm elections, which is the next real check in
Speaker 1: the system, and highly unlikely that there'll be a Trump
Speaker 1: on a ticket uh in two But Mitch McConnell will
Speaker 1: have a large cache of money and is currently recruiting
Speaker 1: candidates for Senate races that are up in that period
Speaker 1: of time. So he's going to continue to be a
Speaker 1: very important mechanic of the Republican Party and a legislative strategists.
Speaker 1: And right now, uh, he is about all we've got
Speaker 1: as a leader in the Republican Party. Meanwhile, as we
Speaker 1: talk about fractures in the Republican Party, there certainly are
Speaker 1: fractures in the Democratic Party Genie, and there's a question
Speaker 1: of how much Joe Biden will be able to bring
Speaker 1: together the left and center and right frankly of the
Speaker 1: Democratic Party in order to get through his policy. What
Speaker 1: is the unity like when it comes to the Democratic caucus.
Speaker 1: The unity we're seeing today is going to be really
Speaker 1: the height of the unity we will see going forward.
Speaker 1: It is going to be tough for Joe Biden to
Speaker 1: keep this large, particularly in the House caucus together. We've
Speaker 1: already heard frustration in some quarters of the progressive wing
Speaker 1: in terms of his proposal on COVID relief, for instance,
Speaker 1: saying things like that almost two trillion dollar bill doesn't
Speaker 1: go far enough. And of course you look at the
Speaker 1: opposite side on the Republican side, and even moderate Democrats
Speaker 1: they say it goes way too far. In other words,
Speaker 1: what does a fifteen dollar minimum wage have to do
Speaker 1: with battling the coronavirus. So Joe Biden is going to
Speaker 1: have his work cut out for him trying to keep
Speaker 1: the caucus together on the Democratic side and trying to
Speaker 1: please this really loud and energetic progressive wing of that party,
Speaker 1: because he's going to have to do that, and his
Speaker 1: focus is going to have to be trying to get
Speaker 1: to sixty in the Senate, and that means he's going
Speaker 1: to have to appeal to moderate Publicans and moderate Democrats,
Speaker 1: and that's not going to make the progressives happy. So
Speaker 1: all these bills were seeing him talk about, from immigration
Speaker 1: to COVID relief. I suspect we will see watered down
Speaker 1: versions of that if we see them get through the
Speaker 1: Senate at all. And yesterday in Congress we got signals
Speaker 1: it's not going to be easy, people like Josh Holly
Speaker 1: holding up the DHS cabinet nomination, not fast tracking it,
Speaker 1: Chuck Grassley saying he's got concerns about the COVID relief bill,
Speaker 1: amongst other things, with the liberal components of that in there.
Speaker 1: So those are signs already before Joe Biden is even
Speaker 1: inaugurated that this is going to be a tough sort
Speaker 1: of line for him to walk here jeans Ana with us,
Speaker 1: and also Rick Davis here and again at the nine
Speaker 1: o'clock our the Air Force one pulling away at Andrew's
Speaker 1: Air Force Base, a president on his way to Florida,
Speaker 1: and outside the Cathedral of St. Matthew in Washington, we're
Speaker 1: waiting for Mr Biden, I believe, to uh enter the church,
Speaker 1: and of course other worthies attending as well. The church
Speaker 1: is one of the Jewels of Washington as a LeFarge
Speaker 1: at the turn of the nineteenth century. It is Romanesque.
Speaker 1: For those of you know the know Boston, there's the
Speaker 1: church at Copley Square, which is much the same feeling,
Speaker 1: maybe a number of years earlier uh than that, Rick Davis,
Speaker 1: you know, is we go to this hour as the
Speaker 1: president flies away. It is a changing of the era.
Speaker 1: And what's so interesting to me, Rick Davis, there's a
Speaker 1: huge presumption with Biden a seventy eight that this is
Speaker 1: a one term presidency. I believe in my life I've
Speaker 1: never understood this was a one term presidency as much
Speaker 1: as this moment. How Rick Davis does the assumption of
Speaker 1: a one term presidency changed the moment And it's a
Speaker 1: very good point, Tom. Joe Biden, because of his age,
Speaker 1: is probably termed out the day he gives his swearing in,
Speaker 1: so uh it is something to remember. UH. Kamala Harris
Speaker 1: is a uh new vice president, as has been remarked
Speaker 1: many times historic UH, and she is going to be
Speaker 1: seen as an heir apparent uh to Joe Biden for
Speaker 1: a presidential run. In The question is can Joe Biden
Speaker 1: UH be relevant over the next two years in order
Speaker 1: to ensure that he doesn't start acting like a lame
Speaker 1: duck president. As we recall, UH, in the last term
Speaker 1: of UH Barack Obama's presidency, he was almost termed out.
Speaker 1: In the first year of his second term, people saw
Speaker 1: him no longer as the future UH, and so policy
Speaker 1: waned and legislative action slowed down. UH Biden's got some momentum,
Speaker 1: and he can write it as long as he can,
Speaker 1: but the political realities are that he is in the
Speaker 1: future of the Democratic Party. Two of you, thank you
Speaker 1: so much. I know you'll be giving us guidance and
Speaker 1: wisdom through the day. We greatly pre should a genius
Speaker 1: of my owner and Rick Davis as well joining us
Speaker 1: now handrittas Race of Vada Partners Economic policy director Handritt
Speaker 1: sid I spelled on the words of Kevin, the biggest
Speaker 1: policy battled down in d C still would come where
Speaker 1: does it lie? I think the most interesting thing, and
Speaker 1: Kevin gave such a great round up, is the reality
Speaker 1: that Senator Schumer is going to be controlling the Senate
Speaker 1: floor from here. So perhaps Senator Marco Rubio and others
Speaker 1: in the Republican Conference want to hold out for the
Speaker 1: perfect they may be able to make some real changes,
Speaker 1: but when push comes to shove, it's going to be
Speaker 1: a majority Leader Schumer that decides which bills go to
Speaker 1: the Senate floor, and they're gonna have to vote against
Speaker 1: a direct payment to individuals, against unemployment insurance benefits at
Speaker 1: the federal level, against more vaccine and testing funding for
Speaker 1: state and local governments. And that's going to be something
Speaker 1: that they have to wear that they have not had
Speaker 1: to deal with under Majority Leader Mitch McConnell. So I
Speaker 1: think that start rate a big number, a big number,
Speaker 1: one point nine really, and Henrietta and we've had a
Speaker 1: big conversation the last couple of weeks about how much
Speaker 1: that will have to come down. If you've got a
Speaker 1: base case yet, Yeah, my base cases that we probably
Speaker 1: end up at the very low end, in the seven
Speaker 1: fifty billion dollar range, if they really try to get
Speaker 1: sixty votes in ten of which we need to come
Speaker 1: from the Republican conference. At the high end, maybe one
Speaker 1: and a half trillion UM. I think that those negotiations
Speaker 1: will probably last until about mid February, and then we'll
Speaker 1: have an understanding of whether Democrats are going to have
Speaker 1: to go it alone or continue trying to negotiate a
Speaker 1: bipartisan package. Um, so it's gonna be a couple more weeks.
Speaker 1: Here Henry and the time keen here in good morning
Speaker 1: to you on this day of inauguration. Is the committee
Speaker 1: process broken forever? Uh? In the Senate? I don't think so.
Speaker 1: I mean, if that's what you're referring to, I think
Speaker 1: that the committees are, especially with the Senators. There's a
Speaker 1: lot of seniority there. So, for instance, there's a lot
Speaker 1: of attention on Senator Bernie Sanders, who will be chairman
Speaker 1: or co chair of the Senate Budget Committee. They're gonna
Speaker 1: come with to an agreement on how to proceed. It
Speaker 1: may take a couple of weeks to hash out, but
Speaker 1: there will be a path forward. They will divvy up
Speaker 1: committee assignments, there will be staff and budgets prepared for
Speaker 1: all of them. There will be a reconciliation bill potentially
Speaker 1: even three depending on who you talked to in the
Speaker 1: Democratic Conference, and this, this power sharing agreement will get.
Speaker 1: Sort of an interesting thing to keep your eye on
Speaker 1: is whether any of the senators decided to leave either
Speaker 1: of their parties become an independent and caucus with the
Speaker 1: other side. Last time around, that's what happened. We could
Speaker 1: definitely see that again. Yesterday we heard Jenny Ellen in
Speaker 1: front of the Senate Banking Committee. We talked a lot about,
Speaker 1: or we heard a lot about the potential for taxation.
Speaker 1: This seemed to be a concern that Republicans were talking
Speaker 1: about as they were saying, we need to pay for
Speaker 1: this somehow do you expect that later this year we're
Speaker 1: going to start hearing more about taxation from the Democratic Party?
Speaker 1: The great question, Leasa, I don't think that the conversation
Speaker 1: about taxation is ever going to go away. UM. I
Speaker 1: assume that in the first House field that gets rolled
Speaker 1: out as early as next Friday, there will be some
Speaker 1: taxation components in it. Um. Certainly there would be in
Speaker 1: a four trillion or six trillion dollar reconciliation build down
Speaker 1: the line to offset infrastructure spending. But what members talk
Speaker 1: about versus what's possible um in terms of actually legislating
Speaker 1: getting fifty one votes but too very different conversations. I
Speaker 1: can't find you the votes for tax increases. If there
Speaker 1: are any, odds, it would come in very specific streamline
Speaker 1: components applicable to very high net worth individuals, or very
Speaker 1: specific income streams from very flush coverations, So the guilty tax,
Speaker 1: the tax on intangibles held overseas um, the capital gains tax.
Speaker 1: Those are conversations that could come up in the back
Speaker 1: app of this year. You'll probably see headline risk before then,
Speaker 1: but I don't anticipate that any of those tax pics
Speaker 1: will actually be implemented. If they are, there will be
Speaker 1: a phase in u there will be a lag time.
Speaker 1: In twenty twenty three is the earliest that I see
Speaker 1: the tax increases actually coming to fruition. In the meantime,
Speaker 1: do you actually see any true fiscal hawks left in
Speaker 1: Congress or have they continued to remain extinct even as
Speaker 1: a Democrat takes office. Well, that's a good question. I
Speaker 1: think if the Republicans are trying to get back there,
Speaker 1: but Democrats are not really receiving that message right now.
Speaker 1: The biggest component of having Bernie Sanders as Chairman of
Speaker 1: the sent Budget Committee is that he's going to be
Speaker 1: responsible for deciding what the appetite is for deficit spending,
Speaker 1: and his appetite is pretty unlimited. When you have Treasury
Speaker 1: sectary nominee Janet Yellen coming in yesterday and saying we
Speaker 1: think that now is the time to deficit spend. Interest
Speaker 1: rates are historic lows, there's not a real concern. And again,
Speaker 1: having control of the set up floor and we're forcing
Speaker 1: Republicans and their fiscal conservative mantra to vote against these
Speaker 1: bills is much different than just avoiding these votes altogether.
Speaker 1: So I think fiscal conservative it might be something that
Speaker 1: we hear in the background, but for all intents and
Speaker 1: purposes instead for the time being, and I'm gona trieselfa
Speaker 1: Helenace Henrid. Always fantastic to get you with us. Thanks
Speaker 1: for joining us today. Thanks for listening to the Bloomberg
Speaker 1: Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud,
Speaker 1: or whichever podcast out for him you prefer. I'm on
Speaker 1: Twitter at Tom Keane before the podcast. You can always
Speaker 1: catch us worldwide. I'm Bloomberg Radio.