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Speaker 2: Welcome to the Tuesday edition of Bloomberg Sound On. I'm
Speaker 2: Joe Matthew in Washington, where it's all about Ukraine today.
Speaker 2: That's certainly the storyline so far, and that's going to
Speaker 2: continue to develop as President Zelenski, as we told you
Speaker 2: in person today in the nation's Capital, will make his
Speaker 2: way from the Capital to the other end of Pennsylvania
Speaker 2: Avenue and a bilateral meeting followed by a news conference
Speaker 2: with Joe Biden.
Speaker 3: We will get there. That's a few hours off.
Speaker 2: In fact, we'll carry it live when these two get
Speaker 2: in front of reporters later on today. So far it's
Speaker 2: about Congress, though in a very skeptical Republican conference in
Speaker 2: the House as opposed to the one in the Senate.
Speaker 2: Remember Mitch mcconoch, Chuck Schumer invited President Zelensky here to
Speaker 2: make the case today and all Senators briefing and then
Speaker 2: the one on one with Speaker Mike Johnson who just
Speaker 2: stood in front of the microphones to talk to reporters
Speaker 2: coming out of that meeting, knowing that he has been
Speaker 2: skeptical that he is not looking to send a blank
Speaker 2: check to Ukraine and in fact is pursuing this deal
Speaker 2: on border security that is also being pursued in the
Speaker 2: Senate that would somehow unlock Ukraine funding. That was not, however,
Speaker 2: the first condition that he rolled out when Republicans are
Speaker 2: when reporters rather asked him about his wariness of sending
Speaker 2: more money to Ukraine. Here's Speaker Mike Johnson.
Speaker 4: I have asked the White House since the day that
Speaker 4: I was handed the gavel as Speaker for clarity. We
Speaker 4: need a clear articulation of the strategy to allow Ukraine
Speaker 4: to win, and thus far their responses have been insufficient.
Speaker 4: They have not provided us the clarity and the detail
Speaker 4: that we requested over and over since literally twenty four
Speaker 4: hours after I was handed the gavel as Speaker of
Speaker 4: the House. And so what the Biden administration seems to
Speaker 4: be asking for is billions of additional dollars with no
Speaker 4: appropriate oversight, no clear strategy to win, and none of
Speaker 4: the answers that I think the American people are owed.
Speaker 2: Then I guess there's the border now. To be fair,
Speaker 2: Speaker Johnson has been making that case and asking those questions.
Speaker 2: But we thought that this money would be unlocked with
Speaker 2: or without conditions for Ukraine, with or without a strategy
Speaker 2: to win, as he says, if there was a deal
Speaker 2: on the border. And that's where we start our conversation
Speaker 2: with Congressman Jonathan Jackson, the Democrat from Illinois, First Great
Speaker 2: City of Chicago. Congressman, it's good to see on Bloomberg.
Speaker 2: We welcome you from your perch on the Foreign Affairs Committee.
Speaker 2: I wonder your thoughts today on what you heard from
Speaker 2: Speaker Johnson. Will Ukraine ever get this money?
Speaker 5: Well, I certainly hope so, but I would also like
Speaker 5: to for this money to go through the normal process.
Speaker 5: There's a check and balance in place, and we've been
Speaker 5: duly elected our constituents to be here to be a
Speaker 5: part of that balance. This is part of our congressional responsibility.
Speaker 5: By going around our Congress and bypassing money to go
Speaker 5: to Israel or to not let us have a robust
Speaker 5: debate about Ukraine. What does peace look like? How you
Speaker 5: measure it? Can we have equal parts diplomacy as well
Speaker 5: as defense. Can we all get to the table. Imagine
Speaker 5: that's like a growing frustration. And then there are limits.
Speaker 5: We have course thirty three trillion dollars and national debt.
Speaker 5: We have two trillion dollars and a growing deficit, and
Speaker 5: we have some serious needs at home. So I think
Speaker 5: the high mark of America being able to write blank
Speaker 5: checks may be behind us at this moment. And so
Speaker 5: we have to be very much responsive to our constituents
Speaker 5: at home. We have issues and water systems and housing.
Speaker 5: We just can't have it one way for all military
Speaker 5: and not understanding the strength of our diplomacy, and where
Speaker 5: does this end? How do we achieve peace and how
Speaker 5: do we achieve compromise? That should also be on the table.
Speaker 2: Have you heard from the White House on this, Congressman,
Speaker 2: because Joe Biden's obviously making the case here for our
Speaker 2: own national security and in fact was the one who
Speaker 2: injected the border debate into this funding request that came
Speaker 2: from the White House for Ukraine, Israel, and Taiwan. We're
Speaker 2: going to, of course, see a news conference later with
Speaker 2: Joe Biden and President Zelenski. Is there any answer he
Speaker 2: could give you that would satisfy you in terms of strategy,
Speaker 2: knowing that, well, we don't know if Ukraine can beat Russia,
Speaker 2: do we.
Speaker 5: Well, I think this is where the issue is. I mean,
Speaker 5: we have to go back to the original. What was
Speaker 5: Russia's initials concern I would say that they were wrong
Speaker 5: to cross over the border and going to Ukraine, But
Speaker 5: when they were talking about the Dombaas region and going
Speaker 5: to the eastern part, they said they have stopped teaching
Speaker 5: the Russian language and in a region that did speak Russian.
Speaker 5: They were also saying that they have a, if you will,
Speaker 5: a bomb phobia. They did not want to see missiles
Speaker 5: at their front door. They did not want to see
Speaker 5: Ukraine joining NATO. And if we go back to recent
Speaker 5: history and World War Two, we know that twenty two
Speaker 5: million Russians were killed and they were like, stop expanding NATO.
Speaker 5: NATO has continually been expanding and going into eastern Europe,
Speaker 5: and now when it got to Russia's doorstep, they said enough.
Speaker 5: So I'd like for us to take a pause, go
Speaker 5: back and revisit this and find out where they are borders.
Speaker 5: These borders now are less than thirty years old. They
Speaker 5: are border disputes that we can see. They're going on
Speaker 5: all around the world, it seems like at the same time,
Speaker 5: and I do think that it's time for us to talk.
Speaker 5: I mean I have constantly been, if you will, a
Speaker 5: little bit dismayed to think that we're quick to jump
Speaker 5: into military action without exhausting all of our opportunities to
Speaker 5: have diplomacy. I'm for a strong defense with an equal
Speaker 5: part of diplomacy, with an equal part of development. I
Speaker 5: like to do a trifecta diplomacy, development and defense, not
Speaker 5: so quick to have an endless amount of war. Now
Speaker 5: we're over one hundred big and dollars into the Ukraine.
Speaker 5: This is another sixty four bigon dollar package. They thought
Speaker 5: this would be a one month issue. I thought this
Speaker 5: was going possibly for six months. And like Russia is
Speaker 5: now their economy is getting stronger as a result of
Speaker 5: the strength as result of the sanctions, they're increasing their
Speaker 5: ties with Iran, they increased their ties with like China.
Speaker 5: So I want to see America's playing field get bigger
Speaker 5: and not smaller. The more people we cut off from
Speaker 5: our foreign policy, the stronger we're making our adversaries.
Speaker 2: Well, you just said a lot of congressmen I'd love
Speaker 2: to unpack some of that because I realized these are
Speaker 2: recently drawn borders, but they are all so agreed to
Speaker 2: by Russia. Should the US not have come to the
Speaker 2: defense of Ukraine to begin with because of that reason
Speaker 2: and the fact that we have not put any American
Speaker 2: boots on the ground or in harm's way is something
Speaker 2: that the Biden administration has been trumping. Made a huge
Speaker 2: dent in the Russian military by way of this proxy war,
Speaker 2: if we.
Speaker 3: Can call it that.
Speaker 2: Are there no benefits to US national security?
Speaker 5: There? Oh? Absolutely there is. We have to stop aggression
Speaker 5: at all levels. We have to. I think US defending
Speaker 5: Ukraine was the right thing to do, and now I
Speaker 5: think it's time to revisit it. This is a very
Speaker 5: substantial army, they have an enormous amount of resources, and
Speaker 5: we have to measure are we going to scale back
Speaker 5: what we would consider not to be our ideal desire
Speaker 5: for Ukraine to have recaptured all the land, versus when
Speaker 5: do we start saving lives and preserving what we have.
Speaker 5: There comes a point where there is a law of
Speaker 5: diminishing returns on how many more bombs for how many
Speaker 5: more inches of land? Ukraine and Belarus, that entire region
Speaker 5: is very important to the world as a bread basket.
Speaker 5: In the meantime, there's other unintended consequences. There are other
Speaker 5: countries that suffer. So I'm trying not to look at
Speaker 5: this through a keyhole, but through the door that we
Speaker 5: saw a spike in worldwide food prices, and my ultimate
Speaker 5: goal is to get back to peace. I don't want
Speaker 5: to bomb my way into a solution that I don't
Speaker 5: see a very good an well.
Speaker 2: I would suggest that there's a diplomatic solution possible. Do
Speaker 2: you believe that Vladimir Putin is capable of such a thing.
Speaker 5: I think everyone is. And I'm a first term freshman congressman.
Speaker 5: Call me naive if you will, I'm fine with that.
Speaker 5: But I do believe in continuously being a peacemaker, continually
Speaker 5: trying to exhaust peaceful means. I'm sure that the body
Speaker 5: count it's going up in Russia, it's substantial. The body
Speaker 5: count that's gone up in Ukraine is substantial and exhausting.
Speaker 5: The people that have fled the country has been enormous.
Speaker 5: The land can get now contaminated with the amount of bombs,
Speaker 5: so it has reached a point of what's left and
Speaker 5: how do we move forward? So at what point do
Speaker 5: we have any sort of pause, if you will, any
Speaker 5: sort of truce and try to get back to the table.
Speaker 5: What does that look like? I don't know, but I
Speaker 5: do know we have to continue to talk. I was
Speaker 5: in a foreign affairs meeting and I asked, who is
Speaker 5: talking to President Putin? Who's talking to President Buten? And
Speaker 5: they said there were some backdoor channels. I said, well,
Speaker 5: I'd like to see the front door. I like to
Speaker 5: see the President Biden and possibly President Puten try to
Speaker 5: get together to talk face to face, man to man,
Speaker 5: eye to eye. I will not stop until peace is exhausted.
Speaker 5: The possibility of peace. We have to believe peace in
Speaker 5: order to achieve it.
Speaker 2: Well, I would certainly never call you naive, Congressman, but
Speaker 2: I wonder if it makes you uncomfortable that you're agreeing
Speaker 2: with some members of the conservative right in the Republican Conference,
Speaker 2: the Marjorie Taylor Greens who say not another dollar.
Speaker 1: JD.
Speaker 2: Vance says it's time for accountability, and it sounds like
Speaker 2: you're keeping company with them from a policy standpoint.
Speaker 5: Do you disagree I've not followed all of their policies.
Speaker 5: Some of the persons you mentioned are not on foreign affairs.
Speaker 5: I'm looking at the information as i've received it. I've
Speaker 5: got enormous amount of respect for many of my colleagues.
Speaker 5: People have come here to be representatives, and we're seeing
Speaker 5: a lot of the same facts. So if we end
Speaker 5: up with the same conclusion having seen the same facts,
Speaker 5: I think that's progress. I don't like to go into
Speaker 5: an ideological bucket or lane, or let's get to what's
Speaker 5: right versus what's wrong.
Speaker 2: We're spending time with Congressman Jonathan Jackson, Democrat from Illinois
Speaker 2: as they look at headlines coming from the President's and
Speaker 2: he was at a fundraiser a short time ago. Congressman,
Speaker 2: and I'd like to get your take on funding for
Speaker 2: Israel as well. Because the president's making news here, I
Speaker 2: can't play it for you. This was not something that
Speaker 2: we could record, but he says Benjamin NETANYAHUO and the
Speaker 2: Israeli government are starting to lose support, which is pretty
Speaker 2: remarkable to hear. Joe Biden says Netanyahu is a good friend,
Speaker 2: but I believe he has to change.
Speaker 3: Do you agree?
Speaker 5: Oh? Absolutely, And I think the benefit of having a
Speaker 5: special relationship having a friendship is you can tell your
Speaker 5: friends things that are inconvenient, things that are uncomfortable, but
Speaker 5: you can tell them the truth. I have the opportunity
Speaker 5: to go to Israel in September with the Congressional Black
Speaker 5: Caucus an APEX. We were in a meeting with the
Speaker 5: Prime Minister, mister Netanyahoo. I specifically asked a question regarding
Speaker 5: the Palestinian visa waiver program, the reciprocal visa waiver program,
Speaker 5: and that simply was, if a person has a blue passport.
Speaker 5: Missus Connaisa Rice was on this program as well. A
Speaker 5: blue passport is a blue passport. If you an American
Speaker 5: citizen and our country has a visa waiver reciprocal program
Speaker 5: with you, you honor our visa likely honor as yours. The
Speaker 5: Palestinian constituents in my district were having a problem going
Speaker 5: into Tel Aviv and on to visit their family in
Speaker 5: the West Bank and Gaza. I specifically asked mister Netanyahu
Speaker 5: about that. He deflected, he had two of his other
Speaker 5: persons answered the questions, so I didn't think he was
Speaker 5: answering with much candor. I think that President Biden is
Speaker 5: telling them the truth that if one hundred and three
Speaker 5: countries have said cease fire. Now if the United States,
Speaker 5: that is your special friend, is the only one that
Speaker 5: goes against everyone in the Security Council, and you're still
Speaker 5: going forward. The humanitarian crisis is unfolding before our very eyes.
Speaker 5: And you see babies now that are missing limbs, when
Speaker 5: you see people that are missing water, that are lacking water,
Speaker 5: when medical supplies are no longer aiding, when you see
Speaker 5: that we have hostages.
Speaker 2: Would we not send money then to Israel? Does Israel
Speaker 2: really need more money?
Speaker 5: Well from the usl Well, that's the second part of
Speaker 5: the question. First, I want to get the hostages out,
Speaker 5: and you can't get the hostages out while you're seeking revenge.
Speaker 5: You have to seek reconciliation or revenge. When I first
Speaker 5: sign on the seas fire, I was seeking reconciliation so
Speaker 5: we could prioritize the hostages. I felt for all those
Speaker 5: families that are in the streets of Israel that were
Speaker 5: asking for their family members to be returned. I don't
Speaker 5: want to see one of them killed because of collateral damage.
Speaker 5: That's another death that's unnecessary. When you see two to
Speaker 5: one children and women are dying, that's wrong. Even when
Speaker 5: you saw George Bush going to Afghanistan, he gave us
Speaker 5: a deck of cards to tell us who he was
Speaker 5: looking for when he went into Iraq, Like who is
Speaker 5: a mosque? And how many people they're saying it's thirty thousand.
Speaker 5: I've heard the Israeli defense firm director say if we're
Speaker 5: killing only two to one of civilians, that that's not bad.
Speaker 5: Where did that calculation come from? That's wrong. So I
Speaker 5: do think that President Biden has to have an uncomfortable
Speaker 5: conversation with mister Netanyaho to tell them the truth. I
Speaker 5: am pro Israel, I'm pro their defense. I do have
Speaker 5: concerns about mister Netanyah who's leadership. I don't think you're
Speaker 5: serving the interests of the people the best.
Speaker 2: Well, this has been a fascinating conversation, Congressman. I appreciate
Speaker 2: your honesty and your generosity with time here because we
Speaker 2: don't have a lot of Democrats speaking specifically to Ukraine
Speaker 2: the way that.
Speaker 3: You are now.
Speaker 2: And I wonder before you leave us, when you look
Speaker 2: at this menu. We've talked about two items on a
Speaker 2: very long menu of items to be taken care of
Speaker 2: by this Congress. It looks like you are going to
Speaker 2: be going onto holiday recess at the end of this week.
Speaker 2: That leaves funding for the government these supplemental requests. We've
Speaker 2: discussed a deal on the border extensions for Faiza and
Speaker 2: the FAA all into next year. Unless you tell me,
Speaker 2: can the House do anything in the next few days.
Speaker 5: I doubt it. I'm hopeful, but on that I think
Speaker 5: I'll be pragmatic and say I don't see it that
Speaker 5: there is an extreme faction within the Republican Party that
Speaker 5: really doesn't want the government. They don't mind seeing the
Speaker 5: government shut down. We've seen them take the government to
Speaker 5: the edge with the spending cap, with the death ceiling.
Speaker 5: We've seen them take the government to the spending brink
Speaker 5: with the appropriations for September speak. McCarthy did the right
Speaker 5: thing in avoiding the government shut down and bring the
Speaker 5: bill to the floor, and they took his head off.
Speaker 5: I mean like he was putting country first. I think
Speaker 5: some other people in the party need to think about
Speaker 5: country first and lose the hard line. No one's going
Speaker 5: to get everything that they want. Let's put America first.
Speaker 5: Let's move the country, our national security, our friends and allies,
Speaker 5: and let's be take humane priorities abroad. What's happening in
Speaker 5: the West Bank, in the settlement, was happening in Gaza
Speaker 5: has to stop. Seventeen thousand people have died. The death
Speaker 5: toll is mounting. Now there's disease in humanitarian crisis. Reconciliation,
Speaker 5: I believe is the only path forward. And you asked
Speaker 5: about the specific funding for Israel. They do need stronger defense.
Speaker 5: Do you know when we started on October seventh, the
Speaker 5: United States did not have a sworn did not have
Speaker 5: a confirmed ambassador from the United States to Israel in place.
Speaker 5: We did not have a confirmed ambassador from the United
Speaker 5: States to Egypt in place, so there was no place
Speaker 5: for the Palestinians to go, So our diplomacy was down.
Speaker 5: When mister Austin went over there with the gunboat, we
Speaker 5: didn't have our diplomacy in place, so we did not
Speaker 5: have a development plan. I've never seen Yahoo speak aggressively
Speaker 5: forcibly about being a peacemaker and talking about a Palestinian
Speaker 5: development plan. He's never sought a two state solution. So
Speaker 5: I want to see peace in the region. I want
Speaker 5: to see children the next time I go over there,
Speaker 5: God willing playing together, not building up a bigger perimeter,
Speaker 5: a bigger border, but that only starts with the pathway through.
Speaker 2: At the same time, Congressman, and I know I'm way
Speaker 2: over time here, but I just I can't get enough
Speaker 2: of the back and forth sometimes here I.
Speaker 3: Can't get nobody with you. Well, God bless you.
Speaker 2: Nobody was telling us what to do after nine to
Speaker 2: eleven or early, and if they did, we weren't listening
Speaker 2: very closely. Does that mean something to you when you
Speaker 2: consider what Israel just went through on October seventh? This
Speaker 2: was like multiple nine to elevens for them, and they
Speaker 2: think they need to root out evil here just across
Speaker 2: the border. Imagine if that happened in Canada, and what
Speaker 2: the heck we would do about it?
Speaker 5: Right? Well, think about it. So what's a lesson learned
Speaker 5: that we figured out from Afghanistan after nine eleven? First
Speaker 5: of all, we went to go after ben Laden, which
Speaker 5: isn't an army, which is a spirit, which is a
Speaker 5: set and a group. Two trillion dollars later, twenty years later,
Speaker 5: we leave Afghanistan having to leave all of our guns
Speaker 5: and boats and planes everything behind, only to find that
Speaker 5: Osama bin Laden was in Pakistan watching Netflix. I guess
Speaker 5: or some of the TV ship of program in a
Speaker 5: compound across the street from like a military base. Give
Speaker 5: me a break. I mean, so intelligence is the way.
Speaker 5: When this started on October seventh, we all agreed this
Speaker 5: was an intelligence failure. Let's not deflect. Let's beef up
Speaker 5: the intelligence. Look at what happened in Rwanda on that
Speaker 5: trip to Israel. I went to Rwanda after we left Israel,
Speaker 5: and Rwanda lost a million residents in one hundred days.
Speaker 5: They arrested thirty thousand people. They've been locked up for
Speaker 5: thirty years. Rwandan intelligence. Rwanda now is the fourth largest
Speaker 5: group that's say, peacekeepers into the United Nations, and they
Speaker 5: have an economy that's thriving, and they've sought a certain
Speaker 5: peace with their neighbors. They had a five million people
Speaker 5: to die in a civil war, if you will, with
Speaker 5: the Congo. So be it in Israel, be it in Rwanda,
Speaker 5: being in South Africa, being with African Americans in the
Speaker 5: United States that had to overcome years and centuries of
Speaker 5: Jim Crow and slavery. Its reconciliation is the pathway forward.
Speaker 2: You know, I was going to ask you, Congressman, what
Speaker 2: your dad would do if he was having this conversation,
Speaker 2: or if he was holding your seat. But I think
Speaker 2: you probably already told us. I hope that you won't
Speaker 2: be a stranger. Jonathan Jackson, Democrat from Illinois. First, it's
Speaker 2: good to see you, Congressman.
Speaker 3: I appreciate you.
Speaker 2: Indeed, I'm Joe Matthew in Washington. We've got to bring
Speaker 2: the panel in right now. We're not breaking. We have
Speaker 2: to continue this conversation with Genie, Shanzeno and Chape and
Speaker 2: Fay because I have to admit and we're going to
Speaker 2: hear obviously perspective from the left and the right here.
Speaker 2: I have to admit, Jeanie, I didn't expect that conversation
Speaker 2: with the congressman, with someone who sits on the House
Speaker 2: Foreign Affairs Committee, and I tried to make the point
Speaker 2: that he's actually in many cases sounding like conservative Republicans.
Speaker 3: In the House.
Speaker 2: Does that tell you about kind of a migration or
Speaker 2: an evolution of democratic thoughts specifically when it comes to Ukraine.
Speaker 2: Let's parse these out individually here, or is the congressman
Speaker 2: just giving us his take from his perch.
Speaker 6: It was a remarkably candid conversation, and the representative just fascinating.
Speaker 6: My view is he does reflect what is happening in
Speaker 6: the Democratic base. I don't know his district well, but
Speaker 6: I would assume in his district in Illinois, and you
Speaker 6: hear it from Democrats across the country and you're focusing
Speaker 6: specifically in this instance on Ukraine, and I think he
Speaker 6: is absolutely right. Americans want to know what is happening
Speaker 6: with their public funds and are those funds being utilized
Speaker 6: or is there a chance of success as it pertains
Speaker 6: to Ukraine. I am struck by the fact that you
Speaker 6: know what a difference a year makes. As Vladimir Zelensky
Speaker 6: apparently leaves the capital empty handed, it is a year
Speaker 6: ago he was met with a standing ovation and you know,
Speaker 6: part of what has happened here is they have not
Speaker 6: had success and Russia has, and so there is that
Speaker 6: there is are the challenges economically and politically in the
Speaker 6: United States. All of those factors weigh in, and I
Speaker 6: think you know the representative mentioned, you know he is
Speaker 6: new in his first termed in Congress. This is why
Speaker 6: bring in new voices to Congress, younger officials, people who
Speaker 6: represent all parts of our country. Because I think he
Speaker 6: is representing the Democratic base, not just what we're hearing
Speaker 6: from Republicans on both of these important issues.
Speaker 2: Well, boy, that that would mean that Joe Biden's on
Speaker 2: an island here at least when it comes to Ukraine.
Speaker 2: Then again there's Chuck Schumer. Listen to the Senate Majority
Speaker 2: leader earlier today on the floor.
Speaker 7: He made it clear, and we all made it clear
Speaker 7: that if we lose Putin wins, and this will be very,
Speaker 7: very dangerous for the United States. So we cannot let
Speaker 7: Putin influence through any surrogate. What is what we need
Speaker 7: to do for Ukraine?
Speaker 2: We turned to Republican strategists, Chapin Fey, Now, Chapin, it's
Speaker 2: great to have you back. What do you make of
Speaker 2: this in person pitch here, he sat down with the Speaker,
Speaker 2: talked to all the Senators on his way to the
Speaker 2: White House. Now, as President Zelenski weren't out as welcome
Speaker 2: in Washington, I don't know if I.
Speaker 8: Would quite characterize that as wearing out his welcome, but
Speaker 8: I you know, I agree with everything Ginny said earlier
Speaker 8: about the changing situation, right, and what a difference a year.
Speaker 9: Makes, And I would just add some of the problems
Speaker 9: over the last year in America, you know, the migrant border.
Speaker 9: That's something on a lot of legislator's minds and may
Speaker 9: even hold up this whole, you know, may hold up
Speaker 9: the Ukraine eight package, you know, the war in Israel. Right,
Speaker 9: We're now seeing on a lot of different fronts financially
Speaker 9: for the United States where.
Speaker 8: That money is going. And I think, you know, the
Speaker 8: representative we've just heard from and the other side of
Speaker 8: the aisle is very concerned with how much is going
Speaker 8: to Ukraine and whether we will be successful and what
Speaker 8: that money, you know, the accountability for the money. Right,
Speaker 8: I've read this morning that they're projecting the Ukraine may
Speaker 8: need another one hundred billion next year after one hundred
Speaker 8: billion has already been allocated. So this is you know,
Speaker 8: a very big funding and foreign policy and war decisions
Speaker 8: for the Congress to make. So I think some negotiations
Speaker 8: and some questions about where the money is going is
Speaker 8: totally fair. And I think, you know, like you said,
Speaker 8: a little struck by how the Democratic Caucus is asking
Speaker 8: similar questions to what the Republicans have been have been asking,
Speaker 8: which means I do think support To answer your first question,
Speaker 8: I do think the support he's going to have to
Speaker 8: work a lot harder this time around to get the funding.
Speaker 2: Genie, what do you make of the messaging from Speaker Johnson?
Speaker 2: He again met one on one with President Zelenski. He
Speaker 2: did get to the border. Just to be clear, when
Speaker 2: he spoke to reporters coming out of the meetings, the
Speaker 2: microphone set up there and says, look, we just had
Speaker 2: our meeting.
Speaker 3: Well, let's do it right now. Mike Johnson just.
Speaker 4: Had a good meeting with President Zelenski. I reiterated to
Speaker 4: him that we stand with him and against Putin's brutal invasion.
Speaker 4: The American people stand for freedom and they're on the
Speaker 4: right side of this fight.
Speaker 2: Then he got into conditions. He said, but we need
Speaker 2: a strategy, we need an endgame. We need to know
Speaker 2: how to win how long it's going to take. And
Speaker 2: he talked about that in length, saying that the Biden
Speaker 2: administration has not made good on this. We've been asking
Speaker 2: since the day I got the gavel, he said, And
Speaker 2: then eventually he got to a border deal. So, Genie,
Speaker 2: what is holding up funding for Ukraine. Is it lack
Speaker 2: of strategy or lack of a border deal.
Speaker 6: I think there are components of both, and it depends
Speaker 6: on who you talk to which of those they stressed.
Speaker 6: I continue to believe it is and the Democrats' best
Speaker 6: interest to accept forward movement, even if it's not everything
Speaker 6: they want. As it pertains to security, the latest polling
Speaker 6: we've seen, Republicans are winning on the issue of border
Speaker 6: security at the polls. You know, you look at the
Speaker 6: Independent number, it's all over eighty percent of Independence say
Speaker 6: the border on the south is insecure. It would behoove
Speaker 6: the Democrats to get there and to move forward. The
Speaker 6: concessions being asked for are not traumatic and not dramatic.
Speaker 6: I think the Biden administration needs to be actively pushing
Speaker 6: for those deeply concerning to me, as we are hearing
Speaker 6: that the White House, while they have talked about it
Speaker 6: and President Obama has, they are still not maybe as
Speaker 6: actively involved in Congress and pushing for this. But it
Speaker 6: is to their benefits, so border they should go with.
Speaker 6: As it pertains to Ukraine, you know, the reality is
Speaker 6: the White House needs to educate on how much more
Speaker 6: expect and costly in lives this whole thing will be.
Speaker 6: Now if we don't fund Ukraine at this moment and
Speaker 6: we push this off, what will the next steps be
Speaker 6: Americans have to write to ask those questions. They've got
Speaker 6: to be answered over and over again by leadership in
Speaker 6: Congress and the White House. And I include in that,
Speaker 6: by the way, Mike Johnson, you're the Speaker of the House.
Speaker 6: You answer that question. You said you supported it. It's
Speaker 6: not all on the White House, fair enough.
Speaker 2: I wonder what we're going to hear a little bit
Speaker 2: later on today, By the way, four fifteen Washington time,
Speaker 2: if you want to take dibbs on when this starts,
Speaker 2: it'll be a bilateral news conference too. And two Biden
Speaker 2: Zelenski two questions each. And you can just imagine shaping
Speaker 2: with the questions are going to be. This might be
Speaker 2: the last opportunity Joe Biden has to make this case
Speaker 2: with President Zelenski standing at his side.
Speaker 3: What do you want to hear?
Speaker 8: Well, I just underscore what Ginny was just saying, and
Speaker 8: you would ask her about, you know, the different issues
Speaker 8: people have our life onto. The problem is people are
Speaker 8: finding excuses right where they were looking for ways to
Speaker 8: say yes a year ago, people are looking for the
Speaker 8: excuses latch onto to say no. So I do think
Speaker 8: the president needs to both silence both presidents need to
Speaker 8: just like GENNI say, explain why the investment now is
Speaker 8: going to be way less and easier than if we,
Speaker 8: you know, let Ukraine do this all on its own. Right,
Speaker 8: what you know, we can't let Russia win. It will
Speaker 8: resonate with a lot of people in the Republican Party
Speaker 8: for sure. Right If not funding this war means that
Speaker 8: Russia is going to win and Putin gets a win,
Speaker 8: then I think people will think twice about it.
Speaker 5: You know.
Speaker 8: I don't know that the President will do this in
Speaker 8: this particular venue, but he really needs to show that
Speaker 8: he's addressing the problems you're at home as well, right,
Speaker 8: There are ways to do both, but a lot of
Speaker 8: us on the right are not seeing anything here at
Speaker 8: home for Americans. So you know, another one hundred billion
Speaker 8: next year to help Ukraine is a hard sell when
Speaker 8: nothing is happening here at home to help, you know,
Speaker 8: close this other border and help with problems here. So
Speaker 8: I do think that has to come out. Whether he
Speaker 8: says that's sitting next to the Lensklee, I don't know.
Speaker 8: He's got two answers, you know, to really be concise
Speaker 8: and deliver a knockout blow here for his package.
Speaker 2: Well, you know, the border is one thing. I wonder
Speaker 2: if he gets to that today, Genie, and maybe he's
Speaker 2: when they're in the Oval Office together they actually do
Speaker 2: craft a strategy if he gets to both of those issues,
Speaker 2: and he's going to say openly, I'm sure you know, look,
Speaker 2: I know that we need a deal on the border
Speaker 2: to make this happen.
Speaker 3: We need to.
Speaker 2: Close our border to secure our border. Whatever language he's
Speaker 2: going to use before we get to the matter of Ukraine,
Speaker 2: what does he need to say about strategy tonight when
Speaker 2: they go live at the White House.
Speaker 6: You know, I think he needs to talk about the
Speaker 6: cost to the American public if they don't approve this funding. Now,
Speaker 6: you know, one of the things you mentioned is the
Speaker 6: rhetoric coming from the right about this and how Democrats
Speaker 6: are starting to match that. There is a key difference.
Speaker 6: We heard jd Vance talking to Steve Bannon and accusing
Speaker 6: Zelensky of corruption. There is little evidence, no evidence that
Speaker 6: I know of that those points are a far afield
Speaker 6: from the valid questions about if we invest this money,
Speaker 6: what do we get out of it, what is it,
Speaker 6: why is it in our interest? And how that's what
Speaker 6: the president needs to focus on because the answers are very,
Speaker 6: very real. From that perspective, Just talk to the national
Speaker 6: security head of Poland who is saying, we have three years.
Speaker 6: We have closed the border at this point, as has
Speaker 6: Finland because of where we are worried about an incursion
Speaker 6: by Russia. If we don't get this right this time,
Speaker 6: time is of the essence. The President has to say
Speaker 6: it's in our interest, in NATO's interest, to move forward
Speaker 6: on this now. The costs are too high to put
Speaker 6: this off.
Speaker 2: Got to be honest, I think he needs to talk
Speaker 2: about where that money's going as well. Having listened to
Speaker 2: both of you, if the bulk of the sixty billion
Speaker 2: dollars stays here in the US and goes to Alabama,
Speaker 2: Georgia and Texas where the defense contractors are, maybe we
Speaker 2: rename this bill something to think about.
Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch the
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Speaker 3: Welcome to our two of Sound on.
Speaker 2: I'm Joe, Matthew and Washington, joined now by Kaylee Lions,
Speaker 2: which we do each day at this time. Try to
Speaker 2: expand our thoughts with Kaylee, and it's good to see you.
Speaker 2: We've likewise been talking politics Zelenski for the last hour.
Speaker 2: We've barely mentioned this CPI data, which glad to say,
Speaker 2: we'll be talking about with Baratramamordy in just a moment.
Speaker 2: You can look at this anyway you want. White House
Speaker 2: put a good spin on it. Markets seem to be
Speaker 2: not freaking out about it, but the fact is inflation
Speaker 2: is picking up.
Speaker 10: A little bit again here, just a little bit on
Speaker 10: the headline figure, So everything that incorporates food and energy prices,
Speaker 10: which we know are really volatile, up a tenth of
Speaker 10: one percent compared to last month. The expectation was inflation
Speaker 10: was not going to increase in peace a month over month,
Speaker 10: but everything else came in roughly in line, so could
Speaker 10: have been worse, I think, is the general takeaway. However,
Speaker 10: we are still far above the Fed's two percent target,
Speaker 10: ahead of the Federal Reserve making a great decision tomorrow.
Speaker 2: Yeah, that's right, And you know, look this always seems
Speaker 2: to come back to the market getting ahead of itself
Speaker 2: doesn't really change anything in terms of hikes, but it
Speaker 2: might not mean cuts as soon as people hoped.
Speaker 3: Is that where we are?
Speaker 10: Yeah, I mean, the market's still looking at more than
Speaker 10: one hundred basis points of cuts that they're expecting from
Speaker 10: the Federal Reserve that the Fed well, and see therein
Speaker 10: lies the rub Joe, and I wonder when we hear
Speaker 10: from Chairman Powell tomorrow how much he really is going
Speaker 10: to try to push back against the notion that the
Speaker 10: Fed's going to be cutting anytime soon, because the fact
Speaker 10: of the matter is, if the market keeps betting the
Speaker 10: Fed is going to turn, financial conditions are going to
Speaker 10: stay easier, and that's going to undo a lot of
Speaker 10: the work that the Federal Reserve was trying to do
Speaker 10: in the first place by tightening things up.
Speaker 2: Fascinating to get into this with borat raum Murdy. He's
Speaker 2: free to speak now, is I love this? Former Deputy
Speaker 2: Director of the National Economic Council in the White House.
Speaker 3: Brot, welcome back to Bloomberg.
Speaker 2: I wonder your thoughts on everything that Kaylee just mentioned here,
Speaker 2: because the FED is obviously looking at this pretty closely.
Speaker 2: I wonder how worried you are you may be about
Speaker 2: the FED starting to cut too early.
Speaker 11: Well, I think the best way to look at the
Speaker 11: data is not necessarily in month over month increments, but
Speaker 11: at least over a three month period. And I think
Speaker 11: if you look at the annualized rate of headline CPI
Speaker 11: over the last three months, it's two point two percent,
Speaker 11: so it's basically at target. And I think that that
Speaker 11: accounts for the fact that there's a lot of housing
Speaker 11: disinflation in the pipeline that's not fully reflected in that figure.
Speaker 11: So if I'm at the FED, certainly if I was
Speaker 11: at the White House, I'd be looking at the longer
Speaker 11: averages here and feeling pretty good that inflation was pretty
Speaker 11: much at target and on its way to at or
Speaker 11: below target over the next few months once the newest
Speaker 11: housing data gets fully incorporated into that data. So as
Speaker 11: for cuts, what the FED is going to do, I
Speaker 11: think what the FED is likely to do is keep
Speaker 11: rates where they are, including into early portion of next year.
Speaker 11: I think, to be honest, what I think the FED
Speaker 11: should be doing is getting out ahead of things a
Speaker 11: little bit and considering rate cuts earlier next year, just
Speaker 11: given the fact that we know there's always a lag
Speaker 11: for that monetary policy to take effect, and you don't
Speaker 11: want to see a significant spike in unemployment before those
Speaker 11: cuts start to come. But I do think that it's
Speaker 11: unlikely that the FED will be cutting early next year.
Speaker 10: Leaves the White House can comment directly on Fed polity,
Speaker 10: something that you can't do when you're inside the building.
Speaker 10: Brought the idea though, of the FED cutting. Does that
Speaker 10: imply that you think there's going to be some real
Speaker 10: softness showing up in the economy that they're going to
Speaker 10: have to address. Does that go against this whole idea
Speaker 10: of a soft landing, because if the landing is soft,
Speaker 10: why do they need to cut.
Speaker 11: Well, I think that's precisely why they're not going to
Speaker 11: cut early next year. I think that the FED is
Speaker 11: likely to wait until they see evidence of a significant
Speaker 11: labor market softening before they start to cut. I just
Speaker 11: think that that may be a mistake in the sense
Speaker 11: that we all know that monetary policy operates with lags.
Speaker 11: I think that given the trend on inflation, the FED
Speaker 11: has largely won its battle against inflation. It's good news.
Speaker 11: I think monetary policy and fiscal policy work together over
Speaker 11: the last few years very very well, and we've largely
Speaker 11: achieved a soft landing. Now is the time to start
Speaker 11: making the pivot away from the highly restrictive rates that
Speaker 11: they have towards more neutral rates. I think that that
Speaker 11: should start early next year. I just question whether this FED,
Speaker 11: which I think is very worried about inflation and its
Speaker 11: reputation on inflation, is likely to make that it as
Speaker 11: quick as it should.
Speaker 2: What are the conversations like inside the White House, the
Speaker 2: ones that we don't hear barat. I don't know if
Speaker 2: you can tell me too much about it, but look,
Speaker 2: Donald Trump used to tweet directly at the FED share
Speaker 2: asking him to move interest rates. We now have the opposite,
Speaker 2: and we're referring to this with every question that we
Speaker 2: ask you here. The White House does not comment on
Speaker 2: the FED. Defer to the FED. Don't get in the
Speaker 2: middle of it. But certainly there are conversations behind closed doors.
Speaker 2: And I wonder how this president and his economic advisors
Speaker 2: feel about the path that this FED has taken, knowing
Speaker 2: that he's going to be running for reelection in the
Speaker 2: midst of these conditions you're describing.
Speaker 11: I think this President honestly takes it very seriously to
Speaker 11: respect the Fed's independence, and I think that filters down
Speaker 11: into his team, and of course senior members of his
Speaker 11: team like Secretary Yellen and NYC Director Brainard came from
Speaker 11: the FED, and so I think they also have a
Speaker 11: very healthy respect for the Fed's independence and the important
Speaker 11: role that plays in US economic stability. That said, I
Speaker 11: think that there has been a significant amount of progress
Speaker 11: on inflation. I think the concern would always be that
Speaker 11: the FED starts to pivot too late, and unemployment starts
Speaker 11: to accelerate before the FED can start cutting, and then
Speaker 11: because of the delay in that taking effect, it's too
Speaker 11: late and you're starting to enter a recessionary period. My hope, again,
Speaker 11: the data we have right now suggests that the economy
Speaker 11: is in a very strong position. There's nothing that I'm
Speaker 11: seeing right now that would suggest that labor market softening
Speaker 11: is going to happen over the last next few months.
Speaker 11: The question is what's going to be happening six, nine,
Speaker 11: twelve months from now, Because as the FED is making
Speaker 11: rate decisions today, that's really the time period where they
Speaker 11: have to be looking at in terms of the effect
Speaker 11: of that decision. And I hope, I'm hoping that the
Speaker 11: FED is looking ahead a little bit, and in order
Speaker 11: to fully achieve this soft landing, you need to make
Speaker 11: sure that you pivot to a more neutral rate in
Speaker 11: advance of any labor market softening.
Speaker 10: Well, on the subject of labor market softening and the
Speaker 10: statement that the President put out today in reaction to CPI,
Speaker 10: he noted that inflation has come down to three point
Speaker 10: one percent at the same time that the unemployment rate
Speaker 10: has made has remained below four percent for the longest
Speaker 10: stretch in decades at this point, and that statement went
Speaker 10: on to say, I know many Americans still find too
Speaker 10: many things unaffordable and brought. We've talked about consistently this
Speaker 10: White House not getting credit for inflation coming down, in
Speaker 10: the economy hanging in there, and if you do start
Speaker 10: to see that labor market softening in a more material way,
Speaker 10: is the clock against the side of not just the President,
Speaker 10: but of the candidate Biden.
Speaker 5: Yeah.
Speaker 11: Look, I think the question of what the economy is
Speaker 11: going to do over the next nine or twelve months
Speaker 11: as we approached the presidential election, in many ways is
Speaker 11: going to be the key question electorally. You know, my
Speaker 11: hope is that we continue to see inflation at or
Speaker 11: near target over the next several months, and you continue
Speaker 11: to see robust consumer spending, robust business investment, and as
Speaker 11: a result, you know, steady economic growth. I think that
Speaker 11: there's a pathway to see all of that. It requires
Speaker 11: the FED, like I said, to be a little bit proactive.
Speaker 11: It requires us to avoid any significant headwinds or unexpected
Speaker 11: turmoil like we saw when Russia and David Ukraine and
Speaker 11: disrupted international markets for oil and for wheat and for
Speaker 11: other products. If we can dodge those types of things,
Speaker 11: I think that there's a lot of optimism. I have
Speaker 11: a lot of optimism about where the economy is going
Speaker 11: to be over the next six to nine months. And
Speaker 11: my guess and my expectation would be that if we
Speaker 11: see that, that's going to be beneficial to the President,
Speaker 11: and I think you'll start to get more credit for
Speaker 11: managing a very strong economic recovery, one that's much better,
Speaker 11: frankly than almost any other leading economy in the world.
Speaker 2: I want to ask you about some of the warnings
Speaker 2: that we received months back. This is late summer going
Speaker 2: into fall, barad I'm sure you remember the resumption of
Speaker 2: student loan payments, told would be a significant drag on
Speaker 2: consumer spending.
Speaker 3: The childcare cliff, we went over it.
Speaker 2: Impacting potentially thousands of childcare programs. COVID Era funding that lapsed,
Speaker 2: we were told millions of families could be impacted. I
Speaker 2: could add the expanded child tax care credit. What happened
Speaker 2: to all of these potential threats were they not real?
Speaker 5: Well?
Speaker 11: I think that in the case of student loan repayment, yes,
Speaker 11: we've seen when it comes to actual student loan borrowers
Speaker 11: who are subject to repayment, we have seen a change
Speaker 11: in their behavior, which is what the White House was projecting.
Speaker 11: I think that in terms of its macroeconomic effect, it
Speaker 11: has been fairly subdued, because, to be honest, we have
Speaker 11: a very large economy, and something that may end up
Speaker 11: affecting ten or twenty million people at the end of
Speaker 11: the day isn't necessarily going to be of macroeconomics significance.
Speaker 11: It's still very impactful for those ten or twenty million
Speaker 11: borrowers who are actively in repayment right now, and who
Speaker 11: have gone from paying zero dollars a month to in
Speaker 11: some cases several hundred dollars a month. Towards their student loans.
Speaker 11: So I think we shouldn't diminish that. But I think
Speaker 11: it's also fair to say it hasn't had a massive
Speaker 11: at macroeconomic effect. Frankly, the White House was never projecting
Speaker 11: that it would have a massive macroeconomic effect on childcare.
Speaker 11: That funding runs out at the end of the year,
Speaker 11: and so the real concern is, come January February March,
Speaker 11: once you see the impact of that funding being withdrawn,
Speaker 11: are you going to have lots of childcare centers across
Speaker 11: the country either pulling back on service or shutting down entirely.
Speaker 11: And what's the impact of that going to be not
Speaker 11: only on childcare workers, but on all those families who
Speaker 11: rely on access to somewhat affordable childcare. So I think
Speaker 11: in that instance, I think it's vitally important that Congress
Speaker 11: step up and avoid that cliff and provide funding because
Speaker 11: we could have real serious labor market effects, labor supply
Speaker 11: effects in the spring of next year if that funding
Speaker 11: is withdrawn.
Speaker 5: Yeah.
Speaker 10: Well, on the subject of funding, Barot, obviously there is
Speaker 10: an ongoing conversation of funding, not just as it relates
Speaker 10: to childcare programs, but just overall. Top line figures for
Speaker 10: the US government of real argument on the Republican side
Speaker 10: that more fiscal discipline needs to be exercised, But you're
Speaker 10: even hearing it, and this ties back to the path
Speaker 10: of interest rates from Treasury Secretary Janet Yellen, who earlier
Speaker 10: today was talking about how she does think inflation can
Speaker 10: get down to two percent. She went on to say, though,
Speaker 10: in her remarks, that persistently high rates could imperil US
Speaker 10: debt sustainability. It comes back down to not just a
Speaker 10: monetary policy question, but a fiscal one as well. Barot,
Speaker 10: how worried should we be about that? Farther down the
Speaker 10: line if we're talking about, sure, a FED that may
Speaker 10: take rates from the high levels of which they are
Speaker 10: now a little lower, but we're still talking about a
Speaker 10: much higher interest rate regime than we were dealing with
Speaker 10: just a few years ago.
Speaker 5: Right.
Speaker 11: I think the key question in all of this is
Speaker 11: debt sustainability. In other words, what percentage of your GDP
Speaker 11: are you paying towards your debts. Obviously there's two variables there,
Speaker 11: the size of the debt and the interest rates that
Speaker 11: those that debt is at. You know, our hope is
Speaker 11: that both of those will come down over time. You know,
Speaker 11: the President has proposed in his budget a three trillion
Speaker 11: dollar reduction in the deficit over the next ten years,
Speaker 11: with a mixture of some spending cuts and some revenue
Speaker 11: increases from those at the very top and from very
Speaker 11: large corporations. You know, I think that the story of
Speaker 11: the last twenty to twenty five years, with first the
Speaker 11: Bush tax cuts and the Trump tax cuts, is an
Speaker 11: enormous reduction in revenue, primarily through cutting taxes for the
Speaker 11: rich and big corporations. And I agree with Secretary Yellen,
Speaker 11: it's not sustainable to maintain those rates and continue to
Speaker 11: fund the types of investments that we need. The solution
Speaker 11: is not to make huge cuts to entitlements or to
Speaker 11: make huge cuts to discretionary spending programs. The solution, as
Speaker 11: the President has proposed, is to increase the amount of
Speaker 11: revenue that we bring in from corporations and from large
Speaker 11: from wealthier individuals, in essence, to go back to the
Speaker 11: free Bush era tax cut rates. That alone would get
Speaker 11: us most of the way there towards addressing the fiscal issues.
Speaker 5: That you have.
Speaker 11: So obviously in twenty twenty five, there's going to be
Speaker 11: a big debate about tax policy on the Hill because
Speaker 11: a lot of the individual provisions and the Trump tax
Speaker 11: bill expire that year, and I think it's underrated the
Speaker 11: extent to which twenty twenty four is going to be
Speaker 11: an election that has an enormous influence on the direction
Speaker 11: of tax policy in the United States.
Speaker 3: That is going to be a grand debate.
Speaker 2: I'm looking forward to hearing the arguments for it, because
Speaker 2: when I say the word revenue on the air, I
Speaker 2: get hate mail every time.
Speaker 3: Broad We've only got a minute left.
Speaker 2: Should we be worried about a downgrade from Moodies if
Speaker 2: this budget debate doesn't go well next year, Well.
Speaker 11: No disrespect to Moodies, but I think what we've seen
Speaker 11: from previous downgrades is that it doesn't have much of
Speaker 11: an effect on market perception. I still think that there's
Speaker 11: an ample demand and respect for US treasuries, you know. Unfortunately,
Speaker 11: Moody is correct about one thing, which is that extremism
Speaker 11: from Republicans, which have caused multiple near misses on the
Speaker 11: debt ceiling, has has done some reputational harm. Again, this
Speaker 11: is solely caused by House Republicans who have taken us
Speaker 11: to the brink of default over and over again. If
Speaker 11: we could avoid that, that would be great. But I
Speaker 11: think at the end of the day, people know the
Speaker 11: United States is good to pay its debts and US
Speaker 11: TATI communities.
Speaker 2: He's not losing sleep. Barat Ramamurdy. Great to see you
Speaker 2: come back and talk to us again soon. Thanks for
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