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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at

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Speaker 1: noon and five pm Eastern on Apple Coarckley and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: Here on Bloomberg TV and Radio with Big News. It

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Speaker 2: hit the terminal right at high noon. The Redhead and

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Speaker 2: one that may not come as a surprise to you

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Speaker 2: because he's been on the shortlist for so long, we

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Speaker 2: can tell you he's at the top of that list.

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Speaker 2: Kevin Hassett, of course, one of the president's top economic

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Speaker 2: advisors going back to the first administration. Now, according to

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Speaker 2: Bloomberg's Nancy Cook, at the top of the shortlist to

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Speaker 2: become the next chair of the Federal Reserve, a job

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Speaker 2: he was asked about recently when he sat down with

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Speaker 2: David Rubinstein for his program Peer to Peer on Bloomberg.

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Speaker 2: They spoke at the Economic Club in Washington. Listen for me,

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Speaker 2: I think that being Director of the National Ecadomic Council

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Speaker 2: is my dream job, and if the President asked me

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Speaker 2: to be fed chair, then of course I'll do it.

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Speaker 2: But if I'm not.

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Speaker 3: Feedchaer, don't be disappointed for me, because I love the job.

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Speaker 2: That I have right now. And you are supposed to

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Speaker 2: say that, right, You have to love the job that

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Speaker 2: you have, Nancy Cook, It's great to see you. National

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Speaker 2: political correspondent with the headline hasse it emerges as front

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Speaker 2: runner in trumb Trump Fedshare audition. He wants this job, right, Yeah, Hassi.

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Speaker 4: Really wants this job. So he's being coy when he's

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Speaker 4: asked about this in interviews, saying I love my job

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Speaker 4: running the NEC and he probably does, but he does

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Speaker 4: really want the job, and internally he is viewed by

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Speaker 4: Trump aids as someone who is campaigning heavily for the job.

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Speaker 4: But also I think Trump is high on him. They

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Speaker 4: had a few meetings in June which we reported on

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Speaker 4: that went quite well, and I think that you know,

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Speaker 4: he was really you know, has been a favorite for

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Speaker 4: a while now. And you know, he has the added

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Speaker 4: value of also having proximity. He's in the White House

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Speaker 4: all the time as the National Economic Council head, and

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Speaker 4: you know, he's around Trump all the time. He is

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Speaker 4: going on TV constantly to deliver the White House's economic

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Speaker 4: message so I think that proximity really matters to Trump.

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Speaker 2: Is he also the path of least resistance to lower

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Speaker 2: interest rates? Is it as simple as that.

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Speaker 4: I think that's part of it as well. You know,

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Speaker 4: another name that we've kept hearing about is Kevin Walsh,

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Speaker 4: who was a FED governor before, who Trump considered to

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Speaker 4: be the FED chair last time during his first term.

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Speaker 4: You know, but I think that there is some you know,

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Speaker 4: he doesn't benefit from proximity, and I think that among

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Speaker 4: the MAGA world he is viewed as more quote unquote

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Speaker 4: Wall Street than has it and potentially more unpredictable, whereas

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Speaker 4: I feel like the Trump camp thinks Hassett will follow

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Speaker 4: the Trump agenda a bit more.

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Speaker 2: It's hard to underscore the daily audition to your point,

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Speaker 2: with the interviews on cable news on Sunday morning talk shows.

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Speaker 2: That's got to play a big role in the President's

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Speaker 2: decision because he's frequently the Donald Trump's economic policy.

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Speaker 4: Yeah, and he's been you know, he was on CNN

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Speaker 4: on Sunday morning. He did that the DC Economic Club.

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Speaker 4: He is appearing at a Wall Street Journal CEO summit

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Speaker 4: in early December. You know, he is really making the

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Speaker 4: rounds and not just doing sort of quick TV hits,

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Speaker 4: but also doing more extended interviews where he's giving his

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Speaker 4: thoughts on a range of policies. You know, inflation, the FED,

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Speaker 4: you know, all the things that tariffs, all the things

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Speaker 4: that are a key part of Trump's economic agenda.

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Speaker 2: He has said frequently. President Trump has said frequently in

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Speaker 2: speeches and in public events recently that Scott Besson was

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Speaker 2: actually his preferred candidate. He's even pointed him out, says, Scott,

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Speaker 2: I wanted you, But Besson likes the idea, likes the

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Speaker 2: job of being Treasury secretary. Is any of that true

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Speaker 2: or is he just playing with people?

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Speaker 3: No?

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Speaker 4: I mean what he is telling people privately, according to

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Speaker 4: my sources, is that you know, he wouldn't mind best

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Speaker 4: in doing both jobs Treasury secretary and fedcher. And I

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Speaker 4: don't think that he's totally dropped that idea. That's not

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Speaker 4: something that Beston wants. And Besson has told Trump that,

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Speaker 4: you know, several times. And so one thing that I'm

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Speaker 4: looking for is, you know, is there an eleventh hour

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Speaker 4: plot twist where Trump just gives best in both jobs

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Speaker 4: or does he go with Hasset?

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Speaker 2: Well, so, what do we need to get through. Next,

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Speaker 2: there are a few remaining hurdles. As you've been reporting,

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Speaker 2: It's time for the finalist interviews next.

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Speaker 4: Yeah, so he So, Scott Besson has finished his interviews,

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Speaker 4: and what happens next is that the Chief of Staff

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Speaker 4: Susie Wiles and Vice President jd Vance are going to

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Speaker 4: do some of the interviews and there are you know,

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Speaker 4: the people that progress and then those and then people

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Speaker 4: will meet with Trump. Scott Besson is not going to

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Speaker 4: recommend someone. You know, Secretary of Menuchin did that during

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Speaker 4: the first term. He recommended Powell and I think definitely

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Speaker 4: came to regret it, and that is one of Trump's

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Speaker 4: big regrets from the first term. Scott Beson has learned

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Speaker 4: from that and he's not going to do that. But

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Speaker 4: so the next steps are, you know, some interviews with

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Speaker 4: some top aids, a vice president and then Trump.

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Speaker 2: J Powell all the while is hanging out the news

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Speaker 2: as a resignation letter. Handy does what next.

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Speaker 1: J Pel is.

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Speaker 4: Hanging in at the FED and I think just trying

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Speaker 4: to keep his head down and do the job, but

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Speaker 4: also try to preserve the independence of the FED.

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Speaker 2: There'll be a final interview then with President Trump is

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Speaker 2: he put all three or however many in front of him,

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Speaker 2: like the apprentice, they all get a one on one.

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Speaker 2: How is that going to work? That he could sell

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Speaker 2: tickets to this? He could?

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Speaker 4: I mean, so we know how he did it the

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Speaker 4: first term, and so the first term he met with

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Speaker 4: people individually, and so I assume that that's going to

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Speaker 4: be the case here. You know where he'll meet with people.

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Speaker 4: You know, and he does know these people, or he

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Speaker 4: knows some of them. He knows Kevin Walsh because he

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Speaker 4: interviewed him the first time. Kevin Walsh also was down

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Speaker 4: in Palm Beach during the transition. He talked to him

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Speaker 4: also for the Treasury Secretary job. He knows Kevin Hassett,

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Speaker 4: and then some of the other people like Fed Governor

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Speaker 4: Chris Waller. You know, he would need to meet with

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Speaker 4: him and see what he thinks. You know, there's some

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Speaker 4: other people in the mix.

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Speaker 2: Really interesting. We've got a three handle on the ten year.

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Speaker 2: I know you're not a market analyst, Dancy, but you

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Speaker 2: kind of of the market with this report today that

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Speaker 2: would suggest that if it's Kevin Hassett or maybe anyone

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Speaker 2: else on the short list, you're going to have lower

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Speaker 2: interest rates.

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Speaker 4: I think that people think that if Kevin Hasset is there,

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Speaker 4: he will push for the rate cuts the Trump wants.

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Speaker 4: He is very much in line with the Trump agenda.

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Speaker 4: And following them.

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Speaker 2: Are the Rick readers and all the others from outside

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Speaker 2: the admin still on the list or rewhittling this.

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Speaker 4: Down, I think that it has it is really the

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Speaker 4: front runner got it.

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Speaker 2: Great reporting today, Nancy, Thank you as always, Thanks so

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Speaker 2: much the great Nancy Cook with us here in studio.

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Speaker 2: Everybody's picking up this story and you'll know that it

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Speaker 2: did come from Nancy's reporting here on Bloomberg. You can

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Speaker 2: find much more on the terminal and online with the

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Speaker 2: headline as we mentioned, Hasset emerges as front runner in

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Speaker 2: Trump fed chair audition. This could come in the next

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Speaker 2: couple of weeks, as we've been hearing creeping up around

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Speaker 2: the Christmas holiday, with some of these interviews finally coming

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Speaker 2: to a close. This is not the story we thought

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Speaker 2: we were going to be talking about today. It's emerged

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Speaker 2: as our top story, and it's even a market mover

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Speaker 2: on top of the other market mover that we started

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Speaker 2: our day with. And that's the Google story, the Sleeping Giant.

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Speaker 2: As I read on the terminal now fully awake. We

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Speaker 2: like the drama, you know when it comes to AI,

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Speaker 2: and on a story like this, having released a new

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Speaker 2: AI software, it's got the new chatbot out that got everybody,

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Speaker 2: including Mark Benioff worked up yesterday. Now it's this deal

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Speaker 2: with Meta and TPUs. I'm guessing a lot of people

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Speaker 2: are hearing about TPUs for the first time today. Not

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Speaker 2: to be confused the GPUs made by Nvidia. These are

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Speaker 2: the Broadcom chips, These specially designed chips that might make

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Speaker 2: an interesting path forward here. But as I mentioned, we

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Speaker 2: see context on stories like these because there seems to

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Speaker 2: be a different one every day. We can hardly count

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Speaker 2: the trillions of dollars any longer. And I'm really excited

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Speaker 2: to say that we're going to spend some time with

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Speaker 2: Dan Ball, who essentially wrote the book for Donald Trump.

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Speaker 2: He'll be modest and tell you many others were involved,

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Speaker 2: but he helped to write the AI action plan. And

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Speaker 2: I'll bring you back to July when President Trump rolled

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Speaker 2: this out here.

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Speaker 5: He is, whether we like it or not, we're suddenly

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Speaker 5: engaged in a fast paced competition to build and define

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Speaker 5: this groundbreaking technology that will determine so much about the

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Speaker 5: future of civilization itself because of the genius and creativity

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Speaker 5: of Silicon Valley, and.

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Speaker 6: It is incredible, incredible genius, without question, the most brilliant

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Speaker 6: place anywhere on Earth. America is the country that started

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Speaker 6: the AI race, and as President of the United States,

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Speaker 6: I'm here today to declare that America is going to

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Speaker 6: win it.

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Speaker 2: We're going to work hard, We're going to win it.

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Speaker 2: And it has been quite a ride since then here

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Speaker 2: for this administration, for the industry. When you look at

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Speaker 2: the charts on Wall Street, maybe save the last week

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Speaker 2: or so for some of them, you know what I'm

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Speaker 2: talking about. But the leadership role appears to be evolving here.

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Speaker 2: It's not just about Nvidia, and certainly the stock is

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Speaker 2: showing that as Meta enters discussions to use Google chips

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Speaker 2: in its data centers that could help to establish TPUs

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Speaker 2: as an alternative to Invidia's GPUs. Those TPUs are designed

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Speaker 2: with the help of Broadcom, which has been enjoying a

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Speaker 2: nice run up recently as well. When it comes to

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Speaker 2: that AI action Plan, it was written, as I mentioned

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Speaker 2: in part by Dean Ball. When President Trump sits back,

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Speaker 2: closes his eyes and thinks about what to do with AI?

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Speaker 2: He thinks of this man senior fellow at the Foundation

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Speaker 2: for American Innovation, He was Senior Policy Advisor for AI

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Speaker 2: and Emerging Technology at the White House Office of Science

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Speaker 2: and Technology Policy, recently among the rest of us in

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Speaker 2: the civilian world. Dean, it's great to see you. Welcome

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Speaker 2: back to Bloomberg. I'm sure I overdid your intro and

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Speaker 2: you can tell me about that later. But I'm just curious.

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Speaker 2: Does a Dean Ball wake up and see headlines like

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Speaker 2: this with everyone pulling their hair out. We're putting in

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Speaker 2: buy and sell orders based on this story and roll

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Speaker 2: your eyes. Do you have a much longer view than

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Speaker 2: this particular newsflow that might be missing the point?

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Speaker 7: No, I think it's a pretty substantial story.

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Speaker 2: Yeah.

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Speaker 7: Actually so. Google's TPUs tensor processing units as opposed to

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Speaker 7: GPUs graphics processing units, have been around for about ten years.

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Speaker 7: Google started creating them in twenty fifteen for its own

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Speaker 7: internal purposes. Right, Google was running lots and lots of

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Speaker 7: AI and machine learning applications, so they sort of needed

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Speaker 7: this for themselves. But they're very, very very effective chips,

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Speaker 7: and it's sort of no surprise to me that a

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Speaker 7: company like Google would start to see there being value

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Speaker 7: and selling those chips to other people, particularly because any

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Speaker 7: well functioning capitalist system, if there's a company making eighty

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Speaker 7: ninety percent profit margins, as in Video does, you should

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Speaker 7: expect there to be competition to start to lower those margins.

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Speaker 7: And that is what appears to be happening here. We'll

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Speaker 7: see if it works. In Video is a fiercely competitive company,

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Speaker 7: so this what's happening.

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Speaker 2: So cheaper doesn't run as hot is more productive. Therefore,

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Speaker 2: a lot of folks have been asking whether there will

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Speaker 2: be a real competitor to in Vidia. Did we finally

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Speaker 2: find one? Well, I think it could be.

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Speaker 7: I think there's a lot of there's a lot of

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Speaker 7: obstacles that Google faces. The most important one by far

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Speaker 7: is not actually just performance of the chip. It's the

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Speaker 7: software ecosystem. So in a way, that's a little bit

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Speaker 7: similar to how the iPhone. You know, Apple's iOS has

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Speaker 7: this huge developer ecosystem, and all these developers when they

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Speaker 7: it's kind of the premiere smartphone market, and you know

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Speaker 7: Android being a close second. There, there's something similar that

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Speaker 7: happens within video chips where all the developers of machine

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Speaker 7: learning models kind of use in Video's software ecosystem, which

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Speaker 7: is called Kuda, and that's a huge moat that in

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Speaker 7: Vidia has possibly more significant even than just their hardware performance.

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Speaker 7: So the question will be can Google develop a similar

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Speaker 7: type of ecosystem. And it's a big challenge when you

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Speaker 7: consider that Google has been used to using these chips,

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Speaker 7: these TPUs almost entirely for internal applications and some things

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Speaker 7: that were offered to developers. But this is mostly for them.

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Speaker 2: They're releasing them or renting them at some point for.

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Speaker 7: Yeah, they do, they rent them on their Google Cloud product.

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Speaker 7: But the idea of selling them to other.

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Speaker 2: That's all new.

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Speaker 7: That's new.

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Speaker 2: So if you're Broadcom, did you just find your new

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Speaker 2: reason to live? I mean this is we've seen a

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Speaker 2: huge run up based on a story like this and

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Speaker 2: just over the past couple of days, and Video is

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Speaker 2: one of the only stocks in the tech sector that's

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Speaker 2: lower today. Is this all adding up in.

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Speaker 7: Your heads to a certain extent, you know? I mean,

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Speaker 7: the market might be overreacting to this particular piece of news.

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Speaker 7: We'll see, right. I think the idea Meta is going

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Speaker 7: to be using in video chips for a long time

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Speaker 7: to come. And by the way, Google uses in video

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Speaker 7: chips to go.

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Speaker 2: To say Google is a client. Yeah, Google is.

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Speaker 7: I'm sure they're one of Google Nvidia's largest customers.

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Speaker 2: And then I'm supposed to ask you again about circular investing,

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Speaker 2: which do you see as misguided in this case?

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Speaker 1: Uh?

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Speaker 7: Not really in this case. No, I mean, look again,

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Speaker 7: are there some transactions that happen in this that seem

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Speaker 7: sort of.

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Speaker 2: A little fishy? Yeah?

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Speaker 7: Maybe, you know, I'm not expert in such things. Sure,

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Speaker 7: I'm more of a policy not an accountant. Yeah, I'm

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Speaker 7: not an accountant. I do have opinions about depreciation schedules,

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Speaker 7: but I'm not an.

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Speaker 2: Account Well, those depreciation schedules are a big deal for

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Speaker 2: the investment community right now. And when you look at

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Speaker 2: all these data centers popping up that are going to,

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Speaker 2: you know, pay a lot of money for cooling, They're

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Speaker 2: going to try to harness enormous amounts of energy. Does

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Speaker 2: a TPU or the next generation make all of this unnecessary?

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Speaker 2: Are we going to have data centers on mothballs when

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Speaker 2: the technology catches up? I don't think so.

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Speaker 7: I think that there's just an enormous amount of underlying

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Speaker 7: demand for AI services, and so you know, I think

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Speaker 7: the companies that are building these data centers are building

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Speaker 7: them primarily because they have trouble meeting demand right now,

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Speaker 7: you know, open ai, anthropic, these these companies are always

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Speaker 7: talking about how limited they are on compute and how

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Speaker 7: they could serve more models, better models, different kinds of

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Speaker 7: products to customers, but they can't because they're compute constraints.

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Speaker 7: So I think they're making a logical calculation. At the

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Speaker 7: end of the day, when it comes to these sort

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Speaker 7: of frontier data centers, you do need to maximize basically

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Speaker 7: computations per square foot, so that that becomes very important.

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Speaker 7: But at the same time, Google on their on their

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Speaker 7: most recent earnings called Google talked about how they had

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Speaker 7: very high utilization rates of the Nvidia V one hundred

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Speaker 7: vas in Victor from from seven eight years ago at

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Speaker 7: this point, so that ship is still being used for

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Speaker 7: different kinds of developer purposes. So it might not be

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Speaker 7: that you use the frontier chip, you know, for for everything.

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Speaker 7: There's a lot of other use cases, and so I

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Speaker 7: think that you know, the sexiest use cases of AI

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Speaker 7: will probably always be on these the big training and

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Speaker 7: they'll be on the latest models. But I think they'll

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Speaker 7: be uses, you know. I mean, we'll see, we'll see

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Speaker 7: if that changes. But I tend to think that the

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Speaker 7: depreciation schedules that we see right now are actually reasonable.

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Speaker 2: Fascinating and good for us to hit that before you go,

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Speaker 2: we've got about a minute left. Do TPUs accelerate the

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Speaker 2: endgame here where you and I both have a digital twin.

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Speaker 7: I mean, at the end of the day, competition is

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Speaker 7: inherently accelerationists, right, So competition is great in that regard.

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Speaker 7: I hope it makes both Nvidia and Google better. Can

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Speaker 7: you sell them to China the TPUs? I don't think

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Speaker 7: Google currently does. I think this could be the next

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Speaker 7: big argument for export controls.

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Speaker 8: Huh.

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Speaker 2: There could be some tips.

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Speaker 7: We'll see if Google wants to, but it's very possible,

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Speaker 7: you know, there there could be some chips that fall

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Speaker 7: into the sort of export control regulations.

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Speaker 2: Well, there needs to be a new AI action plan.

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Speaker 2: Do you go back and rewrite that thing at some point?

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Speaker 7: I don't know about me, but but I think that

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Speaker 7: something like that, you know, a plan like that is

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Speaker 7: worth updating every once in a while.

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Speaker 2: Fascinating Yeah, Dean, thank you. It's great to see you back.

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Speaker 2: Dean Ball, Senior Fellow Foundation for American Innovation with us

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Speaker 2: live on Bloomberg TV and radio. And it's just the

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Speaker 2: voice that we wanted today as we watch shares of

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Speaker 2: these companies react to the news at hand. It's been

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Speaker 2: a good one today for shares of Google and they're

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Speaker 2: still hanging in up about one percent or four dollars,

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Speaker 2: in Vidia down four percent or six dollars a share.

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Speaker 2: We'll assemble our panel next on the fastest show in Politics.

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Speaker 2: This is Bloomberg.

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Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

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Speaker 1: us live weekdays at noon and five pm Eastern on

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Speaker 1: Almacarklay and Android Auto with the Bloomberg Business App. Listen

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Speaker 1: on demand wherever you get your podcasts, or watch us

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Speaker 1: live on YouTube.

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Speaker 2: Thank you for joining us here on the fastest show

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Speaker 2: in Politics. With our panel on deck, we keep our

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Speaker 2: eyes on the White House today. The turkeys have been pardoned.

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Speaker 2: The healthcare plan has not yet emerged, and that has

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Speaker 2: been a big point of conversation this week, with early

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Speaker 2: reporting late weekend and yesterday that the White House was

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Speaker 2: about to put forth a healthcare proposal, and when I

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Speaker 2: say that, I mean one that would answer Democrats on

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Speaker 2: Capitol Hill following the government shutdown by extending Obamacare subsidies

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Speaker 2: reportedly by a couple of years and putting limits on

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Speaker 2: eligibility at seven hundred percent of the federal poverty level.

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Speaker 2: This is not going to be coming forth this week

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Speaker 2: for any number of reasons, and the Press Secretary Caroline

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Speaker 2: Levitt was asked about it yesterday. Here's what she said.

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Speaker 9: Healthcare is a topic of discussion that's happening very frequently

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Speaker 9: and robustly inside the West wing right now. The President's

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Speaker 9: very much involved in these talks, and he's very focused

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Speaker 9: on unveiling a healthcare proposal that will fix the system

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Speaker 9: and will bring down costs for consumers. As for the

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Speaker 9: details of those discussions, I'll let the President speak for himself.

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Speaker 2: Well, the President is not speaking for himself on this front.

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Speaker 2: It was the Treasury Secretary, Scott Bessen who had said

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Speaker 2: the proposal could be out this week, so at some

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Speaker 2: point that likely was the plan. Republican lawmakers were said

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Speaker 2: to be blindsided by this, and there was no love

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Speaker 2: on Capitol Hill from the Republican leadership. So this is

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Speaker 2: going to have to wait a minute. The proposal expected

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Speaker 2: again to include extended subsidies for those purchasing health insurance

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Speaker 2: through the ACA. But then, of course the President will

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Speaker 2: tell you that he wants to send money directly to

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Speaker 2: people so they can buy their own insurance. We play

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Speaker 2: it to the panel for their thoughts on this, and

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Speaker 2: god knows we've talked about it before. Democratic analyst and

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Speaker 2: Bloomberg Politics contributor Genie Shanzano is here Democracy visiting fellow

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Speaker 2: at Harvard Kennedy School's Ash Center. Ashley Davis, our republican

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Speaker 2: strategist partner at S three Group, is with us as well. Genie.

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Speaker 2: We were making comparisons to Infrastructure Week yesterday. The fact

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Speaker 2: of the matter is John Thune promised to vote on

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Speaker 2: the Senate floor, I believe by the tenth of December,

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Speaker 2: so the White House will need something. We'll have to

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Speaker 2: say something about this unless Democrats on Capitol Hill are

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Speaker 2: going to write there our own legislation. And I don't

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Speaker 2: believe that's how it works. When will Donald Trump have

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Speaker 2: to put something on the table.

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Speaker 8: Yeah, I mean, it is really perplexing that anybody in

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Speaker 8: the White House thought the Monday of the short Thanksgiving

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Speaker 8: week hoist on the Republicans in Congress a plan to

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Speaker 8: reform or at least address healthcare costs without discussing it

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Speaker 8: with them.

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Speaker 10: Apparently, first, it makes.

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Speaker 8: No sense, and it was never going to be an

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Speaker 8: easy task, and we know that because for decades Republicans

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Speaker 8: have had trouble addressing health care.

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Speaker 10: This goes back so long.

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Speaker 8: And you know, the President's instincts on this are not

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Speaker 8: wrong politically, He's right.

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Speaker 10: They have to address this.

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Speaker 8: The subsidies are going to expire at the end of

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Speaker 8: next month. There's not a lot of time to deal

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Speaker 8: with it. This is hurting Republicans and the polls as

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Speaker 8: they head into the midterm. But he's facing Republicans who

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Speaker 8: have for years voted against Obamacare, and now apparently the

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Speaker 8: White House wants them to turn on a dime and

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Speaker 8: vote to extend these subsidies.

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Speaker 10: That's going to take an effort by not just the.

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Speaker 8: White House but the President going to Capitol Hill talking

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Speaker 8: to them, addressing their concerns, and that hasn't happened.

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Speaker 10: So politically, this really was not done well.

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Speaker 8: And I'm surprised anybody thought you could just hoist this

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Speaker 8: on them at the last minute, and it was going

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Speaker 8: to pass.

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Speaker 10: Given the history of this issue with Republicans on.

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Speaker 2: The Hill, Ashley, You've got great contacts in the Senate.

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Speaker 2: What does John Thune think about this moment? Is he

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Speaker 2: hoping that the President will take a leadership role here

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Speaker 2: or does he need to figure this out on his

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Speaker 2: own with Democrats?

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Speaker 11: Well, listen, Republicans have known for a year that this

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Speaker 11: period of time of these subsidies were going to expire. Remember,

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Speaker 11: the crux of this issue is because they were expanded

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Speaker 11: at a higher level during COVID, and the Republics are

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Speaker 11: saying it's time to go back.

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Speaker 10: We're not in COVID anymore.

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Speaker 11: That's a very difficult thing to do because a lot

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Speaker 11: of families in our country have depended on it. So

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Speaker 11: it's even though intellectually you can understand the point about overspending,

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Speaker 11: the human side is really impacting these members of Congress

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Speaker 11: because a lot of their constituents do rely on it.

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Speaker 11: I'm going to stick up for the administration here. There's

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Speaker 11: plenty of people on the Hill that knew what was

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Speaker 11: going on with the administration and what they were proposing.

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Speaker 11: What was posed has been talked about for months and

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Speaker 11: months and months. You just can't negotiate with five hundred

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Speaker 11: and thirty five members of Congress. I mean, it's impossible,

439
00:21:39,520 --> 00:21:43,040
Speaker 11: So you have to have a smaller working group. That

440
00:21:43,200 --> 00:21:51,040
Speaker 11: being said, I don't think that the administration appreciated how

441
00:21:51,119 --> 00:21:54,480
Speaker 11: many Democrat votes they will need for some sort of

442
00:21:55,240 --> 00:22:01,080
Speaker 11: plan with this, with any proposal, because many of the Republicans,

443
00:22:01,160 --> 00:22:05,000
Speaker 11: especially on the extreme right, to have no desire to

444
00:22:05,000 --> 00:22:07,840
Speaker 11: spend money, the fiscally conservatives to have no desire to

445
00:22:07,840 --> 00:22:09,720
Speaker 11: spend money, So we are going to have to have

446
00:22:10,240 --> 00:22:14,440
Speaker 11: a bipartisan package. And also just finally, the Democrats in

447
00:22:14,480 --> 00:22:17,040
Speaker 11: the Senate, in the House have been asking for the

448
00:22:17,080 --> 00:22:20,720
Speaker 11: President to engage in this process. So if you looked

449
00:22:20,760 --> 00:22:24,480
Speaker 11: at even what Senator Shaheen said and several others, they

450
00:22:24,480 --> 00:22:27,840
Speaker 11: were like, listen, this isn't going to be the final package,

451
00:22:27,840 --> 00:22:30,479
Speaker 11: but at least we're starting to get engagement, and it

452
00:22:30,520 --> 00:22:34,320
Speaker 11: looked like a serious what leaked looked like a serious

453
00:22:34,440 --> 00:22:36,920
Speaker 11: enough package. So the other thing that's always going to

454
00:22:36,960 --> 00:22:39,840
Speaker 11: be an issue is the high to Amendment, which you know,

455
00:22:40,000 --> 00:22:44,159
Speaker 11: is about spending federal money on abortions, and that was

456
00:22:43,800 --> 00:22:48,320
Speaker 11: there was some language in this proposal that focused on

457
00:22:48,359 --> 00:22:51,720
Speaker 11: some of the other social issues that are controversial for Republicans.

458
00:22:52,119 --> 00:22:55,680
Speaker 11: But the High Amendment was silent, So we'll see how

459
00:22:55,760 --> 00:22:59,479
Speaker 11: that played. That always plays out in healthcare legislation, so

460
00:22:59,720 --> 00:23:02,119
Speaker 11: you know, the drama will continue.

461
00:23:03,480 --> 00:23:07,320
Speaker 2: Genie, it sounds to me like Democrats might regret and

462
00:23:07,400 --> 00:23:08,960
Speaker 2: I know a lot of them didn't like it when

463
00:23:09,000 --> 00:23:12,119
Speaker 2: it happened, but might regret this agreement with John Thune

464
00:23:12,119 --> 00:23:15,399
Speaker 2: for a December ten vote. This is why so many

465
00:23:15,440 --> 00:23:17,359
Speaker 2: said there needed to be a deal, not just the

466
00:23:17,400 --> 00:23:19,600
Speaker 2: promise of a vote. Right, what if it doesn't happen

467
00:23:19,840 --> 00:23:20,160
Speaker 2: by the.

468
00:23:20,160 --> 00:23:24,919
Speaker 8: Tenth Yeah, I mean, it is horrendous for the American

469
00:23:24,960 --> 00:23:27,720
Speaker 8: public if they can't strike a deal. And you know,

470
00:23:27,800 --> 00:23:31,440
Speaker 8: we get back from break in Monday, and we are

471
00:23:31,440 --> 00:23:34,600
Speaker 8: in December already. You have a few days before that

472
00:23:34,720 --> 00:23:37,439
Speaker 8: vote and then a few weeks before the end of

473
00:23:37,480 --> 00:23:39,639
Speaker 8: the year when these subsidies expire.

474
00:23:39,760 --> 00:23:41,800
Speaker 10: So this is disastrous.

475
00:23:41,880 --> 00:23:44,119
Speaker 8: I mean, forget about either of the parties for the

476
00:23:44,160 --> 00:23:48,959
Speaker 8: American public, particularly people who depend on these costs. And

477
00:23:49,280 --> 00:23:51,719
Speaker 8: you know, the reality is is that we've had what

478
00:23:51,920 --> 00:23:55,440
Speaker 8: thirteen members of the GOP come out publicly and say

479
00:23:55,480 --> 00:23:59,560
Speaker 8: they support extending the subsidies. All of them are in

480
00:23:59,640 --> 00:24:03,879
Speaker 8: vulner districts, and so that's why the approach here by

481
00:24:03,960 --> 00:24:07,080
Speaker 8: the White House makes no sense. You were going to

482
00:24:07,320 --> 00:24:11,320
Speaker 8: have to deal first with the GOP, then reach across

483
00:24:11,359 --> 00:24:11,760
Speaker 8: the aisle.

484
00:24:11,960 --> 00:24:14,719
Speaker 10: This was going to take time and concerted effort.

485
00:24:15,080 --> 00:24:17,720
Speaker 8: And they did know to Ashley's point for a long time,

486
00:24:18,000 --> 00:24:21,000
Speaker 8: which makes this more perplexing. But I think it underscores

487
00:24:21,040 --> 00:24:23,920
Speaker 8: what the Democrats have been saying is that the President

488
00:24:24,040 --> 00:24:27,960
Speaker 8: has not been focused like a laser beam on affordability,

489
00:24:28,240 --> 00:24:31,520
Speaker 8: and now it is coming to hit the administration and

490
00:24:31,640 --> 00:24:35,200
Speaker 8: unfortunately the American public, and so I'm not sure.

491
00:24:35,000 --> 00:24:37,680
Speaker 10: That they can get a deal. But I don't think

492
00:24:37,720 --> 00:24:39,560
Speaker 10: it's just a problem for Democrats.

493
00:24:39,560 --> 00:24:42,240
Speaker 8: It's a problem for Republicans and members of the White

494
00:24:42,280 --> 00:24:44,879
Speaker 8: House and all of the American public most importantly.

495
00:24:45,960 --> 00:24:47,920
Speaker 2: Oh my god. So what's the answer. Then, what's the

496
00:24:47,960 --> 00:24:49,919
Speaker 2: short term answer? Ashley? Do you have to have a

497
00:24:49,960 --> 00:24:53,240
Speaker 2: short term extension of subsidies, kind of like a cr

498
00:24:53,320 --> 00:24:55,080
Speaker 2: so we can buy more time to figure this out.

499
00:24:56,440 --> 00:24:59,080
Speaker 11: That's what I keep thinking. And there is some money

500
00:24:59,240 --> 00:25:03,159
Speaker 11: available that like December thirty first, people's benefits aren't going

501
00:25:03,200 --> 00:25:05,680
Speaker 11: to go away. I mean, there you can do something

502
00:25:05,720 --> 00:25:07,960
Speaker 11: through the first quarter, so you know, just to make

503
00:25:07,960 --> 00:25:11,359
Speaker 11: sure that people aren't totally scared, that are listening to us,

504
00:25:11,400 --> 00:25:14,480
Speaker 11: that depend on that there is some flexibility there. But yes,

505
00:25:15,000 --> 00:25:18,879
Speaker 11: I think that this is a political a caring issue

506
00:25:19,040 --> 00:25:21,119
Speaker 11: enough number one, I hope for all members of Congress,

507
00:25:21,160 --> 00:25:23,560
Speaker 11: but also a political issue for both sides that something

508
00:25:23,600 --> 00:25:25,840
Speaker 11: needs to be done. I do believe John Thune will

509
00:25:25,840 --> 00:25:28,760
Speaker 11: give the Democrats their vote on December tenth, as he promised.

510
00:25:28,760 --> 00:25:31,600
Speaker 11: But going back to your I don't know December tenth,

511
00:25:31,600 --> 00:25:34,159
Speaker 11: maybe that week at some point, whether it's legislation that

512
00:25:34,240 --> 00:25:36,399
Speaker 11: can actually pass or not, it's the question, and that

513
00:25:36,960 --> 00:25:38,920
Speaker 11: I agree with you, Joe. I think it is when

514
00:25:38,960 --> 00:25:42,280
Speaker 11: you asked Genie like, should they have gotten a deal

515
00:25:42,480 --> 00:25:45,240
Speaker 11: that said we have to have legislation in place? But

516
00:25:45,320 --> 00:25:48,560
Speaker 11: that would have been impossible during the shutdown.

517
00:25:48,200 --> 00:25:51,840
Speaker 2: I think, well, if this doesn't get done, Ashley, do

518
00:25:51,880 --> 00:25:53,560
Speaker 2: we shut down at the end of January? This is

519
00:25:53,600 --> 00:25:54,560
Speaker 2: the question I keep.

520
00:25:54,400 --> 00:25:59,240
Speaker 11: Asking, Well, I you know, I always feel like shutting

521
00:25:59,280 --> 00:26:02,600
Speaker 11: down was people calling bluff, especially for as long as

522
00:26:02,640 --> 00:26:03,280
Speaker 11: we just did.

523
00:26:04,840 --> 00:26:05,040
Speaker 8: No.

524
00:26:05,200 --> 00:26:08,160
Speaker 11: I think that we'll get I think we'll get something done,

525
00:26:08,200 --> 00:26:12,240
Speaker 11: and I think it will go through September thirtieth, but

526
00:26:12,920 --> 00:26:15,200
Speaker 11: or may. Actually it's going to have to go through

527
00:26:15,200 --> 00:26:18,280
Speaker 11: September thirtieth, just because it's a fiscal bill. So that

528
00:26:18,400 --> 00:26:21,080
Speaker 11: means we're in we're in September thirtieth dealing with a

529
00:26:21,119 --> 00:26:23,879
Speaker 11: shutdown again right before the election, right before people are

530
00:26:23,880 --> 00:26:25,800
Speaker 11: supposed to go home and start campaigning.

531
00:26:26,000 --> 00:26:29,000
Speaker 2: So that's going to be a disaster too. That's why

532
00:26:29,040 --> 00:26:32,040
Speaker 2: there was a two year extension on this thing that leaked, Genie.

533
00:26:32,480 --> 00:26:35,359
Speaker 2: You know, you'd get it past the midterms. Donald Trump

534
00:26:35,440 --> 00:26:37,840
Speaker 2: seemed to think that was a good idea, and you know,

535
00:26:37,920 --> 00:26:40,560
Speaker 2: to Ashley's point, there were a lot of details on this.

536
00:26:40,720 --> 00:26:42,760
Speaker 2: It looked like it was a plan that was being

537
00:26:42,800 --> 00:26:46,560
Speaker 2: prepared for release. Genie, what would Democrats do with the

538
00:26:46,600 --> 00:26:50,080
Speaker 2: plan that we described yesterday, including the limitations on eligibility.

539
00:26:50,119 --> 00:26:51,280
Speaker 2: Would they have to vote for it?

540
00:26:53,119 --> 00:26:55,119
Speaker 8: I think they would want to talk about it. I

541
00:26:55,200 --> 00:26:57,719
Speaker 8: think they would want to negotiate it. I think I

542
00:26:57,840 --> 00:27:00,159
Speaker 8: think it was a step in the right direction. And

543
00:27:00,800 --> 00:27:03,080
Speaker 8: you know, I am not a fan of these sun

544
00:27:03,200 --> 00:27:08,360
Speaker 8: setting attempts, and I bemoaned it when the Democrats did

545
00:27:08,359 --> 00:27:09,280
Speaker 8: it in twenty one.

546
00:27:09,440 --> 00:27:12,080
Speaker 10: I bemoan it. Now if you believe.

547
00:27:11,840 --> 00:27:15,359
Speaker 8: That healthcare is a right for Americans, you should fund it,

548
00:27:15,440 --> 00:27:19,080
Speaker 8: and so I think you may find people who feel

549
00:27:19,080 --> 00:27:21,280
Speaker 8: that way, but of course you need to compromise when

550
00:27:21,280 --> 00:27:22,600
Speaker 8: you're in the minority.

551
00:27:22,480 --> 00:27:23,560
Speaker 10: Or even in the majority.

552
00:27:23,720 --> 00:27:27,640
Speaker 8: So you know. But again, the President's instincts are right here.

553
00:27:27,840 --> 00:27:30,840
Speaker 8: But the President has changed this party. He is now

554
00:27:30,880 --> 00:27:34,560
Speaker 8: worried about a base who are being hurt by the

555
00:27:34,560 --> 00:27:38,320
Speaker 8: these extensions expire. But you've got traditional Republicans who feel

556
00:27:38,400 --> 00:27:41,080
Speaker 8: very differently, even members of the Tea Party, more concerned

557
00:27:41,080 --> 00:27:42,119
Speaker 8: about the fiscal cost.

558
00:27:42,520 --> 00:27:44,840
Speaker 10: And that's where the rub is for Republicans.

559
00:27:45,200 --> 00:27:49,720
Speaker 8: This is a issue that divides Republicans and that's why

560
00:27:49,760 --> 00:27:52,360
Speaker 8: the President's going to have to go in and make

561
00:27:52,440 --> 00:27:55,680
Speaker 8: some deals with the majority in Congress to push this through.

562
00:27:56,840 --> 00:27:58,679
Speaker 2: Well, it's going to have to happen pretty quickly. And

563
00:27:58,720 --> 00:28:00,720
Speaker 2: I thank you both for your insights on this, Genie

564
00:28:00,720 --> 00:28:04,040
Speaker 2: Shanzano and Ashley Davis. A great panel. Thank you both,

565
00:28:04,080 --> 00:28:05,960
Speaker 2: And can I say, Ashley, if I don't see you

566
00:28:06,040 --> 00:28:09,720
Speaker 2: happy Thanksgiving, I think we might have one more show left. Genie,

567
00:28:09,720 --> 00:28:11,919
Speaker 2: I'm Joe, Matthew and Washington thank you for joining us

568
00:28:11,920 --> 00:28:13,960
Speaker 2: here on Balance of Power with a headline that just

569
00:28:14,000 --> 00:28:17,760
Speaker 2: crossed the terminal. Balsonaro ordered by court to start serving

570
00:28:17,800 --> 00:28:23,080
Speaker 2: his sentence in jail. Indeed, the former Brazilian president having

571
00:28:23,119 --> 00:28:26,360
Speaker 2: told a judge on Sunday he violated his ankle monitoring

572
00:28:26,440 --> 00:28:28,040
Speaker 2: the day before at his house because he had a

573
00:28:28,040 --> 00:28:31,560
Speaker 2: nervous breakdown and was suffering hallucinations caused by a change

574
00:28:31,560 --> 00:28:36,600
Speaker 2: in his medication. After tampering with the ankle Braceletton he

575
00:28:36,640 --> 00:28:39,720
Speaker 2: has now been ordered by the court to start serving

576
00:28:39,800 --> 00:28:42,760
Speaker 2: his sentence in jail. We'll turn back to potential piece

577
00:28:42,800 --> 00:28:43,640
Speaker 2: in Ukraine next.

578
00:28:44,960 --> 00:28:48,440
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

579
00:28:48,480 --> 00:28:51,560
Speaker 1: us live weekdays at noon and five pm Eastern on

580
00:28:51,680 --> 00:28:54,920
Speaker 1: Apple Cockway and Android Auto with the Bloomberg Business App.

581
00:28:54,960 --> 00:28:57,959
Speaker 1: You can also listen live on Amazon Alexa from our

582
00:28:58,000 --> 00:29:02,520
Speaker 1: flagship New York station, Say Alexa played Bloomberg eleven thirty.

583
00:29:03,920 --> 00:29:07,240
Speaker 2: I'm Joe Matthew in Washington with her eyes on Abu

584
00:29:07,320 --> 00:29:11,520
Speaker 2: Dhabi today. First it was Geneva over the weekend. Now,

585
00:29:11,600 --> 00:29:17,320
Speaker 2: peace negotiations surrounding Russia's war in Ukraine have settled in

586
00:29:17,400 --> 00:29:21,600
Speaker 2: the UAE, and an important task at hand for the

587
00:29:21,640 --> 00:29:26,000
Speaker 2: Secretary of the Army Dan Driscoll, who is across the

588
00:29:26,040 --> 00:29:30,440
Speaker 2: table from Russian counterparts in trying to negotiate a peace breakthrough.

589
00:29:30,840 --> 00:29:35,360
Speaker 2: The delegations are at it right now, the Secretary finding

590
00:29:35,440 --> 00:29:39,160
Speaker 2: himself in a room with Russian officials that he may

591
00:29:39,200 --> 00:29:42,560
Speaker 2: never have imagined when he took this role as the

592
00:29:42,600 --> 00:29:46,640
Speaker 2: civilian leader of the United States Army. Ukraine's military intelligence

593
00:29:46,720 --> 00:29:50,400
Speaker 2: chief also in Abu Dhabi for meetings President Trump, citing

594
00:29:50,440 --> 00:29:52,840
Speaker 2: progress on the peace proposal. It has gone from twenty

595
00:29:52,840 --> 00:29:57,840
Speaker 2: eight points, we understand, to nineteen that peace proposal with

596
00:29:57,920 --> 00:30:02,600
Speaker 2: elements initially rejected by Ukraine starting to shrink in scope,

597
00:30:02,760 --> 00:30:06,400
Speaker 2: and we understand, according to reports, that President Zelenski is

598
00:30:06,440 --> 00:30:10,400
Speaker 2: standing by to visit Washington if and when there is

599
00:30:10,560 --> 00:30:14,880
Speaker 2: the opportunity for a breakthrough. This idea of peace in

600
00:30:15,040 --> 00:30:17,600
Speaker 2: Ukraine was discussed yesterday at the White House with Press

601
00:30:17,600 --> 00:30:20,400
Speaker 2: Secretary Caroline Levitt when she took questions from reporters.

602
00:30:20,440 --> 00:30:23,600
Speaker 9: Here she is the idea that the United States of

603
00:30:23,640 --> 00:30:26,600
Speaker 9: America is not engaging with both sides equally in this

604
00:30:26,680 --> 00:30:28,800
Speaker 9: war to bring it to an end is a complete

605
00:30:28,800 --> 00:30:31,440
Speaker 9: and total fallacy that could not be further from the truth.

606
00:30:31,480 --> 00:30:34,160
Speaker 9: I have watched as the President and his team have

607
00:30:34,320 --> 00:30:38,680
Speaker 9: worked around the clock overnight, with both sides on endless

608
00:30:38,680 --> 00:30:41,240
Speaker 9: phone calls, endless meetings to try to bring this war

609
00:30:41,280 --> 00:30:41,800
Speaker 9: to a close.

610
00:30:43,120 --> 00:30:45,120
Speaker 2: Remembering it was just a couple of weeks ago that

611
00:30:45,200 --> 00:30:47,640
Speaker 2: Zelenski was back in the White House and the President

612
00:30:47,680 --> 00:30:49,840
Speaker 2: was on the phone with Vladimir Putin and turned away

613
00:30:49,840 --> 00:30:53,440
Speaker 2: from this idea of providing Tomahawk missiles to Ukraine to

614
00:30:53,520 --> 00:30:56,959
Speaker 2: try to hasten the end of the war. This multi

615
00:30:57,080 --> 00:31:01,800
Speaker 2: point plan has since taken over the narrative and may

616
00:31:01,880 --> 00:31:04,920
Speaker 2: well provide the breakthrough that the President is hoping for.

617
00:31:04,920 --> 00:31:08,080
Speaker 2: It's where we start our conversation with Kelly Grico, senior

618
00:31:08,080 --> 00:31:11,440
Speaker 2: fellow with the Reimagining US Grand Strategy program at the

619
00:31:11,440 --> 00:31:14,000
Speaker 2: Stimpson Center. Kelly, it's great to see you. Welcome back

620
00:31:14,400 --> 00:31:17,520
Speaker 2: to Bloomberg TV and Radio. All the while, we should

621
00:31:17,680 --> 00:31:22,480
Speaker 2: remind our listeners and viewers that Russia continues to bombard

622
00:31:22,880 --> 00:31:29,080
Speaker 2: Ukraine and continues to kill civilians by targeting residential areas. Kelly,

623
00:31:29,280 --> 00:31:33,560
Speaker 2: before we ask you about negotiations, what is the status

624
00:31:33,600 --> 00:31:35,400
Speaker 2: of this war on the ground that we had been

625
00:31:35,440 --> 00:31:38,080
Speaker 2: describing for months and months as a war of attrition?

626
00:31:38,200 --> 00:31:40,240
Speaker 2: What is Ukraine's posture right now.

627
00:31:41,160 --> 00:31:44,560
Speaker 12: Yes, so it is a war of attrition, but it's

628
00:31:44,560 --> 00:31:48,840
Speaker 12: not static. What we're seeing is that Russia is making slow,

629
00:31:48,960 --> 00:31:51,960
Speaker 12: costly gains, particularly in the Donasku region, and it looks

630
00:31:52,040 --> 00:31:55,760
Speaker 12: like the town of Prokosk is likely to fall in

631
00:31:55,800 --> 00:31:59,120
Speaker 12: the coming days or weeks, which is an important logistics

632
00:31:59,160 --> 00:32:02,360
Speaker 12: hub for Ukraine. It's I think the important thing really

633
00:32:02,480 --> 00:32:04,680
Speaker 12: is to emphasize that this is costly, but there is

634
00:32:04,680 --> 00:32:07,320
Speaker 12: some movement on the battlefield, and the question becomes whether

635
00:32:07,320 --> 00:32:10,440
Speaker 12: the Russians are really willing to pay those costs to

636
00:32:10,480 --> 00:32:13,520
Speaker 12: try to take all the land by force, and if

637
00:32:13,560 --> 00:32:15,360
Speaker 12: they do that, it would probably be until about twenty

638
00:32:15,360 --> 00:32:18,800
Speaker 12: twenty seven before they could take the rest of Donesque.

639
00:32:19,600 --> 00:32:23,200
Speaker 2: Wow. All the while, Ukraine is attacking Russia, not by

640
00:32:23,200 --> 00:32:27,280
Speaker 2: going after civilian neighborhoods, but energy infrastructure, particularly on the

641
00:32:27,320 --> 00:32:31,000
Speaker 2: Black Sea. To what extent can Ukraine inflig damage without

642
00:32:31,040 --> 00:32:33,680
Speaker 2: receiving more long range missiles when it comes to energy

643
00:32:33,680 --> 00:32:37,040
Speaker 2: infrastructure specifically, Yes, So.

644
00:32:37,280 --> 00:32:40,720
Speaker 12: It's clear that the Ukrainian strikes on energy infrastructure have

645
00:32:40,800 --> 00:32:44,880
Speaker 12: had some impact, but not probably enough to really impair

646
00:32:45,040 --> 00:32:48,040
Speaker 12: Russia's ability to conduct this war. To finance this war.

647
00:32:48,680 --> 00:32:51,160
Speaker 12: It certainly has made it more painful, and it's forcing

648
00:32:51,200 --> 00:32:54,840
Speaker 12: some more acute choices on the Russians ultimately about.

649
00:32:54,840 --> 00:32:56,320
Speaker 10: How they're going to finance their war.

650
00:32:56,840 --> 00:32:58,840
Speaker 12: The defense budget for this coming year is actually a

651
00:32:58,880 --> 00:33:01,400
Speaker 12: bit smaller than it was the previous year. It's still

652
00:33:01,560 --> 00:33:05,880
Speaker 12: enormously large and well above large in terms of post

653
00:33:05,880 --> 00:33:09,240
Speaker 12: Soviet Russian defense budget, but you can see that there's

654
00:33:09,280 --> 00:33:11,200
Speaker 12: some real choices that Russia would have to make if

655
00:33:11,240 --> 00:33:12,760
Speaker 12: it's going to continue to fight this war for a

656
00:33:12,840 --> 00:33:16,120
Speaker 12: few more years, including raising taxes, and of course that

657
00:33:16,240 --> 00:33:19,440
Speaker 12: becomes domestically much harder for Putin.

658
00:33:20,640 --> 00:33:23,640
Speaker 2: Well, so let's start looking inside this peace proposal, at

659
00:33:23,720 --> 00:33:25,760
Speaker 2: least to the extent that we understand it, and Kelly,

660
00:33:25,800 --> 00:33:28,440
Speaker 2: we should be honest. This is a fluid document, as

661
00:33:28,440 --> 00:33:31,520
Speaker 2: the Secretary of State has made clear, But we're talking

662
00:33:31,600 --> 00:33:35,720
Speaker 2: about a potential security guarantee by the US and some

663
00:33:35,800 --> 00:33:39,320
Speaker 2: of our European allies, and it would come at the expense,

664
00:33:39,480 --> 00:33:42,080
Speaker 2: at least in terms of the early drafts of a

665
00:33:42,120 --> 00:33:45,520
Speaker 2: good chunk of Ukraine's standing army. It may not be

666
00:33:45,560 --> 00:33:49,280
Speaker 2: able to defend itself without the security guarantee. So what

667
00:33:49,320 --> 00:33:53,280
Speaker 2: does that need to look like for Voladimir Zelensky for

668
00:33:53,400 --> 00:33:54,440
Speaker 2: it to be acceptable.

669
00:33:55,880 --> 00:33:58,160
Speaker 12: Well, I would just step back for a moment and

670
00:33:58,160 --> 00:34:00,200
Speaker 12: say that I think the notion that Ukraine can not

671
00:34:00,560 --> 00:34:03,800
Speaker 12: defend itself without a security guarantee, or at least if

672
00:34:03,800 --> 00:34:07,080
Speaker 12: we're talking like a NATO style security guarantee, is clearly

673
00:34:07,120 --> 00:34:10,120
Speaker 12: not true given what they've been able to accomplish on

674
00:34:10,160 --> 00:34:13,000
Speaker 12: the battlefield so far. I think what we're seeing in

675
00:34:13,040 --> 00:34:16,239
Speaker 12: the negotiations is it seems like an increasing recognition which

676
00:34:16,280 --> 00:34:19,280
Speaker 12: is clearly painful for Ukraine, but that the best security

677
00:34:19,280 --> 00:34:21,240
Speaker 12: guarantee is going to have to be a robust self

678
00:34:21,239 --> 00:34:24,520
Speaker 12: defense and trying to extract things from Europe in the

679
00:34:24,600 --> 00:34:27,600
Speaker 12: United States to support that. The language and the initial

680
00:34:27,640 --> 00:34:30,960
Speaker 12: proposal talked about some kind of response, it was very

681
00:34:31,040 --> 00:34:34,920
Speaker 12: vague by the Transatlantic community if Russia were to attack again,

682
00:34:35,200 --> 00:34:38,080
Speaker 12: but it really doesn't commit United States or Europe to

683
00:34:38,080 --> 00:34:42,239
Speaker 12: anything specific. And it's clear that you know there's opposition

684
00:34:42,320 --> 00:34:45,400
Speaker 12: to need membership for Ukraine, that that's not going to

685
00:34:45,440 --> 00:34:49,280
Speaker 12: happen politically, and that really Ukraine needs to move towards

686
00:34:49,280 --> 00:34:51,360
Speaker 12: figuring out how it can get the kind of support

687
00:34:51,440 --> 00:34:55,080
Speaker 12: it needs, more indirect form of support to make its

688
00:34:55,120 --> 00:34:57,520
Speaker 12: own robust defense to prevent another war.

689
00:34:58,560 --> 00:35:01,200
Speaker 2: Well, so it sounds like we need to see many

690
00:35:01,239 --> 00:35:04,080
Speaker 2: more revisions. Maybe they're taking place right now, but selling

691
00:35:04,120 --> 00:35:08,960
Speaker 2: this was already a lift for Russia, for the Army

692
00:35:09,000 --> 00:35:12,680
Speaker 2: secretary trying to sell this to Russia. If you start

693
00:35:12,719 --> 00:35:16,320
Speaker 2: making some of the changes that you're suggesting, this could

694
00:35:16,320 --> 00:35:17,520
Speaker 2: be dead on arrival.

695
00:35:17,239 --> 00:35:20,000
Speaker 12: Then right, yes, I mean, I think this is what's

696
00:35:20,040 --> 00:35:24,440
Speaker 12: really interesting about this negotiation is that you know the

697
00:35:24,840 --> 00:35:27,600
Speaker 12: administration is walking a fine line here and that you know,

698
00:35:27,640 --> 00:35:31,680
Speaker 12: the more it compromises with Ukraine about some of these specifics,

699
00:35:31,719 --> 00:35:33,879
Speaker 12: and of course it's hard to know because we haven't

700
00:35:33,880 --> 00:35:36,400
Speaker 12: heard a lot about what the nineteen points on the

701
00:35:36,440 --> 00:35:39,680
Speaker 12: new version says. And the language really matters here a lot.

702
00:35:39,760 --> 00:35:42,399
Speaker 12: You know, are these very substantive changes or are these

703
00:35:42,480 --> 00:35:44,839
Speaker 12: changes more to the language So it's a bit more

704
00:35:44,880 --> 00:35:48,759
Speaker 12: domestically palpable to Ukraine. But if it's going to be

705
00:35:48,800 --> 00:35:52,239
Speaker 12: really substantive changes, and particularly around the NATO issue, then

706
00:35:52,280 --> 00:35:54,640
Speaker 12: it's going to be a non starter for Russia.

707
00:35:54,760 --> 00:35:56,680
Speaker 10: That's very clear. This is a red line for them.

708
00:35:57,800 --> 00:36:00,440
Speaker 2: Well, you're sounding a lot like Evo Dhalder, who spoke

709
00:36:00,480 --> 00:36:02,720
Speaker 2: with on the late edition of Balance of Power yesterday,

710
00:36:02,800 --> 00:36:07,200
Speaker 2: the former US ambassador to NATO also hosing down this

711
00:36:07,320 --> 00:36:09,840
Speaker 2: idea that we could see a breakthrough between now and

712
00:36:09,880 --> 00:36:12,600
Speaker 2: the holidays. Some thought Zelensky could show up even this

713
00:36:12,680 --> 00:36:15,520
Speaker 2: Thanksgiving week, either here in Washington or at mar A Lago.

714
00:36:15,560 --> 00:36:16,719
Speaker 2: Here's what the ambassador said.

715
00:36:17,640 --> 00:36:20,040
Speaker 3: There's not going to be a deal that the Ukrainians

716
00:36:20,080 --> 00:36:22,319
Speaker 3: are signed off on, let alone a deal that the

717
00:36:22,400 --> 00:36:24,399
Speaker 3: Ukrainians and the Russians are going to be signing off

718
00:36:24,440 --> 00:36:26,760
Speaker 3: on by Thursday or by Christmas.

719
00:36:27,560 --> 00:36:30,400
Speaker 2: This conflict has been going on for over eleven years.

720
00:36:30,719 --> 00:36:32,680
Speaker 3: The idea that it's going to be settled because a

721
00:36:32,719 --> 00:36:35,719
Speaker 3: bunch of guys come up with twenty eight points, it's

722
00:36:35,840 --> 00:36:39,560
Speaker 3: just not how it happens. But the Secretary Rubio did

723
00:36:39,880 --> 00:36:43,920
Speaker 3: finally is sit down, have a serious negotiation. This takes time,

724
00:36:44,000 --> 00:36:46,040
Speaker 3: it takes effort, it takes understanding.

725
00:36:47,440 --> 00:36:50,080
Speaker 2: That would imply Kelly Grico that this war is going

726
00:36:50,120 --> 00:36:53,719
Speaker 2: to carry into winter, and that brings a whole new

727
00:36:53,760 --> 00:36:57,080
Speaker 2: strategy for both sides. What does Ukraine need to do

728
00:36:57,160 --> 00:36:57,640
Speaker 2: to prepare?

729
00:36:59,160 --> 00:37:01,840
Speaker 12: Yes, you know, obviously trying to get this done by

730
00:37:01,920 --> 00:37:05,279
Speaker 12: Thursday is overly ambitious and even Christmas is overly ambitious

731
00:37:05,840 --> 00:37:07,680
Speaker 12: just given the realities, I would just say that the

732
00:37:07,680 --> 00:37:11,680
Speaker 12: winter is brim for Ukraine on the battlefield itself. If

733
00:37:11,760 --> 00:37:14,600
Speaker 12: the winter in the weather very much favors Russia because

734
00:37:14,600 --> 00:37:18,240
Speaker 12: they're using these infiltration tactics, very small numbers of forces

735
00:37:18,280 --> 00:37:20,759
Speaker 12: two to three at a time that essentially slip through

736
00:37:20,800 --> 00:37:24,600
Speaker 12: what's a porous Ukrainian line. So the cover of the

737
00:37:24,640 --> 00:37:29,040
Speaker 12: fall of winter, sky and rain and snow makes it

738
00:37:29,239 --> 00:37:33,040
Speaker 12: harder for Ukrainian drones to detect those movements. So Ukraine

739
00:37:33,080 --> 00:37:36,319
Speaker 12: is in a difficult position in terms of for this winter,

740
00:37:36,480 --> 00:37:39,120
Speaker 12: in terms of preventing these kinds of infiltrations, and I

741
00:37:39,120 --> 00:37:41,439
Speaker 12: think we'll have to make some challenging choices about how

742
00:37:41,480 --> 00:37:45,320
Speaker 12: long to defend some key locations, including places like Prokrosk

743
00:37:45,640 --> 00:37:49,239
Speaker 12: Versus deciding that it's not worth losing more manpower and

744
00:37:49,280 --> 00:37:52,320
Speaker 12: that they're better off moving back to a more secure

745
00:37:52,360 --> 00:37:56,960
Speaker 12: defensive line. That's unfortunately the kinds of hard choices Ukraine

746
00:37:56,960 --> 00:37:57,640
Speaker 12: will be facing.

747
00:37:58,840 --> 00:38:02,000
Speaker 2: If you're Russia right now, is it men or maturial

748
00:38:02,120 --> 00:38:04,360
Speaker 2: that you're more worried about lasting through winter?

749
00:38:06,560 --> 00:38:10,640
Speaker 12: I don't it's certainly not manpower they have sufficient manpower.

750
00:38:10,640 --> 00:38:12,520
Speaker 12: I would say for about the next nine months. I

751
00:38:12,520 --> 00:38:15,960
Speaker 12: don't even think it's material if you're Russia in terms

752
00:38:15,960 --> 00:38:21,560
Speaker 12: of you said Russia correct in terms of the winter.

753
00:38:22,480 --> 00:38:24,480
Speaker 12: If anything, I think they're thinking is a little bit

754
00:38:24,520 --> 00:38:26,440
Speaker 12: more long term in terms of what they're going to

755
00:38:26,480 --> 00:38:28,560
Speaker 12: do a year or two years from now, if they

756
00:38:28,560 --> 00:38:31,080
Speaker 12: have to ultimately take this by force and they're not

757
00:38:31,160 --> 00:38:34,720
Speaker 12: able to do it at negotiating table in about nine months. Putin,

758
00:38:34,760 --> 00:38:38,560
Speaker 12: for example, would be facing a mobilization question again. Right now,

759
00:38:38,560 --> 00:38:41,839
Speaker 12: they're paying high salaries to encourage people, you know, from

760
00:38:41,880 --> 00:38:44,440
Speaker 12: parts of Russia to come and join the military through

761
00:38:44,480 --> 00:38:47,879
Speaker 12: these high salaries, but that only can get you so far,

762
00:38:47,960 --> 00:38:50,040
Speaker 12: and they would ultimately face a choice about whether they're

763
00:38:50,040 --> 00:38:53,000
Speaker 12: going to mobilize more broadly to get the kind of

764
00:38:53,000 --> 00:38:55,200
Speaker 12: man power they need. And so I think they're thinking

765
00:38:55,360 --> 00:38:57,880
Speaker 12: in a different timeline about a year from now, whereas

766
00:38:57,960 --> 00:39:00,920
Speaker 12: Ukraine is really thinking about and how it gets through

767
00:39:00,960 --> 00:39:02,319
Speaker 12: the next couple months.

768
00:39:03,120 --> 00:39:06,160
Speaker 2: Kelly I mentioned Tomahawk cruise missiles, which apparently are not

769
00:39:06,320 --> 00:39:09,319
Speaker 2: going to be arriving anytime soon in Ukraine. That was

770
00:39:09,640 --> 00:39:11,640
Speaker 2: something that Zelensky had been asking for. He said it

771
00:39:11,640 --> 00:39:15,640
Speaker 2: would turn the tide in the war by essentially putting

772
00:39:16,040 --> 00:39:19,480
Speaker 2: fear into the hearts of Russians, they would know what

773
00:39:19,520 --> 00:39:22,000
Speaker 2: it's like to be bombed the way Ukraine has been

774
00:39:22,040 --> 00:39:25,240
Speaker 2: bombed for the better part of three years from a distance.

775
00:39:26,280 --> 00:39:30,080
Speaker 2: But we saw initial reactions like this to any number

776
00:39:30,120 --> 00:39:34,279
Speaker 2: of weapons systems that Ukraine requested, the M one Abrams tank,

777
00:39:34,880 --> 00:39:38,640
Speaker 2: the F sixteen included going back to Attackum's missiles. I'm

778
00:39:38,680 --> 00:39:41,560
Speaker 2: just curious to what extent all of these no's that

779
00:39:41,640 --> 00:39:45,600
Speaker 2: turned to maybe's, that became yes's, were actually good ideas

780
00:39:45,600 --> 00:39:46,080
Speaker 2: in the end.

781
00:39:48,239 --> 00:39:51,120
Speaker 12: Well, I think, you know, learned anything from this war.

782
00:39:51,200 --> 00:39:53,279
Speaker 12: I hope it's that people realize that the idea of

783
00:39:53,320 --> 00:39:56,960
Speaker 12: wonder weapons doesn't really exist. A single weapon system cannot

784
00:39:57,040 --> 00:40:01,320
Speaker 12: decisively change the force of the battlefield. These things have mattered,

785
00:40:02,000 --> 00:40:03,879
Speaker 12: you know, for a period off in a period of time,

786
00:40:03,920 --> 00:40:06,760
Speaker 12: a window when they've gotten a new system, a period

787
00:40:06,760 --> 00:40:09,160
Speaker 12: of maybe four to six weeks when they have an

788
00:40:09,160 --> 00:40:11,720
Speaker 12: advantage because the Russians are figuring out how to adapt.

789
00:40:11,960 --> 00:40:15,680
Speaker 12: But after that it returns to this sort of static,

790
00:40:15,760 --> 00:40:18,839
Speaker 12: this attrition, a level of attrition because both sides are

791
00:40:18,840 --> 00:40:23,120
Speaker 12: clearly learning militaries and that's what we would see with tomahawks,

792
00:40:23,160 --> 00:40:25,239
Speaker 12: And I'll just add that I think the tomahawks are

793
00:40:25,280 --> 00:40:28,640
Speaker 12: even less significant providing even a four to six week window,

794
00:40:28,960 --> 00:40:31,879
Speaker 12: because one, the Russians the Ukrainians have their own long

795
00:40:31,960 --> 00:40:34,520
Speaker 12: range strike capabilities, long range drones at this point that

796
00:40:34,560 --> 00:40:37,160
Speaker 12: are doing some of this, and then the numbers that

797
00:40:37,200 --> 00:40:40,440
Speaker 12: we would be talking about are so small that it

798
00:40:40,560 --> 00:40:42,600
Speaker 12: really would not have a large impact.

799
00:40:43,680 --> 00:40:47,040
Speaker 2: Are they using the F sixteen's effectively that they got

800
00:40:47,040 --> 00:40:48,640
Speaker 2: their hands on, remember that was going to turn the

801
00:40:48,640 --> 00:40:50,040
Speaker 2: tide of the war at one point.

802
00:40:50,719 --> 00:40:52,880
Speaker 12: Yes, what I would say is what we see is

803
00:40:52,880 --> 00:40:55,960
Speaker 12: that to the extent they're using them effectively, it's sort

804
00:40:55,960 --> 00:40:59,279
Speaker 12: of the way I predicted on this show, and that

805
00:40:59,520 --> 00:41:02,120
Speaker 12: we wouldn't you seeing them using over the battlefield to

806
00:41:02,120 --> 00:41:05,279
Speaker 12: try to support forces and conor offensives. They're using them

807
00:41:05,360 --> 00:41:08,200
Speaker 12: much more in a defensive role and an interception role

808
00:41:08,520 --> 00:41:13,640
Speaker 12: of shooting down incoming missiles and drones to try to

809
00:41:13,719 --> 00:41:17,000
Speaker 12: keep the airspace contested to try to protect their cities.

810
00:41:17,520 --> 00:41:18,319
Speaker 10: So it's a.

811
00:41:18,239 --> 00:41:21,960
Speaker 12: Far more limited role, which is not surprising given this

812
00:41:22,120 --> 00:41:24,600
Speaker 12: the reality of what Russian air defenses look like.

813
00:41:26,000 --> 00:41:28,879
Speaker 2: She has a way of predicting things on this very program, Kelly.

814
00:41:28,920 --> 00:41:31,840
Speaker 2: Great to see you, Kelly Grico, have a great Thanksgiving

815
00:41:31,880 --> 00:41:34,640
Speaker 2: and thanks for the insights today Senior fellow with the

816
00:41:34,719 --> 00:41:38,920
Speaker 2: Reimagining US Grand Strategy program at the Stimpson Center with

817
00:41:39,080 --> 00:41:44,319
Speaker 2: us live here on Bloomberg. Thanks for listening to the

818
00:41:44,320 --> 00:41:47,719
Speaker 2: Balance of Power podcast. Make sure to subscribe if you

819
00:41:47,719 --> 00:41:51,200
Speaker 2: haven't already, at Apple, Spotify, or wherever you get your podcasts,

820
00:41:51,640 --> 00:41:54,120
Speaker 2: and you can find us live every weekday from Washington,

821
00:41:54,160 --> 00:41:57,280
Speaker 2: DC at New Time Eastern at Bloomberg dot com.