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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is your weekly Washington Policy Pulse, the Balance of

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Speaker 2: Power Podcast. I'm Joe Matthew. Every Monday, Bloomberg Intelligence, senior

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Speaker 2: policy analyst and friend of the show, Nathan Dean shares

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Speaker 2: his weekly call on upcoming catalysts in the nation's capital.

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Speaker 2: Listen for the most recent and relevant policy research from

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Speaker 2: our team at Bloomberg Intelligence. Now with today's installment, here's

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Speaker 2: Nathan Dean.

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Speaker 3: Good morning and good afternoon, everybody. Welcome to the Washington

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Speaker 3: Policy Pulse. My name is Nathan Dean. I'm a senior

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Speaker 3: policy analyst with Bloomberg Intelligence here in the Washington DC Bureau.

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Speaker 3: Joining us today is Tamlin Basin from London. He is

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Speaker 3: going to be talking about the H one B visa program.

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Speaker 3: He actually put out a note at two eleven Eastern

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Speaker 3: time this morning, but since he's based in London, I

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Speaker 3: think it's more appropriate for him to talk about that.

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Speaker 3: I would also just say is that we want to

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Speaker 3: say thank you those of you who are coming to us.

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Speaker 3: The Balance of Power Podcast certainly always welcome your opinions

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Speaker 3: and your thoughts as well, So.

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Speaker 4: Let's go ahead and get started.

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Speaker 3: I want to talk to Tamlin first and then we'll

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Speaker 3: let him get back to his day.

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Speaker 4: So Tamlin, can you just tell us?

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Speaker 3: So Friday night, President Trump puts out in an executive

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Speaker 3: order announcing that the new cost, if you will, for

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Speaker 3: an H one B visa program is now one hundred

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Speaker 3: thousand dollars. You know, for example, I was watching social

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Speaker 3: media and I saw there was an Emirates flight that

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Speaker 3: was supposed to go from San Francisco to Dubai. And

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Speaker 3: as the news was breaking, they had already closed the

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Speaker 3: doors to the Emirates flight and enough people stood up

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Speaker 3: and said we're not leaving that they actually allowed the

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Speaker 3: plane to go back to the gate and offload these individuals.

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Speaker 3: So can you just tell us what is the executive

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Speaker 3: order that President Trump put out in more importantly, what

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Speaker 3: is the impact for the it and the technology firms

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Speaker 3: that you're covering, because I can imagine this is a

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Speaker 3: this is a fairly big deal.

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Speaker 4: Yeah.

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Speaker 1: Sure, First of all, thanks for having Nathan. So the

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Speaker 1: order that came out Friday and sort of the flight

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Speaker 1: you talked about, so it landed with quite a bit

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Speaker 1: of chaos, uncertainty. It was supposed to go in to

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Speaker 1: effect this weekend, but a lot of uncertainty of does

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Speaker 1: that mean existing H one be holders are impacted by this,

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Speaker 1: So really the immediate pushback was just for a little

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Speaker 1: bit of clarity, and that did come over the weekend

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Speaker 1: where where the Trump administration said this is going to

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Speaker 1: apply for next year's applications. So just to back up

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Speaker 1: a little bit about what H one D visas are.

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Speaker 1: These are a skilled immigration visa which has largely since

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Speaker 1: the early nineties been used by the technology sector and

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Speaker 1: it's used really to supplement the labor pool with respect

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Speaker 1: to a lot of these ICT jobs. So a lot

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Speaker 1: of engineers, after engineers, coders, data scientists are using these.

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Speaker 1: They're coming over, they're being sponsored by a large multinational firm,

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Speaker 1: they're working in the US, and they're for the IT

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Speaker 1: services sector. Often doing this because the IP service firm

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Speaker 1: like Infosis, like how To Consultancy, even some of the

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Speaker 1: US listen to ones like The Center and Cognizant are

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Speaker 1: using the H and V program in order to attract

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Speaker 1: talent and then have those individuals really sitting with the

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Speaker 1: end user client, whether that means a financial services firm,

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Speaker 1: whether that means a healthcare firm, what have your It's

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Speaker 1: really important to have some on short delivery to sort

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Speaker 1: of supplement that outsourcing model, which really is based on

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Speaker 1: imperiment in structure with much cheaper offshore delivery of people

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Speaker 1: based sort of in India, in Eastern Europe and Latin America.

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Speaker 1: What this one hundred thousand dollars fee does, especially for

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Speaker 1: these ID services firms, is it really makes it an

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Speaker 1: impractical way forward. This is a fairly low margin business

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Speaker 1: and they simply cannot continue on this sorry phone ringing,

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Speaker 1: they simply cannot shoulder this fee. So they're gonna entirely

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Speaker 1: pivot away from they one B program or they're going

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Speaker 1: to look to pass those costs through to their end

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Speaker 1: user clients. And again many of these are in the

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Speaker 1: financial services world, many of these in healthcare. So I

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Speaker 1: think those are the discussions they're going to be having

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Speaker 1: taken place in the next few weeks.

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Speaker 3: So can you talk about the impact on Amazon Meda

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Speaker 3: and Microsoft, because in the in your note, you know,

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Speaker 3: you say that there are firms like Cognizant that have

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Speaker 3: pulled back, but Amazon Meta and Microsoft have actually increased

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Speaker 3: their usage of H one B visas.

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Speaker 4: So what do you think the impact to them.

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Speaker 1: Is sure, And the reason that these firms pulled back

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Speaker 1: was sort of under Trump one, there was already pressure

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Speaker 1: on this program. This is an issue that really does

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Speaker 1: precture the Republican field with you had during the campaign

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Speaker 1: people like Elon Musk and the tech sector who really

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Speaker 1: are supported of H one B BASA program, But you

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Speaker 1: have others who are more anti immigration and want to

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Speaker 1: see those jobs go to the US. So the IT

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Speaker 1: services sector has sort of made a conscious decision to

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Speaker 1: be the less reliant on that. On the flip side,

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Speaker 1: you have these hyperscalers who have Amazon, on Google, a Meta,

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Speaker 1: who are needing more and more software talent, so they've

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Speaker 1: been relying more and more. And I think in twenty

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Speaker 1: twenty one, the top nine tech firms actually outpaced the

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Speaker 1: top nine services firms. The difference I think here is

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Speaker 1: the margins are a lot wider in the tech space.

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Speaker 1: So they may not love that one hundred thousand dollars

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Speaker 1: per application fee, but they certainly can stomach that if

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Speaker 1: they need to. As opposed to the service sector, we're

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Speaker 1: talking much thinner margins.

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Speaker 3: Great, well, thank you very much for your time, really

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Speaker 3: appreciate it and talk soon. So other things that we

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Speaker 3: wanted to talk about this week is expect more news

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Speaker 3: related to the TikTok deal that President Trump was floating

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Speaker 3: last week. You know, under this deal, at least the

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Speaker 3: framework that's been reported is the United States or in

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Speaker 3: the United States entities would own eighty percent of the

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Speaker 3: deal and twenty percent would be under byteedance.

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Speaker 4: There is going to be a meeting at the White

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Speaker 4: House later today about.

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Speaker 3: This, and again we're recording this on September twenty second,

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Speaker 3: so you know, potentially anti some news about what that

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Speaker 3: deal will actually look like. Again, it's one of those

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Speaker 3: things where we don't really know what the deal is

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Speaker 3: until it's signed.

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Speaker 4: But again, expect some news on that.

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Speaker 3: It's going to be also a fairly quiet week in

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Speaker 3: Washington from the congressional perspective, because we have the United

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Speaker 3: Nations General Assembly. My friends over at Bloomberg Economics, who

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Speaker 3: just said a couple of rows behind me, are going

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Speaker 3: to be covering that. Just remember a lot of speeches. Generally,

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Speaker 3: you know, it starts I think it starts with Brazil

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Speaker 3: every time. You know, the world leaders I think are

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Speaker 3: given around fifteen minutes. But you know, some leaders will

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Speaker 3: just take as many hours as they can. So also,

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Speaker 3: President Trump is set to address the UN later this week,

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Speaker 3: so that's something to keep an eye on. And then

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Speaker 3: the last thing I want to talk about before we

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Speaker 3: get into the shutdown is just some things that we

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Speaker 3: wrote about in terms of the Financial Stability over Side Council.

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Speaker 3: So if you're in the non bank asset management space,

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Speaker 3: so think of one of the big alternative asset managers

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Speaker 3: or me even somebody like black Rock. The Financial Stability

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Speaker 3: Overside Council had their meeting just a few weeks ago.

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Speaker 3: And while you don't really get much good reason, much

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Speaker 3: good readouts why you don't get a really good readout

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Speaker 3: of what happens at the FSAC meeting, they did say

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Speaker 3: that they're looking at guidance for non bank asset managers.

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Speaker 3: So this is if you go back all the way

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Speaker 3: to the creation of dot frank, this is the idea

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Speaker 3: that a non bank institution could be deemed systemically important.

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Speaker 3: And if you get systemically important status, it means you

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Speaker 3: potentially could get hit with capital requirements. Now, back in

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Speaker 3: the day they started with like MetLife, Prudential ge capital

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Speaker 3: and so forth like that, and for a variety of

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Speaker 3: reasons there are no non bank cifties today.

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Speaker 4: Now under the Biden administration, let me back up. Under

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Speaker 4: the Trump one point on administration, they.

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Speaker 3: Put out guidance and essentially said we're not going to

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Speaker 3: look at the entity level, but rather we're going to

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Speaker 3: look at activities based level. Under the Biden administration, they

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Speaker 3: changed the guidance to say, no, we're actually going to

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Speaker 3: go back and start looking at the entity level. Well,

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Speaker 3: now that the Trump administration is back, we're going to

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Speaker 3: go back to this guidance of going back to the

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Speaker 3: activities based levels. So you know, if you're looking at

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Speaker 3: one of these alternative asset managers, and we've always said

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Speaker 3: that this is a low chance of happening, but again,

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Speaker 3: if you're looking at those alternative ASCID managers, you have

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Speaker 3: somewhat more of a clarity that none of them are

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Speaker 3: going to be hit with any type of bank like

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Speaker 3: capital requirements anytime soon. Now, the last thing I want

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Speaker 3: to talk about is the government shut down, because we

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Speaker 3: are approximately eight days away from the government's shutting down

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Speaker 3: and Congress is in here. This week, the House passed

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Speaker 3: a cr essentially keeping the government open until November twentieth

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Speaker 3: and not all of.

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Speaker 4: Them were thrilled with this, but they did pass this.

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Speaker 3: This would keep the government open until November twentieth, keeping

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Speaker 3: everything at fiscal twenty five Fiscal year twenty twenty five levels,

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Speaker 3: and then they left town, left town, and Speaker Johnson

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Speaker 3: even said, you know what, don't even come back until October.

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Speaker 3: They're gone until the shutdown debate is resolved. Now the

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Speaker 3: Senate is out for Rashashana this week, they do not

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Speaker 3: come back until September twenty ninth. It's always feasible that

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Speaker 3: they could come back earlier, but now we're in this

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Speaker 3: stage of the shutdown where both sides are essentially saying

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Speaker 3: the same thing, but they're really just talking past each other.

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Speaker 3: Senator Schumer says he wants a meeting with Majority Leader

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Speaker 3: Senator Thun. Senator Thuhn has said that he wants a

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Speaker 3: meeting with Senator Schumer, or more so, like Senator Schumer.

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Speaker 4: Can call him.

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Speaker 3: In fact, there was a story last week where both

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Speaker 3: sides were saying that the other side just needed to

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Speaker 3: talk to them about setting up a meeting as they

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Speaker 3: were walking past each other talking to reporters, and one

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Speaker 3: of the reporters even said, well, he's right there. Do

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Speaker 3: you want to just go talk to him? And they're like, well,

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Speaker 3: he can come talk to me. Look, they got to

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Speaker 3: get it out of their system. But the reason why

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Speaker 3: I still think we're at a forty percent chance of

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Speaker 3: a shutdown. I remember last week I was at thirty.

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Speaker 3: I've gone up to forty, and that is because of

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Speaker 3: the Jimmy Kimmel saga. And also I would just say

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Speaker 3: is that I do think that there's a potential for

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Speaker 3: a handful of Dems to come through on the Senate

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Speaker 3: side and say, you know what, now's not the time

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Speaker 3: they have a shutdown. Let's go to November twentieth, and

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Speaker 3: let's accept this seven week continuing resolution. I may be

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Speaker 3: out of consensus, out it certainly am compared to poly

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Speaker 3: Market polling Market said seventy percent chance of government shutdown.

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Speaker 3: I would note that they say shutdown this year. They

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Speaker 3: don't say shut down September thirtieth. But the political rhetoric

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Speaker 3: is there. So I think what's going to happen is

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Speaker 3: this is that I think that the Senate will come back.

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Speaker 3: They'll eventually get these Democratic senators to come on board,

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Speaker 3: at least seven or eight of them, and they'll pass

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Speaker 3: to kick the canon. We'll fight this again right before Thanksgiving, because,

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Speaker 3: and I've said this before, the director of the OMB

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Speaker 3: RUSS Vote is the one that ultimately decides who is

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Speaker 3: essential and who is not essential. They're the ones that

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Speaker 3: put out the guidance, and as a result, we could

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Speaker 3: get in a situation where RUSS vote says eighty five

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Speaker 3: percent of the government's not essential or eighty five percent

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Speaker 3: of the government is essential. By law, they cannot pay

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Speaker 3: government workers. And so if you're looking at this from

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Speaker 3: an economic perspective, there's a round seven hundred and fifty

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Speaker 3: thousand government workers that would be deemed if you go

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Speaker 3: based off of past experiences and stuff, that potentially could

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Speaker 3: miss out on government paychecks. They're paid on a bi

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Speaker 3: monthly schedule, so it would be actually fifteen days. The

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Speaker 3: first paycheck is most likely going to be November fifteenth,

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Speaker 3: So if you're looking at this from an economic perspective,

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Speaker 3: keep that in mind. But the last thing I want

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Speaker 3: to leave you with is I was talking with Democratic

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Speaker 3: Aid the other day and I said, tell me why

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Speaker 3: it's a good thing to shut the government down, And

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Speaker 3: they actually had a fairly compelling case. The case was

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Speaker 3: is that they need to show their base that they're fighting,

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Speaker 3: that they need to show that they're taking on President Trump.

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Speaker 4: And because the approval ratings aren't.

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Speaker 3: That all that good for the Democratic Party right now,

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Speaker 3: they're not actually going to be harmed all that much.

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Speaker 3: And it's better to shut the government down now in

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Speaker 3: September of twenty twenty five than it is to shut

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Speaker 3: the government down in twenty twenty six before the November elections,

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Speaker 3: because this is when this has happened in the past,

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Speaker 3: when for example, the Tea Party or the House Freedom

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Speaker 3: Caucus shut the government down back and I think it

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Speaker 3: was like twenty thirteen or twenty fifteen. You know, they

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Speaker 3: certainly came back and this wasn't harmed by them one bit.

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Speaker 3: But again I don't think it really is going to

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Speaker 3: be I still had a forty percent chance of a shutdown.

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Speaker 4: So anyway, I apologize.

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Speaker 3: We went about a minute or two over this week.

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Speaker 3: We want to say thank you very much for attendant.

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Speaker 3: We really appreciate it. Again, I don't think you're going

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Speaker 3: to see much going on in from the Washington space,

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Speaker 3: but again we'll talk soon and always take care.

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Speaker 2: Our thanks to Nathan Dean Bloomberg Intelligence senior policy analyst,

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Speaker 2: bringing you the latest installment of his weekly Washington policy Pulse.

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Speaker 2: For more from Bi or to join this call live

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Speaker 2: each week, you can email Nathan at ndan at Bloomberg

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Speaker 2: dot net. That's n D e A n at Bloomberg

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Speaker 2: dot net and come back to the podcast later today

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Speaker 2: for the latest edition of Balance of Power.