1 00:00:00,880 --> 00:00:04,400 Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us 2 00:00:04,400 --> 00:00:07,480 Speaker 1: live weekdays at five Eastern on Bloomberg dot com, the 3 00:00:07,600 --> 00:00:10,559 Speaker 1: iHeart Radio app, and the Bloomberg Business Happen. We're listening 4 00:00:10,600 --> 00:00:14,840 Speaker 1: on demand wherever you get your podcast. White House is 5 00:00:14,840 --> 00:00:17,759 Speaker 1: calling today's jobs report good news. It's payrolls come in 6 00:00:17,840 --> 00:00:20,520 Speaker 1: stronger than expected, even though the unemployment rate did inch 7 00:00:20,640 --> 00:00:23,480 Speaker 1: higher three point six percent. Has been hearing on Bloomberg Today. 8 00:00:23,720 --> 00:00:28,720 Speaker 1: Wages easing, which makes inflation hawks happy, the labor participation 9 00:00:28,840 --> 00:00:32,840 Speaker 1: rate rising to its highest level since March of twenty twenty. 10 00:00:33,040 --> 00:00:35,760 Speaker 1: President Biden at the White House after the report, I 11 00:00:35,760 --> 00:00:37,920 Speaker 1: think we've got a good jobs report. I'm happy to 12 00:00:37,960 --> 00:00:41,440 Speaker 1: report that our economy has created over three hundred thousand 13 00:00:41,840 --> 00:00:44,760 Speaker 1: new jobs last month, and that's on top of a 14 00:00:44,760 --> 00:00:48,640 Speaker 1: half million jobs we added a month before. All told, 15 00:00:48,640 --> 00:00:52,240 Speaker 1: we've created more than twelve thousand, twelve thousand jobs since 16 00:00:52,280 --> 00:00:56,360 Speaker 1: they took office. There'll be eight thousand of the manufacturing jobs. 17 00:00:57,080 --> 00:01:00,240 Speaker 1: That means overall, we've created more jobs in two years 18 00:01:00,240 --> 00:01:02,680 Speaker 1: that any administrations are created in the first four years. 19 00:01:02,920 --> 00:01:05,199 Speaker 1: I wanted to talk about it with the Labor Secretary, 20 00:01:05,280 --> 00:01:08,400 Speaker 1: who is just so happens. It is his last day 21 00:01:08,480 --> 00:01:11,440 Speaker 1: on the job. So this morning I thought I'd had 22 00:01:11,480 --> 00:01:14,800 Speaker 1: down Labor Department see if we could find Secretary Walsh, 23 00:01:14,840 --> 00:01:19,640 Speaker 1: and we did. He was outside Labor there on Constitution Avenue, 24 00:01:19,640 --> 00:01:21,640 Speaker 1: all the camera crews lined up from the networks. It 25 00:01:21,720 --> 00:01:25,120 Speaker 1: was raining. I think maybe I made him nostalgic for 26 00:01:25,160 --> 00:01:27,119 Speaker 1: Boston because he stopped what he was doing. We both 27 00:01:27,200 --> 00:01:31,120 Speaker 1: ducked inside the Labor department for a brief conversation about 28 00:01:31,680 --> 00:01:34,959 Speaker 1: what's inside the data, among a few other things, and 29 00:01:35,000 --> 00:01:37,760 Speaker 1: I started by asking him about that labor participation rate 30 00:01:37,880 --> 00:01:40,640 Speaker 1: and why people are finally coming back to work. Being 31 00:01:40,680 --> 00:01:42,600 Speaker 1: here to the Department Labor at the last job's day, 32 00:01:42,600 --> 00:01:46,360 Speaker 1: it means a great day for jobs in America. It's 33 00:01:46,720 --> 00:01:49,560 Speaker 1: almost a two year University of the American Rescue playing passing. 34 00:01:50,040 --> 00:01:52,360 Speaker 1: So the President's done an amazing job, and I've been 35 00:01:52,440 --> 00:01:54,920 Speaker 1: part of this ride with him, and it's been amazing. 36 00:01:55,360 --> 00:01:58,600 Speaker 1: The highest labor force participation rate since March of twenty twenty. 37 00:01:58,680 --> 00:02:01,240 Speaker 1: I remember where we all were in March of twenty twenty, 38 00:02:01,280 --> 00:02:04,200 Speaker 1: were in Boston. That was a bad time. So you're 39 00:02:04,200 --> 00:02:07,320 Speaker 1: looking at the highest number since the pandemic essentially, why 40 00:02:07,320 --> 00:02:09,480 Speaker 1: are people now finally coming back to work. Well, a 41 00:02:09,480 --> 00:02:11,400 Speaker 1: lot of it has to do with the economic plan. 42 00:02:11,520 --> 00:02:13,400 Speaker 1: President Biden's laid out a lot of us to do 43 00:02:13,400 --> 00:02:16,720 Speaker 1: with business as well, thinking about and adjusting to the worker. 44 00:02:17,480 --> 00:02:19,040 Speaker 1: People are getting back to work because they need to 45 00:02:19,080 --> 00:02:22,120 Speaker 1: get back to work. I think that, you know, having 46 00:02:22,120 --> 00:02:26,240 Speaker 1: people vaccinated, the numbers of COVID going down, all of 47 00:02:26,280 --> 00:02:28,320 Speaker 1: that stuff is playing into this. You know, it's been 48 00:02:28,360 --> 00:02:30,040 Speaker 1: a long two years really when you think about it, 49 00:02:30,080 --> 00:02:32,720 Speaker 1: and you know, it could have been much much worse. 50 00:02:33,320 --> 00:02:34,639 Speaker 1: It was bad for a lot of people, and we're 51 00:02:34,639 --> 00:02:37,400 Speaker 1: still dealing with the aftermath and inflation and other things. 52 00:02:37,400 --> 00:02:40,000 Speaker 1: But it's good to see those numbers go out. It's 53 00:02:40,040 --> 00:02:42,800 Speaker 1: good to see higher wages for people. It's good to 54 00:02:42,800 --> 00:02:46,160 Speaker 1: see that we can identify today to even increase that 55 00:02:46,240 --> 00:02:49,440 Speaker 1: labor participation or higher. President put in his economic plan 56 00:02:49,520 --> 00:02:52,760 Speaker 1: the other day, the blueprint, the budget defiles, you know, childcare, 57 00:02:53,040 --> 00:02:56,400 Speaker 1: home care, all of those issues. If Congress addresses then 58 00:02:56,440 --> 00:02:58,919 Speaker 1: we will see those those participation rates even go higher, 59 00:02:58,960 --> 00:03:02,359 Speaker 1: which could set records. Wages are easing in this report, 60 00:03:02,440 --> 00:03:05,480 Speaker 1: the market celebrates that. How does the labor secretaries see it? 61 00:03:05,600 --> 00:03:08,640 Speaker 1: You know, they're easing very incrementally. I mean, you're still 62 00:03:08,680 --> 00:03:12,000 Speaker 1: talking about wages from two years are gone up significantly. 63 00:03:12,000 --> 00:03:16,079 Speaker 1: You're still seeing higher wages in hospitality, in restaurant workers 64 00:03:16,120 --> 00:03:19,200 Speaker 1: that have been civilly underpaid for years. So we're seeing that. Obviously, 65 00:03:19,240 --> 00:03:21,040 Speaker 1: we don't want to I'd like to see wages continue 66 00:03:21,080 --> 00:03:23,160 Speaker 1: to gain, but which I think it's four point six 67 00:03:23,240 --> 00:03:25,600 Speaker 1: percent today year over year. You know, we'd like to 68 00:03:25,600 --> 00:03:27,880 Speaker 1: see those continue to increase, but we still have to 69 00:03:27,919 --> 00:03:30,520 Speaker 1: do more work to get inflatory pressures down so that 70 00:03:30,560 --> 00:03:32,920 Speaker 1: people feel actually the wages in their pocket, that they 71 00:03:32,919 --> 00:03:34,920 Speaker 1: actually feel a benefit of that. Okay, so this is 72 00:03:35,080 --> 00:03:38,240 Speaker 1: a balancing act here obviously. As you prepare to leave Washington, though, 73 00:03:38,240 --> 00:03:41,720 Speaker 1: do you worry about how rising interest rates could impact 74 00:03:41,760 --> 00:03:43,440 Speaker 1: wages in the end or is that the point that 75 00:03:43,880 --> 00:03:46,080 Speaker 1: they must well, I mean balance themselves. That's something that 76 00:03:46,080 --> 00:03:47,560 Speaker 1: you have to ask the FED and other folks. But 77 00:03:47,720 --> 00:03:50,520 Speaker 1: but you know, I look at you know, the conversation 78 00:03:50,520 --> 00:03:52,800 Speaker 1: for the last year early has been that rising interest 79 00:03:52,880 --> 00:03:55,520 Speaker 1: rates would lead to higher unemployment. It didn't, And I mean, 80 00:03:55,600 --> 00:03:58,840 Speaker 1: I mean guess it goes against what economists think. I 81 00:03:58,920 --> 00:04:00,640 Speaker 1: just think that we want to contin to see people 82 00:04:00,640 --> 00:04:02,880 Speaker 1: go back to work. The industry is looking for people. 83 00:04:03,400 --> 00:04:05,600 Speaker 1: We're looking here at the Department of Labor to invest 84 00:04:06,000 --> 00:04:10,240 Speaker 1: even more in apprenticeships, training, workforce development to get people 85 00:04:10,240 --> 00:04:12,480 Speaker 1: into good paying jobs. People want to work in America, 86 00:04:12,560 --> 00:04:15,240 Speaker 1: and hopefully we can continue moving forward. Are you going 87 00:04:15,280 --> 00:04:18,000 Speaker 1: to miss this? You came to Washington at a critical 88 00:04:18,000 --> 00:04:21,280 Speaker 1: time for our job market and at a very controversial 89 00:04:21,320 --> 00:04:23,560 Speaker 1: time in our politics. Yeah, you know, of course I'm 90 00:04:23,560 --> 00:04:25,680 Speaker 1: gonna miss it. I love working with this cabinet and 91 00:04:25,720 --> 00:04:27,440 Speaker 1: with this President and the people here at the Department 92 00:04:27,440 --> 00:04:30,880 Speaker 1: of Labor who are amazing employees both on the career side, 93 00:04:31,040 --> 00:04:34,560 Speaker 1: who have been here forever, and they here during secretaries 94 00:04:34,600 --> 00:04:37,280 Speaker 1: and administrations and they stay. And the folks that I 95 00:04:37,400 --> 00:04:39,600 Speaker 1: hear that, the political appointees that here working. So I'm 96 00:04:39,600 --> 00:04:41,920 Speaker 1: gonna miss working with the people here. You know, it's 97 00:04:41,920 --> 00:04:43,600 Speaker 1: a bitter sweet because it's like I said to you 98 00:04:44,080 --> 00:04:46,880 Speaker 1: my first time out of public service, and since April 99 00:04:46,880 --> 00:04:48,800 Speaker 1: twelfth to nineteen ninety seven about that when I got 100 00:04:48,839 --> 00:04:51,240 Speaker 1: sworn in as a state representative. So you know, I'm 101 00:04:51,240 --> 00:04:53,280 Speaker 1: going to miss that. But you know, I'm still going 102 00:04:53,320 --> 00:04:55,640 Speaker 1: to be in and around the business. I hope when 103 00:04:55,680 --> 00:04:58,240 Speaker 1: I start my new job. What's your advice for the 104 00:04:58,279 --> 00:05:00,640 Speaker 1: next labor secretary? You know, we we I don't have 105 00:05:00,680 --> 00:05:03,080 Speaker 1: to give him much advice. We've been we've been connected 106 00:05:03,080 --> 00:05:05,159 Speaker 1: at the HIT for the last two years. And Julie 107 00:05:05,160 --> 00:05:07,479 Speaker 1: Sue is a great person and you know she you know, 108 00:05:07,520 --> 00:05:09,479 Speaker 1: she's my partner in this and you know, all of 109 00:05:09,480 --> 00:05:12,640 Speaker 1: the successes we've had, we have it's collectively together. And 110 00:05:12,640 --> 00:05:15,480 Speaker 1: any bumps we had, I take the blame, it's me um, 111 00:05:15,600 --> 00:05:17,520 Speaker 1: you know, but I think that you know, we work 112 00:05:17,600 --> 00:05:20,159 Speaker 1: for a president that truly does care about getting America 113 00:05:20,240 --> 00:05:22,120 Speaker 1: back and building an economy from the bottom up, in 114 00:05:22,120 --> 00:05:24,200 Speaker 1: the middle out and that's President Biden says it all 115 00:05:24,240 --> 00:05:26,600 Speaker 1: the time. And what he means by that is Americans 116 00:05:26,640 --> 00:05:29,240 Speaker 1: that are struggling out there that didn't support him, that 117 00:05:29,320 --> 00:05:32,039 Speaker 1: might have supported him, that if they're struggling, he wants 118 00:05:32,040 --> 00:05:33,360 Speaker 1: to get them into the middle class. And that's what 119 00:05:33,480 --> 00:05:36,400 Speaker 1: that's how I wrote. That's our job. So lastly, I 120 00:05:36,440 --> 00:05:38,640 Speaker 1: frequently have called you, mister Mayor by accident over the 121 00:05:38,680 --> 00:05:40,800 Speaker 1: last two years, and it's a secretary. When's the last 122 00:05:40,800 --> 00:05:43,120 Speaker 1: time you laced up Paris skates? A long time ago? 123 00:05:44,400 --> 00:05:47,560 Speaker 1: Thank god, I'm not playing. Thanks for being good to 124 00:05:47,640 --> 00:05:50,360 Speaker 1: us at Bloomberg. Say hi to the family back home 125 00:05:50,400 --> 00:05:52,240 Speaker 1: in Boston. I want my friend thank you. Of course, 126 00:05:52,240 --> 00:05:53,919 Speaker 1: he's now on his way to be was going to 127 00:05:54,000 --> 00:05:58,400 Speaker 1: run the NHL players Union, and technically tomorrow, I guess 128 00:05:58,520 --> 00:05:59,960 Speaker 1: is his last day on the job. But I think, 129 00:06:00,080 --> 00:06:03,039 Speaker 1: you know, Saturday, I think that means today is the 130 00:06:03,120 --> 00:06:06,680 Speaker 1: last day. So let's assemble the panel. Bloomberg Politics contributor 131 00:06:06,720 --> 00:06:09,520 Speaker 1: Democratic analyst Genie Schanzano is here, along with Jennifer Kern's 132 00:06:09,560 --> 00:06:14,000 Speaker 1: Republican strategist and former spokesperson for the California Republican Party. 133 00:06:14,040 --> 00:06:16,560 Speaker 1: Great to have you both here, Genie. We back off 134 00:06:16,600 --> 00:06:19,279 Speaker 1: of this and try to figure the politics behind it. 135 00:06:19,279 --> 00:06:21,919 Speaker 1: Because the White House did not schedule an event until 136 00:06:22,040 --> 00:06:24,640 Speaker 1: after the data was released and we heard the President 137 00:06:24,720 --> 00:06:27,279 Speaker 1: was going to speak at ten forty five this morning, 138 00:06:27,520 --> 00:06:29,960 Speaker 1: they clearly thought this was another opportunity to take a 139 00:06:30,040 --> 00:06:33,080 Speaker 1: victory lap that at work. Yeah, you know, they did 140 00:06:33,120 --> 00:06:34,760 Speaker 1: what they needed to do. I think they have to 141 00:06:34,800 --> 00:06:38,479 Speaker 1: be very circumspect. This is a contradictory report and there 142 00:06:38,560 --> 00:06:42,280 Speaker 1: are good signs for them, but there are also signs 143 00:06:42,320 --> 00:06:45,560 Speaker 1: that things could potentially go south if you look at 144 00:06:45,600 --> 00:06:48,440 Speaker 1: the timing of this thing, because he is heading into 145 00:06:48,520 --> 00:06:51,520 Speaker 1: an election year. So if you see the interest rates 146 00:06:51,520 --> 00:06:54,240 Speaker 1: growing up, which we now know as likely to happen, 147 00:06:54,640 --> 00:06:58,400 Speaker 1: it could portendory recession down the road. So the President's 148 00:06:58,400 --> 00:07:01,000 Speaker 1: got to be very very circum spec talk about the 149 00:07:01,040 --> 00:07:03,839 Speaker 1: work that they still have to do. But remember when 150 00:07:03,839 --> 00:07:07,080 Speaker 1: we look at the polls, people are not feeling the 151 00:07:07,200 --> 00:07:10,840 Speaker 1: good numbers that he's talking about. That's the gap he's 152 00:07:10,840 --> 00:07:14,360 Speaker 1: got to address. And the matter of inflation, of course, 153 00:07:14,440 --> 00:07:16,360 Speaker 1: Jennifer is a real one. But when you see in 154 00:07:16,400 --> 00:07:19,960 Speaker 1: this environment, after all these rate hikes, jobs coming in, 155 00:07:20,000 --> 00:07:24,080 Speaker 1: payrolls coming in still hotter than expected. If you're the president, 156 00:07:24,120 --> 00:07:25,760 Speaker 1: you're going to go out there take credit for it, right, 157 00:07:26,960 --> 00:07:29,520 Speaker 1: Oh sure, I mean I think the pr round on 158 00:07:29,520 --> 00:07:33,520 Speaker 1: this is warranted. And you know, if you've got a 159 00:07:33,520 --> 00:07:36,080 Speaker 1: good jobs number, you have to go out there and 160 00:07:36,560 --> 00:07:39,440 Speaker 1: do the dog and pony show. But the problem is 161 00:07:40,040 --> 00:07:42,679 Speaker 1: the hind leg of the dog is sort of limping. 162 00:07:42,760 --> 00:07:46,880 Speaker 1: You know, this inflation issue still hanging over the President's head, 163 00:07:47,200 --> 00:07:49,880 Speaker 1: and you know the pony is still sort of back 164 00:07:49,920 --> 00:07:53,360 Speaker 1: in the stable. So inflation really is the key story 165 00:07:53,440 --> 00:07:57,120 Speaker 1: I think here, and you can have the jobs of performance, 166 00:07:57,200 --> 00:08:00,640 Speaker 1: you can have even pay increases, but those going to 167 00:08:00,680 --> 00:08:04,360 Speaker 1: be enough to keep up with the record inflation highest 168 00:08:04,400 --> 00:08:07,600 Speaker 1: in forty years since Jimmy Carter. That is I think 169 00:08:07,640 --> 00:08:10,720 Speaker 1: going to haunt Biden going into the twenty twenty four 170 00:08:10,840 --> 00:08:14,440 Speaker 1: field where you know, even among his own party, only 171 00:08:14,480 --> 00:08:19,040 Speaker 1: thirty five percent of Democrats and Democrat leaning independence even 172 00:08:19,160 --> 00:08:22,200 Speaker 1: want him to consider running. Well, I find it interesting here, Genie, 173 00:08:22,360 --> 00:08:25,040 Speaker 1: where you look at a number like wages, specifically, the 174 00:08:25,080 --> 00:08:28,840 Speaker 1: market's going to see this differently than main Street, is right. 175 00:08:28,880 --> 00:08:31,880 Speaker 1: You see wages easing, I'll use that word. They didn't 176 00:08:31,880 --> 00:08:36,439 Speaker 1: go down a lot. The market loves that because it's disinflationary. 177 00:08:36,480 --> 00:08:40,199 Speaker 1: But you just heard Secretary Walsh. He didn't. He didn't 178 00:08:40,200 --> 00:08:42,920 Speaker 1: want to indulge that thought. Is it. Yeah, they've gone 179 00:08:42,920 --> 00:08:45,280 Speaker 1: down a little bit because his job is to make 180 00:08:45,280 --> 00:08:48,360 Speaker 1: sure people are employed and have higher wages. So these 181 00:08:48,400 --> 00:08:51,520 Speaker 1: two keep bumping into each other. They do. And it's 182 00:08:51,559 --> 00:08:53,800 Speaker 1: such an important point because we see all three of 183 00:08:53,800 --> 00:08:56,200 Speaker 1: these numbers, and as you talked about, they keep bumping 184 00:08:56,280 --> 00:08:58,679 Speaker 1: up against each other. And I know some economists who 185 00:08:58,760 --> 00:09:01,720 Speaker 1: say the wages number is a really important number. I 186 00:09:01,760 --> 00:09:04,960 Speaker 1: think that's probably true for political scientists like myself, because 187 00:09:04,960 --> 00:09:08,640 Speaker 1: that reflects what people feel and when people feel like 188 00:09:08,760 --> 00:09:13,080 Speaker 1: it is being outpaced by inflation. That's why even when 189 00:09:13,559 --> 00:09:17,320 Speaker 1: the economist macroec economists tell us the numbers are good, 190 00:09:17,320 --> 00:09:20,600 Speaker 1: the numbers are good, people in polls don't reflect that 191 00:09:20,640 --> 00:09:23,200 Speaker 1: because they're not feeling it. Their standard of living is 192 00:09:23,240 --> 00:09:26,640 Speaker 1: still declining, and that's the real challenge that the president 193 00:09:26,679 --> 00:09:29,400 Speaker 1: has faced. I think they are doing a good job 194 00:09:29,480 --> 00:09:33,000 Speaker 1: being circumspect and careful on this, but they've got to 195 00:09:33,120 --> 00:09:36,240 Speaker 1: keep their focus on the fact that the president is 196 00:09:36,280 --> 00:09:39,240 Speaker 1: doing the work to get this economy under control. We're 197 00:09:39,280 --> 00:09:42,199 Speaker 1: still in a precarious place. The race is not over yet. 198 00:09:42,400 --> 00:09:45,240 Speaker 1: I think they've got to avoid standing up and saying, 199 00:09:45,280 --> 00:09:47,840 Speaker 1: you know, we are good to go, because God forbid, 200 00:09:47,840 --> 00:09:49,640 Speaker 1: they hit inflation, they are going to have a lot 201 00:09:49,640 --> 00:09:52,040 Speaker 1: of explaining to do in an election year. Yeah, well, 202 00:09:52,080 --> 00:09:55,000 Speaker 1: that's for sure, and it's all coming against the backdrop 203 00:09:55,120 --> 00:09:58,199 Speaker 1: Jennifer of the new budget proposal, the one the President 204 00:09:58,280 --> 00:10:01,640 Speaker 1: dropped yesterday and it calls for your taxes. We spent 205 00:10:01,720 --> 00:10:03,640 Speaker 1: a lot of time on this yesterday afternoon. Is the 206 00:10:03,720 --> 00:10:07,920 Speaker 1: numbers were just being released, and specifically the corporate tax 207 00:10:08,040 --> 00:10:10,800 Speaker 1: rate rising to twenty eight percent in this proposal. The 208 00:10:10,840 --> 00:10:12,920 Speaker 1: President talked about that today when he was at You know, 209 00:10:13,480 --> 00:10:17,040 Speaker 1: when we talked about twenty eight percent tax rate, Ronald 210 00:10:17,040 --> 00:10:20,079 Speaker 1: Reagan was twenty eight percent tax rate. You know, that 211 00:10:20,440 --> 00:10:24,719 Speaker 1: wacko liberal guy. You know, the idea that that's an 212 00:10:24,800 --> 00:10:28,679 Speaker 1: unreasonable amount. But I get in that later anyway, Jennifer, 213 00:10:28,800 --> 00:10:32,240 Speaker 1: you know he's serious when he starts whispering the Waco 214 00:10:32,480 --> 00:10:35,560 Speaker 1: liberal Ronald Reagan, twenty eight percent. That's probably not going 215 00:10:35,600 --> 00:10:39,160 Speaker 1: to pass, though, Wizard, No, I don't think it is. 216 00:10:39,280 --> 00:10:42,880 Speaker 1: You know that darn Gop just won those mid terms 217 00:10:42,880 --> 00:10:45,400 Speaker 1: over on the House side, So I don't think the 218 00:10:45,400 --> 00:10:48,320 Speaker 1: Biden's going to be successful in that. But that may 219 00:10:48,400 --> 00:10:51,319 Speaker 1: not matter as much as the you know, the public 220 00:10:51,360 --> 00:10:54,880 Speaker 1: optics of the President going around doing this dog and 221 00:10:54,920 --> 00:10:57,680 Speaker 1: pony show. At least he looks like, you know, he's 222 00:10:57,720 --> 00:11:01,199 Speaker 1: trying to solve this economic problem. Woman. We all remember 223 00:11:01,720 --> 00:11:06,440 Speaker 1: James Carvill, love him, political hero, but he says it's 224 00:11:06,440 --> 00:11:11,040 Speaker 1: the economy stupid. Anytime you're going to run in twenty 225 00:11:11,080 --> 00:11:14,280 Speaker 1: twenty four, you need to be focused. And you can 226 00:11:14,320 --> 00:11:16,920 Speaker 1: see that Biden is trying to shore up the economic 227 00:11:17,040 --> 00:11:20,920 Speaker 1: story ahead of any potential announcement. Look, there are other 228 00:11:20,920 --> 00:11:24,280 Speaker 1: things happening too that I think alarm people, and that 229 00:11:24,440 --> 00:11:29,240 Speaker 1: is this run on SVB Silicon Valley Bank, that shows 230 00:11:29,320 --> 00:11:32,680 Speaker 1: that there are some parts of the economy that aren't 231 00:11:32,679 --> 00:11:36,200 Speaker 1: doing so well. You know, this isn't exactly nineteen twenties, 232 00:11:36,720 --> 00:11:39,720 Speaker 1: you know, nineteen thirty financial collapse yet, but a run 233 00:11:39,760 --> 00:11:42,600 Speaker 1: on a bank is not a good thing to have 234 00:11:42,640 --> 00:11:45,400 Speaker 1: if you're looking to run again. Well, no, I guess 235 00:11:45,400 --> 00:11:46,920 Speaker 1: that's true. Is this something he's going to have to 236 00:11:46,920 --> 00:11:49,720 Speaker 1: talk more about, Jennie, Yeah, I do think they're going 237 00:11:49,760 --> 00:11:51,480 Speaker 1: to have to address it. You know, when you have 238 00:11:51,559 --> 00:11:54,320 Speaker 1: headlines in local papers, you know, is this the next 239 00:11:54,480 --> 00:11:58,800 Speaker 1: end ron to Jennifer's point that is concerning territory because 240 00:11:58,840 --> 00:12:02,080 Speaker 1: you have a story. Stories of this kind normally don't 241 00:12:02,120 --> 00:12:05,440 Speaker 1: eke out into the broader press, but this one has 242 00:12:05,520 --> 00:12:08,920 Speaker 1: because it's important to people. So the president the administration 243 00:12:08,960 --> 00:12:11,160 Speaker 1: will have to address it. But I do think the 244 00:12:11,200 --> 00:12:14,559 Speaker 1: budget puts Republicans in the House in particular and an 245 00:12:14,600 --> 00:12:19,920 Speaker 1: awful bind. How can they possibly put forward a balanced 246 00:12:19,920 --> 00:12:24,000 Speaker 1: budget if they've taken Social Security, Medicare medicaid and defense 247 00:12:24,080 --> 00:12:27,199 Speaker 1: off the table. They would have to strike all domestic 248 00:12:27,240 --> 00:12:31,880 Speaker 1: discretionary spending. That's an almost impossible task they've set for themselves. 249 00:12:32,160 --> 00:12:35,160 Speaker 1: The President really politically got them in a bind. I 250 00:12:35,200 --> 00:12:38,400 Speaker 1: think we forgot that. Joe Biden has been here before. 251 00:12:38,520 --> 00:12:41,760 Speaker 1: He's the one who negotiated with John Bayner way way 252 00:12:41,760 --> 00:12:44,040 Speaker 1: back the last time we face this. He knows what 253 00:12:44,080 --> 00:12:46,920 Speaker 1: he's doing on this. He has triangulated them to the 254 00:12:47,000 --> 00:12:48,880 Speaker 1: point where they are going to have a heck of 255 00:12:48,880 --> 00:12:51,360 Speaker 1: a time getting a plan that's balanced and getting to 256 00:12:51,480 --> 00:12:55,040 Speaker 1: two eighteen. And that is going to make him look 257 00:12:55,120 --> 00:12:58,520 Speaker 1: like the adult in the room and the person protecting entitlements, 258 00:12:58,520 --> 00:13:00,320 Speaker 1: which is just where he wants to be a during 259 00:13:00,360 --> 00:13:03,120 Speaker 1: twenty four. We only have a minute left at this 260 00:13:03,200 --> 00:13:05,160 Speaker 1: point here, Jennifer, But I'm just wondering, why is it 261 00:13:05,240 --> 00:13:08,960 Speaker 1: twenty eight percent corporate tax rate so toxic to Republicans 262 00:13:09,000 --> 00:13:12,840 Speaker 1: when it was so recently in place, and at one time, 263 00:13:12,880 --> 00:13:16,440 Speaker 1: as we just I think established, was supported by a 264 00:13:16,520 --> 00:13:21,440 Speaker 1: Republican administration. If we're very concerned about deficits, isn't raising 265 00:13:21,520 --> 00:13:26,560 Speaker 1: revenue from major companies a good way to go about it? Well, 266 00:13:26,600 --> 00:13:30,800 Speaker 1: I think the Republican Party, you know, has become so 267 00:13:31,000 --> 00:13:35,160 Speaker 1: anti tax that, you know, what was acceptable maybe in 268 00:13:35,200 --> 00:13:40,160 Speaker 1: the nineteen eighties is no longer prudent for twenty twenty three. 269 00:13:40,640 --> 00:13:44,080 Speaker 1: But look, I think that Kevin McCarthy is an extraordinarily 270 00:13:44,160 --> 00:13:47,760 Speaker 1: shrewd negotiator. And I actually think, just in opposition to 271 00:13:47,840 --> 00:13:51,200 Speaker 1: Genie's opinion, I think Joe Biden being in Washington, DC 272 00:13:51,400 --> 00:13:54,400 Speaker 1: for the better part of fifty years is actually his 273 00:13:54,559 --> 00:13:58,720 Speaker 1: Achilles heal because McCarthy likes to think outside of the box. 274 00:13:58,800 --> 00:14:00,640 Speaker 1: You know, I've known him since two thousand and three, 275 00:14:00,760 --> 00:14:04,560 Speaker 1: since they recall of Gray Davis. Boy, Kevin McCarthy's going 276 00:14:04,640 --> 00:14:06,400 Speaker 1: to have some tricks up his lee for this a 277 00:14:06,520 --> 00:14:09,240 Speaker 1: round of negotiation. We'll hold that thought because that's where 278 00:14:09,240 --> 00:14:11,680 Speaker 1: we're going to pick up on Joe Biden sitting down 279 00:14:11,679 --> 00:14:15,199 Speaker 1: with Kevin McCarthy. Will it even happen? That's next. This 280 00:14:15,280 --> 00:14:19,440 Speaker 1: is Bloomberg. You're listening to the Bloomberg Sound on podcast. 281 00:14:19,840 --> 00:14:23,320 Speaker 1: Catch us live weekdays at five Eastern on Bloomberg dot com, 282 00:14:23,360 --> 00:14:25,880 Speaker 1: the I Heart Radio app, and the Bloomberg Business App. 283 00:14:26,040 --> 00:14:35,760 Speaker 1: We're listening on demand wherever you get your podcast. This 284 00:14:36,200 --> 00:14:41,000 Speaker 1: is Bloomberg Sound on with Joe Matthew on Bloomberg Radio, 285 00:14:42,520 --> 00:14:45,960 Speaker 1: continuing live from Washington on this Job's Day. The ink 286 00:14:46,120 --> 00:14:48,960 Speaker 1: still drawing on the President's budget, and a lot of 287 00:14:48,960 --> 00:14:52,040 Speaker 1: talk about that on Capitol Hill, of course, with some 288 00:14:52,080 --> 00:14:55,320 Speaker 1: pretty significant deadlines. Go ahead, call it a fiscal cliff 289 00:14:55,360 --> 00:14:58,040 Speaker 1: if you want, not just the budget, but the debt limit. 290 00:14:58,120 --> 00:15:03,280 Speaker 1: And you know they're entangled. Richie Neal, who was just 291 00:15:03,440 --> 00:15:05,720 Speaker 1: a couple of months ago the chair, he's now ranking 292 00:15:05,720 --> 00:15:10,040 Speaker 1: member of the House Ways and Means Committee, eager to 293 00:15:10,120 --> 00:15:13,400 Speaker 1: get the process started. Budget that he released yesterday was 294 00:15:13,520 --> 00:15:15,600 Speaker 1: important and now we have a blueprint and we look 295 00:15:15,680 --> 00:15:17,880 Speaker 1: forward to hearing what the other side has to say 296 00:15:18,040 --> 00:15:22,520 Speaker 1: when at some point they might lay out their budget plan. Okay, well, 297 00:15:23,200 --> 00:15:26,480 Speaker 1: let's hear about that, the new Chair of Ways and Means, 298 00:15:26,480 --> 00:15:31,720 Speaker 1: Republican Jason Smith. After two years of economic failures, the 299 00:15:31,800 --> 00:15:37,320 Speaker 1: American people desperately want results. The President's budget means more pain, 300 00:15:38,200 --> 00:15:42,680 Speaker 1: with one point eight trillion dollars in new taxes on 301 00:15:42,800 --> 00:15:47,400 Speaker 1: main street businesses, many of which still have help wanted 302 00:15:47,520 --> 00:15:51,160 Speaker 1: signs hanging in their windows because of the Democrat fueled 303 00:15:51,440 --> 00:15:56,000 Speaker 1: worker shortage. Let's reassemble our panel Bloomberg Politics contributor and 304 00:15:56,080 --> 00:16:00,000 Speaker 1: Democratic analyst Jeine Schanzano is here along with Republican strategists 305 00:16:00,040 --> 00:16:05,480 Speaker 1: Jennifer Kerns, former spokeswoman for the California Republican Party. Jennifer, 306 00:16:05,960 --> 00:16:08,200 Speaker 1: This budget process, we know is going to be a 307 00:16:08,240 --> 00:16:14,720 Speaker 1: painful one. The President put out all of the proposals yesterday. 308 00:16:15,520 --> 00:16:17,240 Speaker 1: You know, you saw the report saying it's dead on 309 00:16:17,360 --> 00:16:21,760 Speaker 1: arrivals six point nine trillion dollars. There are proposed tax 310 00:16:21,840 --> 00:16:26,280 Speaker 1: hikes in here to pay for the cost of doing business. 311 00:16:26,920 --> 00:16:31,520 Speaker 1: We don't see a lot of cuts. In fact, defense spending, discretionary, nondiscretionary, 312 00:16:31,920 --> 00:16:34,080 Speaker 1: all increasing in this plan. What's it going to look 313 00:16:34,120 --> 00:16:37,920 Speaker 1: like by the time it comes through the pipe in Congress. Well, 314 00:16:38,000 --> 00:16:41,640 Speaker 1: the good news is that McCarthy and Biden are off 315 00:16:41,680 --> 00:16:44,160 Speaker 1: to a decently good start. Dave agreed to at least 316 00:16:44,200 --> 00:16:47,720 Speaker 1: be cordial through the process, which I think, given the 317 00:16:47,760 --> 00:16:51,080 Speaker 1: heated political climate coming off of four years of Donald Trump, 318 00:16:51,320 --> 00:16:54,600 Speaker 1: I think is promising. The bad news for Joe Biden 319 00:16:54,720 --> 00:16:57,800 Speaker 1: is Kevin McCarthy is digging his heels in. He has 320 00:16:57,920 --> 00:17:02,200 Speaker 1: vowed to return federal spending to twenty twenty two levels, 321 00:17:02,200 --> 00:17:06,040 Speaker 1: which is an eight percent reduction. Eight percent reduction, though, 322 00:17:06,200 --> 00:17:09,760 Speaker 1: is not that tough. Most voters look at this and say, hey, 323 00:17:09,840 --> 00:17:12,560 Speaker 1: we're doing an eight percent reduction in our own household. 324 00:17:12,800 --> 00:17:15,159 Speaker 1: Surely the federal government can do that. And I think 325 00:17:15,200 --> 00:17:18,639 Speaker 1: the one difference between McCarthy and prior speakers on the 326 00:17:18,720 --> 00:17:22,840 Speaker 1: Republican side, McCarthey is very press savvy, very media savvy. 327 00:17:23,080 --> 00:17:25,680 Speaker 1: He is not afraid to take this conversation to the 328 00:17:25,720 --> 00:17:29,000 Speaker 1: American people, and that, I think is how he's going 329 00:17:29,040 --> 00:17:32,639 Speaker 1: to apply pressure onto the Biden administration on the budget talks. Well, 330 00:17:32,680 --> 00:17:34,679 Speaker 1: I think we can admit that Joe Biden's doing the 331 00:17:34,720 --> 00:17:37,200 Speaker 1: same thing. Listen to the President at the White House today. 332 00:17:37,320 --> 00:17:39,960 Speaker 1: I told the speaker as soon as he's ready to 333 00:17:40,000 --> 00:17:42,040 Speaker 1: lay out his budget, I'm all going to sit down. 334 00:17:42,680 --> 00:17:44,960 Speaker 1: And now I'm hearing things like, well, we're not gonna 335 00:17:45,000 --> 00:17:47,800 Speaker 1: have our budget till April or May, maybe even June. 336 00:17:50,240 --> 00:17:52,240 Speaker 1: All this talk pushing me to get my budget down. 337 00:17:52,240 --> 00:17:53,600 Speaker 1: I said to have it done by the ninth had 338 00:17:53,720 --> 00:17:56,040 Speaker 1: done by the ninth A handed to you guys, handed 339 00:17:56,080 --> 00:17:59,600 Speaker 1: to them. Why all of a sudden can't they get 340 00:17:59,600 --> 00:18:03,960 Speaker 1: it done in March or maybe even April? Maybe even May. 341 00:18:04,359 --> 00:18:07,800 Speaker 1: I mean, I don't I don't know. It doesn't sound 342 00:18:07,840 --> 00:18:11,399 Speaker 1: like on the low yet. So sort of interesting moment there, Jeanie. 343 00:18:11,440 --> 00:18:13,399 Speaker 1: I mean, see, he just can't get his head around this. 344 00:18:13,440 --> 00:18:16,120 Speaker 1: So when's the Republican budget going to come out? We're 345 00:18:16,160 --> 00:18:19,719 Speaker 1: here and maybe the middle of April. What was the 346 00:18:19,760 --> 00:18:24,920 Speaker 1: whole hurry up and wait all about? Yeah, the President 347 00:18:25,000 --> 00:18:27,800 Speaker 1: has gotten hit so hard up by Republicans and they 348 00:18:27,960 --> 00:18:30,560 Speaker 1: blasted him for being late with his budget. And then 349 00:18:30,600 --> 00:18:32,960 Speaker 1: of course the budget chair Jody Arrington came out and 350 00:18:32,960 --> 00:18:35,480 Speaker 1: said they may not release their budget till May, a 351 00:18:35,600 --> 00:18:37,280 Speaker 1: month after they said they were going to pass it. 352 00:18:37,320 --> 00:18:40,200 Speaker 1: He retracted that said he misspoke. And now, of course 353 00:18:40,240 --> 00:18:42,280 Speaker 1: the President is having some fun. I have to say, 354 00:18:42,280 --> 00:18:45,320 Speaker 1: between the whispering and the joke yesterday in Philly, he 355 00:18:45,400 --> 00:18:47,400 Speaker 1: seems like he's in good form on all of this. 356 00:18:47,760 --> 00:18:50,240 Speaker 1: But you know, the serious question here has to do 357 00:18:50,320 --> 00:18:52,960 Speaker 1: with things like what are we going to do about Medicare? 358 00:18:53,080 --> 00:18:56,080 Speaker 1: You know, the President has a serious proposal in the 359 00:18:56,119 --> 00:18:59,240 Speaker 1: budget which is dead on arrival all of those things, 360 00:18:59,440 --> 00:19:02,960 Speaker 1: but the reality is somebody's got to address the insolvency 361 00:19:03,000 --> 00:19:06,359 Speaker 1: of Medicare. He has a proposal there, Republicans are going 362 00:19:06,359 --> 00:19:10,119 Speaker 1: to have to respond to that issue as one of 363 00:19:10,119 --> 00:19:12,480 Speaker 1: the top issues, and then you just go right down 364 00:19:12,520 --> 00:19:15,560 Speaker 1: the list. And in all of these cases, none of 365 00:19:15,560 --> 00:19:18,000 Speaker 1: this is difficult to wrap your head around. You either 366 00:19:18,080 --> 00:19:21,760 Speaker 1: cut spending, you cut benefits, you cut what's being paid 367 00:19:21,800 --> 00:19:25,359 Speaker 1: to these healthcare insurers, or you raise taxes money. Yeah, 368 00:19:25,400 --> 00:19:27,320 Speaker 1: I mean we you know it's not you know, a 369 00:19:27,400 --> 00:19:31,120 Speaker 1: kindergartener could understand it, but to get it done is difficult. 370 00:19:31,160 --> 00:19:34,200 Speaker 1: I understand that. And the reality is the Republicans are 371 00:19:34,240 --> 00:19:36,920 Speaker 1: going to have to respond with a proposal to do 372 00:19:36,960 --> 00:19:39,760 Speaker 1: all of the things they promise to do. And I 373 00:19:39,800 --> 00:19:41,840 Speaker 1: think it's in all of our interests that they move 374 00:19:41,880 --> 00:19:44,720 Speaker 1: beyond the debt ceiling and get to some serious talks, 375 00:19:44,720 --> 00:19:47,320 Speaker 1: and I hope they will about the budget, because we 376 00:19:47,400 --> 00:19:49,760 Speaker 1: need the deficit to be cut under control, but we 377 00:19:49,800 --> 00:19:52,520 Speaker 1: also need to address things like insolvency of Medicare and 378 00:19:52,640 --> 00:19:55,320 Speaker 1: keep defense spending at par with what it should be. 379 00:19:55,440 --> 00:19:58,440 Speaker 1: These are big, big questions, and it's a huge, huge 380 00:19:58,520 --> 00:20:01,080 Speaker 1: task for the Republicans in the House, not to mention 381 00:20:01,160 --> 00:20:05,080 Speaker 1: Senate and Democrats in Congress as well. Jennifer Kerns, you 382 00:20:05,119 --> 00:20:08,600 Speaker 1: mentioned households understand what it's like to cut eight percent. Obviously, 383 00:20:08,680 --> 00:20:11,600 Speaker 1: that is something we all need to manage in our 384 00:20:11,600 --> 00:20:14,879 Speaker 1: own families. The government works a little bit differently, though, 385 00:20:14,920 --> 00:20:16,480 Speaker 1: and in this case, you cut eight percent of a 386 00:20:16,520 --> 00:20:19,159 Speaker 1: program that somebody depends on, they're going to be screaming 387 00:20:19,200 --> 00:20:22,600 Speaker 1: about it. And that's this is the reality for lawmakers, right. 388 00:20:22,640 --> 00:20:26,199 Speaker 1: This is a big deal for certain individuals. It depends 389 00:20:26,200 --> 00:20:28,080 Speaker 1: on what program you're talking about. And if we take 390 00:20:28,119 --> 00:20:31,240 Speaker 1: Social Security and Medicare off the table as has been done, 391 00:20:31,640 --> 00:20:34,000 Speaker 1: there's actually not a lot of room to work with here. 392 00:20:34,040 --> 00:20:36,040 Speaker 1: I mean, you're you're looking at what thirty percent of 393 00:20:36,080 --> 00:20:38,600 Speaker 1: the budget or something like that to start clipping, and 394 00:20:38,640 --> 00:20:41,159 Speaker 1: we're told defense spending is not going to be on 395 00:20:41,200 --> 00:20:44,920 Speaker 1: the table either. So how do they get it done well? Right? 396 00:20:45,200 --> 00:20:47,480 Speaker 1: And that's why I think you see Kevin McCarthy talking 397 00:20:47,480 --> 00:20:53,520 Speaker 1: about cutting other entitlements, things like food support and housing 398 00:20:53,560 --> 00:20:58,440 Speaker 1: support that people became very reliant upon after the COVID pandemic. 399 00:20:59,080 --> 00:21:02,640 Speaker 1: And now we're three years out. President Biden himself says 400 00:21:02,680 --> 00:21:06,679 Speaker 1: the emergency's ending. Governors like Gavin Newsom say the emergency 401 00:21:06,760 --> 00:21:09,879 Speaker 1: is ending, and I think that the budget has to 402 00:21:09,960 --> 00:21:12,800 Speaker 1: reflect that emergency ending. And I think that's where you 403 00:21:12,800 --> 00:21:16,200 Speaker 1: will see Republicans go. They will get a bit of 404 00:21:16,240 --> 00:21:18,560 Speaker 1: a hit in the press for it. I can almost 405 00:21:18,600 --> 00:21:22,040 Speaker 1: already hear the thirty second ad going against Republicans in 406 00:21:22,040 --> 00:21:24,639 Speaker 1: this targeted districts. Oh, they took away my you know, 407 00:21:24,720 --> 00:21:28,119 Speaker 1: housing benefit, they took away my you know, EBT card. 408 00:21:28,200 --> 00:21:31,639 Speaker 1: But that is part of the honest conversation as Americans 409 00:21:31,920 --> 00:21:34,280 Speaker 1: that we have to have. And you know, Genie is right, 410 00:21:34,800 --> 00:21:38,040 Speaker 1: Senator Chuck Schumer is just as worried about this conversation. 411 00:21:38,640 --> 00:21:41,639 Speaker 1: He in fact said the other day that Kevin McCarthy's 412 00:21:41,640 --> 00:21:44,640 Speaker 1: showing up at the White House and meeting with them 413 00:21:44,640 --> 00:21:49,119 Speaker 1: without having you know, sort of any any promises on 414 00:21:49,160 --> 00:21:51,760 Speaker 1: the table is like sitting down at a poker table 415 00:21:52,080 --> 00:21:54,679 Speaker 1: without cards in your hand. And I think that's exactly 416 00:21:55,400 --> 00:21:57,880 Speaker 1: what Chuck Schumer knows of Kevin McCarthy. So I think 417 00:21:58,119 --> 00:22:00,520 Speaker 1: the GOP is going to get creative here. I think 418 00:22:00,560 --> 00:22:02,920 Speaker 1: that's why they're not rushing to put out the budget. 419 00:22:03,600 --> 00:22:06,560 Speaker 1: And I think you'll be pleasantly surprised at what Kevin 420 00:22:06,600 --> 00:22:10,439 Speaker 1: McCarthy comes up with. Treasury Secretary Jenny Yellen, testifying today 421 00:22:10,960 --> 00:22:13,320 Speaker 1: on Capitol Hill and talking about the budget. That was 422 00:22:13,359 --> 00:22:15,679 Speaker 1: the point of this, but it really lent itself to 423 00:22:15,760 --> 00:22:19,119 Speaker 1: a conversation about the debt limit. And she's there to 424 00:22:19,160 --> 00:22:21,560 Speaker 1: warn lawmakers and she's done it before. Failure to pay 425 00:22:21,560 --> 00:22:25,000 Speaker 1: our bills, she says, we'll produce economic and financial collapse, 426 00:22:25,119 --> 00:22:28,639 Speaker 1: and that prioritizing some payments. As we've discussed, this is 427 00:22:28,680 --> 00:22:30,639 Speaker 1: what some House Republicans want to do. You pay the 428 00:22:30,680 --> 00:22:33,960 Speaker 1: debt on the treasuries, and you stop paying for certain programs. 429 00:22:33,960 --> 00:22:37,920 Speaker 1: Here she said, that is just default by another name. 430 00:22:38,040 --> 00:22:41,080 Speaker 1: Here she is since seventeen eighty nine, the United States 431 00:22:41,119 --> 00:22:44,440 Speaker 1: has always paid its bills on time, and it must 432 00:22:44,480 --> 00:22:48,159 Speaker 1: continue to do so. In my assessment, in those of 433 00:22:48,200 --> 00:22:52,800 Speaker 1: economists across the board, default on her debt would trigger 434 00:22:53,040 --> 00:22:57,200 Speaker 1: an economic and financial catastrophe. So there it is again, Jeannie. 435 00:22:57,480 --> 00:22:59,720 Speaker 1: I know the market thinks this is going to get fixed, 436 00:22:59,800 --> 00:23:02,800 Speaker 1: or least they're allowing space. We're not freaking out about 437 00:23:02,800 --> 00:23:04,800 Speaker 1: this yet. We have other things to freak out about, 438 00:23:04,840 --> 00:23:08,119 Speaker 1: beginning with inflation. But when does this actually become a problem. 439 00:23:08,119 --> 00:23:09,919 Speaker 1: If we're going to hit the X date summer between 440 00:23:10,000 --> 00:23:13,280 Speaker 1: July and August, you know, I think we have a 441 00:23:13,280 --> 00:23:15,480 Speaker 1: little time to go on this, but there is going 442 00:23:15,520 --> 00:23:17,280 Speaker 1: to come a point and you know, we all know 443 00:23:17,359 --> 00:23:19,920 Speaker 1: Washington works best when they get to a deadline, just 444 00:23:19,960 --> 00:23:22,840 Speaker 1: like students, and so it's gonna come this summer. There 445 00:23:22,880 --> 00:23:25,840 Speaker 1: will be no rest for any congressional reporters. But you know, 446 00:23:25,960 --> 00:23:28,000 Speaker 1: I don't know, join Joe, did you coin the name 447 00:23:28,040 --> 00:23:30,159 Speaker 1: default by another name? Or was that hers? Because that 448 00:23:30,280 --> 00:23:33,320 Speaker 1: is brilliant, that was hers? And actually love it, very 449 00:23:33,359 --> 00:23:36,520 Speaker 1: deliberate writing, Jennifer. She's right about this, correct. The idea 450 00:23:36,520 --> 00:23:42,239 Speaker 1: of prioritizing payments in favor of bondholders. That's not going 451 00:23:42,280 --> 00:23:46,280 Speaker 1: to fly politically, is it. No? I don't think it will. 452 00:23:46,480 --> 00:23:49,400 Speaker 1: And look, I know that Janet Yellen has has been 453 00:23:49,440 --> 00:23:53,640 Speaker 1: able to launch what she called extraordinary measures to cover 454 00:23:53,760 --> 00:23:58,480 Speaker 1: the bills. But you're you're right that funding is going 455 00:23:58,520 --> 00:24:01,679 Speaker 1: to run out sometime over the summer. So caution to 456 00:24:02,240 --> 00:24:05,000 Speaker 1: any member of Congress don't plan on taking a summer 457 00:24:05,080 --> 00:24:09,720 Speaker 1: vacation until this is completely dissolved. Caution from Jennifer Kurrns. Jennifer, 458 00:24:09,760 --> 00:24:12,440 Speaker 1: thank you for coming and appreciate your insights. Genie, of course, 459 00:24:12,480 --> 00:24:15,680 Speaker 1: always Genie Schanzana with us making our panel today on 460 00:24:15,680 --> 00:24:18,520 Speaker 1: Bloomberg Sound On, and some important things to think about 461 00:24:18,560 --> 00:24:22,520 Speaker 1: as we head for the weekend. You're listening to the 462 00:24:22,520 --> 00:24:26,639 Speaker 1: Bloomberg Sound On podcast. Catch the program live weekdays at 463 00:24:26,680 --> 00:24:29,720 Speaker 1: five pm Easter on Bloomberg Radio, the tune in app, 464 00:24:29,800 --> 00:24:32,879 Speaker 1: Bloomberg dot Com, and the Bloomberg Business App. You can 465 00:24:32,960 --> 00:24:36,159 Speaker 1: also listen live on Amazon Alexa from our flagship New 466 00:24:36,280 --> 00:24:42,200 Speaker 1: York station, Just say Alexa Play Bloomberg eleven thirty President 467 00:24:42,200 --> 00:24:44,240 Speaker 1: Biden feeling pretty good about the jobs A fourth. Of course, 468 00:24:44,280 --> 00:24:46,280 Speaker 1: it comes out at eight thirty. A short time later, 469 00:24:46,320 --> 00:24:49,480 Speaker 1: we hear President's going to speak publicly. They schedule that 470 00:24:49,560 --> 00:24:52,439 Speaker 1: for ten forty five, and there he was at the 471 00:24:52,480 --> 00:24:55,120 Speaker 1: White House before heading off the weekend. Some good news 472 00:24:55,119 --> 00:24:56,960 Speaker 1: to share. I think we got a good jobs report. 473 00:24:57,160 --> 00:24:59,520 Speaker 1: I'm happy to report that our economy has created over 474 00:24:59,640 --> 00:25:04,119 Speaker 1: three hundred thousand new jobs last month. And that's on 475 00:25:04,160 --> 00:25:06,280 Speaker 1: top of a half a million jobs we added a 476 00:25:06,359 --> 00:25:10,320 Speaker 1: month before. All told, we've created more than twelve thousand, 477 00:25:10,720 --> 00:25:14,200 Speaker 1: twelve thousand jobs since they took office. There'll be eight 478 00:25:14,240 --> 00:25:18,480 Speaker 1: thousand of the manufacturing jobs. That means overall, we've created 479 00:25:18,520 --> 00:25:21,480 Speaker 1: more jobs in two years than any administrations are created 480 00:25:21,480 --> 00:25:23,800 Speaker 1: in the first four years. A couple of important numbers here, 481 00:25:23,920 --> 00:25:28,360 Speaker 1: the unemployment rate rising the three point six percent, remembering 482 00:25:28,359 --> 00:25:32,640 Speaker 1: we got two different surveys here, job growth beating estimates. 483 00:25:32,680 --> 00:25:35,680 Speaker 1: On the payroll side, monthly wages rising at the slowest 484 00:25:35,760 --> 00:25:39,679 Speaker 1: pace in a year. Wall Street likes that component, and 485 00:25:39,720 --> 00:25:44,600 Speaker 1: as we discussed last hour with outgoing Labor Secretary Marty Walsh, 486 00:25:44,640 --> 00:25:47,159 Speaker 1: wages didn't fall enough for him to be concerned that 487 00:25:47,280 --> 00:25:50,359 Speaker 1: people are still making more than they were a year ago. 488 00:25:51,280 --> 00:25:53,760 Speaker 1: The President talked about more than just the jobs report, though, 489 00:25:53,800 --> 00:25:57,240 Speaker 1: just a day after dropping his budget, he says inflation 490 00:25:57,560 --> 00:26:00,760 Speaker 1: is down thirty percent from where it was in the summer, 491 00:26:03,240 --> 00:26:06,760 Speaker 1: and adding all of this up sees the trajectory in place. 492 00:26:06,960 --> 00:26:10,720 Speaker 1: Let's talk about it with Heather Bouchet, member of the 493 00:26:10,760 --> 00:26:14,280 Speaker 1: White House Council of Economic Advisors, on this Job's Day. Heather, 494 00:26:14,400 --> 00:26:16,880 Speaker 1: it is great to have you back with us here 495 00:26:16,920 --> 00:26:22,520 Speaker 1: on Bloomberg. Where is this report in your perspective? When 496 00:26:22,560 --> 00:26:25,520 Speaker 1: you see hotter than expected job growth but easing wages, 497 00:26:25,600 --> 00:26:27,760 Speaker 1: that's the needle you've been trying to threat, isn't it. 498 00:26:29,000 --> 00:26:31,280 Speaker 1: I believe at the top of this segment you called 499 00:26:31,280 --> 00:26:35,159 Speaker 1: this the Goldilocks top support, and that you stole my 500 00:26:35,200 --> 00:26:40,000 Speaker 1: line there. This is certainly what I think we are 501 00:26:40,040 --> 00:26:45,360 Speaker 1: seeing today, that we've seen steady job gains, not as 502 00:26:45,359 --> 00:26:48,840 Speaker 1: hot as January, but you know, certainly as at a 503 00:26:48,920 --> 00:26:52,040 Speaker 1: steady pace, down from where they were, certainly a year ago, 504 00:26:52,359 --> 00:26:54,639 Speaker 1: about half as many jobs being created on average as 505 00:26:54,680 --> 00:26:56,760 Speaker 1: they were you know, you know at the end of 506 00:26:56,760 --> 00:27:00,359 Speaker 1: twenty twenty one. And at the same time, we are seeing, 507 00:27:00,960 --> 00:27:03,640 Speaker 1: while wages are continuing to rise on a nominal basis, 508 00:27:03,680 --> 00:27:06,160 Speaker 1: that pace has been slowing. So that has come down 509 00:27:06,560 --> 00:27:08,960 Speaker 1: from again the end of twenty twenty one, and so 510 00:27:09,000 --> 00:27:11,840 Speaker 1: that's a good indication that we're seeing the kind of 511 00:27:11,880 --> 00:27:15,640 Speaker 1: steady growth that the president wants to see, but we're 512 00:27:15,680 --> 00:27:19,560 Speaker 1: not getting too hot. So that's school delocks right there. Okay, good, 513 00:27:19,680 --> 00:27:22,320 Speaker 1: So I know you're not going to talk about the FED. 514 00:27:22,359 --> 00:27:23,840 Speaker 1: I'm not going to ask you about the FED. But 515 00:27:23,880 --> 00:27:26,680 Speaker 1: when you look at this report and you consider this 516 00:27:27,400 --> 00:27:29,240 Speaker 1: the way you just framed it, is this a job 517 00:27:29,280 --> 00:27:32,040 Speaker 1: market that is strong enough as the payrolls continue to 518 00:27:32,160 --> 00:27:35,640 Speaker 1: beat expectations? Is it a job a job market strong 519 00:27:35,720 --> 00:27:40,040 Speaker 1: enough that it can withstand higher interest rates? Well, that 520 00:27:40,240 --> 00:27:42,359 Speaker 1: is certainly a question. Of course, we don't comment on 521 00:27:42,440 --> 00:27:46,440 Speaker 1: FED policy. But now what we're seeing is continued ongoing 522 00:27:46,520 --> 00:27:49,840 Speaker 1: resilience in the US economy and in the labor market, 523 00:27:50,320 --> 00:27:52,680 Speaker 1: even though a lot of different challenges have been thrown 524 00:27:52,720 --> 00:27:55,280 Speaker 1: at it over the past couple of years. So the 525 00:27:55,280 --> 00:27:57,720 Speaker 1: President made a point when he came into office to 526 00:27:58,320 --> 00:28:01,280 Speaker 1: do what he could do to get the pandemic under control, 527 00:28:01,480 --> 00:28:03,840 Speaker 1: make sure that we got people back to work. He's 528 00:28:03,880 --> 00:28:08,639 Speaker 1: been successful at that, and that is despite different variants 529 00:28:08,640 --> 00:28:11,119 Speaker 1: of the virus that kept popping up, and of course 530 00:28:11,200 --> 00:28:13,800 Speaker 1: the war in the Ukraine that Putin has been waging 531 00:28:13,840 --> 00:28:17,879 Speaker 1: that is upended global energy prices, although certainly gas prices 532 00:28:17,880 --> 00:28:20,320 Speaker 1: have come down since the summer. But those have been 533 00:28:20,400 --> 00:28:23,560 Speaker 1: challenges that the economy has been able to withstand. And 534 00:28:24,080 --> 00:28:27,439 Speaker 1: as the President talked about, he is working on building 535 00:28:27,440 --> 00:28:29,520 Speaker 1: an economy from the bottom up in middle out and 536 00:28:29,640 --> 00:28:33,120 Speaker 1: focused on making sure that we are investing in America 537 00:28:33,840 --> 00:28:35,760 Speaker 1: to all of the legislation that he has put in 538 00:28:35,800 --> 00:28:38,920 Speaker 1: place and that will continue to help drive productivity and 539 00:28:38,960 --> 00:28:43,080 Speaker 1: growth moving forward. Participation has been an issue, I realized, 540 00:28:43,080 --> 00:28:46,000 Speaker 1: and we saw the highest labor force participation rate since 541 00:28:46,120 --> 00:28:50,240 Speaker 1: March of twenty twenty. Do you have a theory or 542 00:28:50,280 --> 00:28:52,600 Speaker 1: do you know what it is that's bringing workers back? 543 00:28:52,680 --> 00:28:58,080 Speaker 1: Is the higher interest rate environment doing that on its own? Well, 544 00:28:58,120 --> 00:29:01,520 Speaker 1: I think a couple of things. Certainly, I think we 545 00:29:01,640 --> 00:29:05,320 Speaker 1: underestimate sometimes we were talking about the economy just how 546 00:29:05,400 --> 00:29:09,080 Speaker 1: hard the pandemic was on families all across the country, 547 00:29:09,160 --> 00:29:11,520 Speaker 1: and what you see is people getting back to the 548 00:29:11,640 --> 00:29:15,080 Speaker 1: labor force participation that they were at pre pandemic. Certainly 549 00:29:15,120 --> 00:29:17,720 Speaker 1: that's the case for workers who are in what economis 550 00:29:17,720 --> 00:29:21,400 Speaker 1: call prime age twenty five to fifty four. So that 551 00:29:21,520 --> 00:29:24,720 Speaker 1: is certainly good news and is indicative of things getting 552 00:29:24,840 --> 00:29:28,240 Speaker 1: back to a semblance of where we were pre pandemic 553 00:29:28,280 --> 00:29:32,120 Speaker 1: in terms of that particular indicator. At the same time, 554 00:29:32,680 --> 00:29:37,800 Speaker 1: certainly there are pressures on families to continue to get 555 00:29:37,880 --> 00:29:40,280 Speaker 1: into the labor market. One thing that we track very 556 00:29:40,320 --> 00:29:44,200 Speaker 1: closely is that this supports for workers in terms of 557 00:29:44,240 --> 00:29:47,520 Speaker 1: the number of people employed in childcare and other care sectors. 558 00:29:47,840 --> 00:29:49,800 Speaker 1: They still haven't come all the way back, which is 559 00:29:50,000 --> 00:29:53,880 Speaker 1: some indication there's still some wiggle room there for labor supply. 560 00:29:54,360 --> 00:29:56,880 Speaker 1: But I think there's a lot of opportunity right now 561 00:29:56,920 --> 00:29:59,800 Speaker 1: in the labor market. You know, again, we have con 562 00:30:00,280 --> 00:30:02,800 Speaker 1: to see jobs being added. We have continued to see 563 00:30:03,000 --> 00:30:05,600 Speaker 1: wages going up, of course at a slower pace, and 564 00:30:05,640 --> 00:30:08,520 Speaker 1: that's that indicates that there's opportunity for folks that might 565 00:30:08,520 --> 00:30:10,680 Speaker 1: be sitting on the sidelines who just are looking for 566 00:30:10,720 --> 00:30:13,720 Speaker 1: that good job or what an expanded child tax credit 567 00:30:13,800 --> 00:30:18,640 Speaker 1: brings them back. Well, anything that helps families cope with 568 00:30:18,680 --> 00:30:22,800 Speaker 1: the challenges that they have at home, providing care, dealing 569 00:30:22,800 --> 00:30:25,360 Speaker 1: with those challenges, that can help them fully participate in 570 00:30:25,400 --> 00:30:27,680 Speaker 1: the economy, being in the labor market or small business 571 00:30:27,720 --> 00:30:30,440 Speaker 1: owner or whatever it is that they choose to do. Certainly, 572 00:30:30,480 --> 00:30:35,200 Speaker 1: all of that can help boost our economic participation. So certainly, yes, 573 00:30:35,720 --> 00:30:38,400 Speaker 1: a big deal being made about easing wages today. You know, 574 00:30:38,400 --> 00:30:40,240 Speaker 1: they're not down a lot here, but it's you know, 575 00:30:40,400 --> 00:30:42,800 Speaker 1: here we are on Bloomberg. The market celebrates that because 576 00:30:42,800 --> 00:30:46,080 Speaker 1: it's disinflationary. That's not great for people on main street obviously, 577 00:30:46,120 --> 00:30:49,520 Speaker 1: as they get potentially left with less money in their pockets. 578 00:30:49,560 --> 00:30:53,200 Speaker 1: Our democratic analysts last hour mentioned that that helps to 579 00:30:53,240 --> 00:30:56,040 Speaker 1: exacerbate the impact of inflation. In fact that they know 580 00:30:56,080 --> 00:30:59,720 Speaker 1: they feel that the lower wage coupled with higher prices. 581 00:30:59,760 --> 00:31:03,160 Speaker 1: Do you worry or about lower wages or do you 582 00:31:03,200 --> 00:31:06,360 Speaker 1: want to see wages come down a bit after rising 583 00:31:06,360 --> 00:31:10,880 Speaker 1: so much. We certainly it's certainly the president's goal that 584 00:31:10,920 --> 00:31:14,280 Speaker 1: we want to see folks getting good jobs, good pay. 585 00:31:14,480 --> 00:31:17,120 Speaker 1: And the President has been very very clear time and 586 00:31:17,160 --> 00:31:21,720 Speaker 1: again that addressing the challenges of inflation are top among 587 00:31:21,800 --> 00:31:25,080 Speaker 1: his priorities. That is why he has focused so hard 588 00:31:25,120 --> 00:31:27,600 Speaker 1: and doing what he could do to get gas prices down, 589 00:31:28,000 --> 00:31:31,360 Speaker 1: focusing so hard on making sure that the whole administration 590 00:31:31,400 --> 00:31:34,040 Speaker 1: did what they could do to unclogged supply chains to 591 00:31:34,160 --> 00:31:37,080 Speaker 1: get goods flowing throughout the economy. That was of course 592 00:31:37,120 --> 00:31:41,040 Speaker 1: contributing both high energy prices, gas prices in particular, and 593 00:31:41,080 --> 00:31:44,640 Speaker 1: supply chains were a big part of that inflation challenge. 594 00:31:45,400 --> 00:31:47,880 Speaker 1: But making sure that people get to work and that 595 00:31:47,920 --> 00:31:51,760 Speaker 1: we keep that employment rate low is certainly going to 596 00:31:51,840 --> 00:31:54,800 Speaker 1: help boost family incomes over the long term. You are 597 00:31:54,840 --> 00:31:57,280 Speaker 1: not only on the Council of Economic Advisors, Heather Brouchet, 598 00:31:57,320 --> 00:32:00,440 Speaker 1: you are also Chief Economists to the invest in America HABINET, 599 00:32:00,800 --> 00:32:03,440 Speaker 1: which is a big title, and we congratulate you for it, 600 00:32:03,440 --> 00:32:05,640 Speaker 1: but I wonder your perspective on the budget the President 601 00:32:05,720 --> 00:32:07,600 Speaker 1: dropped yesterday. Of course, it has a lot to do 602 00:32:08,400 --> 00:32:13,680 Speaker 1: with investing, but it comes against a House Republican majority 603 00:32:13,720 --> 00:32:16,360 Speaker 1: that wants to see spending levels brought back a couple 604 00:32:16,360 --> 00:32:19,600 Speaker 1: of years. This increases spending to six point nine trillion dollars. 605 00:32:19,640 --> 00:32:23,440 Speaker 1: There's a big chasm between the White House and the 606 00:32:23,480 --> 00:32:25,320 Speaker 1: Congress right now. How are you going to bring these 607 00:32:25,320 --> 00:32:29,880 Speaker 1: parties together? Well, you know, the first step is making 608 00:32:29,880 --> 00:32:32,600 Speaker 1: your plans clear. And the President has been very clear 609 00:32:33,080 --> 00:32:35,760 Speaker 1: on his plans from day one. And this budget is 610 00:32:35,800 --> 00:32:39,560 Speaker 1: another another piece of his plan for how he's going 611 00:32:39,560 --> 00:32:41,840 Speaker 1: to grow the economy from the bottom up in middle out. 612 00:32:42,400 --> 00:32:45,400 Speaker 1: And you know, there is a lot of things that 613 00:32:45,640 --> 00:32:47,680 Speaker 1: are proposed in there that are going to lower cost 614 00:32:47,720 --> 00:32:51,680 Speaker 1: for families. We are just talking about inflation. He's proposed 615 00:32:51,720 --> 00:32:55,440 Speaker 1: ways to strengthen and protect both Medicare and Social Security, 616 00:32:56,000 --> 00:32:58,800 Speaker 1: and he's going to do this by making sure that 617 00:32:59,320 --> 00:33:02,000 Speaker 1: doesn't add to the deficit woes, but actually lowers it. 618 00:33:02,440 --> 00:33:04,959 Speaker 1: Its budget lowers a deficit over the next decade by 619 00:33:05,320 --> 00:33:08,400 Speaker 1: three trillion, and doing that by making sure that we 620 00:33:08,440 --> 00:33:10,880 Speaker 1: are focused on making those at the top pay their 621 00:33:10,880 --> 00:33:14,200 Speaker 1: fair share. So there's a lot in here that is 622 00:33:15,040 --> 00:33:17,760 Speaker 1: focused on making sure that the structural bones of the 623 00:33:17,760 --> 00:33:20,720 Speaker 1: economy are pushing in the right direction, that families have 624 00:33:20,800 --> 00:33:23,640 Speaker 1: what they need, that we are addressing those high costs 625 00:33:23,640 --> 00:33:26,200 Speaker 1: that families are facing, and that we're making the kinds 626 00:33:26,200 --> 00:33:29,920 Speaker 1: of investments they're going to boost productivity and the economy 627 00:33:30,600 --> 00:33:33,840 Speaker 1: in the years to come. Well, it's going to be 628 00:33:33,880 --> 00:33:36,160 Speaker 1: a big debate that follows here, and we can follow 629 00:33:36,240 --> 00:33:37,960 Speaker 1: up on that, Heather Bouchet, I just want to ask 630 00:33:38,000 --> 00:33:41,680 Speaker 1: you about the story involving SVP VP rather in the 631 00:33:41,760 --> 00:33:44,680 Speaker 1: failure of this bank. I wonder if it's something that's 632 00:33:44,720 --> 00:33:46,680 Speaker 1: on your radar and to the extent that the White 633 00:33:46,680 --> 00:33:52,480 Speaker 1: House is concerned about this creeping further, about a further contagion. Well, 634 00:33:53,040 --> 00:33:56,160 Speaker 1: it's a great question. Secretary Yellen said this morning that 635 00:33:56,240 --> 00:34:00,120 Speaker 1: she is monitoring the situation very closely, and you know 636 00:34:00,240 --> 00:34:03,160 Speaker 1: we are. Would refer you to the Treasury Department for 637 00:34:03,240 --> 00:34:06,640 Speaker 1: further updates on this situation. Not something that's keeping you 638 00:34:06,720 --> 00:34:11,000 Speaker 1: up at night, though, is that right? I wake up 639 00:34:11,000 --> 00:34:13,239 Speaker 1: each and every day thinking about the health and well 640 00:34:13,280 --> 00:34:15,880 Speaker 1: being of America's economy, so certainly this is this is 641 00:34:16,120 --> 00:34:18,759 Speaker 1: any important development. But I would direct you to Treasury 642 00:34:18,560 --> 00:34:21,040 Speaker 1: day for more questions. Thanks for coming to talk to 643 00:34:21,080 --> 00:34:24,320 Speaker 1: us Happy Jobs Day. Heather Bouche from the Council of 644 00:34:24,360 --> 00:34:26,719 Speaker 1: Economic Advisors at the White House's chief economists to the 645 00:34:26,760 --> 00:34:31,480 Speaker 1: invest In America Cabinet, and Michael McKee joins us now 646 00:34:31,520 --> 00:34:33,279 Speaker 1: from New York with a little bit of analysis on 647 00:34:33,320 --> 00:34:35,000 Speaker 1: everything that we just heard. Michael, do you think the 648 00:34:35,000 --> 00:34:37,879 Speaker 1: White House is concerned about SVB or are they more 649 00:34:38,440 --> 00:34:41,520 Speaker 1: in line with Larry Summers who says that this is 650 00:34:41,560 --> 00:34:45,560 Speaker 1: not systemic. I think they are concerned to the extent 651 00:34:45,640 --> 00:34:50,440 Speaker 1: that nobody really knows whether SVB is going to cause contagion. 652 00:34:50,880 --> 00:34:54,080 Speaker 1: The best guests of analysts is it will not. It's 653 00:34:54,120 --> 00:34:57,120 Speaker 1: a different kind of business model than most of the 654 00:34:57,160 --> 00:35:00,799 Speaker 1: smaller and mid sized banks. Maybe there's a that would 655 00:35:01,320 --> 00:35:04,680 Speaker 1: would have issues, but there isn't really much that the 656 00:35:04,719 --> 00:35:07,319 Speaker 1: administration would be able to do about it. If there 657 00:35:07,360 --> 00:35:10,120 Speaker 1: were some sort of systemic issue, it would fall to 658 00:35:10,200 --> 00:35:13,120 Speaker 1: the FED to figure out how FED and the FDIC 659 00:35:13,280 --> 00:35:15,520 Speaker 1: to figure out how to deal with it. And so 660 00:35:15,600 --> 00:35:17,759 Speaker 1: right now, they'll just keep an eye on it. They'll 661 00:35:17,840 --> 00:35:21,359 Speaker 1: keep an eye on what's going on with SVB and 662 00:35:21,440 --> 00:35:26,040 Speaker 1: the FDIC shutdown, but I don't think it is keeping 663 00:35:26,120 --> 00:35:28,480 Speaker 1: Heather up at night no, at least not yet. That 664 00:35:29,040 --> 00:35:31,880 Speaker 1: was my sense, although I guess we've been referred to 665 00:35:31,920 --> 00:35:35,160 Speaker 1: the Treasury for more on that. But today's jobs report, 666 00:35:35,320 --> 00:35:37,840 Speaker 1: I you know, I use the word goldilocks, and she 667 00:35:38,080 --> 00:35:40,960 Speaker 1: stole it because that's exactly what the White House wants 668 00:35:41,000 --> 00:35:43,800 Speaker 1: to see, right Michael, This is this would be evidence 669 00:35:43,880 --> 00:35:46,920 Speaker 1: that the interest rate hikes are not killing the job market, 670 00:35:46,920 --> 00:35:50,399 Speaker 1: and it could withstand more. Yeah, we have a nice 671 00:35:50,480 --> 00:35:55,440 Speaker 1: narrative in the jobs reports story today and that basically 672 00:35:55,800 --> 00:35:59,440 Speaker 1: we hadn't filled all the jobs that were lost during 673 00:35:59,600 --> 00:36:04,520 Speaker 1: the pandemic, and people hadn't come back into the labor force. 674 00:36:04,920 --> 00:36:07,279 Speaker 1: So now they're coming back into the labor force in 675 00:36:07,400 --> 00:36:11,040 Speaker 1: larger numbers, which pushed unemployment up, and they're finding jobs 676 00:36:11,080 --> 00:36:15,640 Speaker 1: in areas where they were short jobs leisure and hospitality, 677 00:36:16,480 --> 00:36:18,920 Speaker 1: still not even close to filling all the jobs that 678 00:36:19,200 --> 00:36:22,560 Speaker 1: they had before the pandemic, and so you have people 679 00:36:22,560 --> 00:36:26,640 Speaker 1: getting jobs in areas that are in need of people 680 00:36:26,719 --> 00:36:30,440 Speaker 1: but also are lower paid, which keeps the average hourly 681 00:36:30,520 --> 00:36:34,920 Speaker 1: earnings figure down. And on a three month annualized basis, 682 00:36:34,920 --> 00:36:37,920 Speaker 1: you're looking at three point six percent, which is the 683 00:36:37,960 --> 00:36:41,719 Speaker 1: lowest since twenty twenty one. So we are seeing progress 684 00:36:41,719 --> 00:36:44,640 Speaker 1: in all the areas the administration and the FED would 685 00:36:44,680 --> 00:36:48,200 Speaker 1: like to see. The only question here from here is 686 00:36:48,239 --> 00:36:52,640 Speaker 1: whether it's sustained and whether it has had any impact 687 00:36:52,760 --> 00:36:57,920 Speaker 1: on inflation. Well, there's a lot there, and as we 688 00:36:58,000 --> 00:37:01,759 Speaker 1: consider the president's budget here, Michael, I wonder how you 689 00:37:01,800 --> 00:37:05,080 Speaker 1: see these overlapping, because the Republican Party would tell you 690 00:37:05,160 --> 00:37:08,479 Speaker 1: this president's budget will add to inflation, not make it worse, 691 00:37:08,480 --> 00:37:10,879 Speaker 1: and he's asking for things that he knows he cannot get. 692 00:37:12,400 --> 00:37:14,520 Speaker 1: How do you how does this all come together in 693 00:37:14,560 --> 00:37:17,799 Speaker 1: the mix on Capitol Hill? Well, I think I think 694 00:37:18,360 --> 00:37:20,520 Speaker 1: you know as well as I do, Joe, that the 695 00:37:20,520 --> 00:37:24,920 Speaker 1: budget the President put forward is a talking point. The 696 00:37:26,440 --> 00:37:28,200 Speaker 1: Republicans are going to put out a budget that's a 697 00:37:28,239 --> 00:37:31,759 Speaker 1: talking point, but both will take the extreme positions that 698 00:37:32,360 --> 00:37:36,279 Speaker 1: their constituencies would like. Well, the inflation conversation, though, drive 699 00:37:36,360 --> 00:37:39,000 Speaker 1: the end product or the detached in reality. I don't 700 00:37:39,000 --> 00:37:42,920 Speaker 1: think it's the inflation conversation. It's the debt issue that 701 00:37:43,080 --> 00:37:47,839 Speaker 1: Republicans are really exercised about and their view, their view 702 00:37:47,960 --> 00:37:50,359 Speaker 1: is the size of the debt is way too big 703 00:37:50,400 --> 00:37:52,000 Speaker 1: now and it's only going to grow more. And we 704 00:37:52,080 --> 00:37:56,000 Speaker 1: have that CBO report uh that says, well, you don't 705 00:37:56,120 --> 00:38:00,160 Speaker 1: see fifty trillion dollars in debt in ten years. And 706 00:38:00,320 --> 00:38:03,279 Speaker 1: the Democrats will look at the fact that the dead 707 00:38:03,360 --> 00:38:06,280 Speaker 1: is sustainable at these levels as long as we're growing 708 00:38:06,320 --> 00:38:10,440 Speaker 1: fast enough to pay it, and we're not going to 709 00:38:10,480 --> 00:38:16,160 Speaker 1: have interest rates above five percent for ten years, so 710 00:38:16,960 --> 00:38:20,759 Speaker 1: they don't see it as a bigger issue to me 711 00:38:20,840 --> 00:38:25,000 Speaker 1: that I'll just speak as an economist here. Yeah, I'll 712 00:38:25,040 --> 00:38:28,759 Speaker 1: step back and say the failure of both sides is 713 00:38:28,800 --> 00:38:32,680 Speaker 1: that they're not looking at what needs to be done holistically. 714 00:38:33,560 --> 00:38:37,280 Speaker 1: There are a lot of programs that probably don't work 715 00:38:37,400 --> 00:38:42,640 Speaker 1: very well that could see smaller funding. Everybody has a constituency, though, 716 00:38:42,680 --> 00:38:45,440 Speaker 1: and so it's really hard to do that. But nobody 717 00:38:45,520 --> 00:38:47,560 Speaker 1: is looking at what would it take to grow the 718 00:38:47,640 --> 00:38:51,160 Speaker 1: economy faster. A Republican view is tax cuts, grow the 719 00:38:51,160 --> 00:38:55,280 Speaker 1: economy faster. Doesn't happen. Democratic view is that the government 720 00:38:55,320 --> 00:38:59,120 Speaker 1: needs to be more involved in the planning that hasn't 721 00:38:59,160 --> 00:39:01,279 Speaker 1: worked in the past. They need to look at the 722 00:39:01,360 --> 00:39:05,680 Speaker 1: programs that will help now that Inflation Reduction Act. You 723 00:39:05,680 --> 00:39:07,799 Speaker 1: can argue about climate change all you want, but the 724 00:39:07,840 --> 00:39:10,719 Speaker 1: fact that they're going to spend money on infrastructure that's 725 00:39:10,760 --> 00:39:12,719 Speaker 1: going to be good for the economy in the long run. 726 00:39:12,960 --> 00:39:15,319 Speaker 1: It doesn't help immediately, and so it's a little bit 727 00:39:15,320 --> 00:39:18,040 Speaker 1: of a hard political cell. But the whole idea of 728 00:39:18,120 --> 00:39:23,319 Speaker 1: childcare and getting making it possible for more women to work, 729 00:39:23,400 --> 00:39:28,200 Speaker 1: which then creates more wealth in the economy, that's just 730 00:39:28,239 --> 00:39:30,680 Speaker 1: sort of one of those fundamental disagreements between the two 731 00:39:30,719 --> 00:39:33,200 Speaker 1: sides that an economists would tell you would be good 732 00:39:33,200 --> 00:39:35,759 Speaker 1: for the ecop and it won't be resolved, and it 733 00:39:35,800 --> 00:39:39,720 Speaker 1: won't be resolved anytime soon. Thanks for the insights Michael 734 00:39:39,800 --> 00:39:43,000 Speaker 1: McKay and always helping us decipher what we're hearing on 735 00:39:43,040 --> 00:39:45,279 Speaker 1: the data and from the administration for that matter. Thanks 736 00:39:45,320 --> 00:39:47,400 Speaker 1: for listening to the Sound On podcast. Make sure to 737 00:39:47,440 --> 00:39:50,640 Speaker 1: subscribe if you haven't already an Apple, Spotify, and anywhere 738 00:39:50,640 --> 00:39:53,040 Speaker 1: else you get your podcasts, and you can find us 739 00:39:53,040 --> 00:39:56,640 Speaker 1: live every weekday from Washington, DC at one pm Eastern time. 740 00:39:57,040 --> 00:39:58,240 Speaker 1: Bloomberg dot com