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Speaker 2: Welcome to the Friday edition here on Bloomberg Radio on
Speaker 2: the satellite radio channel one twenty one.
Speaker 3: We see you on YouTube? Do you see us?
Speaker 2: Search Bloomberg Business News Live. Having survived the voter rama,
Speaker 2: we'll talk about this. Yes, Senators, we're working at four
Speaker 2: forty five in the morning. Were you not that often?
Speaker 2: Make up for it after spending so many hours outside
Speaker 2: of the nation's capital. We actually got a vote. Something
Speaker 2: actually happened in Washington. Actual news. As we stand by
Speaker 2: to hear from Donald Trump. Well he's talking right now
Speaker 2: now in the White House. When they play it back,
Speaker 2: we'll have it for you. Addressing the governor's working session,
Speaker 2: generating a boatload of headlines. As you just heard from
Speaker 2: Charlie Pellett, twenty five percent auto Tariff's unlocking energy for
Speaker 2: AI will get there.
Speaker 3: He's got lunch today with j d Vance I'm gonna
Speaker 3: swear in.
Speaker 2: How Howard Lutnik as the Secretary of Commerce a little
Speaker 2: bit later on, and then we'll do the EO dance.
Speaker 2: I heard Carol Master talking earlier, says Bloomberg. Business Week
Speaker 2: is now the EO show. I see you too, Carol.
Speaker 3: But of course we'll bring this to you as it
Speaker 3: all happens.
Speaker 2: See pac taking a place just a little bit down
Speaker 2: the Potomac River byron Donald's and Press Secretary Caroline leve
Speaker 2: at the headliners. Christy Nome's going to be there as well,
Speaker 2: the featured official at tonight's Ronald Reagan dinner. So the
Speaker 2: voter rama, imagine four forty five am, what do we have?
Speaker 2: Everybody but Ran Paul on board at least for Republicans.
Speaker 2: Fifty two forty eight, three hundred and forty billion dollar budget.
Speaker 2: There's your framework. They got it done. What Lindsey Graham
Speaker 2: was talking about as a plan B yesterday, Yeah, it happened.
Speaker 2: But before you get real excited, I want you to
Speaker 2: take a look at what Terry Haynes is saying about
Speaker 2: this whole thing. This week's good news, bad news on
Speaker 2: the tax cuts bill, on net markets positive, But here's
Speaker 2: the problem. Terry says, you're gonna have to wait a
Speaker 2: long time, remembering, of course, the government's gonna run out
Speaker 2: of money in the middle of March. Terry Haynes says
Speaker 2: markets will not see a final tax cut bill action
Speaker 2: until the second half the calendar year, probably not the
Speaker 2: fourth quarter. Same basic timetable as twenty seventeen.
Speaker 3: So what does that mean? Markets think.
Speaker 2: Things as negative like tariffs will front run by months
Speaker 2: the positive parts of the.
Speaker 3: Trump economic agenda. So what's Wall Street going to look
Speaker 3: like by then?
Speaker 2: Terry Haynes joins us right now, the founder of Pangea
Speaker 2: Policy on Bloomberg TV and radio. Every now and then,
Speaker 2: I got a crack at Terry. It's great to have
Speaker 2: you back, sir, Happy Friday. That doesn't sound good to
Speaker 2: me when you market's negative. If we're waiting around to
Speaker 2: the fourth quarter to get this tax and spend bill done,
Speaker 2: what will Wall Street do in the meantime?
Speaker 4: They will use one of the great press words. Now,
Speaker 4: they'll fret. They'll fret a lot, and you know, meanwhile,
Speaker 4: other things will happen and they might be good or
Speaker 4: they might be bad. Earnings might be good, geopolitical risk
Speaker 4: might be bad whatever you know it's but it is
Speaker 4: a It's another testament to the difference between political time
Speaker 4: and markets time. You know, some of your colleagues have
Speaker 4: been opining and speculating and seriously, I mean they're they're
Speaker 4: reflecting markets by saying so wondering what you know, like
Speaker 4: where the tax bill is. And you know, the president
Speaker 4: was inaugurated one month and one day ago and Congress
Speaker 4: has been around for two weeks longer than that. This
Speaker 4: takes a while, as you well know, and the audience
Speaker 4: well knows, because there's lots of hoops to jump through,
Speaker 4: and including figuring out what the budget is, figuring out
Speaker 4: what the deficit is, and that's really the starting gun.
Speaker 4: Once they do that, then they could get into the
Speaker 4: specifics on the tax bill, and that takes probably the
Speaker 4: second half of the year, just like twenty seventeen.
Speaker 3: Yep, how about that.
Speaker 2: History is our guide here, at least to some extent.
Speaker 2: This is a different political environment that we're in now.
Speaker 2: There's a much thinner majority for Republicans in the House.
Speaker 2: It could be one member at that point. I guess
Speaker 2: we'll have to wait and see how that goes. When
Speaker 2: at least to phonic heads to the un But I
Speaker 2: just big picture, Terriet, where's your head around this whole thing.
Speaker 2: We've got the House set to vote on something next week,
Speaker 2: and it seeks to cut Medicaid spending to help pay
Speaker 2: for the tax cuts. And we're already hearing a lot
Speaker 2: of outcry about this. Republican members have been home for
Speaker 2: the week. They're holding town halls, They're hearing concerns about
Speaker 2: Doge in some cases going over the line Medicaid. What
Speaker 2: are you going to do with my entitlements here? And
Speaker 2: it's going to make this a knockdown, drag out. I
Speaker 2: guess that's why you see it lasting all year. But
Speaker 2: who's going to win this fight between the Senate and
Speaker 2: the House.
Speaker 3: I don't know yet.
Speaker 4: Frankly, you know, I thought Senator Graham was quite right
Speaker 4: to say everybody needs a Plan B, and you know,
Speaker 4: be may well turn into Plan A. There's no guarantee that,
Speaker 4: given the margins that you just ran down, that the
Speaker 4: House will end up having the votes for much of anything.
Speaker 4: I mean, we you know, we're not even to the point.
Speaker 4: This is how preliminary it is. We're not even to
Speaker 4: the point where the Committee of juror the Committeees of Jurisdiction,
Speaker 4: Energy and Commerce in ways and means even get to
Speaker 4: start talking about exactly what sort of health efficiencies or
Speaker 4: cuts or anything else they might make. But they've got
Speaker 4: to make a lot of them. Their task to make
Speaker 4: a lot of them. So that is going to be
Speaker 4: a knockdown drag out through the spring. And then on
Speaker 4: top of that, I think what shakes markets further in
Speaker 4: Washington confidence over the next few weeks is you're going
Speaker 4: to have a State of the Union address that'll be
Speaker 4: you know, a barn Burner triumphalist. Going forward, you'll have
Speaker 4: a likely i think, government shutdown. You've got debt ceiling
Speaker 4: looming out there the late spring, early summer. There's not
Speaker 4: going to be a lot of confidence in the next
Speaker 4: few weeks in markets that Washington or Trump specifically have
Speaker 4: got the goods to actually execute. Now. I think they
Speaker 4: do want the task cut ultimately, but they're going to
Speaker 4: have to go through a trough first.
Speaker 3: Boy, you just said a lot.
Speaker 2: By the way, this is exactly what Sarah Chamberlin mentioned
Speaker 2: last evening on Balance of Power Republican Main Street Partnership. Yeah,
Speaker 2: shutdown looking like it may actually happen this time. But
Speaker 2: we've got a House resolution Terry that we're told is
Speaker 2: going to be on the floor next week. It includes
Speaker 2: instructions for the House Energy and Commerce Committee to find
Speaker 2: eight hundred and eighty billion dollars in cuts. That's why
Speaker 2: we're talking about Medicaid and potentially some of the other entitlements.
Speaker 2: Can that pass literally actually goes to the floor next week.
Speaker 4: Well, the budget resolution is on is on a knife
Speaker 4: edge right now. I think the budget resolution passes. What
Speaker 4: you just talked about in terms of Medicaid and all
Speaker 4: those kinds of other sorts of things is implied in
Speaker 4: the amount of savings that they're asked to do. But
Speaker 4: nobody's telling them they have to find that amount. Nobody's
Speaker 4: telling Energy and Commerce they have to find that amount
Speaker 4: of savings in medicaid. So, you know, somebody, somebody can
Speaker 4: vote on this thing. Feel covered. But when Energy and
Speaker 4: Commerce comes back in a few weeks and says here's
Speaker 4: how we're going to do this, that's really where the
Speaker 4: rubber meets the road, and you know, frankly, where I
Speaker 4: think some revolt happens. You know, the phrase it keeps
Speaker 4: going around is from uh is from Aaron Sorkin's a
Speaker 4: few good men. Where where the colonel is? It keeps
Speaker 4: getting asked by the processutor, by the defense. You know,
Speaker 4: you said Santiago was not to be touched, you know,
Speaker 4: and yet uh you said Medicaid was not to be touched.
Speaker 4: And yet here we are, you know, yet worse siority
Speaker 4: before it gets better.
Speaker 2: I think Terry Haynes, did you order the code read?
Speaker 2: I want you to walk me into the House Chamber
Speaker 2: the night Donald Trump addresses a joint session of Congress.
Speaker 2: We'll call it State of the Union for the fun
Speaker 2: of it. It's basically the same deal. Decorum.
Speaker 3: Is this going to be a.
Speaker 2: A call in response like Joe Biden had going with
Speaker 2: the Republican cons What's Donald Trump walking into that night?
Speaker 3: It's going to be another circus, isn't it?
Speaker 5: Oh?
Speaker 4: You know, I thought I thought Patrick McHenry on your
Speaker 4: on your program yesterday had it exactly right. It's going
Speaker 4: to be an awful lot like the UK Parliament's PMQ's
Speaker 4: uh and you know I won't belabor it, but uh
Speaker 4: McHenry is uh spot is a keen observer spot on
Speaker 4: about that. Yeah, there's gonna be a lot of yelling
Speaker 4: and screaming one way or the other, and there's gonna
Speaker 4: be a lot of people screaming, you lie, except it's
Speaker 4: going to be the other party this time.
Speaker 3: Boy, where's Chris Congressman Wilson? Now?
Speaker 2: All right, well, Terry, the president's going to be speaking
Speaker 2: in a moment here. He's talking about twenty five percent
Speaker 2: auto tariffs in our remaining thirty seconds.
Speaker 3: Do those ever see implementation?
Speaker 4: Yeah? I think eventually some of them do. I don't
Speaker 4: think thirty seconds or excuse me, thirty percent necessarily, but there
Speaker 4: will be a need to keep the pressure on, and
Speaker 4: we should always remember tariffs to this administration or a
Speaker 4: tool in service of a broader economic policy. Reset.
Speaker 2: He's not only a friend of the program, but a
Speaker 2: friend of the entire network. There's only one Terry Haynes,
Speaker 2: the founder of Pangaea Policy. Terry, it's good to see you.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
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Speaker 2: Thirty headlines are flying out of the White House right
Speaker 2: now as Donald Trump speaks to Republican governors who are
Speaker 2: in town. Republican Governors Association Winter meetings underway. He was
Speaker 2: the headliner speaking to the group last evening, but this
Speaker 2: has been a romp. They've been going for almost an
Speaker 2: hour here right, My god, it has been an hour
Speaker 2: actually since he walked into the State dining room, commenting
Speaker 2: on a number of issues, including auto tariffs. If you're
Speaker 2: looking at the terminal, he says, yeah, twenty five percent
Speaker 2: tariffs on foreign cars to start April second. Probably talked
Speaker 2: about power plants and AI wants to see power plants
Speaker 2: built alongside data centers, AI production facilities, attacked wind energy,
Speaker 2: and started reading off some Doge projects. He's showing up
Speaker 2: with the receipts pretty much every time he's at a podium. Here,
Speaker 2: I can run through them all for you, but you've
Speaker 2: heard them on this program. Coming off a big night
Speaker 2: at the Sea Pack, now, President Trump's going to be
Speaker 2: the headliner there tomorrow, the Conservative Political Action Conference. It's
Speaker 2: happening down the Potomac River, a short ways from the
Speaker 2: nation's capitol. Big ferris Wheel. When you drive down it
Speaker 2: looks like an amusement park, and it is a bit
Speaker 2: of a circus at Seapack.
Speaker 3: That's the point.
Speaker 2: Big Raw rod Elon Musk shows up last night literally
Speaker 2: with a chainsaw and started swinging it around.
Speaker 3: He's yelling. He was wearing terminator sunglasses and a lot
Speaker 3: of questions about the mood he was in.
Speaker 2: Have a little trouble communicating and answering questions last evening.
Speaker 2: In this case, he did all right. He was asked
Speaker 2: about the Doge dividend, sending checks to every American based
Speaker 2: on how much money they save.
Speaker 3: Here's how it went.
Speaker 6: It's money.
Speaker 4: It's taken away from from things that are destructive to
Speaker 4: the country.
Speaker 6: That and from organizations that hate you.
Speaker 3: To you, that's awesome.
Speaker 6: Does it seem I mean, have you talked that's like
Speaker 6: the spoils of battle?
Speaker 3: You know, I like that there traction on that, yeah, yeah, so.
Speaker 6: Yeah, uh yeah.
Speaker 4: Took the president he's supportive of that, and so it
Speaker 4: sounds like, you know, that's something we're going to do.
Speaker 2: Just a sample of the conversation on stage as we
Speaker 2: bring in Max Chafkin, Bloomberg BusinessWeek columnist contributor the Elon Inc.
Speaker 3: Podcast.
Speaker 2: If you're not already subscribed, you should check it out
Speaker 2: if you care about this story, and I know you do.
Speaker 2: If you're here on Bloomberg, Max, it's great to have you.
Speaker 2: If you only knew how often I ask if you
Speaker 2: can come on the program, because it's like it's every
Speaker 2: day there's a story that I'd like to hear you
Speaker 2: weigh in on. So let's go a little bit big
Speaker 2: picture to start. As you just saw Elon Musk with
Speaker 2: the sunglasses. He's got the tech Support T shirt on
Speaker 2: half the time is swinging around a chainsaw and so look, yes,
Speaker 2: but so is he having a blast? Is this a hobby?
Speaker 2: Is this his new full time occupation? Where where does
Speaker 2: Elon Musk the person here? If you're with us on YouTube,
Speaker 2: you see President Malay giving him this chainsaw?
Speaker 3: Is this just a big party for him?
Speaker 4: Max?
Speaker 7: I mean, he is certainly treating it that way, you know,
Speaker 7: and I think for better for worse. On the Sea
Speaker 7: Pack stage, you know, just judging from the audience response,
Speaker 7: as weird and awkward as some of these moments were,
Speaker 7: you know, it seemed like it played pretty well in
Speaker 7: the room. And he is he is a rock star
Speaker 7: in kind of activist conservative circles. He's probably the most
Speaker 7: important surrogate for Donald Trump besides Donald Trump. I think
Speaker 7: there is a serious component here, both in terms of
Speaker 7: what Musk is actually doing. I mean, you know, people
Speaker 7: are being affected in huge ways right now by these
Speaker 7: doge cuts, and civil servants are in a state of,
Speaker 7: i think, from from their point of view, crisis. And also,
Speaker 7: of course there's potential for Musk to benefit from this stuff.
Speaker 7: You know, just just recently seeing reports that the Justice
Speaker 7: Department lawsuit against SpaceX looks like it might be dropped.
Speaker 7: This is involving employing alleged discrimination. You know, there are
Speaker 7: lots of ways that he can use this stick to
Speaker 7: drive profits. And that's kind of what makes it so
Speaker 7: interesting is that on one hand, it seems totally unserious.
Speaker 7: I mean, he's on stage, he's got the chain, you
Speaker 7: can barely he can't hear what he's saying, partly because
Speaker 7: he seems to seems to have trouble finding his words
Speaker 7: at times, but also because the chain is rattling against
Speaker 7: the microphone. And yet and yet he's doing all kinds
Speaker 7: of stuff. So so again it's it's it's a it's
Speaker 7: both serious and unserious at the same time.
Speaker 2: I'd say, well, so you said a couple of things
Speaker 2: there referring to his I guess erratic behavior we'll call it.
Speaker 2: He was having trouble stringing words together in a couple
Speaker 2: of moments last evening.
Speaker 3: That might just have been the mood he was in.
Speaker 2: Look, he's not a public speaker by trade, He's not
Speaker 2: Donald Trump, but there have been questions about his sobriety,
Speaker 2: about his mental state. Can you weigh in on that?
Speaker 7: Yeah, I mean, I obviously I have no idea what
Speaker 7: was what was going on in between his ears during
Speaker 7: that during that appearance. You know, I'll say, Look, Elon Musk,
Speaker 7: as you said, is an unconventional guy. He's somebody who
Speaker 7: has publicly talked about his drug use. He you know,
Speaker 7: he famously smoked took a hit of a joint on
Speaker 7: the Joe Rogan podcast years ago, has talked about ketamine
Speaker 7: use for depression. He also talks about his own kind
Speaker 7: of mental health challenges all the time, you know, And
Speaker 7: I believe even during this appearance, it came up briefly
Speaker 7: talking about his mind being a storm. And so look
Speaker 7: like this is he's unconventional, and he's in some ways transparent,
Speaker 7: at least compared to like a typical political figure, and
Speaker 7: that's part of the peal I think.
Speaker 3: So he's got actual other jobs.
Speaker 2: He runs some pretty important companies, including a massive government contractor,
Speaker 2: and of course Tesla. We can get into Twitter and
Speaker 2: all the rest here. But his actions in Washington are
Speaker 2: impacting some consumer behavior. And I wonder if you see
Speaker 2: this becoming a detriment, for instance, to people who think
Speaker 2: it's a political statement to drive a Tesla.
Speaker 3: Well, yeah, we're seeing that already.
Speaker 7: And I mean, you know, there it's it's hard to
Speaker 7: know exactly how much politics is hurting Tesla's sales. You know,
Speaker 7: Tesla was growing very quickly for a long time. Growth
Speaker 7: has slowed dramatically. You know, the ev industry has also
Speaker 7: had you know, bumps in the road and so on.
Speaker 7: But it really does seem like in the US and Europe,
Speaker 7: where where a lot of Tesla sales come from, the
Speaker 7: sales are slowing down, and that slowdown has coincided with
Speaker 7: Musk's political profile raising. I also think there are potential
Speaker 7: political costs. We're starting to see just the beginnings of
Speaker 7: blowback on the right to some of this stuff. Now,
Speaker 7: you're not going to see this at sapack. You know,
Speaker 7: you're talking about you know, died in the wool, active
Speaker 7: as people who really like Elon Musk. But you know,
Speaker 7: reports in a front page story in the Washington Post
Speaker 7: about cabinet officials kind of privately grumbling. You know, Politico
Speaker 7: did a story about law some Congress people sort of worrying.
Speaker 7: You know, each of these cuts has impact and will
Speaker 7: have political costs, you know, right, we Bloomberg has a
Speaker 7: story today about how one of Musk's DOGE employees, who
Speaker 7: was who resigned after these eugenics reports that he had
Speaker 7: expressed support for eugenics. He's back, and he's inside the
Speaker 7: Social Security Administration. Right, social Security affects a lot of people.
Speaker 7: You know, there's a good chance this is not going
Speaker 7: to be super popular when we get to the midterm.
Speaker 2: Yeah wow, all right, tell me about his day to
Speaker 2: day to the extent that we know, is he's sleeping
Speaker 2: on the floor like he was at Twitter. Does he
Speaker 2: have some kind of a you know, a penthouse patt
Speaker 2: he's living in in Washington? Does he fly back and
Speaker 2: forth to Texas? I don't understand how he does all
Speaker 2: of this stuff, How's he spending all these plates at once?
Speaker 7: Well, I mean he's done this kind of thing for years,
Speaker 7: where he will focus in on one thing. So when
Speaker 7: Tesla was preparing to release the Model three that was
Speaker 7: its affordable sedan back in twenty eighteen, he claimed to
Speaker 7: be sleeping at the factory. When he took over X,
Speaker 7: he claimed to be sleeping at the X office, right,
Speaker 7: and he seems to sort of push everything aside, and
Speaker 7: right now as you say it's doge, he has said
Speaker 7: that he is sleeping at the Eisenhower Executive Office building.
Speaker 7: I think Musk has a tendency to kind of play
Speaker 7: this stuff up like it would not surprise me if
Speaker 7: he also had a hotel room or whatever. But he
Speaker 7: really is. I mean, he is spending a lot of
Speaker 7: time on this and of course spending a ton of
Speaker 7: time just staying on Twitter and posting. I mean, you
Speaker 7: look at the schedule, it is it boggles the normal mind.
Speaker 7: I mean it's a you know, he's posting essentially nearly
Speaker 7: twenty four to seven. So you got to ask yourself, like,
Speaker 7: when is this guy sleeping and how is this going
Speaker 7: to affect his other companies.
Speaker 2: This is exactly the conversation I wanted to have. And
Speaker 2: by the way, sleep deprivation may have a lot to
Speaker 2: do with his erratic behavior, right, this is something that
Speaker 2: we need to allow.
Speaker 3: Max.
Speaker 2: I know I'm asking you a lot of the same
Speaker 2: questions you're asking people in elon Musk's orbit. But what's
Speaker 2: the end game here? I mean, does he just finally
Speaker 2: get bored or how does he wrap this thing up
Speaker 2: when the first year is done with those he just
Speaker 2: moves back to Texas?
Speaker 7: Well, It's interesting, I mean, right now, he seems pretty committed.
Speaker 7: And there had been thoughts that this could be just
Speaker 7: a passing fixation or something like that, or perhaps Trump
Speaker 7: would get tired of him. That doesn't seem like it's
Speaker 7: happening anytime soon. As you brought up, Trump still kind
Speaker 7: of touting Doge at every turn. I think what would
Speaker 7: cause Musk to step away would be genuine trouble at
Speaker 7: his companies. And the truth is, we haven't seen that,
Speaker 7: right investors in Tesla. Tesla stock hasn't been doing great
Speaker 7: over the last six weeks or so, but it's stock
Speaker 7: is still way up After the election. Most Tesla investors
Speaker 7: think Musk's position, you know, with respect to Donald Trump,
Speaker 7: his being a senior advisor to one of the most
Speaker 7: powerful people in the world is a net positive for
Speaker 7: the company, and the stock reflects that. And all of
Speaker 7: Musk's companies right now are essentially up. You know, SpaceX
Speaker 7: is trying to raise a megavaluation, and why wouldn't they, right,
Speaker 7: they're in a great position to win more contracts, which
Speaker 7: we you know, we Bloomberg has been reporting on twitter
Speaker 7: X they're trying to raise money at a higher valuation.
Speaker 7: So basically he's up across the board. So I think
Speaker 7: the thing that could change it, I mean, I think
Speaker 7: the biggest priority for Elon Musk really are these businesses,
Speaker 7: and that's part of why he's doing this. And if
Speaker 7: the businesses clearly are hurting, if the valuations are falling,
Speaker 7: then we'll see movement.
Speaker 2: Really glad you could join us, Max, It's good to
Speaker 2: see a Max Chafkin. Check out the Elon and podcast.
Speaker 2: Follow his work at Bloomberg BusinessWeek. Great conversation here on
Speaker 2: balance of power. Do you hear about the desk? By
Speaker 2: the way, did hear the story coming into the the hour?
Speaker 3: Here?
Speaker 2: Donald Trump on truth social remember Elon Musk. You were
Speaker 2: just seeing it on YouTube. He brought as kid want
Speaker 2: you into the Oval Off is picking his nose at
Speaker 2: the remember this whole thing. Donald Trump does not like
Speaker 2: that germophobe. He had the desk, the Resolute desk removed.
Speaker 2: This is real untruth social quote. The president after election
Speaker 2: gets a choice of one in seven desks. He writes
Speaker 2: this desk. The Cno, which was also very well known
Speaker 2: used by President George H. W. Bush and others, has
Speaker 2: been temporarily installed in the White House while the Resolute
Speaker 2: Desk is being lightly refinished. Very important job. This is
Speaker 2: a beautiful but temporary replacement. We'll let you know when
Speaker 2: the Resolute Desk goes back in there.
Speaker 3: I'm guessing.
Speaker 2: There won't be too many children around it. We'll assemble
Speaker 2: our panel next. Rick and Genie are where us coming up?
Speaker 2: Right here on Bloomberg.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
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Speaker 2: Great to have you with us here on the Friday
Speaker 2: edition of Balance of Power on Bloomberg Radio serious XM
Speaker 2: Channel one twenty one and on YouTube. You can find
Speaker 2: us on YouTube right now search Bloomberg Business News Live.
Speaker 2: He's still talking. President Trump has been talking now for
Speaker 2: almost an hour and a half without interruption as he
Speaker 2: addresses Republican governors who are in town for the RGA
Speaker 2: Governor's Association. They do their winter meetings here. Yeah, the
Speaker 2: headlines are still flying. He's talking about border policy at
Speaker 2: this point, as well as tariff's auto tariffs. He says
Speaker 2: twenty five percent will go into effect on imported cars
Speaker 2: on April second. Probably need to double the energy that
Speaker 2: we have right now. When he talks about AI allowing
Speaker 2: companies to have their own power plants, this has been
Speaker 2: an interesting conversation, talking about chip makers coming in, apple
Speaker 2: shifting plants because of tariffs, building plants in the US
Speaker 2: not Mexico.
Speaker 3: He says he met with Tim Cook yesterday and that
Speaker 3: was the result.
Speaker 2: We will bring you in the room for this once
Speaker 2: we get the tape playback from the White House. This
Speaker 2: is not something that was even supposed to be open
Speaker 2: to press. They decided to let reporters in. Once we
Speaker 2: get our hands on that tape. We'll have it for
Speaker 2: you here. Pretty remarkable as Donald Trump also pledges to
Speaker 2: drop illegal drug use by fifty percent, which is something
Speaker 2: he says could be done through an anti drug ad campaign.
Speaker 3: Paging Nancy Reagan.
Speaker 2: There's a lot more to talk about today, though, because
Speaker 2: something actually took place last evening. Well, I'll correct myself
Speaker 2: and say very early this morning on Capitol Hill.
Speaker 3: Do you see this?
Speaker 2: The Senate actually passed a budget resolution. Not a big shocker,
Speaker 2: following a voter rama that went on for so many hours.
Speaker 2: Four forty five am. They actually got a vote fifty
Speaker 2: two forty eight to pass a three hundred and forty
Speaker 2: billion dollar budget framework.
Speaker 3: Now, this is not the whole deal. This is really
Speaker 3: just the.
Speaker 2: Initial stage to create what I believe Patrick McHenry yesterday
Speaker 2: described as the chassis for the reconciliation process that will
Speaker 2: then follow. Now, Democrats had their way through a lot
Speaker 2: of amendments, didn't change anything in the end. Ran Paul
Speaker 2: is the one no vote on the Republican side. Chuck
Speaker 2: Schumer took to the floor said we were forced to
Speaker 2: go on record. The Republicans forced to go on record
Speaker 2: and defend their plans to cut taxes for Donald Trump's
Speaker 2: billionaire friends.
Speaker 3: It's done.
Speaker 2: The House will have its turn next week, and we
Speaker 2: assemble our signature political panel for their take on things.
Speaker 2: Rick and Jeanie are both with us on the Friday edition.
Speaker 2: Genie Shanzano, Senior Democracy Fellow at the Center for the
Speaker 2: Study of the Presidency in Congress, our Democratic analyst, and
Speaker 2: Rick Davis, Republican strategist partner at Stone Court Capital. Was
Speaker 2: it worth it, Jeanie? Democrats kept them up all night?
Speaker 2: What do they have to show for it?
Speaker 5: Well, Jill, first of all, you didn't let me in
Speaker 5: on what they had to eat and drink throughout the night.
Speaker 5: So I've been waiting with baited breath to see did
Speaker 5: they have any fun during this voterama? But it doesn't.
Speaker 2: You know, I saw a lot of boxes of what
Speaker 2: is it? We the pizza? That's the place, right, the pizza.
Speaker 2: May I may have seen some bottles of wine, but
Speaker 2: I won't go on the record.
Speaker 5: Don't say anything, you know. The reality is is that
Speaker 5: this came out the way we all expected it to
Speaker 5: a party line vote. Democrats did what they needed to do,
Speaker 5: which is ask Republicans to take some hard votes, and
Speaker 5: they took them. But the question now there're several. Number
Speaker 5: one is does Plan B become Plan A or can
Speaker 5: the House really move forward with this one bill? And
Speaker 5: of course, the big thing that's hanging over all of
Speaker 5: this is Donald Trump's promise just the other day again
Speaker 5: not to touch Medicaid and the reality of the numbers
Speaker 5: which make it very difficult to imagine how you can
Speaker 5: get to the trillions of dollars you need without touching Medicaid.
Speaker 5: And so that's what we're going to be waiting for.
Speaker 5: And all of the pressure and the onus is now
Speaker 5: on Mike Johnson, as it usually is.
Speaker 2: A couple of Republicans actually joined I kid, Genie, but
Speaker 2: a couple of Republicans joined Democrats.
Speaker 3: Rick.
Speaker 2: You may not be surprised to see Susan Collins one
Speaker 2: of them, But Josh Holly was the other, backing a
Speaker 2: Democratic amendment that would prohibit tax cuts for wealthy Americans
Speaker 2: if Medicaid funding is cut. Does that give us a
Speaker 2: sense of what might happen next in the House version?
Speaker 6: Yeah, I think that Josh Holly in this case is
Speaker 6: the canary and the mind shaft. I think, you know,
Speaker 6: he makes a point that is not lost on every
Speaker 6: Republican in the Senate. And part of the reason that
Speaker 6: they're doing this two step reconciliation is because they agree
Speaker 6: with Donald Trump. They don't want to touch that Medicare
Speaker 6: Medicaid payment. And what's buried inside of the House strategy is,
Speaker 6: you know, almost a trillion dollars in Medicaid cuts. Now
Speaker 6: nobody on the Senate side knows how to reconcile that,
Speaker 6: and I think, frankly, I was a little bit surprised
Speaker 6: that you didn't have more Republicans joining Holly in that vote,
Speaker 6: because they they will all tell you that this is
Speaker 6: not where they're taking their legislation. They'll look at the
Speaker 6: tax bill and find pay fors along the way, but
Speaker 6: it's not going to be the gutting of Medicaid like
Speaker 6: the House Republicans have done. So it just reinforces the
Speaker 6: Senate strategy, frankly, as being more sound.
Speaker 2: How about that Genie Speaker Johnson, you already said, is
Speaker 2: this work cut out for him? I mean, this could
Speaker 2: be impossible, but he says he's Steve Scalise, Tom Emmer.
Speaker 2: They have plans to get their resolution on the floor
Speaker 2: next week.
Speaker 3: Could that pass.
Speaker 5: It could pass, but it's going to be very, very difficult.
Speaker 5: I mean if you are a Republican in a moderate district,
Speaker 5: and several friends of this show, for instance, Nicole Malia
Speaker 5: Takis has already said she's leaning no on this budget
Speaker 5: resolution because you are a essentially walking yourself out of
Speaker 5: a job.
Speaker 4: You know.
Speaker 5: One of the reasons we keep talking about that Republicans
Speaker 5: have gone along with Donald Trump and the Trump administration
Speaker 5: on so much is that they fear a primary. But
Speaker 5: the reality for these moderates is also they fear what
Speaker 5: is going to be the commercials that showed that they
Speaker 5: were responsible for cutting medicaid and services to their constituents
Speaker 5: so that the wealthy could get an extended and expanded
Speaker 5: tax cut. And that is not a winning message. And
Speaker 5: so Democrats are on one corner salvating about this, hoping
Speaker 5: they continue forward marching. And you've got people like Maliatakis,
Speaker 5: and she's not alone in others who are from districts
Speaker 5: where they simply can't afford to make those kinds of decisions.
Speaker 5: And so I think it's very unlikely that the House
Speaker 5: is able to wean this together. And let's not forget
Speaker 5: all the other promises that Donald Trump has made about
Speaker 5: things he wants to see in this bill. So could
Speaker 5: it happen? I suppose it could, but it is going
Speaker 5: to be very damaging for Republicans in the midterm.
Speaker 2: We have breaking news here across in the terminal, and
Speaker 2: it brings us back to a story I believe the
Speaker 2: three of us were talking about right at this time yesterday,
Speaker 2: remembering that Judge dale Hoe was set to make a
Speaker 2: ruling on this effort by the Department of Justice to
Speaker 2: throw out the corruption charges against New York City Mayor
Speaker 2: Eric Adams, which then set off this whole series of
Speaker 2: events involving the governor. The judge chose not to make
Speaker 2: a ruling yesterday and has just ordered a probe of
Speaker 2: Donald Trump's Department of Justice motion to dismiss the case.
Speaker 2: This is just breaking right now, and we're going to
Speaker 2: be learning more about it through the day here, Rick.
Speaker 2: But now that the ruling has been made, did Governor
Speaker 2: Hulkel make the right move yesterday by setting up these
Speaker 2: so called guardrails and not moving to throw him out
Speaker 2: of office?
Speaker 6: Yeah? I think I was pretty outspoken yesually. When you
Speaker 6: asked you that question, I thought you sure threw this up.
Speaker 6: I think she sticking her nose in New York City politics,
Speaker 6: should have decided to one of two things, yank the
Speaker 6: mayor and create a vacuum that can be filled through
Speaker 6: the election this year, or keep her nose out and
Speaker 6: criticize but stay put in Albany. The mess she's created
Speaker 6: now is sort of a halfway measure that upsets everybody, frankly,
Speaker 6: and may be completely scuttled by this judge's potential to
Speaker 6: undermine the Department of Justice's case, you know, being thrown out.
Speaker 6: So this is a faster moving piece of information news
Speaker 6: then I think the governor probably predicted it would be,
Speaker 6: but her actions indicate that she's just not ready for
Speaker 6: prime time.
Speaker 2: Well, you were very clear about that yesterday, and we
Speaker 2: see the headline of the New York Times Genie facing
Speaker 2: Trump's threats, New York's governor adopts a Rambo at its.
Speaker 2: She actually invoked Rambo yesterday, Sylvester Stallone saying that Trump
Speaker 2: would answer for drawing first blood. Does your opinion on
Speaker 2: her action hear her decision change it all based on
Speaker 2: this judge's motion today, No.
Speaker 5: Not my opinion. And you're right about the language when
Speaker 5: she spoke yesterday, I listened very carefully. It was some
Speaker 5: of the toughest language we have heard. She described herself
Speaker 5: as a vanguard against the attacks by the president. I
Speaker 5: mean to hear this and to think about the fact
Speaker 5: that New York State and New York City are now
Speaker 5: pitted off against the President of the United States in
Speaker 5: this way. This is a national, if not international story.
Speaker 5: What is going on here. I am very surprised that
Speaker 5: the judge came out Judge Hoe and said that he
Speaker 5: is going to take more time. And I just heard
Speaker 5: this from you, Joe, so I haven't heard what he
Speaker 5: actually said. But keep in mind, we will hear attacks
Speaker 5: from this White House on Judge Hoe. He used to
Speaker 5: work for the ACLU. They will describe him once again
Speaker 5: like we have heard, probably unfairly as far as I know,
Speaker 5: as somebody who is doing the bidding of Democrats and
Speaker 5: liberal Democrats in the city. I'm not saying I believe that.
Speaker 5: I'm saying we will hear that rhetoric. You know, his
Speaker 5: role here was very limited. I'm not sure how you
Speaker 5: go forward as a judge and say that, yeah, get
Speaker 5: more information, but can you require the DOJ to prosecute
Speaker 5: when they've said they don't want to. I'm hard pressed
Speaker 5: to imagine that's the case. But from the democratic side,
Speaker 5: what we're hearing is many New Yorkers are saying, Kathy Hochel,
Speaker 5: you know, these courts are the first to stand up
Speaker 5: as a bulwark against what they see as a ravage,
Speaker 5: a chainsaw as you were just talking about that Elon
Speaker 5: Musk is taking to the federal government from Donald Trump
Speaker 5: and his team. I don't think the law fair notion
Speaker 5: works so well for them politically, but they feel like
Speaker 5: they want somebody to respond. So this is what they
Speaker 5: are getting. And I am very surprised that the judge
Speaker 5: said he's going to take more time on this.
Speaker 2: Yeah, we're going to have a probe into this effort. Apparently,
Speaker 2: the guardrails Rick that Kathy Hochel announced following our talk
Speaker 2: yesterday when we heard that some sort of sanction might
Speaker 2: be coming include a special ig for New York City
Speaker 2: Affairs and Inspector General. Also gives the Controller, who we
Speaker 2: had on the late edition of Balance of Power last evening,
Speaker 2: an independent authority to commence litigation against the federal government
Speaker 2: when necessary. The New York's going to start suing here,
Speaker 2: what's this going to look like?
Speaker 3: Yeah, I'm a bit of a mess.
Speaker 6: You know, you wonder why Kathy Hochel didn't spend more
Speaker 6: time attacking the Biden administration when COVID restrictions incapacitated our
Speaker 6: city and a lot of people moved down to Florida,
Speaker 6: or when the you know, incredible amount of financial distress
Speaker 6: caused by inflation created a hardship for her constituents in
Speaker 6: New York. And you know, I just got to believe
Speaker 6: that so much of this is just kind of you know,
Speaker 6: political rhetoric that's not going to mount much. I mean, yeah,
Speaker 6: let's go sue the federal government, you know, knock yourselves out.
Speaker 6: As if there aren't enough lawsuits against the federal government
Speaker 6: right now today, probably more than they've ever seen in
Speaker 6: fifty years. In the first month of this administration hadn't
Speaker 6: slowed him down a bit. So look, I mean, this
Speaker 6: idea of guardrails, so we're going to have an ig
Speaker 6: with no real power to start taking a look at
Speaker 6: Eric Adams. Everybody knows what Eric Adams has been up to.
Speaker 6: I mean, this has been the most well publicized corruption
Speaker 6: incident in New York city history. And you know, news
Speaker 6: traveled fast on this, and he's in the position where
Speaker 6: that's all he's going to do between now and November
Speaker 6: is answer for those charges, even though he's not going
Speaker 6: to be prosecuted by the federal government. And and so.
Speaker 3: I just spend the next four years ago little.
Speaker 2: Thanks for listening to the Balance of Power podcast. Make
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