1 00:00:02,520 --> 00:00:10,119 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,119 Speaker 1: noon and five pm Eastern on Apple, Cocklay and Android 4 00:00:17,160 --> 00:00:20,520 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:23,760 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,200 --> 00:00:27,160 Speaker 2: We want to get the latest out of Capitol Hill now, 7 00:00:27,200 --> 00:00:30,120 Speaker 2: because there is some key action taking place on the 8 00:00:30,200 --> 00:00:33,519 Speaker 2: Hill later this afternoon. The one we're focused on in 9 00:00:33,600 --> 00:00:36,159 Speaker 2: large part here on Bloomberg TV and Radio is the 10 00:00:36,200 --> 00:00:38,600 Speaker 2: action that will come in the Ways and Means Committee 11 00:00:38,640 --> 00:00:41,080 Speaker 2: their markup of their draft tax bill released last night, 12 00:00:41,159 --> 00:00:43,880 Speaker 2: schedule for two thirty pm Eastern time. And of course 13 00:00:43,880 --> 00:00:46,279 Speaker 2: that bill does a lot of things. It makes good 14 00:00:46,320 --> 00:00:49,360 Speaker 2: on some key campaign promises from President Trump, including of course, 15 00:00:49,360 --> 00:00:53,040 Speaker 2: an extension of the twenty seventeen tax cuts, no tax 16 00:00:53,080 --> 00:00:56,520 Speaker 2: on tipped income or overtime at least until twenty twenty eight. 17 00:00:56,880 --> 00:01:00,000 Speaker 2: It raises the endowment taxes high as twenty one percent, 18 00:01:00,560 --> 00:01:03,400 Speaker 2: It doesn't create a new tax bracket for the wealthy, 19 00:01:03,880 --> 00:01:06,880 Speaker 2: creates some deductions for auto loan interest, something else President 20 00:01:06,880 --> 00:01:09,880 Speaker 2: Trump wanted to see. And of course it lifts the 21 00:01:09,920 --> 00:01:12,720 Speaker 2: salt cap to thirty thousand dollars, up from the current 22 00:01:12,760 --> 00:01:15,480 Speaker 2: ten thousand dollars. The thing is, that's not enough for 23 00:01:15,520 --> 00:01:17,959 Speaker 2: a lot of those Republican members who live in blue 24 00:01:18,000 --> 00:01:21,400 Speaker 2: salt states like New York, including owned Republican Congressman Mike 25 00:01:21,480 --> 00:01:23,440 Speaker 2: Lawler of New York, who I spoke with about this 26 00:01:23,760 --> 00:01:25,280 Speaker 2: on Balance of Power last night. 27 00:01:26,200 --> 00:01:29,640 Speaker 3: This bill as written with a thirty thousand dollars cap 28 00:01:30,400 --> 00:01:35,280 Speaker 3: for those making under four hundred thousand, you know, is 29 00:01:35,440 --> 00:01:39,840 Speaker 3: just woefully inadequate. And so no, this does not have 30 00:01:39,920 --> 00:01:43,520 Speaker 3: my support. It will not have my support, and if 31 00:01:43,520 --> 00:01:45,720 Speaker 3: this bill comes to the floor for a vote, I 32 00:01:45,800 --> 00:01:46,440 Speaker 3: will vote no. 33 00:01:49,080 --> 00:01:52,280 Speaker 2: For more, we turn to someone who has experience with 34 00:01:52,400 --> 00:01:55,120 Speaker 2: navigating tax packages like this and markups like the one 35 00:01:55,120 --> 00:01:57,640 Speaker 2: that will take place today, as the former chair of 36 00:01:57,680 --> 00:02:00,280 Speaker 2: the House Ways and Means Committee, Congressman Kevin Brady's Fairman, 37 00:02:00,320 --> 00:02:02,800 Speaker 2: Kevin Brady is joining me now he's now spokesman for 38 00:02:02,840 --> 00:02:06,800 Speaker 2: the Alliance for Competitive Taxation. Welcome back to Balance of Power, 39 00:02:06,960 --> 00:02:09,840 Speaker 2: mister Chairman. When you look at this package as a 40 00:02:09,880 --> 00:02:12,360 Speaker 2: whole and the many different components in it, is its 41 00:02:12,400 --> 00:02:16,680 Speaker 2: biggest weakness. Potentially, this lower than expected lift to the 42 00:02:16,720 --> 00:02:19,080 Speaker 2: SALT cap at least for these SALT members. Could that 43 00:02:19,120 --> 00:02:20,639 Speaker 2: actually tank this entire thing? 44 00:02:21,960 --> 00:02:23,800 Speaker 4: You know it could, Kaylee. Good to see us. So 45 00:02:23,960 --> 00:02:27,680 Speaker 4: it is a big day in Washington, d C. You know, 46 00:02:27,840 --> 00:02:30,480 Speaker 4: when the tax bill gets introduced. While it's not the 47 00:02:30,520 --> 00:02:34,200 Speaker 4: final step, it is a huge step. So starting today 48 00:02:34,200 --> 00:02:35,960 Speaker 4: in about an hour, we're going to see the way 49 00:02:36,000 --> 00:02:40,799 Speaker 4: he means, Committee take this bill up, address amendments, ultimately 50 00:02:40,840 --> 00:02:45,640 Speaker 4: pass out hopefully sometime late tomorrow. And it's a big step. 51 00:02:46,000 --> 00:02:48,880 Speaker 4: So the President should be pleased here. Certainly, his priorities, 52 00:02:48,919 --> 00:02:51,400 Speaker 4: as you pointed out, making so much of the Tax 53 00:02:51,480 --> 00:02:55,120 Speaker 4: Cuts and Jobs Act permanent, you know, preserving and improving 54 00:02:55,200 --> 00:02:59,440 Speaker 4: upon the middle class tax cuts, keeping that small business 55 00:02:59,440 --> 00:03:02,720 Speaker 4: deduction first time we've ever created that twenty seventeen, and 56 00:03:02,840 --> 00:03:06,280 Speaker 4: expanding it some I think very important as well. His 57 00:03:06,400 --> 00:03:09,679 Speaker 4: priorities as you pointed out, about three hundred billion dollars 58 00:03:10,040 --> 00:03:13,720 Speaker 4: in tax relief on tips and overtime for Social Security, 59 00:03:13,760 --> 00:03:16,919 Speaker 4: and some help on car loans for American madattos. All 60 00:03:16,960 --> 00:03:20,040 Speaker 4: I think big priorities for him as well. Certainly to 61 00:03:20,080 --> 00:03:25,000 Speaker 4: your point, the SALT the spending savings number is still 62 00:03:25,080 --> 00:03:26,639 Speaker 4: up in the air, going to be a big part 63 00:03:26,680 --> 00:03:29,320 Speaker 4: of this assault number is still up in the air 64 00:03:29,360 --> 00:03:34,120 Speaker 4: as well. I'm confident they will find a common ground here, 65 00:03:34,160 --> 00:03:38,000 Speaker 4: but I will just point out in twenty seventeen, only 66 00:03:38,080 --> 00:03:42,080 Speaker 4: eight counties in all of America have an average salt 67 00:03:42,080 --> 00:03:45,800 Speaker 4: deduction of more than thirty thousand. Today it's gotten somewhat bigger. 68 00:03:46,080 --> 00:03:49,960 Speaker 4: But the point being, you are, you know, devoting about 69 00:03:50,000 --> 00:03:54,839 Speaker 4: three hundred billion dollars or so to a relatively few 70 00:03:54,920 --> 00:03:58,360 Speaker 4: number of counties, to a few number of taxpayers, And 71 00:03:58,440 --> 00:04:02,080 Speaker 4: obviously for both the President and tax riders, they're trying 72 00:04:02,120 --> 00:04:04,760 Speaker 4: to juggle that against the numbers, the cap they have 73 00:04:05,600 --> 00:04:08,760 Speaker 4: on deficits here, and also the fact that what they're 74 00:04:08,800 --> 00:04:13,360 Speaker 4: doing in middle class families and small businesses all that's 75 00:04:13,480 --> 00:04:17,159 Speaker 4: huge expensive. So yeah, there is a lot more, a 76 00:04:17,160 --> 00:04:21,080 Speaker 4: lot more conversations to be had both as it goes 77 00:04:21,080 --> 00:04:24,560 Speaker 4: to the floor next week as schedulemen through the Senate. 78 00:04:24,839 --> 00:04:27,360 Speaker 4: Still a lot of work left to be done. 79 00:04:28,880 --> 00:04:31,120 Speaker 2: Well, and when we consider the price tag of all 80 00:04:31,160 --> 00:04:32,840 Speaker 2: of this, the Ways and Means Committee had a four 81 00:04:32,880 --> 00:04:35,800 Speaker 2: and a half trillion dollar cap essentially to the revenue 82 00:04:35,800 --> 00:04:37,960 Speaker 2: that could be lost over the next decade as a 83 00:04:37,960 --> 00:04:42,000 Speaker 2: result of this policy. In the Joint Taxation Committee Joint 84 00:04:42,000 --> 00:04:44,359 Speaker 2: Committee on Taxation says it actually is only going to 85 00:04:44,440 --> 00:04:47,480 Speaker 2: result in three point seven trillion dollars in lost revenue. 86 00:04:47,520 --> 00:04:50,080 Speaker 2: And I wonder if you see that as by design 87 00:04:50,200 --> 00:04:53,080 Speaker 2: that they purposefully left themselves some margin to work with 88 00:04:53,160 --> 00:04:54,160 Speaker 2: on some of these issues. 89 00:04:54,880 --> 00:04:57,159 Speaker 4: I think so, And for three reasons, they don't know 90 00:04:57,240 --> 00:04:59,560 Speaker 4: yet what that spending number is going to be at 91 00:04:59,600 --> 00:05:02,000 Speaker 4: the end of the day when it goes to the Senate. 92 00:05:02,160 --> 00:05:06,320 Speaker 4: That's Kaylee so key, because it's not only the key 93 00:05:06,400 --> 00:05:10,600 Speaker 4: to passing the bill, it's to unlocking the Senate baseline, 94 00:05:10,640 --> 00:05:13,880 Speaker 4: which allows tax writers to make more of these tax 95 00:05:13,960 --> 00:05:17,320 Speaker 4: cuts permanent. So saving's number is really big here. Again, 96 00:05:17,680 --> 00:05:20,840 Speaker 4: they haven't finished out the salt to issue. They're very 97 00:05:20,920 --> 00:05:24,840 Speaker 4: aggressive in the House on the Inflation Reduction Act, so 98 00:05:24,880 --> 00:05:27,200 Speaker 4: as that moves to the floor and through the Senate, 99 00:05:27,400 --> 00:05:29,320 Speaker 4: there may be some changes there. So I think it 100 00:05:29,360 --> 00:05:32,839 Speaker 4: was wise for them, and obviously for the fiscal conservatives. 101 00:05:33,080 --> 00:05:36,600 Speaker 4: You know, this is an effort to bring them into 102 00:05:36,600 --> 00:05:39,680 Speaker 4: the fold here, so I think it was they were 103 00:05:39,760 --> 00:05:44,240 Speaker 4: using some good strategy and good thinking and introducing this bill. 104 00:05:46,200 --> 00:05:48,280 Speaker 2: I also wonder as we consider our audience here on 105 00:05:48,320 --> 00:05:50,760 Speaker 2: Bloomberg TV and Radio. How do you think the business, 106 00:05:50,760 --> 00:05:54,440 Speaker 2: the corporate community should be looking at this package as 107 00:05:54,480 --> 00:05:56,919 Speaker 2: a whole. Knowing there was a lot of conversation around 108 00:05:57,120 --> 00:06:02,239 Speaker 2: sea salt in particular, c not like salt lake sea salt, 109 00:06:02,279 --> 00:06:05,280 Speaker 2: but like corporate state local tax deduction. I feel like 110 00:06:05,320 --> 00:06:08,159 Speaker 2: for some reason I have to make that clear, mister Chairman. 111 00:06:08,200 --> 00:06:10,760 Speaker 2: But the sea salt conversation, the question around whether or 112 00:06:10,760 --> 00:06:13,520 Speaker 2: not they would try to close the carry the interest loophole, 113 00:06:13,560 --> 00:06:17,680 Speaker 2: which they did not, is this actually the best kind 114 00:06:17,720 --> 00:06:20,160 Speaker 2: of package corporate America could have hoped for, short of 115 00:06:20,200 --> 00:06:22,719 Speaker 2: bringing down substantially the corporate tax rate itself. 116 00:06:23,680 --> 00:06:26,360 Speaker 4: Yeah, so I think to your point, yes, you know, 117 00:06:26,400 --> 00:06:29,880 Speaker 4: I think for corporations large or small, you know, keeping 118 00:06:29,960 --> 00:06:34,440 Speaker 4: that corpor rate as it as it is, not making permanent, 119 00:06:34,520 --> 00:06:38,000 Speaker 4: but fully restoring those three tax provisions so key to 120 00:06:38,120 --> 00:06:42,480 Speaker 4: innovation and competitiveness, like research and development, you know, in 121 00:06:42,680 --> 00:06:45,400 Speaker 4: full of the media expensing. I think five years is 122 00:06:45,480 --> 00:06:47,760 Speaker 4: what was in the bill. I think people would love 123 00:06:47,800 --> 00:06:50,680 Speaker 4: to make that permanent. But that's a big step by 124 00:06:50,720 --> 00:06:54,520 Speaker 4: itself in the international tax space, which is where we 125 00:06:54,720 --> 00:06:57,720 Speaker 4: made sure in twenty seventeen our US companies could compete 126 00:06:57,720 --> 00:07:00,280 Speaker 4: and win anywhere in the world, including your at home, 127 00:07:00,600 --> 00:07:04,000 Speaker 4: and when they succeeded bringing those profits an investment back 128 00:07:04,080 --> 00:07:08,080 Speaker 4: to the United States. The tax writers avoided any tax 129 00:07:08,160 --> 00:07:11,520 Speaker 4: hikes there, and I think sent a strong signal to 130 00:07:11,680 --> 00:07:15,960 Speaker 4: our foreign competitor competitors that their global tax is not 131 00:07:16,040 --> 00:07:20,320 Speaker 4: going to impact our progoth tax areas. So from that standpoint, 132 00:07:20,400 --> 00:07:24,080 Speaker 4: I think it was very strong. Certainly, there aren't corporate 133 00:07:24,880 --> 00:07:27,960 Speaker 4: salt restrictions in there which would have carved back would 134 00:07:27,960 --> 00:07:31,240 Speaker 4: have effectively been a backdoor approach on the corporate rate 135 00:07:31,320 --> 00:07:35,280 Speaker 4: and increase there. I think they're satisfaction there as well. 136 00:07:35,360 --> 00:07:38,040 Speaker 4: I think there is concern on the pass two side, 137 00:07:38,480 --> 00:07:41,400 Speaker 4: you know, restrictions on their ability to work around the 138 00:07:41,520 --> 00:07:45,840 Speaker 4: salt cap. I think everyone's trying to digest who who's 139 00:07:45,920 --> 00:07:50,920 Speaker 4: impacted by that into what degree. Certainly conservative heard race today, 140 00:07:51,000 --> 00:07:53,600 Speaker 4: but again tax writers are trying to find that balance 141 00:07:53,880 --> 00:07:57,240 Speaker 4: and will there will be changes made in this bill 142 00:07:57,280 --> 00:07:57,960 Speaker 4: as it goes. 143 00:07:57,840 --> 00:08:02,800 Speaker 2: Forward well, and obviously we'll learn more, hopefully about what 144 00:08:03,000 --> 00:08:06,080 Speaker 2: changes will look like after this markup concludes. However long 145 00:08:06,200 --> 00:08:08,520 Speaker 2: that takes, I've been told it could go well into 146 00:08:08,560 --> 00:08:11,560 Speaker 2: the night tonight. In ways and means, mister Chairman. But 147 00:08:11,640 --> 00:08:13,240 Speaker 2: of course it's not just ways and means that is 148 00:08:13,520 --> 00:08:16,520 Speaker 2: marking things up today. The House Energy and Commerce Committee 149 00:08:16,560 --> 00:08:18,960 Speaker 2: is as well. In fact, that starts sooner at two 150 00:08:19,040 --> 00:08:23,080 Speaker 2: pm Eastern time. They've saved, according to the Congressional Budget Office, 151 00:08:23,160 --> 00:08:25,800 Speaker 2: more than the eight hundred and eighty billion dollars in 152 00:08:25,880 --> 00:08:28,200 Speaker 2: cost savings that they were charged with. But as a result, 153 00:08:28,240 --> 00:08:31,760 Speaker 2: according to the CBO, thirteen point seven million people could 154 00:08:32,000 --> 00:08:36,440 Speaker 2: be kicked off Medicaid roles over the next decade. We've 155 00:08:36,480 --> 00:08:39,199 Speaker 2: heard from Republican Senator Josh Holly who says this is 156 00:08:39,280 --> 00:08:43,960 Speaker 2: morally wrong, politically suicidal for Republicans, And I wonder how 157 00:08:44,000 --> 00:08:46,920 Speaker 2: you yourself, from the outside now looking in view this 158 00:08:47,080 --> 00:08:49,880 Speaker 2: politically for Republicans as they consider their maps in twenty 159 00:08:49,920 --> 00:08:50,440 Speaker 2: twenty six. 160 00:08:51,679 --> 00:08:55,199 Speaker 4: So I will tell you from my experience with congressional 161 00:08:55,240 --> 00:08:59,599 Speaker 4: budget offs in twenty seventeen on healthcare, They're estimates of 162 00:08:59,760 --> 00:09:03,400 Speaker 4: who who is kicked off or kept on our healthcare 163 00:09:03,520 --> 00:09:08,959 Speaker 4: programs is usually woefully wrong and off by millions. And 164 00:09:09,040 --> 00:09:12,160 Speaker 4: in this case, I am skeptical about their conclusion. So 165 00:09:12,360 --> 00:09:14,800 Speaker 4: if you look at what the reforms for Medicaid are 166 00:09:15,200 --> 00:09:18,839 Speaker 4: so who might lose their coverage, those who are ineligible 167 00:09:18,960 --> 00:09:23,079 Speaker 4: to be covered by Medicaid, those who are here undocumented 168 00:09:23,480 --> 00:09:27,920 Speaker 4: and should not be eligible for Medicaid. Able bodied Americans 169 00:09:28,040 --> 00:09:32,160 Speaker 4: mainly men who are capable of working or going to 170 00:09:32,280 --> 00:09:36,320 Speaker 4: school or volunteering twenty hours a week. Certainly if they 171 00:09:36,400 --> 00:09:39,480 Speaker 4: want to stay Medicaid, they can take those steps to 172 00:09:39,640 --> 00:09:43,240 Speaker 4: do that. And then those who are impacted, perhaps by 173 00:09:43,360 --> 00:09:46,000 Speaker 4: reforms to the payment system. As you know, the way 174 00:09:46,080 --> 00:09:49,480 Speaker 4: we fund medicate it doesn't go to where people are at, 175 00:09:49,559 --> 00:09:52,480 Speaker 4: It goes where matching funds are at. States have gained 176 00:09:52,520 --> 00:09:55,880 Speaker 4: that to pretty large degree. So if you look at 177 00:09:55,920 --> 00:09:59,800 Speaker 4: the real reforms in Medicaid, it is it's hard to 178 00:10:00,080 --> 00:10:04,760 Speaker 4: agree with that number of thirteen million, and frankly, a 179 00:10:04,880 --> 00:10:09,319 Speaker 4: number of those individuals frankly aren't eligible for Medicaid in 180 00:10:09,360 --> 00:10:10,000 Speaker 4: the first place. 181 00:10:11,920 --> 00:10:14,200 Speaker 2: Okay, so perhaps you don't think this will be quite 182 00:10:14,240 --> 00:10:17,960 Speaker 2: as politically suicidal as Senator Holly is characterizing, if indeed 183 00:10:18,000 --> 00:10:21,520 Speaker 2: the people affected are not as high in number. But 184 00:10:21,600 --> 00:10:23,800 Speaker 2: I do wonder it's not just Senator Holly. There were 185 00:10:23,800 --> 00:10:26,200 Speaker 2: a number of moderates who were concerned about this as well. 186 00:10:26,280 --> 00:10:29,200 Speaker 2: Add those moderates to the people in the Salt Caucus 187 00:10:29,280 --> 00:10:31,839 Speaker 2: who are willing to die on the hill of the 188 00:10:31,920 --> 00:10:34,520 Speaker 2: Salt Cap, with the fiscal conservatives in the House, the 189 00:10:34,720 --> 00:10:37,840 Speaker 2: likes of Chip Roy, for example, who are saying spending 190 00:10:37,880 --> 00:10:40,719 Speaker 2: cuts are not going far enough as it stands. Right now, 191 00:10:41,720 --> 00:10:44,480 Speaker 2: do you see the votes as being there on the 192 00:10:44,559 --> 00:10:47,240 Speaker 2: House floor knowing you expect this legislation to change, But 193 00:10:47,400 --> 00:10:49,439 Speaker 2: just how hard with this narrow majority is it going 194 00:10:49,520 --> 00:10:52,360 Speaker 2: to be to pass even changed legislation with all of 195 00:10:52,440 --> 00:10:55,080 Speaker 2: these various factions who want different outcomes. 196 00:10:56,120 --> 00:10:59,439 Speaker 4: Well, ultimately, yes, I do believe it will pass the 197 00:10:59,520 --> 00:11:01,760 Speaker 4: House and ultimately a Senate, and I think we'll be 198 00:11:01,840 --> 00:11:06,040 Speaker 4: done by that August first to timetable for the debt 199 00:11:06,160 --> 00:11:12,640 Speaker 4: sealing issue. But will it be difficult in every step? Absolutely? 200 00:11:12,760 --> 00:11:16,640 Speaker 4: It was in twenty seventeen. It will be now, especially 201 00:11:16,760 --> 00:11:20,199 Speaker 4: with such a near zero majority. But everyone knows this. 202 00:11:20,400 --> 00:11:24,880 Speaker 4: Everyone's staying at the table, the speaker, the committee leaders, 203 00:11:25,040 --> 00:11:29,520 Speaker 4: the leadership, constant meetings with lawmakers, just as we did 204 00:11:29,600 --> 00:11:33,000 Speaker 4: in twenty seventeen. And so yeah, there are difficult challenges left, 205 00:11:33,040 --> 00:11:35,600 Speaker 4: but ultimately, at the end of the day, I'm confident 206 00:11:35,640 --> 00:11:36,640 Speaker 4: they'll get where they need to be. 207 00:11:36,800 --> 00:11:37,320 Speaker 5: On time. 208 00:11:39,400 --> 00:11:41,760 Speaker 2: All right, mister chairman. Good to have you as always, 209 00:11:41,880 --> 00:11:44,199 Speaker 2: especially on a day like today. The former chair of 210 00:11:44,280 --> 00:11:46,120 Speaker 2: the House Ways and Means Committee and as spokesman for 211 00:11:46,200 --> 00:11:49,800 Speaker 2: the Alliance for Competitive Taxation, Kevin Brady here with us 212 00:11:50,160 --> 00:11:52,760 Speaker 2: on Balance of Power on Bloomberg TV and radio. 213 00:11:55,040 --> 00:11:58,480 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 214 00:11:58,559 --> 00:12:01,400 Speaker 1: us live weekdays at noon and five pm. He's durn 215 00:12:01,559 --> 00:12:04,920 Speaker 1: on Apple Cocklay and Android Auto with the Bloomberg Business App. 216 00:12:05,040 --> 00:12:08,000 Speaker 1: You can also listen live on Amazon Alexa from our 217 00:12:08,080 --> 00:12:09,600 Speaker 1: flagship New York station. 218 00:12:09,960 --> 00:12:15,000 Speaker 2: Just Say Alexa played Bloomberg eleven thirty Shiam indeed, Kaylee 219 00:12:15,120 --> 00:12:19,559 Speaker 2: lines in Washington or President Trump is not today. He 220 00:12:19,679 --> 00:12:21,760 Speaker 2: is in the Middle East instead, the first of a 221 00:12:21,800 --> 00:12:25,600 Speaker 2: three nation a visit to the region being Saudi Arabia, 222 00:12:25,640 --> 00:12:28,439 Speaker 2: where he touted today investment pledges made by the Sadis 223 00:12:28,480 --> 00:12:31,240 Speaker 2: into the United States, although we knew about them largely already, 224 00:12:31,280 --> 00:12:33,959 Speaker 2: to the tune of six hundred billion dollars, the Saudi 225 00:12:34,000 --> 00:12:36,839 Speaker 2: Crown Prince Mohammed ben Solomon promising to try to get 226 00:12:36,840 --> 00:12:39,880 Speaker 2: that number to the one trillion dollar mark that President 227 00:12:39,920 --> 00:12:43,760 Speaker 2: Trump has been seeking for some time now, and Of course, 228 00:12:43,840 --> 00:12:46,880 Speaker 2: President Trump had some kind words for the Crown Prince, 229 00:12:46,960 --> 00:12:48,959 Speaker 2: viewing him as a friend as a strong partner, to 230 00:12:49,080 --> 00:12:51,880 Speaker 2: use his characterization as we heard him speak at the 231 00:12:51,920 --> 00:12:54,840 Speaker 2: Saudi US Investment Forum in Riod, But he also had 232 00:12:54,880 --> 00:12:58,559 Speaker 2: plenty of words for the not friends, shall we say, 233 00:12:58,640 --> 00:13:00,839 Speaker 2: talking specifically about an On and how he wants to 234 00:13:01,000 --> 00:13:03,880 Speaker 2: make sure that they never have a nuclear weapon, but 235 00:13:04,000 --> 00:13:06,679 Speaker 2: also his hope that Iran won't necessarily be on his 236 00:13:06,880 --> 00:13:08,760 Speaker 2: list of enemies forever. 237 00:13:09,840 --> 00:13:13,920 Speaker 6: I have never believed in having permanent enemies. I am 238 00:13:14,240 --> 00:13:16,760 Speaker 6: different than a lot of people think. I don't like 239 00:13:16,880 --> 00:13:21,760 Speaker 6: permanent enemies, but sometimes you need enemies to do the job, 240 00:13:21,880 --> 00:13:25,040 Speaker 6: and you have to do it right. Enemies get you motivated. 241 00:13:25,120 --> 00:13:28,600 Speaker 6: In fact, some of the closest friends of the United 242 00:13:28,679 --> 00:13:33,520 Speaker 6: States of America nations we fought wars against in generations past, 243 00:13:33,760 --> 00:13:36,640 Speaker 6: and now they're our friends and our allies. 244 00:13:38,880 --> 00:13:41,199 Speaker 2: I don't know if our political panel has any permanent 245 00:13:41,440 --> 00:13:44,000 Speaker 2: enemies they'd like to discuss, but maybe they do want 246 00:13:44,040 --> 00:13:46,599 Speaker 2: to discuss President Trump's trip to the Middle East, so 247 00:13:46,679 --> 00:13:49,040 Speaker 2: we turned to them on that note. Bloomberg Politics contributors 248 00:13:49,120 --> 00:13:51,520 Speaker 2: Rick Davis and Jeanie Shanzeno are with me. Rick Davis 249 00:13:51,520 --> 00:13:55,400 Speaker 2: is Stone Court Capital partner and Republican strategist, genior Democratic analyst, 250 00:13:55,480 --> 00:13:57,720 Speaker 2: and Senior Democracy Fellow at the Center for the Study 251 00:13:58,120 --> 00:13:59,840 Speaker 2: of the Presidency and Congress. 252 00:14:00,400 --> 00:14:00,559 Speaker 4: Rick. 253 00:14:00,679 --> 00:14:03,040 Speaker 2: Obviously he did take some time to talk about Iran. 254 00:14:03,120 --> 00:14:07,720 Speaker 2: He talked about Syria and relieving sanctions on Syria, Lebanon, Gaza. 255 00:14:07,840 --> 00:14:10,280 Speaker 2: He did hit areas in the Middle East, in which 256 00:14:10,600 --> 00:14:14,439 Speaker 2: obviously there is ongoing geopolitical conflict. But we've said from 257 00:14:14,480 --> 00:14:17,920 Speaker 2: the beginning that largely this trip is about the money. 258 00:14:18,320 --> 00:14:21,080 Speaker 2: Is walking away from Saudi Arabia with six hundred billion 259 00:14:21,080 --> 00:14:24,480 Speaker 2: dollars in investment pledges that the Saudi's actually had already 260 00:14:24,520 --> 00:14:25,800 Speaker 2: announced enough of a win. 261 00:14:27,800 --> 00:14:29,960 Speaker 7: I think it's a good backdrop for the trip. I mean, 262 00:14:30,040 --> 00:14:33,280 Speaker 7: obviously he brought a lot of business executives there to 263 00:14:33,400 --> 00:14:36,560 Speaker 7: try and cement their own transactions, which I'm sure they're 264 00:14:36,600 --> 00:14:39,400 Speaker 7: going to be well received. And you know, you got 265 00:14:39,520 --> 00:14:44,400 Speaker 7: to remember, the entire Saudi Sovereign Wealth Fund PIF is 266 00:14:44,520 --> 00:14:47,560 Speaker 7: only a trillion dollars. So the idea that we would 267 00:14:47,600 --> 00:14:51,520 Speaker 7: get a commitment for a trillion dollars, which would represent 268 00:14:51,600 --> 00:14:55,120 Speaker 7: one hundred percent of the capacity of their Sovereign Wealth 269 00:14:55,160 --> 00:14:58,400 Speaker 7: Fund is not really realistic, and Saudi Arabia is not 270 00:14:58,480 --> 00:15:01,360 Speaker 7: the same it was for years ago when Donald Trump 271 00:15:01,480 --> 00:15:05,600 Speaker 7: left office. They now operate in a budget deficit because 272 00:15:05,640 --> 00:15:10,240 Speaker 7: of the massive giga projects that NBS has launched in 273 00:15:10,680 --> 00:15:13,680 Speaker 7: his own country. So you know, whether they even have 274 00:15:13,800 --> 00:15:17,920 Speaker 7: the capacity to do that over time is at least 275 00:15:17,960 --> 00:15:21,800 Speaker 7: a not an academic question. So I think this was 276 00:15:21,840 --> 00:15:23,720 Speaker 7: as good as anybody was going to get. Still a 277 00:15:23,760 --> 00:15:26,400 Speaker 7: good thing for them to be committed to this kind 278 00:15:26,400 --> 00:15:30,840 Speaker 7: of investment in the US, and more importantly, probably secures 279 00:15:30,920 --> 00:15:34,520 Speaker 7: them as a very strong ally, certainly as long as 280 00:15:34,600 --> 00:15:39,160 Speaker 7: Donald Trump's in office, something that really was a question 281 00:15:39,360 --> 00:15:42,120 Speaker 7: mark during the period of time when Joe Biden was 282 00:15:42,200 --> 00:15:45,320 Speaker 7: in office and really didn't consider them as strategic an 283 00:15:45,320 --> 00:15:46,880 Speaker 7: ally as Donald Trump does. 284 00:15:48,640 --> 00:15:52,680 Speaker 2: Well, when we consider these alliances or these partners potentially 285 00:15:52,760 --> 00:15:54,480 Speaker 2: in the Middle East, Genie knowing it's not just the 286 00:15:54,520 --> 00:15:56,360 Speaker 2: Saudist he's paying a visit to, but cut her in 287 00:15:56,440 --> 00:15:59,640 Speaker 2: the UAE as well, how does it play at home 288 00:15:59,680 --> 00:16:02,600 Speaker 2: the US drawing closer to these countries, bringing in dollars 289 00:16:03,480 --> 00:16:07,080 Speaker 2: from these countries. I just I wonder here, this is 290 00:16:07,240 --> 00:16:09,680 Speaker 2: how the president is spending his first big trip abroad 291 00:16:10,120 --> 00:16:12,680 Speaker 2: of his second term, not going to somewhere you would 292 00:16:12,680 --> 00:16:14,760 Speaker 2: maybe expect, like the UK or Europe or one of 293 00:16:14,800 --> 00:16:18,000 Speaker 2: our North American partners, but instead to the Middle East. 294 00:16:18,120 --> 00:16:18,960 Speaker 2: Is it a good decision? 295 00:16:20,320 --> 00:16:20,480 Speaker 8: You know? 296 00:16:20,640 --> 00:16:23,960 Speaker 9: It's It's his first trip in his first administration was 297 00:16:24,040 --> 00:16:27,680 Speaker 9: also to the Middle East, and I think while Americans 298 00:16:27,800 --> 00:16:31,440 Speaker 9: may not pay as much attention to what is going 299 00:16:31,520 --> 00:16:34,520 Speaker 9: on overseas the way we obviously do what is going 300 00:16:34,560 --> 00:16:38,200 Speaker 9: on in our own country, the fact is, I think 301 00:16:38,280 --> 00:16:41,120 Speaker 9: it is a smart move for the president. There's not 302 00:16:41,360 --> 00:16:45,120 Speaker 9: only the investment and business components that you've been talking about, 303 00:16:45,440 --> 00:16:49,040 Speaker 9: but the strategic importance of the Middle East today even 304 00:16:49,160 --> 00:16:53,480 Speaker 9: more critical today than it was when he was first president. 305 00:16:53,600 --> 00:16:56,520 Speaker 9: I mean, if we just reflect on the conflicts in 306 00:16:56,680 --> 00:17:02,280 Speaker 9: the world today, whether that's Russia, Ukraine, the Hamas, Israel, Pakistan, 307 00:17:02,400 --> 00:17:06,000 Speaker 9: and India, these countries the three he is visiting on 308 00:17:06,160 --> 00:17:10,159 Speaker 9: this trip, have been key to resolving or trying to 309 00:17:10,320 --> 00:17:15,400 Speaker 9: help the US resolve those conflicts. And so from that perspective, 310 00:17:15,920 --> 00:17:18,560 Speaker 9: in addition to all of the monetary aspects of this, 311 00:17:18,840 --> 00:17:22,119 Speaker 9: the strategic importance of these places in the Middle East 312 00:17:22,160 --> 00:17:25,800 Speaker 9: today is critical and so I think that's so important. 313 00:17:25,840 --> 00:17:29,199 Speaker 9: And Kaylea was so happy you started with Iran because 314 00:17:29,320 --> 00:17:31,879 Speaker 9: I thought this was the most interesting thing the President 315 00:17:32,000 --> 00:17:35,960 Speaker 9: said today, which I saw as a warning to Iran. 316 00:17:36,760 --> 00:17:40,119 Speaker 9: US Donald Trump are being pressured by Israel to go 317 00:17:40,280 --> 00:17:42,720 Speaker 9: a different route with Iran, and he is warning them 318 00:17:43,040 --> 00:17:46,120 Speaker 9: that he could consider the bombing they've been talking publicly 319 00:17:46,200 --> 00:17:49,159 Speaker 9: about if they don't come to thea to the table 320 00:17:49,280 --> 00:17:53,119 Speaker 9: for some kind of renewed deal on the nuclear program. 321 00:17:53,240 --> 00:17:56,879 Speaker 9: So I'm really interested to see how that statement he 322 00:17:57,000 --> 00:17:58,480 Speaker 9: made today lands in Tehran. 323 00:18:00,600 --> 00:18:02,840 Speaker 2: Well, absolutely, and when we consider it's not just a 324 00:18:02,920 --> 00:18:04,920 Speaker 2: Ron he wants to deal with, but some of the 325 00:18:05,040 --> 00:18:09,080 Speaker 2: Iranian proxies that are engaged in conflict, like Kamos in Israel. 326 00:18:09,160 --> 00:18:12,040 Speaker 2: To the point Genie was making, the President did talk 327 00:18:12,320 --> 00:18:15,280 Speaker 2: rick about wanting to be a peace maker, how that 328 00:18:15,400 --> 00:18:17,800 Speaker 2: is one of his primary goals in his second term 329 00:18:18,560 --> 00:18:22,400 Speaker 2: as president. He also was speaking specifically to Saudi Arabia, 330 00:18:22,520 --> 00:18:24,879 Speaker 2: talking about how much he wants them to join the 331 00:18:24,960 --> 00:18:28,120 Speaker 2: Abraham Accords. He called it his dream. Is this also 332 00:18:28,200 --> 00:18:30,800 Speaker 2: a US president that we see in live pursuit of 333 00:18:30,880 --> 00:18:31,879 Speaker 2: a Nobel Peace Prize? 334 00:18:33,880 --> 00:18:37,320 Speaker 7: Yeah, he's not made it a secret that the two 335 00:18:37,440 --> 00:18:39,480 Speaker 7: major things that he would like to accomplish in his 336 00:18:39,680 --> 00:18:43,320 Speaker 7: term is make America rich again and win a Nobel 337 00:18:43,400 --> 00:18:48,920 Speaker 7: Peace Prize. And I don't think that's a bad motivation. 338 00:18:50,280 --> 00:18:52,720 Speaker 7: He's invested a lot of his own administration time and 339 00:18:52,800 --> 00:18:56,200 Speaker 7: his time personally and trying to get a deal in Ukraine, 340 00:18:56,440 --> 00:18:59,840 Speaker 7: although that seems to be a bit far off. He's 341 00:19:00,160 --> 00:19:04,200 Speaker 7: pressured Bibi nint Yahoo in the Middle East, and he 342 00:19:04,320 --> 00:19:09,920 Speaker 7: has used this carrot and stick approach with a lot 343 00:19:10,000 --> 00:19:13,119 Speaker 7: of regimes, basically saying either you're going to clean yourself 344 00:19:13,240 --> 00:19:15,760 Speaker 7: up and become a part of the world community, or 345 00:19:15,800 --> 00:19:18,560 Speaker 7: I'm going to use the stick on you. And so 346 00:19:18,720 --> 00:19:23,520 Speaker 7: far nobody has challenged that that claim. They pretty much 347 00:19:24,600 --> 00:19:28,440 Speaker 7: found ways of playing inside his sandbox. And it'll be 348 00:19:28,520 --> 00:19:31,359 Speaker 7: interesting to see if Iran does the same, because they 349 00:19:31,440 --> 00:19:35,920 Speaker 7: do know that both the US and Israel have the 350 00:19:36,040 --> 00:19:41,359 Speaker 7: capacity to disrupt their ability to produce fissual material. And 351 00:19:41,960 --> 00:19:44,240 Speaker 7: you know, do they cut a new deal and the 352 00:19:44,359 --> 00:19:47,600 Speaker 7: reality is the fact that Trump is offering one, they 353 00:19:47,680 --> 00:19:49,640 Speaker 7: have to be scratching their head and tearror on going. 354 00:19:50,000 --> 00:19:53,000 Speaker 7: This sounds just like the Biden administration. Take the deal. 355 00:19:53,800 --> 00:19:55,800 Speaker 7: It's definitely going to be better for Iran and for 356 00:19:55,880 --> 00:19:56,960 Speaker 7: the rest of the world if they do. 357 00:19:58,920 --> 00:19:59,040 Speaker 3: Well. 358 00:19:59,080 --> 00:20:01,359 Speaker 2: I'm glad you raise you as well, Rick, because we 359 00:20:01,440 --> 00:20:03,880 Speaker 2: also learned from President Trump in his speech that after 360 00:20:04,000 --> 00:20:07,040 Speaker 2: teasing yesterday the suggestion he himself might go to Turkey 361 00:20:07,119 --> 00:20:10,200 Speaker 2: on Thursday to join the Ukrainian president Vladimir's Lensky and 362 00:20:10,240 --> 00:20:12,720 Speaker 2: potential peace talks with Russia that we weren't sure whether 363 00:20:12,800 --> 00:20:16,280 Speaker 2: or not Vladimir Putin would show up to, he said, instead, 364 00:20:16,400 --> 00:20:19,560 Speaker 2: it's Marco Rubio that will be going. Do you see that, 365 00:20:19,680 --> 00:20:22,200 Speaker 2: genie as the president in advance, trying to save face 366 00:20:22,280 --> 00:20:24,880 Speaker 2: and case Putin is a no show and the whole 367 00:20:24,920 --> 00:20:27,200 Speaker 2: thing turns out to be underwhelming. 368 00:20:29,080 --> 00:20:31,720 Speaker 9: Yeah, I think it might be. You know, I thought 369 00:20:31,800 --> 00:20:34,160 Speaker 9: all along it would be too early for the President 370 00:20:34,280 --> 00:20:36,919 Speaker 9: to join. While it would be amazing to see all 371 00:20:37,000 --> 00:20:38,840 Speaker 9: three of those men in the same room if we 372 00:20:38,880 --> 00:20:41,640 Speaker 9: could get a glimpse of it, I thought it would 373 00:20:41,680 --> 00:20:43,760 Speaker 9: be too early. And I do think it may be 374 00:20:43,880 --> 00:20:47,760 Speaker 9: a sign that, as we sort of indicated and thought, 375 00:20:47,840 --> 00:20:51,080 Speaker 9: that Putin may not go there, And of course then 376 00:20:51,240 --> 00:20:54,320 Speaker 9: this leaves us exactly where we were. And this, of 377 00:20:54,440 --> 00:20:57,920 Speaker 9: course is another of the President's commitments on the campaign 378 00:20:58,040 --> 00:21:03,280 Speaker 9: trail that he's having trouble getting to. Not surprisingly, he 379 00:21:03,520 --> 00:21:06,440 Speaker 9: over promised and is under delivering, and you can see 380 00:21:06,480 --> 00:21:09,600 Speaker 9: the frustration. And that's why I think he tends to 381 00:21:09,680 --> 00:21:11,800 Speaker 9: these business deals because he feels like he can have 382 00:21:12,000 --> 00:21:15,400 Speaker 9: more luck there than he could on the geopolitical side 383 00:21:15,480 --> 00:21:17,320 Speaker 9: in these really difficult conflicts. 384 00:21:18,840 --> 00:21:21,280 Speaker 2: Rick, we just have a minute left. But can Secretary 385 00:21:21,320 --> 00:21:24,080 Speaker 2: of State Mark or Rubio and Vladimir's Lynsky make progress 386 00:21:24,160 --> 00:21:27,400 Speaker 2: themselves in Turkey even if Russia is not at the table. 387 00:21:29,160 --> 00:21:30,720 Speaker 7: Well, I mean, Russia's got to be at the table 388 00:21:30,760 --> 00:21:33,480 Speaker 7: to make progress. It doesn't have to be Vladimir Putin. 389 00:21:33,560 --> 00:21:36,600 Speaker 7: They've got a team that have been negotiating with the 390 00:21:36,720 --> 00:21:39,680 Speaker 7: US over this for some time. And you'd never have 391 00:21:39,840 --> 00:21:42,440 Speaker 7: the principles in a meeting if you didn't already have 392 00:21:42,560 --> 00:21:45,080 Speaker 7: a bake deal. So the idea that all three of 393 00:21:45,119 --> 00:21:46,800 Speaker 7: them are going to go and actually hash it out 394 00:21:47,040 --> 00:21:50,160 Speaker 7: is just not realistic for where we are as nation 395 00:21:50,320 --> 00:21:53,240 Speaker 7: states in the world today. So hopefully they'll make progress 396 00:21:53,280 --> 00:21:55,480 Speaker 7: to the point where they can actually start talking about 397 00:21:55,560 --> 00:21:58,680 Speaker 7: having the principals meeting, and that would indicate for the 398 00:21:58,760 --> 00:22:01,600 Speaker 7: first time I think since they started this process that 399 00:22:01,720 --> 00:22:04,200 Speaker 7: they may be nearing something that would look like a deal. 400 00:22:05,920 --> 00:22:09,320 Speaker 2: All Right, A reality check from Rick Davis alongside Geenie Shanzano, 401 00:22:09,359 --> 00:22:12,080 Speaker 2: our political panel on this Tuesday. Thank you as always 402 00:22:12,119 --> 00:22:14,320 Speaker 2: for joining me here on Balance of Power. 403 00:22:17,680 --> 00:22:21,160 Speaker 1: You're listening to the Bloomberg Balance of Power Podcast. Catch 404 00:22:21,200 --> 00:22:24,639 Speaker 1: us live weekdays at noon and five pm Eastern on Apple, 405 00:22:24,720 --> 00:22:28,040 Speaker 1: Cocklay and Android Auto with the Bloomberg Business App. Listen 406 00:22:28,160 --> 00:22:31,199 Speaker 1: on demand wherever you get your podcasts, or watch us 407 00:22:31,280 --> 00:22:32,280 Speaker 1: live on YouTube. 408 00:22:33,920 --> 00:22:36,040 Speaker 2: In Washington, where we've been keeping a close eye on 409 00:22:36,080 --> 00:22:39,200 Speaker 2: the Middle East today, Saudi Arabia specifically where President Trump 410 00:22:39,600 --> 00:22:43,000 Speaker 2: spent his day speaking at the Saudi US Investment Forum 411 00:22:43,440 --> 00:22:45,920 Speaker 2: in Riad, and a number of different issues, of course, 412 00:22:46,080 --> 00:22:49,240 Speaker 2: many of them targeted at the Middle East, geopolitical conflicts 413 00:22:49,960 --> 00:22:52,359 Speaker 2: there that he would like to see and investment he 414 00:22:52,400 --> 00:22:54,440 Speaker 2: would like to see coming from the region into the 415 00:22:54,600 --> 00:22:56,520 Speaker 2: United States. That's a big part of what this trip 416 00:22:57,160 --> 00:22:59,959 Speaker 2: is all about. But we heard plenty about other things too, 417 00:23:00,200 --> 00:23:03,680 Speaker 2: including his tariff policy. The President actually took time to 418 00:23:03,760 --> 00:23:06,400 Speaker 2: call out the agreement that was reached just days ago 419 00:23:06,600 --> 00:23:09,560 Speaker 2: with China, calling it a breakthrough, talking about how China 420 00:23:09,640 --> 00:23:12,560 Speaker 2: has agreed to open up to the US for trade, 421 00:23:12,920 --> 00:23:15,520 Speaker 2: though noting China still has to do that and we'll 422 00:23:15,560 --> 00:23:19,800 Speaker 2: see what happens. And as we consider this changing trade 423 00:23:19,840 --> 00:23:22,159 Speaker 2: relationship between the US and China, that is something that 424 00:23:22,480 --> 00:23:25,800 Speaker 2: my colleague David Gurub Bloomberg correspondent is focusing on today 425 00:23:25,800 --> 00:23:27,720 Speaker 2: as he had the chance to sit down with the 426 00:23:27,960 --> 00:23:30,960 Speaker 2: former Ambassador to China, Nicholas Burns, of course, who held 427 00:23:31,000 --> 00:23:34,399 Speaker 2: that position during the last administration under Joe Biden, and 428 00:23:34,520 --> 00:23:37,240 Speaker 2: David Gurub is joining me now. David, I do wonder 429 00:23:37,400 --> 00:23:41,000 Speaker 2: the ambassador's thoughts about what we have seen from honestly, 430 00:23:41,080 --> 00:23:43,840 Speaker 2: since President Trump took office and the Fentanel tariffs almost 431 00:23:43,880 --> 00:23:47,640 Speaker 2: immediately went into effect against China and others through Liberation 432 00:23:47,840 --> 00:23:49,360 Speaker 2: Day to where we are now. 433 00:23:50,440 --> 00:23:52,159 Speaker 8: Well, he's watching it with great interest and thanks for 434 00:23:52,200 --> 00:23:54,240 Speaker 8: having me, Kaylee, as you might expect. And this was 435 00:23:54,240 --> 00:23:56,159 Speaker 8: one of the hardest jobs in government when he had it, 436 00:23:56,520 --> 00:23:58,440 Speaker 8: right on the heels of COVID, having to navigate a 437 00:23:58,600 --> 00:24:01,440 Speaker 8: very much changed China, and we talked a lot about that, 438 00:24:01,600 --> 00:24:03,440 Speaker 8: about what the landscape looked like while he was there, 439 00:24:03,480 --> 00:24:05,199 Speaker 8: in the work that he did to kind of rehabilitate 440 00:24:05,240 --> 00:24:08,520 Speaker 8: that relationship after the first Trump term, the work he 441 00:24:08,600 --> 00:24:10,680 Speaker 8: did to try to secure a new line, a conduitive 442 00:24:10,680 --> 00:24:14,080 Speaker 8: communication between Washington and Beijing, and we talked about what's 443 00:24:14,080 --> 00:24:15,879 Speaker 8: happened since he left government. So his last day was 444 00:24:15,920 --> 00:24:18,679 Speaker 8: on January twentieth. He came back to Boston. He's now 445 00:24:18,720 --> 00:24:21,320 Speaker 8: professor at the Harvard Kennedy School and has been watching 446 00:24:21,359 --> 00:24:24,680 Speaker 8: all of this happen from afar and as you suggest, 447 00:24:24,800 --> 00:24:26,760 Speaker 8: and that's where I began the interview, just asking him 448 00:24:27,000 --> 00:24:29,160 Speaker 8: how he watched what unfolded in Geneva over the course 449 00:24:29,200 --> 00:24:31,520 Speaker 8: of the weekend and if he sees what occurred there 450 00:24:31,760 --> 00:24:33,920 Speaker 8: the outcome of that meeting as a positive step. Let's 451 00:24:33,920 --> 00:24:34,800 Speaker 8: take a listen to what he had to say. 452 00:24:35,560 --> 00:24:38,119 Speaker 10: Well, first of all, I start from a first principle, 453 00:24:38,200 --> 00:24:40,920 Speaker 10: and that is that China has been the largest and 454 00:24:41,080 --> 00:24:44,920 Speaker 10: most important disruptor in the global trade system for about 455 00:24:44,960 --> 00:24:48,359 Speaker 10: three decades right now. There's a reason why the United 456 00:24:48,400 --> 00:24:51,880 Speaker 10: States and many other countries around the world have placed 457 00:24:51,960 --> 00:24:56,600 Speaker 10: terrists on China's manufactured exports. In particular, is because China's 458 00:24:56,600 --> 00:24:59,760 Speaker 10: been dumping them around the world below the cost of production, 459 00:25:00,359 --> 00:25:02,480 Speaker 10: and it's been a killer for jobs, both in the 460 00:25:02,640 --> 00:25:05,520 Speaker 10: United States historically in the last several decades, but also 461 00:25:05,640 --> 00:25:08,040 Speaker 10: around the world. You have a situation now where Turkey 462 00:25:08,560 --> 00:25:13,080 Speaker 10: and India and Brazil and Colombia and Mexico and Canada 463 00:25:13,119 --> 00:25:15,159 Speaker 10: and the United States and the European Union have all 464 00:25:15,200 --> 00:25:18,280 Speaker 10: put tariffs on China. So I have a degree of 465 00:25:18,359 --> 00:25:22,440 Speaker 10: sympathy for the situation that President Trump and his team inherited, 466 00:25:22,760 --> 00:25:25,680 Speaker 10: which was a situation that we left when I left 467 00:25:26,000 --> 00:25:29,760 Speaker 10: in mid January as ambassador to China President Biden a 468 00:25:29,920 --> 00:25:32,720 Speaker 10: year ago, I made twenty twenty four placed one hundred 469 00:25:32,760 --> 00:25:36,600 Speaker 10: percent tariffs on Chinese evs, fifty percent on semi conductors, 470 00:25:36,680 --> 00:25:40,119 Speaker 10: twenty five percent on lithium batteries. So the root of 471 00:25:40,200 --> 00:25:45,000 Speaker 10: this problem is China and Chinese trade policy. The Chinese 472 00:25:45,040 --> 00:25:47,120 Speaker 10: are trying to act now. You sought in the statements 473 00:25:47,160 --> 00:25:49,440 Speaker 10: over the weekend from Vice Premier Early Funk is that 474 00:25:49,560 --> 00:25:53,560 Speaker 10: they're the innocent party, that they're the victim of this 475 00:25:53,720 --> 00:25:56,440 Speaker 10: trade war by President Trump what in fact, and that 476 00:25:56,560 --> 00:25:59,040 Speaker 10: they're the responsible party, when in fact the reality is 477 00:25:59,080 --> 00:25:59,520 Speaker 10: quite different. 478 00:25:59,560 --> 00:26:00,840 Speaker 4: I think important to. 479 00:26:00,920 --> 00:26:04,840 Speaker 10: Set the stage having said that these are going to 480 00:26:04,880 --> 00:26:08,480 Speaker 10: be very very difficult negotiations over the next ninety days. 481 00:26:08,920 --> 00:26:13,840 Speaker 10: I think in the end self interest and logic will prevail. 482 00:26:14,080 --> 00:26:17,719 Speaker 10: Both sides need and agreement. It was encouraging to hear 483 00:26:17,960 --> 00:26:21,080 Speaker 10: Treasury Secretary Scott bess And say that they had agreed 484 00:26:21,280 --> 00:26:24,280 Speaker 10: in principle they don't want it to couple these two economies. 485 00:26:25,240 --> 00:26:27,320 Speaker 10: Last year, we had a six hundred and forty two 486 00:26:27,560 --> 00:26:31,240 Speaker 10: billion dollars two way trade relationship in goods and services 487 00:26:31,600 --> 00:26:34,600 Speaker 10: with China. China is our third largest trade partner. About 488 00:26:34,600 --> 00:26:39,200 Speaker 10: a million American jobs depend on trade with China. Upwards 489 00:26:39,240 --> 00:26:43,440 Speaker 10: of twenty million manufacturing jobs in China depend on trade 490 00:26:43,480 --> 00:26:46,600 Speaker 10: with the United States. So neither country can afford to 491 00:26:46,800 --> 00:26:50,720 Speaker 10: sunder the economic ties and the millions of interactions that 492 00:26:50,840 --> 00:26:53,680 Speaker 10: our private sector has had with the Chinese economy over 493 00:26:53,720 --> 00:26:55,520 Speaker 10: the last forty years. And I think in the end 494 00:26:56,000 --> 00:26:59,119 Speaker 10: there will be a trade agreement, but getting there, I 495 00:26:59,160 --> 00:27:03,200 Speaker 10: think is going to be extreme, ordinarily difficult, difficult. 496 00:27:03,280 --> 00:27:04,800 Speaker 8: And I asked him sort of how he sees these 497 00:27:04,840 --> 00:27:06,840 Speaker 8: next ninety days playing out, and he said, there's going 498 00:27:06,880 --> 00:27:07,920 Speaker 8: to have to be a lot of urgency and a 499 00:27:07,960 --> 00:27:09,840 Speaker 8: lot of alacrity on the part of both the US 500 00:27:10,320 --> 00:27:11,920 Speaker 8: and China as they try to have that sort of 501 00:27:12,240 --> 00:27:15,360 Speaker 8: consultative mechanism, as the Treasury Secretary put it, go into 502 00:27:15,400 --> 00:27:17,679 Speaker 8: effect of maintain the level of dialogue that they had 503 00:27:17,720 --> 00:27:20,639 Speaker 8: over the course of the weekend. And he's optimistic that 504 00:27:20,760 --> 00:27:22,760 Speaker 8: something will come from this, but again underscore is how 505 00:27:22,760 --> 00:27:24,760 Speaker 8: difficult it's going to be. We had a very wide 506 00:27:24,840 --> 00:27:27,080 Speaker 8: ranging conversation. Something we've talked an awful lot about is 507 00:27:27,119 --> 00:27:30,240 Speaker 8: just the state of the State Department today of US diplomacy. 508 00:27:30,359 --> 00:27:32,960 Speaker 8: He spent most of his forty five year career in 509 00:27:33,080 --> 00:27:35,680 Speaker 8: the State Department. He's lived in seven countries. China was 510 00:27:35,680 --> 00:27:38,080 Speaker 8: the last one in which he lived. And I asked 511 00:27:38,160 --> 00:27:40,440 Speaker 8: him at the end what he's telling his students today 512 00:27:40,920 --> 00:27:44,000 Speaker 8: about sort of the path forward for diplomacy. Obviously, he's 513 00:27:44,040 --> 00:27:46,200 Speaker 8: teaching a lot of students who wanted to go down 514 00:27:46,240 --> 00:27:48,000 Speaker 8: a path that's since been foreclosed. Have we've seen the 515 00:27:48,040 --> 00:27:50,800 Speaker 8: cuts in the US diplomatic corps. He's telling them to 516 00:27:50,840 --> 00:27:52,280 Speaker 8: be patient. He thinks that there's going to be an 517 00:27:52,280 --> 00:27:55,080 Speaker 8: awareness of broader awareness. In the end, Kley that it's 518 00:27:55,119 --> 00:27:59,280 Speaker 8: important to have career diplomats like himself. Of astinating conversation, 519 00:27:59,320 --> 00:28:00,960 Speaker 8: I thought we're going to available as a big take 520 00:28:01,000 --> 00:28:04,080 Speaker 8: podcast since so I encourage everybody to download that as 521 00:28:04,119 --> 00:28:04,399 Speaker 8: they can. 522 00:28:05,760 --> 00:28:08,480 Speaker 2: Absolutely that's where you can find the conversation in full, 523 00:28:08,600 --> 00:28:11,520 Speaker 2: hosted of course by David Gura from the Bloomberg Big 524 00:28:11,600 --> 00:28:14,879 Speaker 2: Take podcast in Bloomberg Correspondent joining us live from Boston today. 525 00:28:15,320 --> 00:28:18,640 Speaker 2: Thank you so much, And as we consider the de escalated, 526 00:28:18,680 --> 00:28:21,240 Speaker 2: if you will, trade tensions between the US and China, 527 00:28:21,320 --> 00:28:23,520 Speaker 2: the tariff rate that has been taken lower, at least 528 00:28:23,560 --> 00:28:26,440 Speaker 2: for this ninety day period does beg the question of 529 00:28:26,480 --> 00:28:28,960 Speaker 2: what difference that will ultimately make for the US economy 530 00:28:29,000 --> 00:28:32,359 Speaker 2: and the inflationary pressures that could have resulted if tariff 531 00:28:32,400 --> 00:28:35,160 Speaker 2: stayed as high as they were. We got CPI data 532 00:28:35,200 --> 00:28:38,120 Speaker 2: today that of course showed inflation pressures in the economy 533 00:28:38,160 --> 00:28:40,160 Speaker 2: that were cooler than expected in the month of April, 534 00:28:40,200 --> 00:28:42,600 Speaker 2: with just a two tenths of a percent increase month 535 00:28:42,680 --> 00:28:45,960 Speaker 2: on month, and President Trump has finally chimed in on 536 00:28:46,200 --> 00:28:49,200 Speaker 2: that data, taking to true social at a pretty late 537 00:28:49,280 --> 00:28:51,040 Speaker 2: hour in the Middle East, where he is right now 538 00:28:51,160 --> 00:28:54,440 Speaker 2: saying no inflation and prices of gasoline, energy, groceries, and 539 00:28:54,520 --> 00:28:58,320 Speaker 2: practically everything else are down in all caps, the FED 540 00:28:58,560 --> 00:29:02,200 Speaker 2: must lower the rate like Europe and China have done 541 00:29:02,800 --> 00:29:06,360 Speaker 2: what is wrong with too late Powell not fair to America, 542 00:29:06,480 --> 00:29:08,960 Speaker 2: which is ready to blossom. Just let it all happen. 543 00:29:09,520 --> 00:29:12,640 Speaker 2: It will be a beautiful thing. Let's see if Kitty 544 00:29:12,720 --> 00:29:15,240 Speaker 2: Richards agrees whether or not that would be a beautiful thing. 545 00:29:15,320 --> 00:29:17,280 Speaker 2: She's seen her fellow at the Groundwork Collaborative and is 546 00:29:17,360 --> 00:29:18,920 Speaker 2: joining me here in our Washington, d C. 547 00:29:19,080 --> 00:29:19,440 Speaker 3: Studio. 548 00:29:19,560 --> 00:29:21,600 Speaker 2: Good to have you back, Thanks so much. The balance 549 00:29:21,680 --> 00:29:24,280 Speaker 2: of power. When you look at the inflation data we 550 00:29:24,360 --> 00:29:27,840 Speaker 2: got today, which yes, is cooler than expected, is there 551 00:29:27,880 --> 00:29:31,760 Speaker 2: a case to be made that with the lack of increased, 552 00:29:31,800 --> 00:29:34,800 Speaker 2: elevated inflationary pressures that seem to have amounted thus far, 553 00:29:34,880 --> 00:29:37,520 Speaker 2: at least from tariffs, that the FED could be safe 554 00:29:37,560 --> 00:29:39,600 Speaker 2: to do what the President says, go ahead and cut 555 00:29:39,600 --> 00:29:39,880 Speaker 2: the rate. 556 00:29:40,120 --> 00:29:42,400 Speaker 11: I think the Fed is in a really complicated position, 557 00:29:42,480 --> 00:29:45,360 Speaker 11: and I don't envy them. You know, I have been 558 00:29:45,520 --> 00:29:48,440 Speaker 11: arguing for quite some time, for a couple of years now, 559 00:29:48,600 --> 00:29:51,520 Speaker 11: that the FED was behind the curve on lowering rates. 560 00:29:52,600 --> 00:29:56,840 Speaker 11: But the uncertainty created by the tariffs, I think we're 561 00:29:56,920 --> 00:30:00,400 Speaker 11: not really seeing tariff effects showing up in prices yet, 562 00:30:01,480 --> 00:30:05,400 Speaker 11: but that's partly just because those effects wouldn't be showing 563 00:30:05,480 --> 00:30:05,840 Speaker 11: up yet. 564 00:30:06,120 --> 00:30:06,280 Speaker 9: Right. 565 00:30:06,600 --> 00:30:11,000 Speaker 11: All of this has happened very rapidly, And if you 566 00:30:11,080 --> 00:30:14,760 Speaker 11: think about imported goods, I think sometimes we forget, you know, 567 00:30:14,840 --> 00:30:17,280 Speaker 11: we're just starting to feel the warmth of summer here, 568 00:30:18,160 --> 00:30:21,040 Speaker 11: but people who are trying to place orders for imported 569 00:30:21,080 --> 00:30:25,400 Speaker 11: goods are placing orders now for Christmas presents because it 570 00:30:25,440 --> 00:30:27,600 Speaker 11: takes a long time for container ships to arrive here, 571 00:30:28,360 --> 00:30:32,440 Speaker 11: so we're not seeing the shortages and the supply chain 572 00:30:32,520 --> 00:30:35,520 Speaker 11: disruptions really play out yet. I think that puts the 573 00:30:35,560 --> 00:30:38,560 Speaker 11: FED in a difficult position. And we've got FED governors 574 00:30:38,600 --> 00:30:42,720 Speaker 11: talking about stagflation right, the worry that we've already seen 575 00:30:42,760 --> 00:30:45,960 Speaker 11: consumer confidence just fall through the floor. And if we 576 00:30:46,040 --> 00:30:49,240 Speaker 11: start to see demand being reduced at the same time 577 00:30:49,280 --> 00:30:52,080 Speaker 11: as we're having these supply problems, we could be in 578 00:30:52,160 --> 00:30:56,960 Speaker 11: a really difficult position for managing both inflation and unemployment. 579 00:30:57,320 --> 00:30:59,960 Speaker 2: Well to that point, is the lagged effect. The time 580 00:31:00,200 --> 00:31:02,920 Speaker 2: of the lag the same for what could happen in 581 00:31:03,000 --> 00:31:05,280 Speaker 2: consumer demand and in the labor market as it is 582 00:31:05,400 --> 00:31:07,640 Speaker 2: for when it shows up in inflation data. I'm just 583 00:31:07,680 --> 00:31:09,200 Speaker 2: wondering what triggers the FED first. 584 00:31:09,320 --> 00:31:11,440 Speaker 11: I think that's a really good question. And it's hard 585 00:31:11,560 --> 00:31:14,200 Speaker 11: to say how that's all going to play out. You know, 586 00:31:14,280 --> 00:31:18,600 Speaker 11: I do think it as as has happened every month 587 00:31:18,840 --> 00:31:21,120 Speaker 11: for a couple of years now. One of the big 588 00:31:21,200 --> 00:31:25,840 Speaker 11: standouts in the inflation report was high shelter inflation. Housing 589 00:31:25,920 --> 00:31:29,440 Speaker 11: costs are continuing to go up and up, and that's 590 00:31:29,480 --> 00:31:32,520 Speaker 11: where I'd like to see policy makers really focus. Those 591 00:31:32,560 --> 00:31:35,560 Speaker 11: are the prices that are really locking Americans out of 592 00:31:35,600 --> 00:31:39,800 Speaker 11: the middle class. But again, it's a really difficult position 593 00:31:40,080 --> 00:31:44,280 Speaker 11: for monetary policy makers to be in. They have very 594 00:31:44,400 --> 00:31:48,560 Speaker 11: blunt instruments for dealing with these problems, and when things 595 00:31:48,600 --> 00:31:51,600 Speaker 11: are being thrown at them at this speed, it's hard 596 00:31:51,640 --> 00:31:53,160 Speaker 11: to know how the economy is going to react. 597 00:31:53,760 --> 00:31:55,280 Speaker 2: I just want to point out for our audience here 598 00:31:55,320 --> 00:31:57,360 Speaker 2: on Bloomberg TV and Radio that we do have eyes 599 00:31:57,400 --> 00:32:00,240 Speaker 2: on President Trump arriving to dinner with the Saudi Crown 600 00:32:00,280 --> 00:32:04,320 Speaker 2: Prince Mohammed bin Salman in Saudi Arabia after the two 601 00:32:04,360 --> 00:32:06,720 Speaker 2: of them, of course, appeared together at the Saudi US 602 00:32:06,840 --> 00:32:10,080 Speaker 2: Investment Forum earlier today. This just one leg, of course, 603 00:32:10,120 --> 00:32:12,160 Speaker 2: of the President's wider trip to the Middle East, which 604 00:32:12,240 --> 00:32:15,800 Speaker 2: Kitty in large part is about attracting investment from these countries, 605 00:32:15,880 --> 00:32:17,920 Speaker 2: not just the Saudis, but the Uaean cutter as well, 606 00:32:17,960 --> 00:32:20,280 Speaker 2: and bringing it to the United States. We're talking hundreds 607 00:32:20,280 --> 00:32:22,400 Speaker 2: of billions of dollars or even trillions, if you believe 608 00:32:22,920 --> 00:32:25,880 Speaker 2: the math of the president that companies are investing here. 609 00:32:26,000 --> 00:32:28,880 Speaker 2: How long is that going to take to materialize, to 610 00:32:28,960 --> 00:32:32,200 Speaker 2: make a difference in available jobs in the US and 611 00:32:32,240 --> 00:32:35,920 Speaker 2: actual hiring practices in productivity. Is most of this even 612 00:32:35,960 --> 00:32:38,920 Speaker 2: going to be realized realistically by the time he leaves office. 613 00:32:39,400 --> 00:32:41,960 Speaker 11: I think there's a real open question about whether these 614 00:32:42,080 --> 00:32:46,120 Speaker 11: sorts of negotiations will yield much fruit at all. You know, 615 00:32:46,480 --> 00:32:49,000 Speaker 11: the United States is already a very attractive place for 616 00:32:49,040 --> 00:32:53,640 Speaker 11: foreign investment, but it's because of things like our very 617 00:32:53,840 --> 00:32:59,680 Speaker 11: stable bond market and our highly educated workforce. It's the 618 00:32:59,760 --> 00:33:03,120 Speaker 11: things that it's the investments that we've made in our 619 00:33:03,200 --> 00:33:05,680 Speaker 11: people in our country that make this an attractive place 620 00:33:05,760 --> 00:33:08,880 Speaker 11: to invest. And I don't think that the economic policy 621 00:33:08,920 --> 00:33:12,680 Speaker 11: of the Trump administration is aiding in those draws to 622 00:33:12,760 --> 00:33:16,760 Speaker 11: foreign capital. The other question is, even if there is 623 00:33:16,800 --> 00:33:20,920 Speaker 11: additional investment, how will that actually translate for workers and families. 624 00:33:21,080 --> 00:33:22,680 Speaker 11: And that's one of the things that I think is 625 00:33:22,760 --> 00:33:25,960 Speaker 11: often missed in the conversation about the tariffs, especially that 626 00:33:28,400 --> 00:33:32,280 Speaker 11: a fear goal is to reshore manufacturing and bring back good, 627 00:33:32,640 --> 00:33:35,960 Speaker 11: strong American jobs. You have to have worker power and 628 00:33:36,040 --> 00:33:40,240 Speaker 11: worker protection to ensure that that happens. Otherwise, things like tariffs. 629 00:33:40,480 --> 00:33:43,720 Speaker 11: We saw this during the supply chain disruptions during the pandemic. 630 00:33:44,560 --> 00:33:48,760 Speaker 11: Supply chain disruptions become just another opportunity for powerful corporations 631 00:33:48,840 --> 00:33:53,680 Speaker 11: to price goug They don't have to share those profits 632 00:33:53,720 --> 00:33:57,480 Speaker 11: with their workers. We saw corporations turning in record profits 633 00:33:57,720 --> 00:34:00,720 Speaker 11: over in a quarter after quarter during a time where 634 00:34:00,960 --> 00:34:05,200 Speaker 11: prices were skyrocketing and wages were barely keeping up. And so, 635 00:34:05,800 --> 00:34:08,160 Speaker 11: you know, if you think about an economic policy that 636 00:34:08,360 --> 00:34:11,120 Speaker 11: is trying to center that sort of revival of the 637 00:34:11,200 --> 00:34:15,680 Speaker 11: American working class, we're really missing some pretty important pieces. 638 00:34:15,920 --> 00:34:19,279 Speaker 11: And in fact, on the other side of town, we've 639 00:34:19,320 --> 00:34:22,040 Speaker 11: got Capitol Hill marking up right, that's what I was 640 00:34:22,120 --> 00:34:25,279 Speaker 11: going to have big bills that are going to you know, 641 00:34:25,400 --> 00:34:28,760 Speaker 11: if Republicans in Congress have their way, Trump's big beautiful 642 00:34:28,840 --> 00:34:31,319 Speaker 11: bill is going to kick millions of people off their 643 00:34:31,360 --> 00:34:35,319 Speaker 11: health insurance, increase health insurance costs for millions more by 644 00:34:35,320 --> 00:34:39,840 Speaker 11: an average of seven hundred dollars a year, and also 645 00:34:40,040 --> 00:34:44,399 Speaker 11: hand out more tax breaks to multinational corporations for their 646 00:34:44,480 --> 00:34:47,759 Speaker 11: overseas profits. So if you're trying to bring investment and 647 00:34:47,920 --> 00:34:50,879 Speaker 11: jobs into the country, it's really hard to see how 648 00:34:51,640 --> 00:34:53,560 Speaker 11: this pencils out with the tax bill. 649 00:34:53,680 --> 00:34:55,320 Speaker 2: We have less than a minute left here, kitty, But 650 00:34:55,360 --> 00:34:57,719 Speaker 2: you also have no tax on tipped income or overtime 651 00:34:57,920 --> 00:35:01,040 Speaker 2: until twenty twenty eight, an expansion of the child tax 652 00:35:01,120 --> 00:35:03,359 Speaker 2: credit that people can claim are there not good things 653 00:35:03,440 --> 00:35:04,960 Speaker 2: in here for the American working class? 654 00:35:05,040 --> 00:35:07,520 Speaker 11: So I think no tax on tips in overtime is 655 00:35:07,600 --> 00:35:10,640 Speaker 11: a really perfect example of something that it sounds like 656 00:35:10,840 --> 00:35:14,000 Speaker 11: you are talking about working class people, But the fact 657 00:35:14,040 --> 00:35:16,680 Speaker 11: of the matter is if you work in a restaurant 658 00:35:17,239 --> 00:35:19,640 Speaker 11: and you know, are a waitress and trying to make 659 00:35:19,800 --> 00:35:22,400 Speaker 11: ends meet with your family, you're going to get pennies 660 00:35:22,560 --> 00:35:26,239 Speaker 11: out of no tax on tips. Whereas if you are 661 00:35:27,360 --> 00:35:33,560 Speaker 11: a fancy consultant who's able to reclassify your income as gratuities, 662 00:35:33,680 --> 00:35:35,440 Speaker 11: which let me tell you, there's going to be a 663 00:35:35,520 --> 00:35:38,840 Speaker 11: whole law practice that springs up around how to do that, 664 00:35:39,400 --> 00:35:41,800 Speaker 11: you could get tens of thousands of dollars out of this. 665 00:35:42,080 --> 00:35:45,120 Speaker 11: So there are a lot of these Trump tax cuts 666 00:35:45,160 --> 00:35:47,800 Speaker 11: that are really trojan horses for tax cuts for the wealthy. 667 00:35:48,040 --> 00:35:50,320 Speaker 2: All right, Kitty Richards at the Groundwork Collaborative. 668 00:35:52,560 --> 00:35:56,040 Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catch 669 00:35:56,120 --> 00:35:58,920 Speaker 1: us live weekdays at noon and five pm E's durn 670 00:35:59,080 --> 00:36:02,480 Speaker 1: on Apple, Coggline, Android Otto with the Blueberg Business App. 671 00:36:02,560 --> 00:36:05,560 Speaker 1: You can also listen live on Amazon Alexa from our 672 00:36:05,600 --> 00:36:10,120 Speaker 1: flagship New York station Just Say Alexa played Bloomberg eleven thirty. 673 00:36:11,760 --> 00:36:14,440 Speaker 2: Republicans want to keep the House in twenty twenty six, 674 00:36:14,520 --> 00:36:16,520 Speaker 2: where every seat will be up for grabs, and the 675 00:36:16,600 --> 00:36:19,080 Speaker 2: Senate is another question too, because there's a number of 676 00:36:19,200 --> 00:36:22,240 Speaker 2: key seats that are in play, including one in Michigan 677 00:36:22,640 --> 00:36:25,360 Speaker 2: thanks to the retirement of Senator or the planned retirement 678 00:36:25,400 --> 00:36:28,160 Speaker 2: that is, of Senator Gary Peters, the Democrat. It's kicking 679 00:36:28,200 --> 00:36:31,640 Speaker 2: off a contest for his seat who will sit there next, 680 00:36:31,719 --> 00:36:34,120 Speaker 2: and there are a number of Democrats already in this primary, 681 00:36:34,360 --> 00:36:37,520 Speaker 2: of course, current US Congressman Haley Stevens, former Michigan Speaker 682 00:36:37,600 --> 00:36:41,799 Speaker 2: Joe Tate, State Senator Mallory mcguaro, and our next guest 683 00:36:42,080 --> 00:36:46,000 Speaker 2: here on Balance of Power, Abdul Lsi said, Ed is 684 00:36:46,120 --> 00:36:48,800 Speaker 2: joining us as well. He is, of course a Democratic 685 00:36:48,840 --> 00:36:51,160 Speaker 2: candidate for Senate in the state of Michigan, and we 686 00:36:51,239 --> 00:36:54,400 Speaker 2: appreciate your time and joining us here on Bloomberg, Sir, 687 00:36:55,040 --> 00:36:58,040 Speaker 2: would we consider the legislation that is currently underway on 688 00:36:58,200 --> 00:37:00,800 Speaker 2: Capitol Hill, the idea that it will provide some tax 689 00:37:00,880 --> 00:37:03,560 Speaker 2: breaks to those who say work on tipped income or 690 00:37:03,640 --> 00:37:06,000 Speaker 2: work over time hours, they won't see their taxes go 691 00:37:06,160 --> 00:37:09,080 Speaker 2: up as a result of the twenty seventeen tax cuts 692 00:37:09,160 --> 00:37:12,480 Speaker 2: inspire expiring, but knowing also that there will be some 693 00:37:12,600 --> 00:37:15,600 Speaker 2: people who may get kicked off Medicaid roles on net? 694 00:37:15,800 --> 00:37:18,120 Speaker 2: What does it mean? How does it play in a 695 00:37:18,200 --> 00:37:19,040 Speaker 2: state like Michigan. 696 00:37:20,239 --> 00:37:22,120 Speaker 5: You know, I think on net it's a disaster. I 697 00:37:22,160 --> 00:37:25,200 Speaker 5: think the points that you made about those particular tax breaks, 698 00:37:25,320 --> 00:37:27,440 Speaker 5: I agree with them. They're just a fig leaf though, 699 00:37:27,600 --> 00:37:31,160 Speaker 5: for what will ultimately be major Medicaid cuts that'll drop 700 00:37:31,280 --> 00:37:35,480 Speaker 5: five hundred thousand Michiganders in millions more across this country 701 00:37:36,080 --> 00:37:37,719 Speaker 5: off of Medicaid. I just want to be clear, right, 702 00:37:37,760 --> 00:37:40,360 Speaker 5: we talk about Medicaid as a health insurance program for 703 00:37:40,440 --> 00:37:43,120 Speaker 5: the poor, but one in every two every other kid 704 00:37:43,560 --> 00:37:47,360 Speaker 5: in Michigan is insured via Medicaid and they're talking about 705 00:37:47,840 --> 00:37:49,680 Speaker 5: work requirements. I always want you to think about this. 706 00:37:49,880 --> 00:37:52,520 Speaker 5: We're going back to an era of child labor and 707 00:37:52,920 --> 00:37:55,440 Speaker 5: we're to make kids work for their medicaid. It makes 708 00:37:55,520 --> 00:37:57,440 Speaker 5: no sense. The real folks who are going to get 709 00:37:57,480 --> 00:38:00,359 Speaker 5: the biggest tax breaks tend to be the billionaire who 710 00:38:00,560 --> 00:38:03,879 Speaker 5: Donald Trump seems to want to give an opportunity every 711 00:38:03,920 --> 00:38:05,640 Speaker 5: single moment he can. I mean, it's as if the 712 00:38:06,000 --> 00:38:08,520 Speaker 5: stock tip that he gave them just before he pulled 713 00:38:08,600 --> 00:38:11,759 Speaker 5: back on his disastrous tariffs worn enough. Now he wants 714 00:38:11,800 --> 00:38:14,120 Speaker 5: to cut their taxes. And meanwhile he's out in the 715 00:38:14,160 --> 00:38:17,120 Speaker 5: Middle East accepting a gift of what a four hundred 716 00:38:17,160 --> 00:38:19,400 Speaker 5: million dollar airplane And like you got a question, the 717 00:38:19,480 --> 00:38:23,400 Speaker 5: dude really likes golden toilets, that does this airplane have 718 00:38:23,480 --> 00:38:26,000 Speaker 5: golden toilets too? I mean, this is just it's a 719 00:38:26,080 --> 00:38:28,800 Speaker 5: disaster for working people across my state and a disaster 720 00:38:28,920 --> 00:38:30,160 Speaker 5: for working people across the country. 721 00:38:31,880 --> 00:38:33,719 Speaker 2: And I would point out for our audience who may 722 00:38:33,760 --> 00:38:35,360 Speaker 2: not be able to spot this, I do believe that 723 00:38:35,440 --> 00:38:37,600 Speaker 2: is a Medicare for All book that is on the 724 00:38:37,640 --> 00:38:41,600 Speaker 2: bookshelf behind you as you have this conversation. What is 725 00:38:41,719 --> 00:38:45,680 Speaker 2: then the appropriate way to address issues around entitlements, knowing 726 00:38:45,760 --> 00:38:48,320 Speaker 2: that financially there is an argument that these are not 727 00:38:48,400 --> 00:38:51,080 Speaker 2: going to be sustainable for much longer that there is 728 00:38:51,200 --> 00:38:54,040 Speaker 2: of course an impetus to cut spending to rain in 729 00:38:54,160 --> 00:38:56,239 Speaker 2: the debt and deficit. If you were to sit in 730 00:38:56,320 --> 00:38:59,680 Speaker 2: the US Senate, how would you suggest fixing that problem? 731 00:38:59,719 --> 00:39:02,120 Speaker 2: If you don't want to take away benefits from. 732 00:39:01,960 --> 00:39:04,759 Speaker 5: Those who need it, you know, to me, the real 733 00:39:04,840 --> 00:39:08,000 Speaker 5: question is sustainability for the average family in Michigan, and 734 00:39:08,080 --> 00:39:10,560 Speaker 5: I think they're watching as their grocery prices are going 735 00:39:10,600 --> 00:39:12,920 Speaker 5: through the roof. They're watching as they're worried about falling 736 00:39:12,960 --> 00:39:15,080 Speaker 5: into debt simply for going to see a doctor. They're 737 00:39:15,080 --> 00:39:16,920 Speaker 5: worried about whether or not they're going to be able 738 00:39:16,960 --> 00:39:19,080 Speaker 5: to have a job next year or let alone tomorrow. 739 00:39:19,239 --> 00:39:21,120 Speaker 5: They're worried about whether or not their kid's school is 740 00:39:21,160 --> 00:39:23,920 Speaker 5: a place that's educating that kid for the future. And 741 00:39:24,080 --> 00:39:27,040 Speaker 5: right now they're finding it all deeply unsustainable. Now, the 742 00:39:27,080 --> 00:39:29,560 Speaker 5: way that we finance government too often has focused on 743 00:39:29,640 --> 00:39:32,359 Speaker 5: the well being of the fortune five hundred rather than 744 00:39:32,400 --> 00:39:34,160 Speaker 5: the well being of the three hundred and fifty million 745 00:39:34,520 --> 00:39:36,680 Speaker 5: of us who make this country what it is, and 746 00:39:36,760 --> 00:39:39,000 Speaker 5: so to me, my vision for government is one where 747 00:39:39,400 --> 00:39:43,080 Speaker 5: the everyday American worker understands that their life in the richest, 748 00:39:43,120 --> 00:39:45,799 Speaker 5: most powerful country in the world is in fact sustainable, 749 00:39:46,080 --> 00:39:47,800 Speaker 5: and that we need to make decisions about where we 750 00:39:48,080 --> 00:39:51,880 Speaker 5: invest our dollars to be building toward that sustainability. You know, 751 00:39:52,400 --> 00:39:54,480 Speaker 5: to everybody watching, to me, we all know that the 752 00:39:54,560 --> 00:39:57,600 Speaker 5: engine of an economy is people, right, it's people having 753 00:39:57,640 --> 00:40:00,320 Speaker 5: incredible ideas and opportunities to build that. And to me, 754 00:40:00,480 --> 00:40:03,279 Speaker 5: that looks like an economy built on small businesses. It's 755 00:40:03,280 --> 00:40:05,800 Speaker 5: an economy where rather than passing tax cuts for the 756 00:40:06,120 --> 00:40:09,000 Speaker 5: biggest companies, we're making it easier to build and scale 757 00:40:09,040 --> 00:40:11,560 Speaker 5: and grow a small business that takes its wealth and 758 00:40:11,640 --> 00:40:13,920 Speaker 5: puts it back into the local community. There's just a 759 00:40:14,000 --> 00:40:16,560 Speaker 5: difference in vision here, but we can in fact do 760 00:40:16,760 --> 00:40:19,120 Speaker 5: the things that we've done for a very long time 761 00:40:19,239 --> 00:40:21,759 Speaker 5: if we're willing to make decisions about how we right 762 00:40:21,840 --> 00:40:24,279 Speaker 5: size our economy. You go back fifty sixty seventy years 763 00:40:25,160 --> 00:40:27,160 Speaker 5: from here, and you look at when the economy was 764 00:40:27,200 --> 00:40:29,880 Speaker 5: buzzing the strongest. It's a moment when we used to 765 00:40:29,920 --> 00:40:32,319 Speaker 5: tax corporations in the wealthy at a far higher rate 766 00:40:32,440 --> 00:40:34,640 Speaker 5: so that we could actually invest in the well being 767 00:40:34,680 --> 00:40:36,279 Speaker 5: of everyday folks. And I think we just need to 768 00:40:36,360 --> 00:40:38,759 Speaker 5: be thinking and studying our history to go back to 769 00:40:38,840 --> 00:40:39,160 Speaker 5: that time. 770 00:40:41,120 --> 00:40:43,360 Speaker 2: Well, when we consider the economy of Michigan and the 771 00:40:43,440 --> 00:40:46,719 Speaker 2: workers in Michigan in particular, President Trump argues that one 772 00:40:46,800 --> 00:40:49,920 Speaker 2: of the ways to bring about that kind of renaissance, 773 00:40:50,000 --> 00:40:52,759 Speaker 2: to be reinvesting in the US economy is the imposition 774 00:40:52,960 --> 00:40:55,720 Speaker 2: of tariffs, which we have seen on things like autos, 775 00:40:55,760 --> 00:40:58,719 Speaker 2: and which actually have been welcomed by many workers in 776 00:40:58,800 --> 00:41:02,120 Speaker 2: the auto sector, if not the companies themselves. People who 777 00:41:02,120 --> 00:41:04,800 Speaker 2: would if you were to be a Michigan senator, be 778 00:41:04,960 --> 00:41:08,680 Speaker 2: your constituents. And I wonder, and I've asked this of 779 00:41:08,760 --> 00:41:11,200 Speaker 2: one of your opponents, Mallorie Tomorrow, as well, what your 780 00:41:11,239 --> 00:41:13,640 Speaker 2: message would be to those who feel like the trade 781 00:41:13,680 --> 00:41:17,759 Speaker 2: policies of President Trump actually do serve to benefit them. 782 00:41:19,000 --> 00:41:20,400 Speaker 5: Yeah, I want to be clear about something, not that 783 00:41:20,520 --> 00:41:23,120 Speaker 5: it has been a disaster for working people across our state. 784 00:41:23,719 --> 00:41:26,160 Speaker 5: It's hollowed out towns, it's destroyed a whole way of 785 00:41:26,200 --> 00:41:29,279 Speaker 5: life for folks in Michigan. And so the way I 786 00:41:29,320 --> 00:41:31,040 Speaker 5: think about it, and forgive me, I'm a doctor, So 787 00:41:32,080 --> 00:41:34,760 Speaker 5: offer me analogy here. I think about it like a cancer, 788 00:41:35,000 --> 00:41:37,160 Speaker 5: and if you want to treat cancer, everybody knows that 789 00:41:37,360 --> 00:41:39,319 Speaker 5: you need a bit of chemotherapy. Now I think abou 790 00:41:39,360 --> 00:41:41,799 Speaker 5: chemotherapy is that it's a poison. So you use it very, 791 00:41:41,960 --> 00:41:44,319 Speaker 5: very sparingly. You use it in a very directed way, 792 00:41:44,600 --> 00:41:47,000 Speaker 5: and you're constantly tracking what the impact is because of 793 00:41:47,040 --> 00:41:49,520 Speaker 5: course you want to kill the tumor the cancer before 794 00:41:50,400 --> 00:41:53,120 Speaker 5: it hurts the patient too much. Now, if you think 795 00:41:53,160 --> 00:41:56,560 Speaker 5: about tariffs as that chemotherapy, right, then the way you'd 796 00:41:56,560 --> 00:41:58,359 Speaker 5: want to do this is to be really thoughtful about 797 00:41:58,360 --> 00:42:00,880 Speaker 5: the kind of industries that you want to invest in. 798 00:42:00,960 --> 00:42:03,680 Speaker 5: You make those investments, you let your creating partners know 799 00:42:03,760 --> 00:42:06,680 Speaker 5: that you're going to be tariffing around these particular industries 800 00:42:07,719 --> 00:42:10,440 Speaker 5: a set of benchmarks, and then as those companies meet 801 00:42:10,480 --> 00:42:13,920 Speaker 5: those benchmarks, you start to pull away, always telegraphing what 802 00:42:14,000 --> 00:42:15,239 Speaker 5: it is you're going to do. But the thing about 803 00:42:15,280 --> 00:42:17,920 Speaker 5: Donald Trump is that he gets the right problem, and 804 00:42:18,000 --> 00:42:21,200 Speaker 5: then his solution is always him handed. It's always chaotic, 805 00:42:21,280 --> 00:42:23,160 Speaker 5: and it's always self serving, which is exactly what we 806 00:42:23,239 --> 00:42:26,400 Speaker 5: saw with this iteration of tariffs. So while tariffs themselves 807 00:42:26,480 --> 00:42:29,080 Speaker 5: can be a useful tool like chemotherapy to treat cancer. 808 00:42:29,400 --> 00:42:30,960 Speaker 5: The way that he'd gone about to do it is 809 00:42:31,000 --> 00:42:34,200 Speaker 5: really more about accruing power with corporate CEOs and bringing 810 00:42:34,239 --> 00:42:36,800 Speaker 5: them to heal than it is about actually addressing the problem. 811 00:42:36,920 --> 00:42:39,080 Speaker 5: As we see with the fact that he's now blinked 812 00:42:39,160 --> 00:42:41,239 Speaker 5: and we're kind of back to square one, And you 813 00:42:41,280 --> 00:42:43,840 Speaker 5: got to ask yourself, what did we achieve here aside 814 00:42:43,880 --> 00:42:47,839 Speaker 5: from more inflation and the destruction of thousands of small 815 00:42:47,880 --> 00:42:50,400 Speaker 5: businesses across our state and our country. 816 00:42:52,000 --> 00:42:54,160 Speaker 2: Well we did just here from President Trump talking in 817 00:42:54,239 --> 00:42:57,720 Speaker 2: part about his tariff policy at the Saudi US Investment 818 00:42:58,160 --> 00:43:00,520 Speaker 2: Forum and read. But he used his time to touch 819 00:43:00,560 --> 00:43:03,200 Speaker 2: on a number of subjects as well, including the ongoing 820 00:43:03,520 --> 00:43:07,520 Speaker 2: conflict between Israel and Hamas in Gaza. We obviously are 821 00:43:07,600 --> 00:43:10,600 Speaker 2: paying close attention to whether Israel potentially escalates things in 822 00:43:10,680 --> 00:43:14,560 Speaker 2: Gaza even further, and knowing what a flashpoint that was 823 00:43:14,680 --> 00:43:18,080 Speaker 2: as an issue in Michigan in particular in twenty twenty four, 824 00:43:18,160 --> 00:43:21,239 Speaker 2: I wonder if you're anticipating the same thing in twenty 825 00:43:21,320 --> 00:43:21,879 Speaker 2: twenty six. 826 00:43:23,520 --> 00:43:26,040 Speaker 5: Michiganders of all stripes, you know, they'll drop their kids 827 00:43:26,080 --> 00:43:28,120 Speaker 5: off at school or their grandkids off at school. They 828 00:43:28,160 --> 00:43:30,239 Speaker 5: look at that school and they say, Man, that place 829 00:43:30,280 --> 00:43:32,439 Speaker 5: doesn't look much different than it did thirty years ago 830 00:43:32,440 --> 00:43:35,200 Speaker 5: when I went there. I wonder what a couple million 831 00:43:35,280 --> 00:43:38,480 Speaker 5: dollars might do for that school. And instead, our government 832 00:43:38,640 --> 00:43:41,880 Speaker 5: has been doing this thing of sending tens of billion 833 00:43:42,480 --> 00:43:45,719 Speaker 5: of dollars to a foreign military to drop bombs on 834 00:43:46,040 --> 00:43:48,560 Speaker 5: other kids and their schools. And I think all of 835 00:43:48,680 --> 00:43:52,279 Speaker 5: us understand that that kind of investment, it's contrary to 836 00:43:52,360 --> 00:43:54,719 Speaker 5: what's good for all of us. And so I know 837 00:43:54,880 --> 00:43:57,520 Speaker 5: that Michiganders would rather us be spending our money here 838 00:43:57,680 --> 00:44:00,759 Speaker 5: investing in our kids rather than sending them to forn militaries. 839 00:44:00,760 --> 00:44:03,200 Speaker 5: And I do anticipate that it's going to continue to 840 00:44:03,320 --> 00:44:05,640 Speaker 5: be an issue simply because it makes no sense for 841 00:44:05,719 --> 00:44:08,160 Speaker 5: the average michigandor and it makes no sense for our 842 00:44:08,200 --> 00:44:10,120 Speaker 5: country well. 843 00:44:10,160 --> 00:44:11,880 Speaker 2: And of course, on that issue in others, you are 844 00:44:11,920 --> 00:44:14,680 Speaker 2: trying to draw a distinction between that and your primary 845 00:44:14,719 --> 00:44:18,759 Speaker 2: opponents in this democratic contest for this Senate seat. And 846 00:44:18,800 --> 00:44:23,719 Speaker 2: I wonder how you're thinking about differentiating yourself compared to 847 00:44:23,840 --> 00:44:26,600 Speaker 2: those who are running against you, and if this risks 848 00:44:26,680 --> 00:44:30,120 Speaker 2: exposing through this primary some of the fissures within the 849 00:44:30,200 --> 00:44:33,279 Speaker 2: Democratic Party right now that obviously has been wrestling with 850 00:44:33,360 --> 00:44:35,880 Speaker 2: itself in the aftermath of the last election. 851 00:44:37,600 --> 00:44:39,239 Speaker 5: I'll tell you this, I got nothing but respect for 852 00:44:39,320 --> 00:44:42,320 Speaker 5: folks who are running right now to take on Trump 853 00:44:42,360 --> 00:44:45,160 Speaker 5: and trump Ism, given all of the damage that he's 854 00:44:45,280 --> 00:44:48,359 Speaker 5: done to our country and it's standing abroad, and all 855 00:44:48,480 --> 00:44:51,240 Speaker 5: the damage he's doing to the lives of everyday folks 856 00:44:51,560 --> 00:44:54,600 Speaker 5: in my state and elsewhere. That being said, the big 857 00:44:54,680 --> 00:44:57,440 Speaker 5: difference with me is just that I don't take corporate 858 00:44:57,600 --> 00:45:00,400 Speaker 5: contributions for a reason, because I think that Trump is 859 00:45:00,400 --> 00:45:02,600 Speaker 5: actually just the symptom of a far bigger disease, and 860 00:45:02,640 --> 00:45:05,400 Speaker 5: that disease is the politics that have been dominated by 861 00:45:05,480 --> 00:45:09,279 Speaker 5: corporate interests and frankly, the interests of billionaires, and I 862 00:45:09,360 --> 00:45:12,600 Speaker 5: think that has led us to a system where the 863 00:45:12,640 --> 00:45:15,400 Speaker 5: economy doesn't work for working people, where we can't guarantee 864 00:45:15,400 --> 00:45:18,800 Speaker 5: people healthcare, where our air, water, and soil get corrupted 865 00:45:18,840 --> 00:45:21,719 Speaker 5: by the interests of a few, very, very large corporations. 866 00:45:21,760 --> 00:45:23,480 Speaker 5: I think we can do better. And so what you're 867 00:45:23,480 --> 00:45:25,200 Speaker 5: going to hear from me is somebody who's taking the 868 00:45:25,280 --> 00:45:28,200 Speaker 5: time to listen to everyday folks and talking very clearly 869 00:45:28,320 --> 00:45:31,239 Speaker 5: about the kinds of policy solutions to take on monopolies 870 00:45:31,280 --> 00:45:33,840 Speaker 5: that are raising the price of our groceries, or to 871 00:45:34,000 --> 00:45:37,040 Speaker 5: address the way that big tech is corrupting our minds 872 00:45:37,080 --> 00:45:39,680 Speaker 5: and our families, fracking our attention out of our eyeballs 873 00:45:39,719 --> 00:45:43,480 Speaker 5: and ear drums. The ability to guarantee health care for everybody, 874 00:45:43,719 --> 00:45:46,040 Speaker 5: like the book that I wrote on Medicare for All, 875 00:45:46,560 --> 00:45:48,120 Speaker 5: and so that is going to be the big focus 876 00:45:48,200 --> 00:45:51,040 Speaker 5: and part of me for that is I'm not going 877 00:45:51,080 --> 00:45:53,080 Speaker 5: to pull punches when it comes to a foreign policy 878 00:45:53,680 --> 00:45:57,080 Speaker 5: that has us being first among equals, actually following the 879 00:45:57,200 --> 00:45:59,920 Speaker 5: rules of the rules based international order that are predeces 880 00:46:00,040 --> 00:46:02,319 Speaker 5: us are set about. After World War Two, we got 881 00:46:02,360 --> 00:46:04,320 Speaker 5: an opportunity to do so much better, to invest in 882 00:46:04,400 --> 00:46:07,080 Speaker 5: our own communities and to take on the power of 883 00:46:07,239 --> 00:46:11,120 Speaker 5: the richest, most powerful folks that are leaving us more unequal, angrier, 884 00:46:11,640 --> 00:46:14,719 Speaker 5: and more lonely and less well to do for it. 885 00:46:16,320 --> 00:46:18,480 Speaker 2: All right, Abdua, we appreciate you joining us here on 886 00:46:18,640 --> 00:46:21,600 Speaker 2: Balance of Power at Dual LSA ed Democratic candidate for 887 00:46:21,760 --> 00:46:24,560 Speaker 2: US Senate in Michigan. Thank you for joining us live 888 00:46:24,880 --> 00:46:25,719 Speaker 2: from an arbor. 889 00:46:28,760 --> 00:46:31,960 Speaker 8: Thanks for listening to the Balance of Power podcast. Make 890 00:46:32,000 --> 00:46:34,920 Speaker 8: sure to subscribe if you haven't already, at Apple, Spotify, 891 00:46:35,040 --> 00:46:37,640 Speaker 8: or wherever you get your podcasts, and you can find 892 00:46:37,680 --> 00:46:40,920 Speaker 8: us live every weekday from Washington, DC at noontime Eastern 893 00:46:41,239 --> 00:46:42,399 Speaker 8: at Bloomberg dot com