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 Coarckley 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
00:00:25,239 --> 00:00:28,120
Speaker 2: We consider the impact of trade deals being announced at

7
00:00:28,120 --> 00:00:30,720
Speaker 2: the White House. Of course, it was Japan late yesterday.

8
00:00:30,760 --> 00:00:33,920
Speaker 2: We talked about it here on Balance of Power has

9
00:00:33,960 --> 00:00:36,519
Speaker 2: its own elements at the President Trump last evening at

10
00:00:36,520 --> 00:00:39,000
Speaker 2: the White House. That has been followed, of course, by

11
00:00:39,080 --> 00:00:42,760
Speaker 2: news on the terminal here that the EU could be next.

12
00:00:42,760 --> 00:00:44,760
Speaker 2: We're going to explore both of these ahead. Listen to

13
00:00:44,800 --> 00:00:46,600
Speaker 2: the President from last night at the White House.

14
00:00:47,200 --> 00:00:49,760
Speaker 3: I just signed the largest trade deal in history, I

15
00:00:49,760 --> 00:00:52,680
Speaker 3: think maybe the largest deal in history with Japan. We

16
00:00:52,760 --> 00:00:54,840
Speaker 3: worked on it long and hard, and it's a great

17
00:00:54,880 --> 00:00:58,120
Speaker 3: deal for everybody. It's a great deal, a lot different

18
00:00:58,160 --> 00:01:00,720
Speaker 3: from the deals in the past. I can that we're

19
00:01:00,720 --> 00:01:03,400
Speaker 3: doing things that have never been done in this country before,

20
00:01:03,400 --> 00:01:06,360
Speaker 3: and our country is becoming very rich again. And that's

21
00:01:06,400 --> 00:01:07,080
Speaker 3: the way it should be.

22
00:01:09,959 --> 00:01:12,319
Speaker 4: One of the main focal points when it does come

23
00:01:12,520 --> 00:01:14,680
Speaker 4: to that Japan deal has to do with this five

24
00:01:14,800 --> 00:01:18,360
Speaker 4: hundred and fifty billion dollar investment fund. It's something that

25
00:01:18,400 --> 00:01:21,399
Speaker 4: the administration is touting as innovative and ultimately helped to

26
00:01:21,440 --> 00:01:24,000
Speaker 4: get that trade deal over at the finish line. And

27
00:01:24,000 --> 00:01:26,600
Speaker 4: that's where we want to start by bringing in Bloomberg's

28
00:01:26,880 --> 00:01:30,880
Speaker 4: Josh Winngrove helps to lead our White House coverage here. Josh,

29
00:01:30,920 --> 00:01:33,640
Speaker 4: thanks for being here. I'm wondering if you could help

30
00:01:33,720 --> 00:01:36,640
Speaker 4: us connect the dots here because we saw this deal

31
00:01:36,640 --> 00:01:41,000
Speaker 4: emerge with Japan. The Administration says that this investment fund

32
00:01:41,240 --> 00:01:45,080
Speaker 4: ultimately was what helped to clinch the deal. Should we

33
00:01:45,160 --> 00:01:48,320
Speaker 4: expect other trading partners, such as the European Union to

34
00:01:48,360 --> 00:01:51,680
Speaker 4: put something that the Administration deems innovative on the table?

35
00:01:51,720 --> 00:01:54,040
Speaker 4: One would they? And two would that even look like?

36
00:01:54,120 --> 00:01:55,720
Speaker 5: I think innovative is going to be in the eye

37
00:01:55,760 --> 00:01:58,160
Speaker 5: of the beholder. And I think the Japan situation was

38
00:01:58,760 --> 00:02:01,640
Speaker 5: pretty unique. Could make the argument, for instance, that they

39
00:02:01,640 --> 00:02:05,280
Speaker 5: had fewer ways to fire back than Europe did. They

40
00:02:05,280 --> 00:02:08,240
Speaker 5: had less leverage that way. What they had was a

41
00:02:08,280 --> 00:02:10,920
Speaker 5: pocketbook to make this pledge. Now, I should note we

42
00:02:11,000 --> 00:02:13,680
Speaker 5: do not have details on it, and as we've been

43
00:02:13,840 --> 00:02:16,239
Speaker 5: saying in our reporting, of course, the number was four

44
00:02:16,360 --> 00:02:19,800
Speaker 5: hundred printed on the President's desk until he scratched it

45
00:02:19,800 --> 00:02:21,239
Speaker 5: out with SHARPI and then it was five hundred, and

46
00:02:21,240 --> 00:02:23,440
Speaker 5: now it's five point fifty. We don't know details. The

47
00:02:23,520 --> 00:02:26,200
Speaker 5: Japanese are saying these are low and guarantees, the Americans

48
00:02:26,200 --> 00:02:30,280
Speaker 5: saying something different. Eye popping number anyway you cut it one,

49
00:02:30,280 --> 00:02:33,760
Speaker 5: that'll be difficult for other countries to match preps. With

50
00:02:33,880 --> 00:02:37,040
Speaker 5: Korea looking at a similar model. They have similar concerns

51
00:02:37,080 --> 00:02:41,800
Speaker 5: to Japan around auto tariffs, steel tariffs as well, So

52
00:02:41,919 --> 00:02:44,640
Speaker 5: you know, a big one here. I'm glad my toddler

53
00:02:44,760 --> 00:02:47,519
Speaker 5: was asleep when this really popped off, because that really

54
00:02:47,560 --> 00:02:50,799
Speaker 5: smoothed my night over a little bit. That was important.

55
00:02:50,840 --> 00:02:54,040
Speaker 5: But I think one thing here is just to back up,

56
00:02:54,040 --> 00:02:56,079
Speaker 5: like so much of Trump's you on trade was forged,

57
00:02:56,600 --> 00:02:58,720
Speaker 5: like in how he like you know, with Japan in

58
00:02:58,760 --> 00:03:02,280
Speaker 5: the eighties in New York all the consternation around that.

59
00:03:02,360 --> 00:03:04,639
Speaker 5: So this is symbolic in some ways, but I think

60
00:03:04,680 --> 00:03:07,560
Speaker 5: it's just really too early to say whether it's a

61
00:03:07,639 --> 00:03:10,440
Speaker 5: template for the EU. And of course we're seeing today

62
00:03:10,440 --> 00:03:14,360
Speaker 5: progress potentially on the EU or other deals like the

63
00:03:14,400 --> 00:03:16,600
Speaker 5: seth Koreans. We do think though that, you know, you

64
00:03:16,840 --> 00:03:20,160
Speaker 5: start looking at this fifteen number as more of a floor.

65
00:03:20,320 --> 00:03:22,399
Speaker 5: One other thing that Trump did was scratch out ten.

66
00:03:22,720 --> 00:03:22,840
Speaker 4: Right.

67
00:03:22,919 --> 00:03:24,799
Speaker 5: The initial deal here was the Japanese would go down

68
00:03:24,840 --> 00:03:27,320
Speaker 5: to ten on general goods, no die.

69
00:03:27,520 --> 00:03:30,000
Speaker 2: So this fund, this five hundred and fifty billion dollars

70
00:03:30,120 --> 00:03:33,519
Speaker 2: and to your point, yes, smacks of the eighties when

71
00:03:33,520 --> 00:03:37,360
Speaker 2: the refrain was Japan is buying the ground beneath our feet?

72
00:03:37,640 --> 00:03:39,960
Speaker 2: Is that the cost of selling cars here? That's the

73
00:03:40,000 --> 00:03:43,760
Speaker 2: carve out for Japan? And where's all that money going?

74
00:03:43,840 --> 00:03:45,280
Speaker 2: Can we do anything we want with it?

75
00:03:45,360 --> 00:03:47,760
Speaker 5: Is so unclear. I cannot stress this enough. It's like

76
00:03:47,760 --> 00:03:50,120
Speaker 5: there's no details on it. No one's put anything in

77
00:03:50,120 --> 00:03:52,720
Speaker 5: writing yet we're going to see, including Tokyo correct. And

78
00:03:52,760 --> 00:03:54,960
Speaker 5: the Americans are saying this is new money. For instance,

79
00:03:55,000 --> 00:03:57,720
Speaker 5: SoftBank has already talked about one hundred billion dollar pledge.

80
00:03:58,680 --> 00:04:01,040
Speaker 5: The Americans are saying new money would seem to preclude

81
00:04:01,040 --> 00:04:04,160
Speaker 5: them sort of double counting previous announcements, which Trump has

82
00:04:04,320 --> 00:04:06,280
Speaker 5: not been shy about doing in the past on things

83
00:04:06,320 --> 00:04:08,960
Speaker 5: for instance, of course, nip On steel deal as well.

84
00:04:09,480 --> 00:04:11,320
Speaker 5: So they're saying, look, we're going to have, like you know,

85
00:04:11,440 --> 00:04:13,440
Speaker 5: a new chips fab going to be one hundred million

86
00:04:13,480 --> 00:04:15,560
Speaker 5: dollar project. We heard from Secretary of Line Against Secretary

87
00:04:15,600 --> 00:04:17,720
Speaker 5: Bevesn't this morning on this. The Japanese is gott to

88
00:04:17,720 --> 00:04:19,839
Speaker 5: come up with the money and then the operator leases

89
00:04:19,880 --> 00:04:23,200
Speaker 5: that plant. But there's so many ways to slice this

90
00:04:23,360 --> 00:04:26,800
Speaker 5: apple if you wanted to. And you know, for instance,

91
00:04:27,760 --> 00:04:29,800
Speaker 5: how they calculate what the net profit is, you know

92
00:04:29,800 --> 00:04:31,960
Speaker 5: how the Americans get their share. Who knows. But for

93
00:04:31,960 --> 00:04:35,360
Speaker 5: the Japanese, this was the price of getting it down

94
00:04:35,400 --> 00:04:37,560
Speaker 5: to fifteen. And yes it's actually twelve and a half

95
00:04:37,640 --> 00:04:40,400
Speaker 5: because a Kazawa is saying that the MFN rate is

96
00:04:40,440 --> 00:04:44,520
Speaker 5: included in the fifteen. So the previously, before all this started,

97
00:04:44,520 --> 00:04:45,919
Speaker 5: the auto tariff was about two and a half, and

98
00:04:45,920 --> 00:04:48,280
Speaker 5: that would be fifteen for them. They can work with that.

99
00:04:48,720 --> 00:04:50,880
Speaker 5: And now if you're the South Koreans, you have more

100
00:04:50,920 --> 00:04:53,599
Speaker 5: pressure to try to match that. They of course have

101
00:04:53,880 --> 00:04:59,360
Speaker 5: less domestic US production than Japanese companies do. And if

102
00:04:59,400 --> 00:05:03,240
Speaker 5: your other automakers in Europe, in Canada and Mexico, these

103
00:05:03,320 --> 00:05:06,280
Speaker 5: numbers probably change your calculus a little bit as well.

104
00:05:06,480 --> 00:05:09,360
Speaker 4: Well, since we are talking about how autos really were

105
00:05:09,600 --> 00:05:11,599
Speaker 4: at the heart of this steel on both ends. The

106
00:05:11,800 --> 00:05:14,159
Speaker 4: administration also says that it's going to see you perhaps

107
00:05:14,760 --> 00:05:20,240
Speaker 4: more lenient standards for US automakers. Sector specific tariffs have

108
00:05:20,440 --> 00:05:23,920
Speaker 4: really come into these negotiations under Section two thirty two,

109
00:05:24,040 --> 00:05:27,360
Speaker 4: enacted on national security concerns. These are totally separate from

110
00:05:27,400 --> 00:05:30,120
Speaker 4: the so called reciprocal tariff plans. Can you just walk

111
00:05:30,160 --> 00:05:33,359
Speaker 4: us through? Is this where the US perhaps has more leverage?

112
00:05:33,400 --> 00:05:35,520
Speaker 4: Is that why they're coming into the conversation in a

113
00:05:35,560 --> 00:05:38,120
Speaker 4: meaningful way or were they always supposed to be intertwined?

114
00:05:38,160 --> 00:05:40,520
Speaker 5: Yeah, I think it's the glass half full empty scenario

115
00:05:40,600 --> 00:05:43,919
Speaker 5: right here. They had always separated these out, and the

116
00:05:44,080 --> 00:05:46,200
Speaker 5: hint was that the US did not want to budge

117
00:05:46,279 --> 00:05:48,400
Speaker 5: on these sectoral tariffs, which by the way, have a

118
00:05:48,440 --> 00:05:51,560
Speaker 5: stronger legal footing than the IEPA tariffs that we've been

119
00:05:51,560 --> 00:05:54,640
Speaker 5: talking about there, so they're more bulletproof. And in some

120
00:05:54,720 --> 00:05:57,480
Speaker 5: ways they didn't. There's no change in steel tariffs, for

121
00:05:57,520 --> 00:06:00,480
Speaker 5: instance with the Japanese, who of course just bought one

122
00:06:00,480 --> 00:06:03,880
Speaker 5: of the biggest American steel producers. So you know, it's

123
00:06:04,200 --> 00:06:05,960
Speaker 5: in some ways you're looking, hey, look, you know, maybe

124
00:06:06,000 --> 00:06:08,640
Speaker 5: there is room for any good The doors open to

125
00:06:08,680 --> 00:06:10,560
Speaker 5: some of these two three to two tariffs because the

126
00:06:10,600 --> 00:06:13,640
Speaker 5: Japanese brought it down on autos but they didn't on others.

127
00:06:13,640 --> 00:06:15,599
Speaker 5: And it's still a little fuzzy on what they agreed

128
00:06:15,640 --> 00:06:19,080
Speaker 5: to on pharmaceutical tariffs and semiconductor terraffs which are coming,

129
00:06:19,960 --> 00:06:22,359
Speaker 5: and they seem to be some sort of concession to

130
00:06:22,400 --> 00:06:25,359
Speaker 5: the Japanese on that as well. But again, you know,

131
00:06:25,480 --> 00:06:28,880
Speaker 5: the price if five hundred and fifty billion dollars of

132
00:06:28,920 --> 00:06:32,320
Speaker 5: a presidential directed fund, which is what they're saying it is,

133
00:06:32,360 --> 00:06:34,919
Speaker 5: Trump can pick a project flick of a pen and

134
00:06:34,920 --> 00:06:37,839
Speaker 5: the Japanese have to fund it, is the price of

135
00:06:37,880 --> 00:06:40,200
Speaker 5: bringing it two three to two down ten percentage points.

136
00:06:40,520 --> 00:06:42,680
Speaker 5: That's going to be a pretty high price of entry

137
00:06:42,720 --> 00:06:44,599
Speaker 5: if you're a country that is wanting to bring yours

138
00:06:44,640 --> 00:06:45,159
Speaker 5: down as well.

139
00:06:45,279 --> 00:06:47,960
Speaker 2: Getting into the granular with josh Win Grove, Bloomberg White

140
00:06:47,960 --> 00:06:50,279
Speaker 2: House Correspondent, josh thank you. Maybe next time we talk

141
00:06:50,480 --> 00:06:51,719
Speaker 2: it'll be about a deal with the EU.

142
00:06:51,960 --> 00:06:54,320
Speaker 5: Thank you. As long as it's before or after bedtime.

143
00:06:53,920 --> 00:06:57,200
Speaker 2: That's something we'll make sure is the case as always,

144
00:06:57,279 --> 00:06:59,559
Speaker 2: josh Win Grove, And we want to add the voice

145
00:06:59,560 --> 00:07:03,680
Speaker 2: of Congress Brendan Boyle, who's of course ranking member on

146
00:07:03,880 --> 00:07:08,520
Speaker 2: the House Budget Committee, also representing Pennsylvania's second district Congressman.

147
00:07:08,600 --> 00:07:10,720
Speaker 2: It's good to have you back on Bloomberg TV and Radio.

148
00:07:10,760 --> 00:07:13,480
Speaker 2: I'm really curious to get your ideas here on the

149
00:07:13,480 --> 00:07:15,840
Speaker 2: budget writing process because it looks like it could be

150
00:07:15,920 --> 00:07:19,040
Speaker 2: fraught this September. But I'd like to ask you about

151
00:07:19,040 --> 00:07:21,160
Speaker 2: the matter we're talking about at hand here the trade

152
00:07:21,160 --> 00:07:24,040
Speaker 2: deals that have been emerging from the White House. Some

153
00:07:24,120 --> 00:07:26,680
Speaker 2: say this is vindication for the tariff regime. What are

154
00:07:26,680 --> 00:07:29,640
Speaker 2: these deals with the likes of Japan, the Philippines and

155
00:07:29,680 --> 00:07:31,600
Speaker 2: others mean for your state in Pennsylvania.

156
00:07:32,880 --> 00:07:35,360
Speaker 6: Well, great to be back with you, and let's be clear.

157
00:07:35,480 --> 00:07:38,280
Speaker 7: The reason why my state, the Commonwealth of Pennsylvania, voter

158
00:07:38,360 --> 00:07:42,600
Speaker 7: for Donald Trump by just over a percentage point is because,

159
00:07:42,760 --> 00:07:46,680
Speaker 7: overwhelmingly voters who swung from twenty twenty to twenty twenty.

160
00:07:46,400 --> 00:07:50,120
Speaker 6: Four, we're saying costs were just too high.

161
00:07:50,320 --> 00:07:54,840
Speaker 7: I heard it anecdotally all over my district and really

162
00:07:54,880 --> 00:07:58,760
Speaker 7: all over the Commonwealth. I even observed focus groups that

163
00:07:58,760 --> 00:08:02,640
Speaker 7: that was a swing voters, and it was so consistent

164
00:08:03,000 --> 00:08:05,520
Speaker 7: I would say for at least eighty percent of voters.

165
00:08:05,200 --> 00:08:07,720
Speaker 6: Who swung it was because of high costs.

166
00:08:07,960 --> 00:08:10,680
Speaker 7: So what has Donald Trump done his first six months

167
00:08:10,680 --> 00:08:13,880
Speaker 7: in office. He hasn't solved the problem of costs and

168
00:08:13,920 --> 00:08:17,040
Speaker 7: goods being too high. He's actually made them worse. We

169
00:08:17,080 --> 00:08:20,280
Speaker 7: see Amazon raising their prices and all sorts of goods,

170
00:08:20,320 --> 00:08:24,800
Speaker 7: Walmart quietly raising their prices on all sorts of goods.

171
00:08:25,240 --> 00:08:30,040
Speaker 7: The main driver of this, of course, the tariffs. This

172
00:08:30,080 --> 00:08:33,800
Speaker 7: has been a real problem for our economy. The Fed

173
00:08:33,880 --> 00:08:36,720
Speaker 7: has outright said the reason why they are keeping interest

174
00:08:36,760 --> 00:08:40,280
Speaker 7: rates as high as they are because of the uncertainty

175
00:08:40,600 --> 00:08:44,199
Speaker 7: of high tariffs. So forgive me if I don't applaud

176
00:08:44,320 --> 00:08:47,760
Speaker 7: when the arsonist starts to put out the fire that

177
00:08:47,880 --> 00:08:49,200
Speaker 7: he started in the first place.

178
00:08:50,640 --> 00:08:53,080
Speaker 4: But Congressmen, at the same time, you also represent a

179
00:08:53,120 --> 00:08:55,320
Speaker 4: state that's home to a lot of steel production in

180
00:08:55,360 --> 00:08:57,760
Speaker 4: the United States, and we've seen many of the steel

181
00:08:57,800 --> 00:09:03,439
Speaker 4: manufacturers applaud these tariffs of a more protectionist policy. I'm

182
00:09:03,440 --> 00:09:06,400
Speaker 4: wondering if you would caution the administration when it comes

183
00:09:06,400 --> 00:09:09,480
Speaker 4: to any sort of potential carve outs or limitations on

184
00:09:09,600 --> 00:09:13,480
Speaker 4: these sector specific tariffs like steel, as they are negotiating

185
00:09:13,480 --> 00:09:14,640
Speaker 4: these deals going forward.

186
00:09:15,360 --> 00:09:17,440
Speaker 7: Yeah, you know, I'm glad you brought up this example

187
00:09:17,600 --> 00:09:21,080
Speaker 7: because whether you know it or not, you actually are

188
00:09:21,120 --> 00:09:24,320
Speaker 7: bringing up an example of an area where I have

189
00:09:24,480 --> 00:09:25,920
Speaker 7: supported tariffs.

190
00:09:26,480 --> 00:09:30,720
Speaker 6: Now, what's the difference. I supported tariffs in the.

191
00:09:30,640 --> 00:09:35,400
Speaker 7: Past and currently as it applies to specific countries that

192
00:09:35,440 --> 00:09:38,960
Speaker 7: are behaving in bad behavior and on particular products. So,

193
00:09:39,080 --> 00:09:43,680
Speaker 7: for example, tariff on China for their constant incessant steel

194
00:09:43,760 --> 00:09:48,480
Speaker 7: dumping dumping to hurt the US steel industry. That is

195
00:09:48,520 --> 00:09:52,200
Speaker 7: an example of using tariffs as a tool in the toolbox.

196
00:09:53,240 --> 00:09:57,360
Speaker 7: But what President Trump is doing is entirely different. Placing

197
00:09:57,440 --> 00:10:02,000
Speaker 7: tariffs on over ninety different countries, many of whom are

198
00:10:02,240 --> 00:10:06,360
Speaker 7: close US allies such as Canada and various European countries, Japan,

199
00:10:07,320 --> 00:10:12,560
Speaker 7: South Korea, with all sorts of bizarre rates that have

200
00:10:12,679 --> 00:10:16,240
Speaker 7: no justification. In fact, is laughable when they attempted to

201
00:10:16,280 --> 00:10:20,080
Speaker 7: pretend like there was an economic formula, mathematical formula to

202
00:10:20,200 --> 00:10:25,319
Speaker 7: describe these underlying these tariff rates, when in fact it

203
00:10:25,400 --> 00:10:30,920
Speaker 7: was a completely fraudulent, made up thing. So that is

204
00:10:31,320 --> 00:10:34,199
Speaker 7: I think a clear difference between using tariffs in a

205
00:10:34,320 --> 00:10:38,840
Speaker 7: narraf in an arrow way as a specific tool versus

206
00:10:38,840 --> 00:10:42,280
Speaker 7: what Donald Trump is doing, which are tariffs writ large

207
00:10:42,400 --> 00:10:44,040
Speaker 7: as your major policy.

208
00:10:45,080 --> 00:10:47,040
Speaker 2: Well, Congressman, I want to know what is in your

209
00:10:47,080 --> 00:10:49,720
Speaker 2: toolbox right now on the Budget Committee, because we've been

210
00:10:49,760 --> 00:10:53,320
Speaker 2: talking with some pretty angry Democrats since the Recisions Package

211
00:10:53,360 --> 00:10:56,960
Speaker 2: passed days ago, and not that much longer ago the

212
00:10:56,960 --> 00:11:00,600
Speaker 2: President's Big beautiful bill. Are Democrats going to be party

213
00:11:00,720 --> 00:11:03,560
Speaker 2: to debate to regular order if there is such a

214
00:11:03,600 --> 00:11:05,840
Speaker 2: thing in crafting a budget for the next fiscal year,

215
00:11:06,280 --> 00:11:09,240
Speaker 2: or have Republicans burned the bridge? And your response will

216
00:11:09,240 --> 00:11:10,000
Speaker 2: be a middle finger.

217
00:11:13,320 --> 00:11:17,079
Speaker 6: Sorry you threw me for loop on the middle finger reference.

218
00:11:17,640 --> 00:11:19,840
Speaker 7: Obviously you know I'm from Philly, so you thought that

219
00:11:19,880 --> 00:11:23,080
Speaker 7: I might be familiar with that gesture and a Philly

220
00:11:23,080 --> 00:11:26,920
Speaker 7: sports fan. But anyway, I'll instead just talk about the

221
00:11:26,960 --> 00:11:32,199
Speaker 7: budget process. You know, Republicans, unfortunately, led by Russ vote

222
00:11:32,200 --> 00:11:35,440
Speaker 7: the most dangerous man in America that almost no one has.

223
00:11:35,360 --> 00:11:39,360
Speaker 6: Ever heard of. They are breaking the budget process, and

224
00:11:39,400 --> 00:11:42,400
Speaker 6: the way they're doing it is by trying to have

225
00:11:42,440 --> 00:11:45,240
Speaker 6: a normal appropriations process one.

226
00:11:45,120 --> 00:11:48,080
Speaker 7: Day, and then the very day after saying okay, but

227
00:11:48,120 --> 00:11:51,960
Speaker 7: we're going to unilaterally rescind X, Y and Z and

228
00:11:52,040 --> 00:11:55,600
Speaker 7: break the agreement that we just reach. So look, I

229
00:11:55,600 --> 00:11:58,560
Speaker 7: don't believe in government shutdowns, they're costly, they don't make

230
00:11:58,600 --> 00:11:59,240
Speaker 7: any sense.

231
00:12:00,080 --> 00:12:02,520
Speaker 6: I don't want to see one. But let's be clear,

232
00:12:02,880 --> 00:12:03,960
Speaker 6: I am not going.

233
00:12:03,720 --> 00:12:07,240
Speaker 7: To support a continuation of the status quo in which

234
00:12:07,280 --> 00:12:11,839
Speaker 7: this administration is acting illegally as it relates to impoundment

235
00:12:12,280 --> 00:12:15,760
Speaker 7: and recisions. Let's not forget the prevailing law here is

236
00:12:15,800 --> 00:12:18,800
Speaker 7: the Budget and Empowerment Control Act of nineteen seventy four.

237
00:12:19,240 --> 00:12:24,360
Speaker 7: The Supreme Court has previously ruled unanimously that what previous

238
00:12:24,360 --> 00:12:27,560
Speaker 7: president did President Nixon in when he went down this

239
00:12:27,720 --> 00:12:30,680
Speaker 7: road more than a half century ago, the same road

240
00:12:30,679 --> 00:12:33,360
Speaker 7: that Donald Trump and russ Vote are going down today.

241
00:12:33,440 --> 00:12:35,600
Speaker 6: So that's where things stand on the budget.

242
00:12:35,640 --> 00:12:38,080
Speaker 7: If we are going to have regular order, then you

243
00:12:38,160 --> 00:12:41,040
Speaker 7: certainly will see why Democratics support.

244
00:12:41,080 --> 00:12:42,760
Speaker 6: But that's not what we're seeing from this White House.

245
00:12:44,160 --> 00:12:46,760
Speaker 4: But Congressman, let's say there's not regular order. Does that

246
00:12:46,800 --> 00:12:49,560
Speaker 4: then make a shutdown perhaps inevitable here because you said

247
00:12:49,559 --> 00:12:51,120
Speaker 4: that you don't want to see one. But we've spoken

248
00:12:51,160 --> 00:12:53,920
Speaker 4: to a few different Democratic House members in the past

249
00:12:53,920 --> 00:12:56,400
Speaker 4: week who seem to be flirting with the idea that

250
00:12:56,559 --> 00:12:59,120
Speaker 4: Democrats could gain more leverage if they do threaten to

251
00:12:59,160 --> 00:13:00,000
Speaker 4: shut down the government.

252
00:13:01,160 --> 00:13:03,920
Speaker 7: Well, I would direct you to actually a longer piece

253
00:13:03,960 --> 00:13:06,319
Speaker 7: that I wrote for The Bulwark a couple days ago

254
00:13:06,440 --> 00:13:11,880
Speaker 7: that kind of fleshes this out and adds entire clarity

255
00:13:11,920 --> 00:13:12,840
Speaker 7: to what I'm saying.

256
00:13:13,200 --> 00:13:16,040
Speaker 6: What I'm saying is that we need to get.

257
00:13:15,880 --> 00:13:19,559
Speaker 7: Back to regular order, have a normal appropriations process without

258
00:13:19,600 --> 00:13:24,160
Speaker 7: these unilateral recisions. If the administration continues to do that,

259
00:13:24,559 --> 00:13:27,400
Speaker 7: then I certainly would not be in favor or vote

260
00:13:27,400 --> 00:13:30,680
Speaker 7: for a scenario in which we have reached an agreement

261
00:13:30,720 --> 00:13:33,760
Speaker 7: on a Monday on a bipartisan basis, and then the

262
00:13:33,880 --> 00:13:36,720
Speaker 7: very next day, on a Tuesday, the White House says.

263
00:13:36,480 --> 00:13:38,480
Speaker 6: Oh, thanks for your vote for that.

264
00:13:38,760 --> 00:13:41,679
Speaker 7: We're now rescinding X, Y, and Z in that bill,

265
00:13:41,880 --> 00:13:44,560
Speaker 7: but we're keeping the parts that we like. I'm not

266
00:13:44,600 --> 00:13:46,560
Speaker 7: going to be a sucker, and I'm certainly not going

267
00:13:46,600 --> 00:13:49,120
Speaker 7: to go along with that. So I believe actually a

268
00:13:49,120 --> 00:13:52,439
Speaker 7: shutdown is more likely than not, and it is directly

269
00:13:52,480 --> 00:13:54,320
Speaker 7: as a result of what the White House is doing

270
00:13:54,360 --> 00:13:56,199
Speaker 7: when it comes to the budget and recisions.

271
00:13:57,120 --> 00:13:59,080
Speaker 2: The headline on your piece in the Bulwark is why

272
00:13:59,080 --> 00:14:02,600
Speaker 2: Democrats must think hard about voting to fund the government.

273
00:14:03,000 --> 00:14:06,240
Speaker 2: If that's the starting point here, Congressman, you wonder where

274
00:14:06,280 --> 00:14:10,880
Speaker 2: we're going to be post September, will be incumbent upon Democrats.

275
00:14:11,240 --> 00:14:13,400
Speaker 2: If you are willing to vote to shut down the

276
00:14:13,400 --> 00:14:16,839
Speaker 2: government to also have a plan to reopen it at

277
00:14:16,880 --> 00:14:17,360
Speaker 2: some point.

278
00:14:18,160 --> 00:14:18,360
Speaker 8: Yeah.

279
00:14:18,480 --> 00:14:19,080
Speaker 6: Let's be clear.

280
00:14:19,440 --> 00:14:23,760
Speaker 7: Republicans, as they constantly remind us, are in the majority

281
00:14:23,800 --> 00:14:25,760
Speaker 7: in the House and run the House. They're in the

282
00:14:25,760 --> 00:14:28,680
Speaker 7: majority in the Senate and run the Senate, and they

283
00:14:28,680 --> 00:14:31,160
Speaker 7: control the White House and all the executive branches. If

284
00:14:31,200 --> 00:14:34,520
Speaker 7: there is a government shutdown, it will be because Republicans

285
00:14:34,600 --> 00:14:36,000
Speaker 7: want to shut down the government.

286
00:14:36,240 --> 00:14:36,640
Speaker 6: Period.

287
00:14:38,520 --> 00:14:41,520
Speaker 2: There's another recisions package. We've only got a minute left

288
00:14:41,880 --> 00:14:46,320
Speaker 2: make that more likely. If Republicans decide to rescind education funding,

289
00:14:46,440 --> 00:14:48,520
Speaker 2: for instance, we can bank on a shutdown.

290
00:14:49,440 --> 00:14:52,560
Speaker 7: There is no question that another recisions package from this

291
00:14:52,680 --> 00:14:56,720
Speaker 7: White House is them essentially saying we want a full

292
00:14:56,840 --> 00:15:01,040
Speaker 7: government shutdown. Russell Voden, by the way, last week, let's

293
00:15:01,080 --> 00:15:04,040
Speaker 7: not forget what he said. He said the problem with

294
00:15:04,080 --> 00:15:07,520
Speaker 7: the budget process is that it's two bipartisan. So he's

295
00:15:07,520 --> 00:15:11,080
Speaker 7: outright saying that they want a government shutdown and they

296
00:15:11,080 --> 00:15:12,000
Speaker 7: want a force one.

297
00:15:12,920 --> 00:15:15,240
Speaker 2: He's the ranking member on the House Budget Committee and

298
00:15:15,320 --> 00:15:18,280
Speaker 2: knows what he speaks when it comes to budget matters,

299
00:15:18,320 --> 00:15:23,480
Speaker 2: Congressman Brendan Boyle, Democrat from Pennsylvania. We appreciate the insights.

300
00:15:23,560 --> 00:15:25,760
Speaker 2: As always, Let's stay in touch as we get closer

301
00:15:26,000 --> 00:15:27,160
Speaker 2: to September thirtieth.

302
00:15:29,280 --> 00:15:32,760
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

303
00:15:32,840 --> 00:15:35,880
Speaker 1: us live weekdays at noon and five pm Eastern on

304
00:15:36,000 --> 00:15:39,240
Speaker 1: Apple Corclay and Android Auto with the Bloomberg Business App.

305
00:15:39,280 --> 00:15:42,320
Speaker 1: You can also listen live on Amazon Alexa from our

306
00:15:42,320 --> 00:15:47,520
Speaker 1: flagship New York station. Just say Alexa, play Bloomberg eleven thirty.

307
00:15:48,400 --> 00:15:51,680
Speaker 2: Indeed, we're gaining momentum here in earnings reporting season.

308
00:15:51,680 --> 00:15:53,320
Speaker 9: We'll have a lot more to talk about after the bell.

309
00:15:53,440 --> 00:15:56,400
Speaker 2: We're gaining momentum, Tyler, in the number of trade deals

310
00:15:56,400 --> 00:16:00,080
Speaker 2: being announced by this White House. First fire to be

311
00:16:00,200 --> 00:16:02,480
Speaker 2: lit under this market was Japan. Now, headlines of a

312
00:16:02,520 --> 00:16:04,640
Speaker 2: potential deal with the EU got us to new highs

313
00:16:04,640 --> 00:16:06,640
Speaker 2: for the session. We've got the S and P five

314
00:16:06,680 --> 00:16:08,520
Speaker 2: hundred and now about a half percent. That dows up

315
00:16:08,560 --> 00:16:10,320
Speaker 2: one percent. Investors love where this is going.

316
00:16:10,320 --> 00:16:11,920
Speaker 4: It seems right, and we should point out a really

317
00:16:11,920 --> 00:16:14,120
Speaker 4: critical part of this deal when it comes to Japan

318
00:16:14,200 --> 00:16:17,640
Speaker 4: is that fifteen percent tariff is going to extend to autos.

319
00:16:17,720 --> 00:16:19,960
Speaker 4: This is something that we know Japan has been pushing for.

320
00:16:20,000 --> 00:16:23,280
Speaker 4: Our data from Bloomberg Economic shows around eighty percent of

321
00:16:23,320 --> 00:16:26,240
Speaker 4: that country's trade surplus with the US is in car

322
00:16:26,240 --> 00:16:28,480
Speaker 4: and auto part something that we've been watching really closely.

323
00:16:28,680 --> 00:16:30,880
Speaker 2: That's right, and as we promised to you, a conversation

324
00:16:31,000 --> 00:16:33,320
Speaker 2: with the source when it comes to tariffs at the

325
00:16:33,320 --> 00:16:36,160
Speaker 2: White House, he's with us right now in studio in

326
00:16:36,160 --> 00:16:37,200
Speaker 2: our Washington bureau.

327
00:16:37,240 --> 00:16:38,560
Speaker 9: That would be Peter Navarro.

328
00:16:38,800 --> 00:16:41,080
Speaker 2: I want to get the title right, Peter, Senior Counselor

329
00:16:41,120 --> 00:16:43,120
Speaker 2: to the President, Director of the Office of Trade and

330
00:16:43,160 --> 00:16:45,320
Speaker 2: Manufacturing Policy at the White House.

331
00:16:45,400 --> 00:16:48,280
Speaker 9: Welcome back. You're the first person I thought of this morning.

332
00:16:48,280 --> 00:16:50,840
Speaker 2: I saw the details on Japan, and I thought, Tyler,

333
00:16:50,880 --> 00:16:53,960
Speaker 2: what does Peter Navarro think about this? Because it was

334
00:16:54,000 --> 00:16:56,080
Speaker 2: a twenty five percent tariff at one point, right, and

335
00:16:56,080 --> 00:16:59,000
Speaker 2: now we've got a very creative wrinkle with this investment fund.

336
00:16:59,400 --> 00:17:00,920
Speaker 9: Was this in your for trade?

337
00:17:01,080 --> 00:17:01,240
Speaker 10: Yeah?

338
00:17:01,360 --> 00:17:06,800
Speaker 11: Look for your viewers and listeners, let's see where we started, right,

339
00:17:06,920 --> 00:17:10,080
Speaker 11: we come in, President comes in the administration. We got

340
00:17:10,080 --> 00:17:13,160
Speaker 11: a two and a half percent tariff. That's basically what

341
00:17:13,200 --> 00:17:17,200
Speaker 11: we're charging Japan. We went to twenty five percent tariffs

342
00:17:17,200 --> 00:17:21,000
Speaker 11: on autos through what's called the two thirty two right,

343
00:17:21,280 --> 00:17:25,720
Speaker 11: and then we institute a global teriff on Japan. And

344
00:17:26,480 --> 00:17:29,440
Speaker 11: what we've got here is a beautiful thing. We go

345
00:17:29,520 --> 00:17:33,720
Speaker 11: from twenty five percent to fifteen percent on autos for Japan.

346
00:17:33,800 --> 00:17:38,119
Speaker 11: That was part of what President Trump was traded. The

347
00:17:38,200 --> 00:17:41,679
Speaker 11: sneaky great thing about this is the five hundred and

348
00:17:41,800 --> 00:17:46,160
Speaker 11: fifty billion dollars that we're going to get from Japan

349
00:17:47,080 --> 00:17:50,440
Speaker 11: and essentially as a blank check to invest in America.

350
00:17:50,560 --> 00:17:54,120
Speaker 11: And the thing that really needs to be understood here

351
00:17:54,760 --> 00:17:58,720
Speaker 11: is it's going to be used to basically cure our

352
00:17:58,760 --> 00:18:03,520
Speaker 11: supply chain vulnerability. Okay, this is really important. We've seen

353
00:18:04,040 --> 00:18:07,560
Speaker 11: in the pandemic that we were exposed on pharmaceuticals. We

354
00:18:07,640 --> 00:18:09,879
Speaker 11: know we've got a chip problem where too many of

355
00:18:09,920 --> 00:18:13,919
Speaker 11: the chips are made offshore. We've seen recently with China

356
00:18:14,240 --> 00:18:19,159
Speaker 11: their export restrictions on things like gallium, on rare earth magnets,

357
00:18:19,440 --> 00:18:23,680
Speaker 11: critical minerals, and so this money and Howard Luttneck, the

358
00:18:23,720 --> 00:18:26,600
Speaker 11: Commerce Secretaries, I think it's going to be the symphony

359
00:18:26,720 --> 00:18:31,160
Speaker 11: orchestra guy on this. We are going to figure out

360
00:18:31,200 --> 00:18:34,960
Speaker 11: every vulnerability we have in our economy and make sure

361
00:18:35,000 --> 00:18:37,720
Speaker 11: that we close that gap with now the help of

362
00:18:37,720 --> 00:18:38,400
Speaker 11: the Japanese.

363
00:18:38,400 --> 00:18:39,920
Speaker 12: So for me, that's the big thing. Now.

364
00:18:39,960 --> 00:18:42,840
Speaker 11: The other thing to keep in mind here is because

365
00:18:42,880 --> 00:18:44,679
Speaker 11: I know you're going to ask me about what's happening

366
00:18:44,720 --> 00:18:47,840
Speaker 11: with the EU and things like that, what this deal does,

367
00:18:48,560 --> 00:18:53,320
Speaker 11: as what the Indonesian deal did, is it spurs.

368
00:18:52,920 --> 00:18:54,240
Speaker 12: Other deals along.

369
00:18:54,840 --> 00:18:58,920
Speaker 11: Right in this case, right now, we're in a situation where,

370
00:18:58,920 --> 00:19:02,480
Speaker 11: for example, German cars are going to be at a

371
00:19:02,520 --> 00:19:09,080
Speaker 11: disadvantage now to Japanese cars because it's a twenty five

372
00:19:09,119 --> 00:19:13,359
Speaker 11: percent tariff on German same thing with Hyundai's from South Korea.

373
00:19:14,000 --> 00:19:17,200
Speaker 11: So as as it's just watching the boss, I mean,

374
00:19:17,840 --> 00:19:20,120
Speaker 11: I'm almost getting tired of win In, but I don't.

375
00:19:19,920 --> 00:19:23,160
Speaker 12: Think you have it will okay. But as I watch him,

376
00:19:24,520 --> 00:19:27,040
Speaker 12: he's like a maestro. He sees he wasn't doing a

377
00:19:27,119 --> 00:19:27,960
Speaker 12: Japanese deal.

378
00:19:28,119 --> 00:19:31,800
Speaker 11: He was doing a synergistic whole deal with the rest

379
00:19:31,840 --> 00:19:32,399
Speaker 11: of the world.

380
00:19:32,680 --> 00:19:34,639
Speaker 12: This is just one part of that chess game.

381
00:19:34,800 --> 00:19:37,320
Speaker 4: Well, let's follow on this here talk about the European Union,

382
00:19:37,320 --> 00:19:40,200
Speaker 4: because the Treasury Secretary Scott Besson was asked on Bloomberg

383
00:19:40,240 --> 00:19:44,439
Speaker 4: Television earlier today if the EU has put forth anything innovative,

384
00:19:44,600 --> 00:19:47,280
Speaker 4: such as what we're seeing with this fund. Should we

385
00:19:47,440 --> 00:19:49,720
Speaker 4: use this idea of the fund? Would that be something

386
00:19:49,720 --> 00:19:52,679
Speaker 4: innovative that the administration is looking for. What are you

387
00:19:52,760 --> 00:19:54,960
Speaker 4: looking for from the EU in order to clinch it?

388
00:19:55,160 --> 00:19:58,560
Speaker 11: Tyler, It's a great question. What I what I want

389
00:19:58,640 --> 00:20:02,359
Speaker 11: everybody to know is we have these large trade deficits

390
00:20:03,119 --> 00:20:06,879
Speaker 11: with we call them the fifteen big ones, right and

391
00:20:07,119 --> 00:20:10,120
Speaker 11: including the EU writ large. But every one of their

392
00:20:10,240 --> 00:20:14,359
Speaker 11: like fingerprints, every country or in this case, EU entity

393
00:20:14,480 --> 00:20:17,320
Speaker 11: that we deal with has a different set of problems

394
00:20:17,520 --> 00:20:20,760
Speaker 11: that we got to deal with. So every deal is

395
00:20:20,800 --> 00:20:23,359
Speaker 11: going to be unique to deal with that fingerpriro problem.

396
00:20:23,400 --> 00:20:27,920
Speaker 11: The problem we have with the EU is that they

397
00:20:27,960 --> 00:20:32,280
Speaker 11: basically violate the WTO rules in terms of our AGG products,

398
00:20:32,280 --> 00:20:35,399
Speaker 11: so we can't export to them. They've got a teriff

399
00:20:35,880 --> 00:20:39,760
Speaker 11: which was four times higher than ours once when we

400
00:20:39,840 --> 00:20:42,240
Speaker 11: got in, but they also have this thing the value

401
00:20:42,280 --> 00:20:46,040
Speaker 11: added tacks. I'd love to see some relief related to

402
00:20:46,119 --> 00:20:47,720
Speaker 11: the value added tax.

403
00:20:47,560 --> 00:20:49,320
Speaker 12: Which is unique.

404
00:20:49,560 --> 00:20:53,399
Speaker 11: What I can guarantee you is once the deal's made,

405
00:20:53,800 --> 00:20:56,080
Speaker 11: we're going to have a situation where we'd be able

406
00:20:56,080 --> 00:20:59,960
Speaker 11: to sell more AG products, more autos, and we'll see

407
00:21:00,119 --> 00:21:02,920
Speaker 11: a dramatic reduction in that trade deficit.

408
00:21:03,000 --> 00:21:05,080
Speaker 12: But as to what it's going to look like, uh,

409
00:21:06,040 --> 00:21:06,880
Speaker 12: we'll see.

410
00:21:06,840 --> 00:21:10,440
Speaker 2: Is the design to see gms and Fords driving around

411
00:21:10,560 --> 00:21:14,040
Speaker 2: Japan driving around Europe? Or have we realized that that's

412
00:21:14,080 --> 00:21:18,080
Speaker 2: not going to happen and therefore the investment fund with

413
00:21:18,160 --> 00:21:19,720
Speaker 2: Japan or something similar with the.

414
00:21:19,880 --> 00:21:23,080
Speaker 11: Well, certainly we'd love to see a lot more American

415
00:21:23,119 --> 00:21:24,600
Speaker 11: cars driving around Europe.

416
00:21:25,680 --> 00:21:27,679
Speaker 12: Japan's a tough market.

417
00:21:27,720 --> 00:21:32,400
Speaker 11: If you ever been there, they export a lot more

418
00:21:32,440 --> 00:21:34,760
Speaker 11: cars than they ever use in the country. It's just

419
00:21:34,920 --> 00:21:37,920
Speaker 11: it's just they just there. It's land constrained and things

420
00:21:37,920 --> 00:21:38,080
Speaker 11: like that.

421
00:21:38,240 --> 00:21:39,920
Speaker 2: Drive on the left side too, Peter, they've got the

422
00:21:39,960 --> 00:21:43,440
Speaker 2: steering wheel on the wrong side, but not going there.

423
00:21:44,119 --> 00:21:48,520
Speaker 11: But but what we can do with Japan is get

424
00:21:48,520 --> 00:21:50,440
Speaker 11: them to buy more ag products. And the other part

425
00:21:50,440 --> 00:21:54,040
Speaker 11: of the deal, which we didn't talk about is Alaska LNG.

426
00:21:54,720 --> 00:21:58,600
Speaker 11: I mean, if you think about Japan's vulnerability, they have

427
00:21:58,640 --> 00:22:02,760
Speaker 11: a long standing pro problem with China. There's there's over

428
00:22:02,760 --> 00:22:05,480
Speaker 11: the Sincaco Islands and a whole bunch of other things, right,

429
00:22:05,920 --> 00:22:09,760
Speaker 11: and they have to figure out a way to maintain

430
00:22:09,880 --> 00:22:14,720
Speaker 11: their energy security in a world of volatility in Asia,

431
00:22:15,200 --> 00:22:19,880
Speaker 11: and they're a lot closer to Alaska than they are

432
00:22:19,960 --> 00:22:23,639
Speaker 11: to the Persian Gulf, and and so doing an LNG

433
00:22:23,920 --> 00:22:27,520
Speaker 11: deal and using their money to help do it is

434
00:22:27,560 --> 00:22:29,359
Speaker 11: a really big big.

435
00:22:29,160 --> 00:22:29,679
Speaker 12: Part of this.

436
00:22:29,880 --> 00:22:33,320
Speaker 11: So look, they're they're an important ally to us, a

437
00:22:33,359 --> 00:22:36,639
Speaker 11: long unk term ally. And this thing works on both

438
00:22:36,840 --> 00:22:41,760
Speaker 11: economic security and national security. And I got to applaud

439
00:22:42,280 --> 00:22:45,480
Speaker 11: James and Grey or Howard Lutnik and Scottivessant.

440
00:22:47,160 --> 00:22:50,040
Speaker 12: What we've done is every country has a template.

441
00:22:50,119 --> 00:22:53,320
Speaker 11: Right, there's like four or five verticals that we look

442
00:22:53,400 --> 00:22:57,359
Speaker 11: at terms of tariffs, non tariff barriers, digital taxes, things

443
00:22:57,400 --> 00:23:01,800
Speaker 11: like that. And they're just going in and the countries

444
00:23:01,840 --> 00:23:04,560
Speaker 11: are lining up like they're at a deli pulling numbers,

445
00:23:04,840 --> 00:23:07,160
Speaker 11: and they want a deal and the president then comes

446
00:23:07,160 --> 00:23:10,320
Speaker 11: in and closes it. And by the way, when you

447
00:23:10,359 --> 00:23:13,440
Speaker 11: closed that deal last night, it started at.

448
00:23:13,359 --> 00:23:17,920
Speaker 12: Four hundred billion. I saw the sharp Yeah yeah, so.

449
00:23:19,920 --> 00:23:21,680
Speaker 9: Yeah, well we.

450
00:23:21,680 --> 00:23:23,520
Speaker 4: When we are talking about paging the deals, I do

451
00:23:23,640 --> 00:23:25,400
Speaker 4: have to ask you about our Bloomberg News reporting, which

452
00:23:25,440 --> 00:23:28,080
Speaker 4: is that the EU sees progress towards a US trade

453
00:23:28,119 --> 00:23:31,800
Speaker 4: deal with a fifteen percent baseline tariff. Is that where

454
00:23:32,400 --> 00:23:32,960
Speaker 4: these numbers are.

455
00:23:33,400 --> 00:23:35,960
Speaker 12: Let's let's view the spin of the game.

456
00:23:36,040 --> 00:23:36,240
Speaker 9: Right.

457
00:23:36,320 --> 00:23:40,080
Speaker 11: The Canadians do this probably the best or the worst,

458
00:23:40,080 --> 00:23:44,360
Speaker 11: depending on what you think of that. But they they

459
00:23:44,440 --> 00:23:50,040
Speaker 11: we don't negotiate in public, Okay. These other countries aspirationally

460
00:23:50,480 --> 00:23:53,280
Speaker 11: negotiate in public to try to get us to where

461
00:23:53,400 --> 00:23:54,160
Speaker 11: they want.

462
00:23:54,040 --> 00:23:54,560
Speaker 12: Us to go.

463
00:23:54,760 --> 00:23:57,680
Speaker 11: So I would say that, even though it was reported

464
00:23:57,720 --> 00:24:00,000
Speaker 11: on Bloomberg, I would take it with a grain of salt.

465
00:24:00,160 --> 00:24:01,160
Speaker 12: Let's see what happens.

466
00:24:01,240 --> 00:24:05,439
Speaker 11: It never never assumed that anything's fixed until the boss

467
00:24:05,480 --> 00:24:06,760
Speaker 11: says it's fixed.

468
00:24:06,920 --> 00:24:09,679
Speaker 4: But should we expect that the baseline rate is tending?

469
00:24:11,760 --> 00:24:12,560
Speaker 12: I wouldn't go there.

470
00:24:12,760 --> 00:24:15,320
Speaker 11: That's aspirational. The EU, it depends on what they give

471
00:24:15,400 --> 00:24:18,639
Speaker 11: the boss. I mean, look, here's the problem with the

472
00:24:18,640 --> 00:24:22,280
Speaker 11: EU that, besides the high tariffs that they charge us.

473
00:24:22,320 --> 00:24:26,640
Speaker 11: Let's okay, high tariffs, they're non tariff barriers. When we've

474
00:24:26,760 --> 00:24:30,800
Speaker 11: challenged them on meat and pork in one case is

475
00:24:30,840 --> 00:24:33,600
Speaker 11: they refuse to abide by the cases.

476
00:24:33,640 --> 00:24:34,680
Speaker 12: So that's a problem.

477
00:24:35,119 --> 00:24:38,960
Speaker 11: This I'm telling you. The value added tax. Okay, it's

478
00:24:39,000 --> 00:24:41,840
Speaker 11: like on autos, you start with a ten percent tariff

479
00:24:42,040 --> 00:24:44,720
Speaker 11: and you add a nineteen percent value added tacks that's

480
00:24:44,760 --> 00:24:47,480
Speaker 11: not just a tariff, it's also an export subsidy the

481
00:24:47,520 --> 00:24:49,840
Speaker 11: way it works under the rules of the World Trade Organization.

482
00:24:50,160 --> 00:24:53,280
Speaker 11: And then you got all these digital taxes that the

483
00:24:53,320 --> 00:24:56,720
Speaker 11: Europeans invented and trying to slap on our big tech companies.

484
00:24:57,119 --> 00:24:59,360
Speaker 12: So let's see what happens.

485
00:24:59,600 --> 00:25:02,160
Speaker 11: I never ahead of the boss, happy to talk about

486
00:25:02,200 --> 00:25:04,000
Speaker 11: the EU d I'll come right back here to talk

487
00:25:04,040 --> 00:25:04,399
Speaker 11: about it.

488
00:25:04,440 --> 00:25:05,000
Speaker 9: I look forward to it.

489
00:25:05,080 --> 00:25:08,159
Speaker 11: But I caution you that if if the EU is

490
00:25:08,200 --> 00:25:13,720
Speaker 11: putting something out there in the biosphere out here, it's

491
00:25:13,800 --> 00:25:17,119
Speaker 11: aspirational rather than maybe what's going to happen.

492
00:25:17,160 --> 00:25:19,760
Speaker 2: We hear you when it comes to August first, markets

493
00:25:19,760 --> 00:25:21,800
Speaker 2: of course want to know what we can bank on.

494
00:25:21,880 --> 00:25:23,880
Speaker 2: Here are you in a world where if you get

495
00:25:23,960 --> 00:25:26,520
Speaker 2: enough of these you had a couple of more countries.

496
00:25:26,680 --> 00:25:29,280
Speaker 2: Maybe it's the EU, South Korea, something else that I'm

497
00:25:29,320 --> 00:25:30,280
Speaker 2: not thinking of here.

498
00:25:30,720 --> 00:25:32,800
Speaker 9: Do you say you know what? It's August first? Everybody,

499
00:25:32,800 --> 00:25:33,480
Speaker 9: you're on your own?

500
00:25:33,680 --> 00:25:36,120
Speaker 2: Or would you extend that to countries that are in

501
00:25:36,200 --> 00:25:37,160
Speaker 2: talks with the White House.

502
00:25:37,440 --> 00:25:39,479
Speaker 11: Again, I never get ahead of that, and I just

503
00:25:40,000 --> 00:25:43,400
Speaker 11: my job is to help the trade team figure out

504
00:25:43,440 --> 00:25:48,520
Speaker 11: what we have to negotiate. For give you an example,

505
00:25:48,720 --> 00:25:52,440
Speaker 11: for example, on the whole critical minerals rare Earth thing,

506
00:25:53,359 --> 00:25:56,520
Speaker 11: when when we were hit with that by China, that

507
00:25:56,640 --> 00:26:01,280
Speaker 11: was a major thing I think in world politics, right,

508
00:26:01,359 --> 00:26:06,240
Speaker 11: it's not nothing for China to withhold something as critical

509
00:26:06,280 --> 00:26:07,760
Speaker 11: to technology as they did.

510
00:26:07,800 --> 00:26:11,000
Speaker 12: It was a wake up call to the world.

511
00:26:11,440 --> 00:26:16,239
Speaker 11: But what that has has focused our attention on is

512
00:26:16,640 --> 00:26:19,000
Speaker 11: how do we solve that problem? So now we think

513
00:26:19,040 --> 00:26:23,560
Speaker 11: in terms of what's Japan, what's the Congo, what's Guyana,

514
00:26:23,600 --> 00:26:25,280
Speaker 11: what can they contribute?

515
00:26:25,359 --> 00:26:29,160
Speaker 12: That's one of the verticals. Okay, so again let's let's

516
00:26:29,520 --> 00:26:31,800
Speaker 12: it's going to be case by case.

517
00:26:31,880 --> 00:26:34,720
Speaker 4: Yes, since you did bring up China, the administration moved

518
00:26:34,880 --> 00:26:37,040
Speaker 4: last week to ease those restrictions when it did come

519
00:26:37,080 --> 00:26:39,720
Speaker 4: to Nvidia selling its Age twenty ships. I'm wondering if

520
00:26:39,720 --> 00:26:43,120
Speaker 4: you have any national security concerns around this move which

521
00:26:43,400 --> 00:26:44,679
Speaker 4: had been put in place.

522
00:26:45,720 --> 00:26:48,800
Speaker 11: That was that was not my lane. I mean, basically,

523
00:26:48,800 --> 00:26:53,760
Speaker 11: we're given to the Age twenty and we believe that

524
00:26:53,760 --> 00:26:56,440
Speaker 11: that's in the interest of the United States. I think

525
00:26:56,480 --> 00:26:59,840
Speaker 11: the reporting on that was a little bit over the

526
00:26:59,840 --> 00:27:02,159
Speaker 11: t hop in terms of what China was actually getting.

527
00:27:02,840 --> 00:27:05,320
Speaker 11: But that's not something I want to wax elegrat yet

528
00:27:05,960 --> 00:27:07,800
Speaker 11: Howard here or David.

529
00:27:08,480 --> 00:27:10,919
Speaker 2: We've been lucky to have Howard Lutnick, Scott Besson and

530
00:27:10,920 --> 00:27:13,199
Speaker 2: al Peter Navarro all on the same day in this studio,

531
00:27:13,240 --> 00:27:14,280
Speaker 2: which is pretty remarkable.

532
00:27:14,280 --> 00:27:17,080
Speaker 9: And we've learned a lot from these conversations. Is there

533
00:27:17,119 --> 00:27:17,440
Speaker 9: any of this?

534
00:27:17,840 --> 00:27:20,160
Speaker 12: I'm like they were like my opening acts.

535
00:27:20,320 --> 00:27:22,960
Speaker 9: I think we saved the best. Sorry, Howard, I think

536
00:27:23,000 --> 00:27:24,280
Speaker 9: we saved the best for last.

537
00:27:25,440 --> 00:27:26,119
Speaker 12: The epilogue.

538
00:27:26,240 --> 00:27:28,680
Speaker 9: Well, I don't know. Let's that's the Boston when we're done.

539
00:27:28,920 --> 00:27:31,160
Speaker 2: When it comes to the defense contractors, we can talk

540
00:27:31,160 --> 00:27:34,399
Speaker 2: about GM. But when Tyler mentioned national security, when you

541
00:27:34,400 --> 00:27:36,560
Speaker 2: hear raytheon or at Locke and say, hey, the steal

542
00:27:37,160 --> 00:27:40,080
Speaker 2: is eating into our margins when we're making missiles in

543
00:27:40,119 --> 00:27:41,120
Speaker 2: military hardware?

544
00:27:41,160 --> 00:27:42,480
Speaker 9: Is that the cost of doing business?

545
00:27:42,880 --> 00:27:44,600
Speaker 12: So let's go back to the japan deal.

546
00:27:44,800 --> 00:27:48,280
Speaker 11: We just got one hundred more orders for Boeing and

547
00:27:48,359 --> 00:27:50,360
Speaker 11: we got the Japanese.

548
00:27:49,960 --> 00:27:53,520
Speaker 9: To and that business increase. The impact on the margin is.

549
00:27:53,800 --> 00:27:56,000
Speaker 11: We're going to do our arm sales today. And during

550
00:27:56,000 --> 00:27:59,280
Speaker 11: the first term I was I was basically the tip

551
00:27:59,280 --> 00:28:02,359
Speaker 11: of the spear on arm sales and we were having

552
00:28:02,400 --> 00:28:04,720
Speaker 11: some big problems with the Hill and all and even

553
00:28:04,760 --> 00:28:07,359
Speaker 11: within the State Department. And then we just turned that

554
00:28:07,480 --> 00:28:12,199
Speaker 11: around and it started selling f sixteens to.

555
00:28:11,520 --> 00:28:12,760
Speaker 12: Bosnia and stuff like that.

556
00:28:12,880 --> 00:28:16,720
Speaker 11: And that's good for America because it means we don't

557
00:28:16,720 --> 00:28:19,640
Speaker 11: have to fight the battles. We create jobs at home.

558
00:28:19,760 --> 00:28:23,080
Speaker 11: So Raytheon's going to be quite happy. And if any

559
00:28:23,160 --> 00:28:27,600
Speaker 11: Raytheon lobbyists dares criticize any particular part of the Trump thing,

560
00:28:27,760 --> 00:28:29,560
Speaker 11: they're not seeing the big picture.

561
00:28:29,560 --> 00:28:32,480
Speaker 2: Because the scale the increase in business will offset the

562
00:28:32,520 --> 00:28:34,080
Speaker 2: impact on margin that that we're talking.

563
00:28:34,119 --> 00:28:36,400
Speaker 11: That's what your point, That's what I think. That's what

564
00:28:36,440 --> 00:28:39,360
Speaker 11: the markets have figured out. I remember, I remember when

565
00:28:39,480 --> 00:28:43,080
Speaker 11: when the Boss first put on the tariffs and the market,

566
00:28:43,200 --> 00:28:45,720
Speaker 11: you know, the Dow went below forty thousands. I'd be

567
00:28:45,760 --> 00:28:47,560
Speaker 11: sitting on set like this, I said, what are you doing?

568
00:28:47,720 --> 00:28:49,000
Speaker 11: We're going to fifty thousand.

569
00:28:49,120 --> 00:28:51,120
Speaker 9: We're at a new all time high here already.

570
00:28:51,240 --> 00:28:55,880
Speaker 2: Yeah, fifty thousand. Easy, come back and see us when

571
00:28:55,920 --> 00:28:57,560
Speaker 2: he needs to the next deal. It's good to see you,

572
00:28:57,560 --> 00:28:59,920
Speaker 2: as always, Straight from the White House, Peter Navarro. It's

573
00:29:00,080 --> 00:29:01,880
Speaker 2: only on Bloomberg TV and radio.

574
00:29:05,280 --> 00:29:08,720
Speaker 1: You're listening to the Bloomberg Balance of Power Podcast. Catch

575
00:29:08,800 --> 00:29:11,800
Speaker 1: us live weekdays at noon and five pm Eastern on

576
00:29:11,960 --> 00:29:15,200
Speaker 1: Alma Coarckley and Android Auto with the Bloomberg Business App.

577
00:29:15,360 --> 00:29:18,640
Speaker 1: Listen on demand wherever you get your podcasts, or watch

578
00:29:18,680 --> 00:29:21,200
Speaker 1: us live on YouTube.

579
00:29:21,520 --> 00:29:22,880
Speaker 9: Welcome to the Wednesday edition.

580
00:29:23,160 --> 00:29:25,600
Speaker 2: We're live in Washington, as Charlie mentioned here on Bloomberg

581
00:29:25,680 --> 00:29:28,520
Speaker 2: Radio satellite radio channel one twenty one. You can watch

582
00:29:28,600 --> 00:29:32,120
Speaker 2: us on Bloomberg Originals and yes right now on YouTube.

583
00:29:32,120 --> 00:29:35,280
Speaker 2: Search Bloomberg Business News Live because you're gonna want to see,

584
00:29:35,880 --> 00:29:39,080
Speaker 2: not just hear our conversation with Senator Bill Cassidy. We

585
00:29:39,160 --> 00:29:42,720
Speaker 2: have news today. It started last night. It's still developing.

586
00:29:42,960 --> 00:29:46,840
Speaker 2: We'll start with Japan, a big deal announced by President Trump,

587
00:29:47,400 --> 00:29:50,280
Speaker 2: who is still trumping the benefits of this deal. With

588
00:29:50,360 --> 00:29:52,960
Speaker 2: half the administration, it seems like out in force today,

589
00:29:53,560 --> 00:29:56,320
Speaker 2: most of them here on Bloomberg. Let's start with the

590
00:29:56,360 --> 00:29:59,000
Speaker 2: President last evening in our new deal with Tokyo with

591
00:29:59,080 --> 00:30:00,440
Speaker 2: a fifteen percent tariff.

592
00:30:00,440 --> 00:30:01,960
Speaker 9: Here's Donald Trump from last night.

593
00:30:02,040 --> 00:30:04,560
Speaker 3: I just signed the largest trade deal in history, I

594
00:30:04,560 --> 00:30:07,440
Speaker 3: think maybe the largest deal in history with Japan. We

595
00:30:07,560 --> 00:30:09,640
Speaker 3: worked on it long and hard, and it's a great

596
00:30:09,640 --> 00:30:12,880
Speaker 3: deal for everybody. It's a great deal, a lot different

597
00:30:12,920 --> 00:30:15,000
Speaker 3: from the deals in the past. I can tell you

598
00:30:15,040 --> 00:30:17,280
Speaker 3: that we're doing things that have never been done in

599
00:30:17,320 --> 00:30:20,200
Speaker 3: this country before, and our country is becoming very rich again,

600
00:30:20,840 --> 00:30:21,880
Speaker 3: and that's the way it should be.

601
00:30:23,160 --> 00:30:25,840
Speaker 2: Well, it's being well received on Wall Street. Markets are

602
00:30:25,880 --> 00:30:28,160
Speaker 2: on its hair here and it's not the only reason.

603
00:30:28,240 --> 00:30:32,760
Speaker 2: Commerce Secretary Howard Lutnik in studio here at Bloomberg talking

604
00:30:32,760 --> 00:30:35,560
Speaker 2: with Anne Marie hor during this morning says Japan's pledge

605
00:30:35,960 --> 00:30:39,200
Speaker 2: of hundreds of billions of dollars in US investments could

606
00:30:39,200 --> 00:30:40,560
Speaker 2: be a model for the EU.

607
00:30:41,560 --> 00:30:42,080
Speaker 9: Just like that.

608
00:30:42,120 --> 00:30:44,440
Speaker 2: We have headlines on the EU and this is why

609
00:30:44,480 --> 00:30:47,360
Speaker 2: the markets have just reached to new highs for the day.

610
00:30:47,400 --> 00:30:51,520
Speaker 2: The Financial Times reporting USU close on a fifteen percent

611
00:30:51,680 --> 00:30:56,760
Speaker 2: tariff deal. USU would have a wave rather aircraft spirits,

612
00:30:57,720 --> 00:31:03,280
Speaker 2: medical device tariffs line. It appears maybe safe the Euro

613
00:31:03,440 --> 00:31:06,920
Speaker 2: hitting the days high on this report on US EU

614
00:31:07,040 --> 00:31:10,480
Speaker 2: tariff talk. This is something that we discussed with both

615
00:31:10,520 --> 00:31:13,480
Speaker 2: Howard Lutnik and Scott Besson earlier, and it does appear

616
00:31:13,560 --> 00:31:16,680
Speaker 2: that we may be on the verge of another big announcement.

617
00:31:16,720 --> 00:31:19,920
Speaker 2: This would be with regard to the EU, likely the

618
00:31:19,960 --> 00:31:23,200
Speaker 2: biggest that we've seen yet, assuming that it does come

619
00:31:23,280 --> 00:31:25,760
Speaker 2: in the form of a true deal. Now, as promised,

620
00:31:25,920 --> 00:31:28,480
Speaker 2: the Senator from Louisiana is with us. He's live on

621
00:31:28,560 --> 00:31:32,640
Speaker 2: Capitol Hill, Republican Bill Cassidy. It's great to have you

622
00:31:32,720 --> 00:31:35,520
Speaker 2: back on Bloomberg TV and radio. Doctor, good to see you.

623
00:31:36,040 --> 00:31:38,600
Speaker 2: We've got a lot to talk about, from government funding

624
00:31:38,640 --> 00:31:40,800
Speaker 2: to trade, as I mentioned, to your effort now your

625
00:31:40,880 --> 00:31:43,560
Speaker 2: plan to save social security, and I'd like to get

626
00:31:43,560 --> 00:31:46,440
Speaker 2: into all of these first. With news breaking on trade,

627
00:31:46,480 --> 00:31:49,200
Speaker 2: I have to ask you about this. We'll start with Japan.

628
00:31:49,240 --> 00:31:52,240
Speaker 2: I was amazed to learn about how much business Louisiana

629
00:31:52,640 --> 00:31:55,000
Speaker 2: is doing with Japan. In fact, your state is the

630
00:31:55,040 --> 00:31:58,280
Speaker 2: second in the nation for foreign direct investment from Japan.

631
00:31:58,440 --> 00:32:01,680
Speaker 2: The President's deal here include this investment fund, dimensioned five

632
00:32:01,760 --> 00:32:04,959
Speaker 2: hundred billion dollars to make more investments in the US.

633
00:32:05,200 --> 00:32:07,680
Speaker 2: How much of that money should go to Louisiana.

634
00:32:07,800 --> 00:32:09,040
Speaker 13: A lot of it will go to Louisia.

635
00:32:09,880 --> 00:32:14,400
Speaker 14: We have both access to inexpensive natural gas, a great workforce,

636
00:32:14,760 --> 00:32:18,200
Speaker 14: the Mississippi River to transport goods around the world, and

637
00:32:18,280 --> 00:32:23,560
Speaker 14: so Japan and other countries are investing in Louisiana for products,

638
00:32:23,600 --> 00:32:25,920
Speaker 14: not just for our country, but for around the world.

639
00:32:27,400 --> 00:32:30,800
Speaker 2: If there's an EU deal announced today's, Senator or in

640
00:32:30,840 --> 00:32:34,120
Speaker 2: the days ahead, is this vindication for the whole idea

641
00:32:34,280 --> 00:32:35,640
Speaker 2: of the Trump tariff regime.

642
00:32:37,200 --> 00:32:37,400
Speaker 13: Yeah.

643
00:32:37,440 --> 00:32:41,880
Speaker 14: I think the President aggressively pushing back on other countries

644
00:32:42,360 --> 00:32:46,640
Speaker 14: with their tariff and non tariff barriers is clearly playing dividends.

645
00:32:46,920 --> 00:32:48,400
Speaker 14: And so you got a tip of the hat to

646
00:32:48,440 --> 00:32:51,120
Speaker 14: the President. He saw it through and it appears to

647
00:32:51,160 --> 00:32:51,560
Speaker 14: be working.

648
00:32:52,720 --> 00:32:52,800
Speaker 6: Well.

649
00:32:52,880 --> 00:32:56,040
Speaker 2: Let's get to your business in the Upper Chamber, Senator.

650
00:32:56,200 --> 00:32:58,840
Speaker 2: I know in the House they're heading home today. It's

651
00:32:58,840 --> 00:33:03,120
Speaker 2: flyout day for for members by order of this speaker.

652
00:33:03,320 --> 00:33:05,719
Speaker 2: Is Leader Thune planning to do the same, or are

653
00:33:05,720 --> 00:33:08,400
Speaker 2: you going to stay over time to work on nominations

654
00:33:08,480 --> 00:33:09,360
Speaker 2: or other legislation.

655
00:33:10,360 --> 00:33:13,800
Speaker 14: He's talking about staying overtime to work on legislation. Showed

656
00:33:13,840 --> 00:33:16,600
Speaker 14: me to work on nominations. Of course, I'm hoping we

657
00:33:16,640 --> 00:33:20,280
Speaker 14: also do some legislative stuff. We're here to pass laws

658
00:33:20,280 --> 00:33:22,520
Speaker 14: and make the country better, so we have that opportunity.

659
00:33:22,600 --> 00:33:25,800
Speaker 13: Let's do so. Principally, he's looking at nominations.

660
00:33:26,560 --> 00:33:29,920
Speaker 2: Nominations and maybe God forbid, spending a little time on

661
00:33:29,960 --> 00:33:31,600
Speaker 2: writing a budget for the next fiscal year.

662
00:33:32,480 --> 00:33:33,440
Speaker 13: Wouldn't that be good?

663
00:33:34,200 --> 00:33:37,320
Speaker 14: You know, the three appropriation bills that we're taking up

664
00:33:37,920 --> 00:33:41,560
Speaker 14: have significant recisions or rebalancing of where we spend our money.

665
00:33:41,840 --> 00:33:45,040
Speaker 13: I like that because it may not be that we need.

666
00:33:44,920 --> 00:33:48,520
Speaker 14: Another recisions bill because on a bipartisan basis, Congress has

667
00:33:48,560 --> 00:33:51,560
Speaker 14: come together and said let's shave here and push up there,

668
00:33:51,800 --> 00:33:55,560
Speaker 14: and they're significantly increasing defense spending in a more dangerous world,

669
00:33:55,880 --> 00:34:00,000
Speaker 14: but significantly decreasing other pots of money, showing the Appropriations

670
00:34:00,000 --> 00:34:02,680
Speaker 14: COMDIA is doing the people's business of making sure we

671
00:34:02,720 --> 00:34:03,680
Speaker 14: spend our money wisely.

672
00:34:05,120 --> 00:34:05,440
Speaker 9: Well.

673
00:34:05,760 --> 00:34:09,080
Speaker 2: Senator, our viewers and listeners should know, if they don't already,

674
00:34:09,080 --> 00:34:12,040
Speaker 2: that you're not only a practicing physician. You're Chairman of

675
00:34:12,080 --> 00:34:15,080
Speaker 2: the Committee on Health, Education, Labor, and Pensions, and you've

676
00:34:15,120 --> 00:34:17,840
Speaker 2: got an important project underway that we've actually talked about

677
00:34:17,840 --> 00:34:21,000
Speaker 2: before that is advancing to the next stage here because

678
00:34:21,040 --> 00:34:24,080
Speaker 2: you've got a Democrat on board, Senator Tim Kaine, helping

679
00:34:24,120 --> 00:34:28,719
Speaker 2: to propose a rescue plan for social security.

680
00:34:28,800 --> 00:34:30,360
Speaker 9: It would essentially.

681
00:34:29,960 --> 00:34:33,160
Speaker 2: Create a second Social Security fund that would invest in

682
00:34:33,480 --> 00:34:36,400
Speaker 2: more appreciable assets like treasuries.

683
00:34:36,520 --> 00:34:38,359
Speaker 9: Senator tell our audience how it would work.

684
00:34:39,239 --> 00:34:42,759
Speaker 14: Context the Social Security Trust Fund is going insolvent in

685
00:34:42,800 --> 00:34:46,080
Speaker 14: about eight years. By law, the amount of money coming

686
00:34:46,120 --> 00:34:49,040
Speaker 14: in has to match the amount of going out when

687
00:34:49,040 --> 00:34:50,680
Speaker 14: that trust fund goes insolvent.

688
00:34:51,360 --> 00:34:52,400
Speaker 13: In order to match.

689
00:34:52,200 --> 00:34:55,200
Speaker 14: Those two outgo will cut by twenty one to twenty

690
00:34:55,239 --> 00:34:58,239
Speaker 14: five percent. If you're getting social or if you're going

691
00:34:58,280 --> 00:35:00,719
Speaker 14: to your benefit will cut by two one to twenty

692
00:35:00,719 --> 00:35:03,360
Speaker 14: five percent. And nobody has a plan to address that.

693
00:35:03,920 --> 00:35:08,480
Speaker 14: So our plan create an investment fund separate from Social Security.

694
00:35:08,840 --> 00:35:11,880
Speaker 14: Put one point five trillion dollars in it over five years.

695
00:35:12,239 --> 00:35:14,080
Speaker 14: Invest it like you would a four oh one k

696
00:35:14,520 --> 00:35:17,840
Speaker 14: in the power of the US economy in over seventy

697
00:35:17,880 --> 00:35:20,799
Speaker 14: five years. But the rule of seventy two, which your

698
00:35:20,800 --> 00:35:23,279
Speaker 14: listeners know about the rule of seventy two, it.

699
00:35:23,239 --> 00:35:24,440
Speaker 13: Just blossoms out.

700
00:35:24,640 --> 00:35:28,520
Speaker 14: We use that money to offset any borrowing require to

701
00:35:28,600 --> 00:35:32,840
Speaker 14: pay scheduled promise benefits. By the way, importantly, if the

702
00:35:32,880 --> 00:35:36,879
Speaker 14: market goes up or down doesn't affect the beneficiary. All

703
00:35:37,000 --> 00:35:40,359
Speaker 14: risk is borne by the investment fund, and by that

704
00:35:40,840 --> 00:35:44,480
Speaker 14: we can bail out Social Security and also perhaps decrease

705
00:35:44,520 --> 00:35:46,760
Speaker 14: our nation's in debtedness by twenty percent.

706
00:35:47,920 --> 00:35:49,800
Speaker 2: Never thought I'd be talking about the rule of seventy

707
00:35:49,800 --> 00:35:53,160
Speaker 2: two with Senator Cassidy. Where where does the initial one

708
00:35:53,160 --> 00:35:55,000
Speaker 2: and a half trillion dollars come from?

709
00:35:55,400 --> 00:35:57,920
Speaker 14: Yeah, so in our plan, we would borrow three hundred

710
00:35:57,960 --> 00:36:01,680
Speaker 14: billion a year for five years. But the way the

711
00:36:02,040 --> 00:36:03,120
Speaker 14: way the federal government.

712
00:36:02,880 --> 00:36:06,080
Speaker 13: Does its budget, we have a unified budget. So if you.

713
00:36:06,000 --> 00:36:07,920
Speaker 14: Borrow money and put it in escrow, it does not

714
00:36:08,040 --> 00:36:10,759
Speaker 14: contribute to your nation's in debtedness because you could just

715
00:36:10,840 --> 00:36:11,440
Speaker 14: dissolve the.

716
00:36:11,480 --> 00:36:14,279
Speaker 13: Escrow and pay off the bonds. And so we don't

717
00:36:14,360 --> 00:36:16,400
Speaker 13: add to the debt as we borrow that money.

718
00:36:17,640 --> 00:36:20,600
Speaker 2: And now these are treasuries that we're talking about purely.

719
00:36:20,600 --> 00:36:23,680
Speaker 2: Would you invest in crypto or any other securities?

720
00:36:24,400 --> 00:36:24,759
Speaker 13: Right now?

721
00:36:24,800 --> 00:36:27,320
Speaker 14: The Social Security Trust Fund puts all of its money

722
00:36:27,320 --> 00:36:30,399
Speaker 14: in treasuries. Some of those from like a few years ago,

723
00:36:30,680 --> 00:36:33,560
Speaker 14: are bearing two percent less than the rate of inflation.

724
00:36:34,080 --> 00:36:35,759
Speaker 13: No, we would do like your four oh one K.

725
00:36:36,360 --> 00:36:39,680
Speaker 14: First, there would be a board of trustees, our investors

726
00:36:39,840 --> 00:36:42,239
Speaker 14: and arms length and arms linked away from Congress and

727
00:36:42,280 --> 00:36:45,080
Speaker 14: the Executive. They would bid out to someone to manage

728
00:36:45,120 --> 00:36:48,000
Speaker 14: the money, as the federal government's currently does with the

729
00:36:49,080 --> 00:36:52,719
Speaker 14: savings plan for federal employees the retirement system. They would

730
00:36:52,760 --> 00:36:55,920
Speaker 14: make the decisions on a fiduciary basis, they would make

731
00:36:55,960 --> 00:36:59,520
Speaker 14: the decisions again arms arms links separated, but they could

732
00:36:59,560 --> 00:37:02,000
Speaker 14: put it in equities of any sort and assets of

733
00:37:02,000 --> 00:37:04,840
Speaker 14: any sort. They could put it in treasuries. Those are

734
00:37:04,880 --> 00:37:07,520
Speaker 14: pretty low yielding. Probably put it in something different.

735
00:37:08,320 --> 00:37:10,680
Speaker 2: For following rule of seventy two here, and you're talking

736
00:37:10,760 --> 00:37:14,640
Speaker 2: about decades not years, Senator, in our remaining moment, you

737
00:37:14,680 --> 00:37:16,600
Speaker 2: point out you just set it as well in your

738
00:37:16,600 --> 00:37:19,680
Speaker 2: op ed in the Washington Posts, the Social Security Trust

739
00:37:19,719 --> 00:37:22,239
Speaker 2: Fund will be insolvent as soon as twenty thirty three.

740
00:37:22,600 --> 00:37:25,360
Speaker 2: Would this separate account have enough money to make up

741
00:37:25,400 --> 00:37:26,480
Speaker 2: the difference by then?

742
00:37:27,560 --> 00:37:30,719
Speaker 14: So not by twenty thirty three, So it only partially

743
00:37:30,760 --> 00:37:34,520
Speaker 14: offset the borrowing required to pay schedule benefits. By the way,

744
00:37:34,640 --> 00:37:37,279
Speaker 14: everybody knows we're going to borrow that money. No one

745
00:37:37,320 --> 00:37:39,920
Speaker 14: has a plan how to offset it. But in our plan,

746
00:37:40,560 --> 00:37:43,640
Speaker 14: as it goes up at first, would partially offset and

747
00:37:43,719 --> 00:37:46,680
Speaker 14: at the end it could potentially fully offset and even

748
00:37:46,760 --> 00:37:49,920
Speaker 14: evergreen the Social Security Trust Fund, so we.

749
00:37:49,920 --> 00:37:51,280
Speaker 13: Never have to worry about this again.

750
00:37:52,440 --> 00:37:54,800
Speaker 2: He's got a Democrat on his side now, as I mentioned,

751
00:37:54,880 --> 00:37:58,120
Speaker 2: Senator Tim Kine joining hands with Senator Bill Cassidy on

752
00:37:58,160 --> 00:38:01,200
Speaker 2: the effort to save social security. Senator, It's good to

753
00:38:01,200 --> 00:38:02,880
Speaker 2: see you and I appreciate your being with us. Welcome

754
00:38:02,920 --> 00:38:03,760
Speaker 2: back to Bloomberg.

755
00:38:05,880 --> 00:38:09,359
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

756
00:38:09,440 --> 00:38:12,480
Speaker 1: us live weekdays at noon and five pm Eastern on

757
00:38:12,600 --> 00:38:15,839
Speaker 1: Apple Coarclay, and Android Auto with the Bloomberg Business App.

758
00:38:15,880 --> 00:38:18,920
Speaker 1: You can also listen live on Amazon Alexa from our

759
00:38:18,920 --> 00:38:24,120
Speaker 1: flagship New York station, Just say Alexa, play Bloomberg eleven thirty.

760
00:38:25,000 --> 00:38:26,680
Speaker 2: Thanks for being with us on the Wednesday edition of

761
00:38:26,719 --> 00:38:29,560
Speaker 2: Balance of Power here on Bloomberg Radio. Find us on

762
00:38:29,600 --> 00:38:33,080
Speaker 2: YouTube by searching Bloomberg Business News Live. You can always

763
00:38:33,120 --> 00:38:36,000
Speaker 2: watch us on Bloomberg Originals as well, and listen to

764
00:38:36,040 --> 00:38:39,160
Speaker 2: the program or watch it, for that matter, on the

765
00:38:39,200 --> 00:38:44,399
Speaker 2: Bloomberg Professional App. Fun watching these markets alongside Charlie Pellett Today.

766
00:38:44,400 --> 00:38:46,279
Speaker 2: Everybody's in a great mood about the trade deals we

767
00:38:46,320 --> 00:38:49,680
Speaker 2: had Japan yesterday, at least a framework trade agreement, that's

768
00:38:49,719 --> 00:38:52,440
Speaker 2: what we call it. Looks like the EU might be next.

769
00:38:52,480 --> 00:38:53,759
Speaker 2: We're going to have more on this coming up at

770
00:38:53,760 --> 00:38:56,640
Speaker 2: the top of our next hour. In conversation with Bloomberg

771
00:38:56,680 --> 00:38:59,960
Speaker 2: White House correspondent Josh Wingrove will be joined as well

772
00:39:00,040 --> 00:39:03,280
Speaker 2: by Congressman Brendan Boyle, who's the ranking Democrat, ranking member

773
00:39:03,320 --> 00:39:04,720
Speaker 2: on the House Budget Committee.

774
00:39:04,760 --> 00:39:05,640
Speaker 9: This is flyout day.

775
00:39:05,640 --> 00:39:10,160
Speaker 2: They're already getting out of dodge after this whole Jeffrey

776
00:39:10,160 --> 00:39:13,400
Speaker 2: Epstein blow up in the House, and an important conversation

777
00:39:13,760 --> 00:39:16,480
Speaker 2: this time. Next hour, one hour from right now, we

778
00:39:16,560 --> 00:39:20,000
Speaker 2: sit down with the President's trade.

779
00:39:19,680 --> 00:39:21,160
Speaker 9: Advisor, Peter Navarro.

780
00:39:21,880 --> 00:39:24,080
Speaker 2: We'd be very curious to hear how he's looking at

781
00:39:24,080 --> 00:39:29,240
Speaker 2: these deals, of course, being the man who supported sky

782
00:39:29,320 --> 00:39:32,839
Speaker 2: heights harriffs that seemed to be shrinking before our eyes

783
00:39:32,880 --> 00:39:35,000
Speaker 2: in some cases. But we'll get into this deal. See

784
00:39:35,040 --> 00:39:38,840
Speaker 2: where we're going with the EU. Domestically speaking, as lawmakers

785
00:39:38,880 --> 00:39:43,040
Speaker 2: fly home, there's big news. Mister Salt is staying in Washington.

786
00:39:43,040 --> 00:39:43,600
Speaker 9: Did you hear this?

787
00:39:43,680 --> 00:39:47,040
Speaker 2: Mike Lawler, the congressman Republican from New York who's been

788
00:39:47,040 --> 00:39:50,440
Speaker 2: on this program many times talking about the state and

789
00:39:50,480 --> 00:39:56,640
Speaker 2: local tax deduction, has decided to not run for governor

790
00:39:56,719 --> 00:39:59,000
Speaker 2: of New York. It's a big breaker up in New

791
00:39:59,040 --> 00:40:01,600
Speaker 2: York and it's going to have some interesting implications about

792
00:40:01,640 --> 00:40:03,480
Speaker 2: not only who's going to Albany, but who's going to

793
00:40:03,520 --> 00:40:06,520
Speaker 2: be in his seat here in Congress. It might not

794
00:40:06,600 --> 00:40:09,520
Speaker 2: be the easiest reelection effort, which is well why he's

795
00:40:09,560 --> 00:40:11,920
Speaker 2: not running for governor. It's where we start with our

796
00:40:12,080 --> 00:40:14,960
Speaker 2: political panel. They're both with us today Bloomberg Politics contributors

797
00:40:15,000 --> 00:40:18,600
Speaker 2: Genie Shanzano and Rick Davis. Rick is our Republican strategist

798
00:40:18,920 --> 00:40:22,080
Speaker 2: and partner at Stone Court Capital. Genie is senior Democracy

799
00:40:22,080 --> 00:40:24,160
Speaker 2: Fellow with the Center for the Study of the Presidency

800
00:40:24,239 --> 00:40:26,759
Speaker 2: in Congress. Genie, you're in New York and I'm going

801
00:40:26,800 --> 00:40:28,680
Speaker 2: to start with you on this because, boy, we had

802
00:40:28,680 --> 00:40:31,239
Speaker 2: it out over the salt matter, and Micha Lawler has

803
00:40:31,280 --> 00:40:34,960
Speaker 2: certainly had plenty to talk about here on Bloomberg. We've

804
00:40:35,040 --> 00:40:37,440
Speaker 2: even asked him about his potential run for governor. He

805
00:40:37,440 --> 00:40:42,719
Speaker 2: always danced around it. Does this mean essentially that we're

806
00:40:42,719 --> 00:40:45,160
Speaker 2: going to have a race down.

807
00:40:44,960 --> 00:40:45,680
Speaker 9: To two here?

808
00:40:45,760 --> 00:40:48,680
Speaker 2: Because it is very good news for Aleast Dephonic, the

809
00:40:48,719 --> 00:40:51,120
Speaker 2: Republican who now looks like we'll be facing the incumbent.

810
00:40:52,440 --> 00:40:55,719
Speaker 10: Yeah, that's right. You know, I love your moniker, mister Saul,

811
00:40:55,800 --> 00:40:58,400
Speaker 10: and I'm assuming the representative would love it as well.

812
00:40:58,440 --> 00:41:01,400
Speaker 10: There's nothing he wants to do more than remind the

813
00:41:01,440 --> 00:41:05,480
Speaker 10: people of Goodson Valley in Rockland County, the seventeenth district

814
00:41:05,800 --> 00:41:09,080
Speaker 10: that he helped, you know, lift the cap on salt.

815
00:41:09,160 --> 00:41:12,359
Speaker 10: He worked so hard on that. But yeah, this race

816
00:41:12,440 --> 00:41:14,719
Speaker 10: is really going to come down to two.

817
00:41:15,200 --> 00:41:15,400
Speaker 13: You know.

818
00:41:15,440 --> 00:41:18,080
Speaker 10: One of the interesting things is Governor Hokel is being

819
00:41:18,160 --> 00:41:21,760
Speaker 10: challenged by her own sitting lieutenant governor, which is very odd.

820
00:41:22,160 --> 00:41:25,440
Speaker 10: But once he gets through that hurdle, it'll probably be

821
00:41:25,840 --> 00:41:29,719
Speaker 10: vocal versus Stephanic. And I think what this shows us

822
00:41:29,920 --> 00:41:35,200
Speaker 10: is how focused President Trump is on twenty twenty six

823
00:41:35,719 --> 00:41:38,959
Speaker 10: on this particular district because this is one of three

824
00:41:39,120 --> 00:41:42,160
Speaker 10: that Kamala Harris won that was won by a Republican

825
00:41:42,560 --> 00:41:45,480
Speaker 10: in the House, and this is one that Democrats are

826
00:41:45,480 --> 00:41:49,200
Speaker 10: eyeing for a big pickup. And I think Donald Trump,

827
00:41:49,239 --> 00:41:52,040
Speaker 10: having Wawler in the White House we understand last week

828
00:41:52,120 --> 00:41:54,800
Speaker 10: and then just the other day, has made his position

829
00:41:55,000 --> 00:41:58,279
Speaker 10: very clear that we need you, Mike. And so the

830
00:41:58,400 --> 00:42:01,719
Speaker 10: representative is staying where he is and he's going to

831
00:42:01,800 --> 00:42:04,239
Speaker 10: try to run and this will be a hard fought race.

832
00:42:04,280 --> 00:42:06,720
Speaker 10: I think one of the most watched in the twenty

833
00:42:06,760 --> 00:42:10,160
Speaker 10: twenty sixth cycle to see if Democrats can possibly take

834
00:42:10,200 --> 00:42:10,600
Speaker 10: it back.

835
00:42:11,760 --> 00:42:14,319
Speaker 2: Rick Governor Hochel says, of course, he doesn't have the

836
00:42:14,400 --> 00:42:18,080
Speaker 2: spine to face me. Was this a decision based purely

837
00:42:18,120 --> 00:42:21,400
Speaker 2: on polls in the governor's race, or more like Genie's

838
00:42:21,400 --> 00:42:24,640
Speaker 2: talking about, he's more needed here in Washington when it

839
00:42:24,640 --> 00:42:25,800
Speaker 2: comes to the Republican Party.

840
00:42:27,160 --> 00:42:31,840
Speaker 8: You know, I think a little bit of Republican unity. Also,

841
00:42:32,200 --> 00:42:35,400
Speaker 8: Elis Stephonic has made it clear she's going to be

842
00:42:35,400 --> 00:42:39,040
Speaker 8: a candidate for that spot in New York, and really

843
00:42:39,160 --> 00:42:41,960
Speaker 8: based on the experience he's had in the Trump camp,

844
00:42:42,040 --> 00:42:46,480
Speaker 8: you know, administration first being identified as the next in

845
00:42:46,600 --> 00:42:50,480
Speaker 8: future ambassador to the UN than not being able to

846
00:42:50,480 --> 00:42:54,279
Speaker 8: do that because they needed her votes, she really is

847
00:42:54,520 --> 00:42:57,440
Speaker 8: the person who should be given the first shot at

848
00:42:57,440 --> 00:43:01,640
Speaker 8: that and I think Lawler is doing a real favor

849
00:43:01,719 --> 00:43:05,759
Speaker 8: to her by setting aside his ambitions to let her run,

850
00:43:05,840 --> 00:43:11,520
Speaker 8: especially in a very very interesting Republican year. So that

851
00:43:11,640 --> 00:43:14,360
Speaker 8: being said, he does have his challenges. As Genie said,

852
00:43:14,400 --> 00:43:17,640
Speaker 8: I mean, he's one of five districts in New York

853
00:43:17,640 --> 00:43:21,080
Speaker 8: that Biden won that are currently occupied by Republicans, and

854
00:43:21,120 --> 00:43:23,880
Speaker 8: they'll be the very top of the target list for

855
00:43:24,080 --> 00:43:28,080
Speaker 8: the Democratic Congressional Campaign Committee. So he's going to have

856
00:43:28,120 --> 00:43:30,640
Speaker 8: to run a flawless campaign to make it back into Congress,

857
00:43:31,040 --> 00:43:35,560
Speaker 8: and that will be his reward for becoming mister.

858
00:43:35,400 --> 00:43:41,440
Speaker 2: Salt, affectionately known. It's interesting you mentioned the D triple See.

859
00:43:41,440 --> 00:43:45,000
Speaker 2: A spokeswoman for the D Trip says, quote, Mike Lawler

860
00:43:45,080 --> 00:43:47,480
Speaker 2: might have chickened out of a statewide race, but he

861
00:43:47,520 --> 00:43:52,160
Speaker 2: can't outrun his heinous record of rubber stamping Trump's extreme

862
00:43:52,239 --> 00:43:55,600
Speaker 2: agenda at every turn. What will this campaign be like

863
00:43:55,640 --> 00:43:59,160
Speaker 2: for Democrats in New York, Genie, It's going to be ugly.

864
00:43:59,200 --> 00:44:02,520
Speaker 10: I heard Mike the other day talking about how Nancy Pelosi,

865
00:44:02,560 --> 00:44:04,920
Speaker 10: of all people, has been approaching him on the floor,

866
00:44:04,960 --> 00:44:08,239
Speaker 10: sort of tapping her wrists, saying time, time, let's go.

867
00:44:08,480 --> 00:44:11,319
Speaker 10: She wanted him to announce this run for governor. Now

868
00:44:11,360 --> 00:44:14,080
Speaker 10: that he is staying put, they know it's going to

869
00:44:14,120 --> 00:44:17,000
Speaker 10: be even tougher. The Democrats do, but they've got some

870
00:44:17,080 --> 00:44:20,560
Speaker 10: wind at their back. You know, historically this should be

871
00:44:20,840 --> 00:44:24,440
Speaker 10: a harder year twenty twenty six for the Republicans, and

872
00:44:24,480 --> 00:44:27,000
Speaker 10: Mike Lawler knows it's better than anybody. Some of these

873
00:44:27,040 --> 00:44:29,879
Speaker 10: town halls he's been giving over the spring, he has

874
00:44:30,000 --> 00:44:34,960
Speaker 10: been viciously attacked by Democrats and Republicans over his support

875
00:44:35,000 --> 00:44:38,160
Speaker 10: of things like the cuts and Medicaid and snap and

876
00:44:38,440 --> 00:44:41,920
Speaker 10: Democrats are going to keep pushing this. That said, I

877
00:44:42,080 --> 00:44:44,680
Speaker 10: wonder how smart a strategy this is on the part

878
00:44:44,719 --> 00:44:47,640
Speaker 10: of the president. You know, Mike Lawler has proven he

879
00:44:47,719 --> 00:44:50,920
Speaker 10: can win in a purple district. We haven't seen that

880
00:44:50,960 --> 00:44:54,319
Speaker 10: from Elise Deephonic. And while she'll have the endorsement of

881
00:44:54,360 --> 00:44:57,480
Speaker 10: the President, she is going to have to defend her

882
00:44:57,600 --> 00:45:01,919
Speaker 10: record as a leader of the Congress which pushed through

883
00:45:01,960 --> 00:45:05,360
Speaker 10: this bill with these tremendous cuts and the impact on

884
00:45:05,440 --> 00:45:09,120
Speaker 10: the deficit. All the while, she has been just a real,

885
00:45:09,320 --> 00:45:13,160
Speaker 10: real visceral supporter of the president, and he is most

886
00:45:13,320 --> 00:45:16,640
Speaker 10: unhappy in the state, not to mention most I'm not unhappy,

887
00:45:16,680 --> 00:45:19,759
Speaker 10: so unpopular, and of course, not to mention, it's been

888
00:45:19,840 --> 00:45:23,239
Speaker 10: decades since a Republican has won statewide here. So you know,

889
00:45:23,360 --> 00:45:25,279
Speaker 10: I wonder if this is a good move on the

890
00:45:25,280 --> 00:45:27,960
Speaker 10: part of the Republicans to back her versus Lawler in

891
00:45:28,000 --> 00:45:28,479
Speaker 10: this race.

892
00:45:29,520 --> 00:45:32,520
Speaker 2: You wonder if this helps Lawler in his quest for

893
00:45:32,800 --> 00:45:37,960
Speaker 2: now re election. Rick Davis, he's introducing the Mamdanni Act,

894
00:45:39,200 --> 00:45:42,080
Speaker 2: referring of course, to the Democratic nominee for Mayor in

895
00:45:42,080 --> 00:45:45,440
Speaker 2: New York to examine the risks of government run grocery

896
00:45:45,480 --> 00:45:49,440
Speaker 2: stores risk Rick. This legislation would direct the FTC to

897
00:45:49,520 --> 00:45:52,640
Speaker 2: conduct the comprehensive study into the competitive, economic, and supply

898
00:45:52,760 --> 00:45:56,440
Speaker 2: chain impacts of government owned grocery stores, which is something

899
00:45:56,480 --> 00:46:00,200
Speaker 2: that Zora Mandanni has talked about, along with the the

900
00:46:00,239 --> 00:46:02,759
Speaker 2: free subway and so forth. Is that the kind of

901
00:46:02,840 --> 00:46:06,120
Speaker 2: rhetoric that keeps a Republican in New York?

902
00:46:07,360 --> 00:46:10,320
Speaker 8: Well, I'm sure there's been a lot of polling around

903
00:46:10,880 --> 00:46:14,759
Speaker 8: New York Republicans on issues raised by Mandami and his

904
00:46:14,840 --> 00:46:18,440
Speaker 8: primary campaign, and I'm sure this one spikes with people.

905
00:46:18,520 --> 00:46:20,680
Speaker 8: What in the world do we want a grocery store

906
00:46:20,760 --> 00:46:24,359
Speaker 8: run by the government, no telling what decisions they'll make

907
00:46:24,400 --> 00:46:29,040
Speaker 8: on things like grapes and carrots. And so it's the

908
00:46:29,120 --> 00:46:32,120
Speaker 8: power of incumbency. He can do that as a sitting

909
00:46:32,360 --> 00:46:38,279
Speaker 8: United States Congressman, to use the facilities of power that

910
00:46:38,320 --> 00:46:41,360
Speaker 8: he's got available. And it's going to be a tough

911
00:46:42,000 --> 00:46:45,319
Speaker 8: re election for all Republicans. It's a party out of

912
00:46:45,360 --> 00:46:49,799
Speaker 8: power season and so cycles matter, and this is not

913
00:46:49,880 --> 00:46:53,440
Speaker 8: a good one for Republicans running for House seats, and

914
00:46:53,760 --> 00:46:56,439
Speaker 8: so he's going to need every advantage he can take

915
00:46:58,040 --> 00:47:00,440
Speaker 8: make use of, and this is a very good start.

916
00:47:00,760 --> 00:47:02,719
Speaker 8: The fact that he's focused on doing these kinds of

917
00:47:02,800 --> 00:47:04,839
Speaker 8: things means he knows he's going to have a tough

918
00:47:04,960 --> 00:47:08,560
Speaker 8: race and he's going to use every outs of power

919
00:47:08,560 --> 00:47:10,240
Speaker 8: that he's got to be re elected.

920
00:47:11,239 --> 00:47:13,360
Speaker 2: I think Rick is suggesting that the grapes would be

921
00:47:13,400 --> 00:47:16,400
Speaker 2: soft at the government run grocery store, the food, the

922
00:47:16,400 --> 00:47:17,080
Speaker 2: fruit would.

923
00:47:16,920 --> 00:47:18,200
Speaker 9: Be bruised, Genie.

924
00:47:18,800 --> 00:47:20,759
Speaker 2: But you've got the matter of money as well at

925
00:47:20,800 --> 00:47:22,840
Speaker 2: Republicans backs here, and I'm wondering if you guys have

926
00:47:22,920 --> 00:47:25,680
Speaker 2: thoughts on this. The RNC and the first half of

927
00:47:25,680 --> 00:47:28,320
Speaker 2: the year sixty five and a half million dollars cash

928
00:47:28,480 --> 00:47:32,000
Speaker 2: on hand advantage over the Democratic Party.

929
00:47:32,640 --> 00:47:34,240
Speaker 9: How worried does that make you, Genie?

930
00:47:35,680 --> 00:47:37,680
Speaker 10: It is a source of worry, I think. You know,

931
00:47:37,840 --> 00:47:40,960
Speaker 10: Republicans have done a very good job raising money for

932
00:47:41,040 --> 00:47:45,160
Speaker 10: these house races and Democrats not so much. You know,

933
00:47:45,520 --> 00:47:48,799
Speaker 10: it really is going to fall on Hakeem Jeffries and

934
00:47:49,040 --> 00:47:51,479
Speaker 10: his team to get out there and raise the money

935
00:47:51,560 --> 00:47:53,480
Speaker 10: they need. And one of the things that's hurting the

936
00:47:53,520 --> 00:47:57,879
Speaker 10: Democrats is things like Momdani winning this primary. I mean,

937
00:47:57,920 --> 00:48:00,400
Speaker 10: he is the gift that keeps on giving to Donald

938
00:48:00,440 --> 00:48:03,560
Speaker 10: Trump and the Republicans, and that is something they are

939
00:48:03,600 --> 00:48:05,759
Speaker 10: going to take to the bank, and they already have.

940
00:48:06,719 --> 00:48:09,800
Speaker 10: So they really have to get Democrats a message together

941
00:48:09,920 --> 00:48:12,839
Speaker 10: that they can run on so that they can keep

942
00:48:12,920 --> 00:48:16,480
Speaker 10: up this history of overturning the House and taking it back.

943
00:48:16,520 --> 00:48:18,800
Speaker 10: It's going to be very close, but they're going to

944
00:48:18,880 --> 00:48:21,239
Speaker 10: need money and they're going to need a message and

945
00:48:21,400 --> 00:48:25,280
Speaker 10: leadership to do that. And Republicans so far Mike Johnson

946
00:48:25,680 --> 00:48:28,600
Speaker 10: is showing that they can raise with the best of them,

947
00:48:28,640 --> 00:48:31,000
Speaker 10: and these are historic fundraising numbers for him.

948
00:48:32,040 --> 00:48:36,000
Speaker 2: You wonder if the government run grocery store sells the

949
00:48:36,680 --> 00:48:40,080
Speaker 2: coke with the sugar cane or with the corn syrup.

950
00:48:40,120 --> 00:48:43,640
Speaker 2: There's got to be a government mandate on one of those. Rick,

951
00:48:43,680 --> 00:48:45,960
Speaker 2: Are we making too much about the role money plays

952
00:48:46,880 --> 00:48:49,720
Speaker 2: in this campaign? Are we going to start talking about

953
00:48:49,760 --> 00:48:52,040
Speaker 2: a counterintuitive take here that Republicans keep.

954
00:48:51,920 --> 00:48:52,480
Speaker 9: The House.

955
00:48:53,920 --> 00:48:57,680
Speaker 8: Well? And Senator Phil Graham one said money is the

956
00:48:57,680 --> 00:49:01,560
Speaker 8: mother's milk of politics, and I don't disagree with him.

957
00:49:01,600 --> 00:49:04,480
Speaker 8: Money matters. You can't make too much of it, but

958
00:49:04,560 --> 00:49:07,319
Speaker 8: it doesn't on its own elect anybody. And there are

959
00:49:07,360 --> 00:49:10,279
Speaker 8: lots of examples of that. You know, Democrats are running

960
00:49:10,280 --> 00:49:13,359
Speaker 8: around today with these fundraising numbers trying to say, well,

961
00:49:13,400 --> 00:49:17,000
Speaker 8: you know, back in twenty seventeen, similar cycle, similar president.

962
00:49:18,080 --> 00:49:22,239
Speaker 8: You know, we were radically out fundraised, same like now,

963
00:49:22,800 --> 00:49:25,880
Speaker 8: and we did really well. Anyway, you know, that's a

964
00:49:25,880 --> 00:49:30,640
Speaker 8: really lame excuse. Democrats are in a free fall. Democrat

965
00:49:30,719 --> 00:49:33,640
Speaker 8: Party can't raise money. They don't have anybody out there,

966
00:49:33,920 --> 00:49:37,320
Speaker 8: you know, taking leadership of the party who can. It's

967
00:49:37,360 --> 00:49:40,239
Speaker 8: a difficult situation for them. And if they don't get

968
00:49:40,280 --> 00:49:45,279
Speaker 8: on it, some of these very close races like Mike

969
00:49:45,400 --> 00:49:49,759
Speaker 8: Lawlers may result in a Republican reelection when otherwise a

970
00:49:50,680 --> 00:49:53,560
Speaker 8: better funded challenger could could win that race.

971
00:49:54,680 --> 00:49:57,600
Speaker 2: There was recent polling from Tony Fabrizio that we talked

972
00:49:57,640 --> 00:50:03,279
Speaker 2: about briefly, Genie that sh the difference maker in Republicans

973
00:50:03,320 --> 00:50:06,520
Speaker 2: holding the majority on Capitol Hill would in fact be

974
00:50:06,600 --> 00:50:11,120
Speaker 2: the extension of expanded healthcare subsidies under Obamacare that are

975
00:50:11,160 --> 00:50:13,680
Speaker 2: set to expire at the end of the year. Here

976
00:50:14,280 --> 00:50:16,880
Speaker 2: if Congress does not act, do you believe that singular

977
00:50:16,960 --> 00:50:20,200
Speaker 2: issue could turn the tide. Is this still the narrative

978
00:50:20,200 --> 00:50:22,000
Speaker 2: that history is on the side of the Democrats.

979
00:50:23,600 --> 00:50:26,520
Speaker 10: You know, I think it is a critically important issue.

980
00:50:26,600 --> 00:50:29,400
Speaker 10: Is this issue of healthcare and the expansion of that

981
00:50:29,560 --> 00:50:34,120
Speaker 10: is critically important. But the problem is Democrats can't pick

982
00:50:34,200 --> 00:50:37,680
Speaker 10: up seats without having a message and a messenger. And

983
00:50:37,719 --> 00:50:40,600
Speaker 10: that's the trouble they have had. And so when you

984
00:50:40,719 --> 00:50:44,920
Speaker 10: have the president constantly talking about Mamdani, the socialist communist

985
00:50:45,000 --> 00:50:47,440
Speaker 10: in New York City is taking over the party that

986
00:50:47,600 --> 00:50:50,800
Speaker 10: is really going to weigh happy on these democratic races.

987
00:50:50,800 --> 00:50:53,719
Speaker 10: And so they have to find a way to get

988
00:50:53,760 --> 00:50:57,279
Speaker 10: back to a message of defeating the president and repealing

989
00:50:57,320 --> 00:51:00,400
Speaker 10: this bill and the impact he has had add on

990
00:51:00,480 --> 00:51:04,239
Speaker 10: the middle, lower and working classes of this country despite

991
00:51:04,320 --> 00:51:07,840
Speaker 10: promising otherwise. And just look at all these trade issues.

992
00:51:08,200 --> 00:51:10,839
Speaker 10: They are hitting the lower and middle class who will

993
00:51:10,880 --> 00:51:14,560
Speaker 10: pay these tariffs and not these foreign countries. So they

994
00:51:14,600 --> 00:51:17,239
Speaker 10: need a message and a messenger if they're going to defeat.

995
00:51:18,000 --> 00:51:23,000
Speaker 2: Worth noting Hakim Jeffries still has not endorsed Zora Memdani

996
00:51:23,080 --> 00:51:24,880
Speaker 2: even after their meeting here in Washington.

997
00:51:27,880 --> 00:51:30,319
Speaker 9: Thanks for listening to the Balance of Power podcast.

998
00:51:30,920 --> 00:51:34,080
Speaker 2: Make sure to subscribe if you haven't already, at Apple, Spotify,

999
00:51:34,160 --> 00:51:36,719
Speaker 2: or wherever you get your podcasts, and you can find

1000
00:51:36,800 --> 00:51:40,040
Speaker 2: us live every weekday from Washington, DC at noontime Eastern

1001
00:51:40,360 --> 00:51:41,720
Speaker 2: at bloomberg dot com