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Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us

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Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the

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Speaker 1: iHeartRadio app and the Bloomberg Business App, or listening on

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Speaker 1: demand wherever you get your podcast.

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Speaker 2: We've spent the better part of the week talking about

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Speaker 2: a potential deal on the border funding for Israel Ukraine,

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Speaker 2: maybe a breakthrough in the Senate, the Senate, the House.

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Speaker 2: We're out today. We only have a couple legislative days

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Speaker 2: left here. They've got through the end of next week

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Speaker 2: essentially to get something done, and we're going to talk

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Speaker 2: to Congressman Don Bayer about that in just a moment.

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Speaker 2: The headline, though on jobs is stronger than expected, pretty

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Speaker 2: much across the board. As we connect with our friend

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Speaker 2: Michael McKee in New York, Bloomberg Economics Editor, one hundred

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Speaker 2: and ninety nine thousand jobs. Michael, it's great to see you.

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Speaker 2: I heard you live at eight thirty, and I know

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Speaker 2: you've been talking about this ever since. I can tick

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Speaker 2: through the data. If you're listening to Bloomberg, if you

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Speaker 2: have a terminal, you don't need me to tell you.

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Speaker 2: Monthly wage growth rising more than expected, workforce participation up.

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Speaker 2: It's hard to find bad news in here, I guess,

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Speaker 2: depending on how you look at things. Michael McKee, what

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Speaker 2: does it mean for the Fed next week?

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Speaker 3: Well, it's good news for the FED basically tells them

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Speaker 3: that we are still seeing strength in the economy. It

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Speaker 3: has slowed, hiring is lower than it was, but we're

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Speaker 3: seeing wage gains and the rate of wage gains is slowing,

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Speaker 3: so less inflation pressure. But overall it fits Goldilocks soft

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Speaker 3: landing scenario quite well. I joked earlier today that I

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Speaker 3: wish I had been at the Council of Economic Advisors

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Speaker 3: this morning when they opened the champagne bottles, because this

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Speaker 3: is certainly a good news for the Biden administration.

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Speaker 2: Sure is. I mean, look, I guess it's good to

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Speaker 2: see wage growth in an era of inflation. But doesn't

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Speaker 2: this become the definition of inflation area at some point, Michael,

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Speaker 2: or am I reading it wrong?

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Speaker 3: Well, it would if it were continuing to go up.

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Speaker 3: But what we're seeing is wage growth coming down. The

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Speaker 3: FED thinks that average hourly earnings of between three and

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Speaker 3: three and a half percent are what's sustainable with two

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Speaker 3: percent inflation. It still leaves you a little ahead of inflation,

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Speaker 3: and so we're down to four percent now, so we're

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Speaker 3: getting into that range, and as long as it continues

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Speaker 3: in that direction, the Fed will feel justified. Then the

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Speaker 3: question becomes if we get down to the three and

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Speaker 3: a half percent range and inflation continues to fall, when

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Speaker 3: do they start cutting interest rates? That'll be a key

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Speaker 3: question that'll be asked if Jay poll next week.

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Speaker 2: So this is sweet music for the White House, obviously, Michael,

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Speaker 2: it would be an orchestra though if we actually did

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Speaker 2: see a soft landing at some point in what's going

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Speaker 2: to be a reelection year, potentially for Joe Biden, certainly

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Speaker 2: a campaign year. But Bloomberg Economics is telling us that

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Speaker 2: a recession probably already started in October. How do we

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Speaker 2: rationalize that call.

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Speaker 3: Well, nobody's been able to predict recessions with any accuracy.

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Speaker 3: We find out later that we were in a recession

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Speaker 3: because the numbers get revised, and they get revised lower

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Speaker 3: to show that things were actually contracting. Right now, it

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Speaker 3: doesn't seem like that's the case. That we're seeing still

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Speaker 3: still growth in just about every category, and certainly the

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Speaker 3: hiring levels and the unemployment rate of three point seven

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Speaker 3: percent suggests that we're not in recession. It could always

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Speaker 3: be changed, and we could find out in the new

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Speaker 3: year that we are.

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Speaker 1: But at this.

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Speaker 3: Point it looks like a soft landing. The issue is

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Speaker 3: how do you define it in terms of time. You

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Speaker 3: could come out if you were Jay Powell or Joe

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Speaker 3: Biden right now and say, well, we had a soft landing.

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Speaker 3: Do you wait until you get to two percent inflation

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Speaker 3: sometime next year? Because the economy is always evolving, so

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Speaker 3: you're always at risk of while we had it. And

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Speaker 3: then it left.

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Speaker 2: Good to see you, Michael, have a great weekend. Thanks

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Speaker 2: for the good news. Michael McKee, Bloomberg Economics Editor, with

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Speaker 2: us from world headquarters in New York. As we turned

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Speaker 2: to the Congressman from Virginia, Don Byer, the Democrat from

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Speaker 2: the Commonwealth, is with us. At least you're still here, Congressman.

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Speaker 2: By the nature of your district, of course, I know

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Speaker 2: a lot of lawmakers have headed home for the weekend,

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Speaker 2: and I love to start with you. Welcome back on

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Speaker 2: the news on jobs here. Aren't you itching to see

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Speaker 2: that Michigan accomplished banner? Go up here see Joe Biden

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Speaker 2: take victory for beating inflation. For accomplishing the soft landing.

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Speaker 2: Is this it right now?

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Speaker 4: Well, Jay, I wish it were that simple. But there's

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Speaker 4: a lot of really good news. I loved your interview.

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Speaker 4: You just had the fact that it's the fourteen million

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Speaker 4: new jobs in the Biden administration. This is the twenty

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Speaker 4: second straight month we've been below four percent unemployment rate.

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Speaker 4: That's never happened in our lives. And now we see

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Speaker 4: inflations down to about a third of what it was

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Speaker 4: a year ago. I was fascinating to see the Michigan

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Speaker 4: Consumer Sentiment at Index this morning that Americans are beginning

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Speaker 4: to see feel and project much lower interest expectations, including

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Speaker 4: an eight year range of two point eight percent. So

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Speaker 4: we're moving in the right direction. The problem we have,

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Speaker 4: and I think most people have comment on this, is

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Speaker 4: that we have not gotten used to the nine ten

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Speaker 4: percent of higher prices that hit us last year when

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Speaker 4: the inflation was so high. So food still costs more

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Speaker 4: than we think it should. Gasoline's getting in the right place,

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Speaker 4: which is great. But you know, unless we expect massive deflation,

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Speaker 4: which would be terrible for the economy, we're not going

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Speaker 4: to go back to the prices the way they were

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Speaker 4: and that's going to make us pretty unhappy for the

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Speaker 4: middle run.

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Speaker 2: And that's why Joe Biden looks at that historically low

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Speaker 2: approval rating. He's in the upper thirties, low forties, depending

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Speaker 2: on the poll that you're watching. Congressman, Can that change

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Speaker 2: in the next year?

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Speaker 4: I think so. And you know, if the Fed starts

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Speaker 4: to move those rates down, that will be a wonderful thing.

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Speaker 4: I mean, the markets are going to love it, and

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Speaker 4: I think the people will feel much better about it.

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Speaker 4: Here right now, it's pretty hard to buy a new

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Speaker 4: home when you know thirty year interest rates or six

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Speaker 4: seven eight percent. So I'm hoping that Jay Powell and

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Speaker 4: his team look at these numbers and say, Okay, we've

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Speaker 4: done enough. Let's start to move this loos in this

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Speaker 4: economy a little bit more.

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Speaker 2: Well, that would be a good thing. There's a thought, though,

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Speaker 2: that what's happening on Capitol Hill is an economic risk

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Speaker 2: in itself. Congressman, and I wonder your thoughts on this.

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Speaker 2: As a member of the minority party, you're a bystander

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Speaker 2: in some cases when it comes to the dysfunction that

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Speaker 2: we've seen. But is it likely we're going to go

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Speaker 2: into this recess next week without anything being accomplished on

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Speaker 2: funding for Israel, for Ukraine on the border, or for

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Speaker 2: overall government funding.

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Speaker 4: Joe, there's three big things hanging over us in the

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Speaker 4: next six seven days. One are the FAISA seven h

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Speaker 4: two law, which is basically came after nine to eleven,

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Speaker 4: which gives our Intelligence Committee the ability to listen in

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Speaker 4: on foreign conversations. That expires twelve thirty one, and we

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Speaker 4: really dare not have it be out of not the

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Speaker 4: law for even a day, so we've got to get

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Speaker 4: that done. The FAA is about to expire again, so

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Speaker 4: we need the Federal Aviation Administration to be authorized this week.

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Speaker 4: But the big thing is Ukraine's out of money and

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Speaker 4: they're out of weapons. They desperately need the new investment

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Speaker 4: from the USA, and that's you know, sixty billion dollars

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Speaker 4: is what the President's asked for. Israel is really looking

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Speaker 4: forward to its investment, and the people in Palestine need

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Speaker 4: that humanitarian assistance. All three of them right now are

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Speaker 4: hinging on whether or not we can get agreement on

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Speaker 4: border control. Basically, the Center Republicans have said, without significant

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Speaker 4: change in the border laws, you know, it's just toughening

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Speaker 4: up the border. They won't move forward. They've turned down

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Speaker 4: all the Biden us for more money for Bord regards

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Speaker 4: for judges to process assilent applications. I'm hoping that Senator

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Speaker 4: Chris Murphy, a Democrat from Connecticut, who's leading the charge

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Speaker 4: on our side, will be able to come up with

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Speaker 4: a good compromise and we can get that done this

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Speaker 4: coming week.

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Speaker 2: Well, I'm by the boys.

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Speaker 1: Now.

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Speaker 2: That would be a piece.

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Speaker 4: It is a dangerous thing in terms of handing Ukraine

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Speaker 4: back to Putin.

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Speaker 2: I get it. If you accomplished that next week, though,

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Speaker 2: this would be this would be a screamer of a headline.

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Speaker 2: As we say in the business, it's been twenty thirty

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Speaker 2: years in the making to actually get Republicans and Democrats

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Speaker 2: together here and pass legislation, not just an agreement, but

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Speaker 2: make it law. Congressman, there's a report from Reuters today

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Speaker 2: the Biden administration is considering supporting new restrictions on who

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Speaker 2: can seek asylum, defining asylum more narrowly, as well as

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Speaker 2: an expanded deportation process, maybe open to designating additional safe

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Speaker 2: third countries. Is that what you're hearing from the White House.

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Speaker 2: Would you support those measures?

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Speaker 4: Yes? I would, and I think, you know, Joe, we're

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Speaker 4: looking at eleven twelve thousand people a day crossing the border.

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Speaker 4: And these aren't folks swimming across the Rio Grande. They're

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Speaker 4: walking across the bridge from Warez to l Passo and

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Speaker 4: turning themselves in and claiming asylum. And we have a

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Speaker 4: very generous asylum system. Because we can't process them it's two, three,

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Speaker 4: four years to get a hearing, we release them into

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Speaker 4: the countryside the so called you know, humanitarian parole, and

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Speaker 4: then we end up with ever more people without papers

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Speaker 4: in the US who can't work in the normal economy.

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Speaker 4: We've got to do something. Even when democratic city is

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Speaker 4: like New York and Chicago are pushing back hard, we

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Speaker 4: know that there has to be a bipartisan solution.

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Speaker 2: That's an important statement for a Democrat to say to

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Speaker 2: your colleagues you're talking with when reporters like me are

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Speaker 2: not around feel the same way, or is this going

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Speaker 2: to be something that Democrats need to do some soul

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Speaker 2: searching on before voting next week If it really came

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Speaker 2: to that.

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Speaker 4: Yes, some soul searching. And certainly not everyone on the

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Speaker 4: Democratic side agrees with me. You know, we have a

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Speaker 4: there's a natural conflict between our compassion, our desire to

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Speaker 4: help every human being and take care of people who

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Speaker 4: are fleeing your murder and sexual assault and deep poverty

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Speaker 4: at the same time, recognizing, as Barack Obama said that

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Speaker 4: we're not a country if we don't have a border,

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Speaker 4: and I think there are ways we can work together.

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Speaker 4: One of the pushbacks from my Republican pals is they

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Speaker 4: don't want to give citizenship access to the Dreamers or

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Speaker 4: to the people that have been here on temporary protective

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Speaker 4: status sometimes for decades. And one of the things we

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Speaker 4: want to see, as Democrats in fact seen reright House

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Speaker 4: officials said, you know, I'll trade all kinds of border

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Speaker 4: security for the right of our dreamers to have a

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Speaker 4: path to citizenship.

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Speaker 2: Well, all right, so let's stop right there, because I

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Speaker 2: haven't heard that word from a Democrat on the program, Congressmen,

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Speaker 2: since this debate began about border security, the throws of

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Speaker 2: debate that we're in right now, the idea is, instead

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Speaker 2: of asking for help with Dreamers, Democrats will trade border

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Speaker 2: reform for Ukraine funding. What about dreamers? My goodness, they're

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Speaker 2: old enough to have kids themselves now.

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Speaker 4: Oh, I thank you a lot of them now. There

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Speaker 4: are many in my district in northern Virginia, and you know,

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Speaker 4: they're the heart of our economy. They're all valedictorians of

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Speaker 4: their high school classes, and they're doing really well in

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Speaker 4: our Virginia colleges and universities. But you're right, some of

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Speaker 4: them are getting to be into their thirties with families

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Speaker 4: of their own and still don't feel like they can

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Speaker 4: be American citizens, no green cards. It's really unfair.

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Speaker 2: But they're not going to be part of this deal, though,

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Speaker 2: are they?

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Speaker 5: Well?

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Speaker 4: I wish they were. I'm not a senator, so I'm

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Speaker 4: not part of those conversations. I'm certainly hoping that people

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Speaker 4: like Christoph Murphy are asking that as our part of

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Speaker 4: the deal.

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Speaker 2: Spending time with Congressman Don Byer on Bloomberg's sound on Congressman,

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Speaker 2: I'd love to ask you about the rub when it

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Speaker 2: comes to Israel as well, because a number of progressive Democrats,

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Speaker 2: and in this case, many Senators, are asking for humanitarian

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Speaker 2: strings attached to the money, if you will, it's not

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Speaker 2: just Israel technically as Ukraine as well, but Chris van

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Speaker 2: Holland about a dozen progressive Democratic senators have put up

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Speaker 2: this amendment to the supplemental that would require exported offensive

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Speaker 2: weapons be used quote in accordance with US law, international

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Speaker 2: humanitarian law, and the law of armed conflict. Would also

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Speaker 2: require a report to Congress on each country's use of

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Speaker 2: US supplied weapons. Isn't that already implied in an arms

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Speaker 2: sharing agreement? Congressman, do we need that?

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Speaker 1: Well?

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Speaker 4: I think all that Senator Van Hollo is trying to

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Speaker 4: do is emphasize it because it already is the law.

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Speaker 4: We certainly inspect Israel and Ukraine and Russia and well

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Speaker 4: comas not to obey international law and Geneva Convention and

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Speaker 4: all that. Yeah, so I have no objection to the amendment,

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Speaker 4: but it should be being being done already.

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Speaker 2: You know one thing we started on the jobs report

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Speaker 2: last thing we talked about when you were here. As

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Speaker 2: someone who has worked a career in the auto business, Congressman,

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Speaker 2: that of course would be you. We saw the impact

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Speaker 2: of the UAW strike coming to an end. It's partly

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Speaker 2: why this Job's report was so strong. Are you happy

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Speaker 2: with the terms of that contractor that they get too

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Speaker 2: much from the Big Three?

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Speaker 4: No? I am happy for the terms with it and Sadly,

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Speaker 4: the incomes of the top executives were so out of

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Speaker 4: skew with what the average worker was making. They had

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Speaker 4: a really strong case to make. And those auto workers

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Speaker 4: they've sucked it up, sucked it up and took a

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Speaker 4: big hit in two thousand and eight, two thousand and

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Speaker 4: nine at the Great Recession when the Carter Governor stepped

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Speaker 4: into say at the car manufacturers. Now they're just trying

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Speaker 4: to begin to catch up from all those years of

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Speaker 4: the left behind. I think it was a good deal.

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Speaker 2: Glad you could join us, Congressman. I hope you have

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Speaker 2: a great weekend. If I don't see you again, have

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Speaker 2: a great holiday season. And thanks for the insights from

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Speaker 2: the great state of Virginia. Congressman Don Byer, the Democrat

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Speaker 2: with the setting us up for our panel, Rick and

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Speaker 2: Junie or on the way in next.

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Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch the

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Speaker 1: program live weekdays at one Eastern on Bloomberg Radio, the

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Speaker 1: tune in app, Bloomberg dot Com, and the Bloomberg Business App.

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Speaker 1: You can also listen live on Amazon Alexa from our

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Speaker 1: flagship New York station, Just say Alexa Play Bloomberg eleven thirty.

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Speaker 2: We should hear from the RNC on whether it's going

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Speaker 2: to allow Republican presidential candidates to take part in unsanctioned debates.

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Speaker 2: The funny part is they're already scheduling them, and I'm

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Speaker 2: not sure what that says about the role of the

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Speaker 2: RNC is playing here. As we reassembled our panel, we've

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Speaker 2: got a couple of pretty important headlines on the campaign trail.

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Speaker 2: Reminding we told you about this yesterday. There are debates

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Speaker 2: coming together in Iowa about five days before the caucuses

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Speaker 2: and two days before New Hampshire. In Manchester, there might

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Speaker 2: even be competing debates. We'll see who shows up. I'm

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Speaker 2: assuming Ronda Santis will still be there as we bring

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Speaker 2: you the story here, great reporting from Nancy Cook. It's

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Speaker 2: an exclusive at Bloomberg Ronda Santa's super pack canceling a

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Speaker 2: donor event before the debate the other night that would

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Speaker 2: have included a ticket to the event, citing a lack

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Speaker 2: of interest among donors. That's tough. Rick Davis and Genie

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Speaker 2: Shanzo back with us. Rick, this Republican is having trouble resonating.

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Speaker 2: You've suggested he might not make it to New Hampshire.

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Speaker 2: Where's your head today?

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Speaker 6: Yeah, I think that's still the case. You have to

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Speaker 6: have a rationale to how to win, and and if

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Speaker 6: if you predicate all of that on saying you're going

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Speaker 6: to win Iowa, and Ron DeSantis, for instance, said I'm

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Speaker 6: going to win Iowa. Now, anything short of winning Iowa

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Speaker 6: is going to be looking like a big defeat for him.

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Speaker 6: I don't know why he would have put that marker out,

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Speaker 6: it was a relatively recent thing, and maybe just feeling

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Speaker 6: defensive about his flagging campaign. But the bottom line is

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Speaker 6: he sets expectations, the media will follow those expectations to

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Speaker 6: where he is, and then if he doesn't win, even

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Speaker 6: if he has a great showing, they're going to say, oh,

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Speaker 6: but he said he was going to win and now

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Speaker 6: he didn't.

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Speaker 2: So and there's no expectation that.

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Speaker 6: Anybody has of him being competitive until maybe when they

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Speaker 6: get back down to Florida.

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Speaker 2: But that's way too long.

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Speaker 6: The last the lesson we learned from Rudy Giuliani is

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Speaker 6: he can't lose, lose, lose, and then expect to win.

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Speaker 2: You can't start your campaign in Florida. I don't know

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Speaker 2: if we're reading into this a little bit here, Genie.

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Speaker 2: But the Never Back Down a pack had planned this luncheon.

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Speaker 2: They invited three thousand people and it wasn't cheap. Ten

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Speaker 2: thousand dollars contribution would give you access to this luncheon. This,

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Speaker 2: by the way, was in Tuscaloosa. This is Rick Davis

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Speaker 2: Country here as well as a ticket to the debate

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Speaker 2: itself and an invite to a post debate celebration if

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Speaker 2: you want to hang out with the governor. Just before

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Speaker 2: the debate, Never back Down decided to cancel the lunch, Genie,

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Speaker 2: What does that mean?

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Speaker 7: Never back Down has backed down Joe, And you.

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Speaker 2: Know, yes, that's right.

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Speaker 7: I'm seldom empathetic to run DeSantis, but as you go

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Speaker 7: through that in such detail, it makes me feel badly

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Speaker 7: for him. You know, his campaign has been in a

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Speaker 7: bit of chaos. Never back Down losing leadership, been in chaos.

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Speaker 7: His poll numbers have been going in exactly the wrong direction.

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Speaker 4: You know.

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Speaker 7: I think we have to keep in mind we don't

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Speaker 7: get a lot of public polls from Iowa of late.

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Speaker 7: But I think this is, you know, another in a

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Speaker 7: continuing assign that his campaign is faltering. I agree, he

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Speaker 7: may not be there. Maybe he shouldn't be there in

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Speaker 7: New Hampshire depending on what happens in Iowa. But keep

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Speaker 7: in mind, even if he was able to squeak out

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Speaker 7: Iowa after his ninety nine county tour, Iowa is seldom

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Speaker 7: a predictor of the winner of the primary, and his

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Speaker 7: numbers simply don't look good in the remaining states as

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Speaker 7: of now, So he is not in a good position.

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Speaker 7: I think we're gonna see Sununu in New Hampshire make

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Speaker 7: an endorsement fairly soon, and I suspect he is not

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Speaker 7: looking as kindly at Disantis as he would have been

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Speaker 7: maybe six or eight months ago.

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Speaker 2: Similar events in Miami around the debate there in November

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Speaker 2: raised roughly a million dollars for Never Back Down pack Rick.

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Speaker 2: You've put events like that together. Is this just the

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Speaker 2: nature of the business. Sometimes they don't pan out. You

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Speaker 2: go to Tuscaloosa, maybe you don't have the network there

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Speaker 2: you thought you had, or is this actually a signed

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Speaker 2: that we should be looking at.

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Speaker 6: It's hard to get people to go to Tee Town

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Speaker 6: other than on Saturdays of home games, and so I

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Speaker 6: think that if Alabama was playing Auburn, you wouldn't have

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Speaker 6: you'd have a crowd but the bottom line is his

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Speaker 6: pack is in trouble. Most of their senior leadership have left.

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Speaker 6: They've actually, you know, tried to start a new super

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Speaker 6: pack to support the DeSantis campaign. What do you need

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Speaker 6: a new one for if the one you currently have

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Speaker 6: that you gave, you know, eighty million dollars to is

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Speaker 6: working fine. So there's just something that smells bad under

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Speaker 6: the cover. None of this stuff adds up. And as

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Speaker 6: you say, if you're having trouble raising money at an

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Speaker 6: event where arguably he did a pretty good job at

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Speaker 6: the debate, so they clearly had a lot running on that,

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Speaker 6: I think it's just it's an indication that there's a

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Speaker 6: level of dysfunction that could be problematic. And and if

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Speaker 6: they're running out of money, that's even a bigger problem

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Speaker 6: because different from most Superpa super packs, never backed out

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Speaker 6: is actually running the campaign. I mean, it's almost like

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Speaker 6: the Santas campaign is a guest of never back down

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Speaker 6: in this election, and they're doing all the organizational work

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Speaker 6: in Iowa. They're doing all the get out to vote,

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Speaker 6: they're doing all the caucus organizing, they're doing the ID

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Speaker 6: This is all things that campaigns generally take responsibily for

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Speaker 6: because they know if anything goes wrong, you're completely out

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Speaker 6: of the race. And that seems to be what's happening here.

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Speaker 2: Wow, we'll get ready for the ads. Axios had some

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Speaker 2: fascinating numbers this morning, Genie on political advertising group m

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Speaker 2: forecasting that ad spend could reach fifteen point nine billion

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Speaker 2: dollars in twenty twenty four, seventeen billion when you include

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Speaker 2: direct mail, while ad Impact tells this more than one

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Speaker 2: hundred million dollars was spent September through September on Republican

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Speaker 2: primary rate. That's more than we've seen in any other cycle.

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Speaker 2: We're about to get delu'sed, Genie, when does Joe Biden

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Speaker 2: start spending some money on ads?

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Speaker 7: Already spending he has spent more than most of his

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Speaker 7: predecessors to this point. But to your point, he is

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Speaker 7: going to be investing more. But you know, gosh, who

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Speaker 7: wants to live in one of these swing states now?

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Speaker 7: Because you know those of us saying we're not going

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Speaker 7: to be getting these But if you are in Michigan

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Speaker 7: or you're in Pennsylvania, your life is pretty much going

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Speaker 7: to be these ads. And that's true whether you're watching

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Speaker 7: TV or whether you're online I mean it is going

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Speaker 7: to be insanity in those five or six or seven

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Speaker 7: if you will state so you know, get ready, you

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Speaker 7: got to buckle in. They're prepared for it. But it's bad.

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Speaker 2: It's a lot of money here, Rick, one hundred million dollars,

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Speaker 2: so it really will come down to a battle of

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Speaker 2: dollars at some point. I find it fascinating. Now streaming

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Speaker 2: TV is the new frontier for political advertising. Is it

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Speaker 2: worth the money?

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Speaker 6: Yeah?

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Speaker 2: Look I love streaming TV. You get all kinds of

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Speaker 2: feedback mechanisms.

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Speaker 6: You know whether or not somebody who's actually watching when

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Speaker 6: your commercial ran, You know the demographics of the people,

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Speaker 6: you know the exact location.

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Speaker 2: The targeting is amazing. Rick Davis, Genie Shanzano insiders with

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Speaker 2: us every day on sound On. I'm Joe Matthew in Washington.

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Speaker 2: I'm glad you're with us. This is Bloomberg.

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Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us

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Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the

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00:22:34,560 --> 00:22:37,679
Speaker 1: iHeartRadio app and the Bloomberg Business app, or listen on

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Speaker 1: demand wherever you get your podcasts.

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Speaker 2: We're just coming off that week long pause. They never

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Speaker 2: used that word because it has implications. Secretary General who

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Speaker 2: Terra has talked about this yesterday.

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Speaker 8: There is a high risk of the total collapse of

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Speaker 8: the humanitarian support system in Gaza, which would have devastating consequences.

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Speaker 2: Devastating consequences. That vote could come as little as an

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Speaker 2: hour's time. And we're joined right now by Nick Wadams,

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Speaker 2: who runs our national security team here at Bloomberg in Washington.

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Speaker 2: It's good to see you.

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Speaker 1: Next.

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Speaker 2: The significance of this vote, knowing that Tel Aviv will

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Speaker 2: not respond to it.

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Speaker 9: Is what, Well, that's a great question. And when we

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Speaker 9: ask a lot at the UN when there is just

438
00:23:19,960 --> 00:23:22,280
Speaker 9: so much talk and so often so little action, this

439
00:23:22,359 --> 00:23:24,639
Speaker 9: one does feel a little bit different, though, because what

440
00:23:24,680 --> 00:23:27,520
Speaker 9: you're seeing here is whether the US is going to

441
00:23:28,320 --> 00:23:32,600
Speaker 9: veto this resolution and really just stay in lockstep with

442
00:23:32,760 --> 00:23:36,480
Speaker 9: Israel and give Israel the cover it needs to press ahead,

443
00:23:36,560 --> 00:23:38,880
Speaker 9: or whether this US is going to signal it's sort

444
00:23:38,920 --> 00:23:43,439
Speaker 9: of growing alarm and dissatisfaction with the way Israel has

445
00:23:43,480 --> 00:23:45,879
Speaker 9: conducted this campaign. So it might not vote yes, but

446
00:23:45,920 --> 00:23:48,960
Speaker 9: it might not vote no. It might abstain, allow the

447
00:23:49,040 --> 00:23:53,040
Speaker 9: vote to pass, put more scrutiny on Israel and say Listen,

448
00:23:53,119 --> 00:23:55,000
Speaker 9: you guys, if you want our support, you need to

449
00:23:55,000 --> 00:23:58,119
Speaker 9: get your act together. The calls for something, you know,

450
00:23:58,200 --> 00:24:02,760
Speaker 9: protection of civilians is getting louder, and you got to

451
00:24:02,800 --> 00:24:05,040
Speaker 9: do something because what we're seeing so far is not

452
00:24:05,200 --> 00:24:05,800
Speaker 9: up to snuff.

453
00:24:06,200 --> 00:24:08,879
Speaker 2: Has the Security Council done the same thing for the

454
00:24:08,920 --> 00:24:11,280
Speaker 2: war in Ukraine knowing that Russia is a member.

455
00:24:11,520 --> 00:24:15,200
Speaker 9: Well, I mean they can't do anything on Ukraine because

456
00:24:15,280 --> 00:24:18,440
Speaker 9: Russia just paralyzes absolutely everything. And you're seeing that play

457
00:24:18,440 --> 00:24:20,760
Speaker 9: out a little bit here as well, where you know,

458
00:24:20,800 --> 00:24:24,000
Speaker 9: the US and Russia are so at odds over absolutely everything,

459
00:24:24,520 --> 00:24:28,640
Speaker 9: including this one, and so it's just absolutely freezes things.

460
00:24:28,640 --> 00:24:31,720
Speaker 9: So if they the US did abstain from a resolution

461
00:24:31,920 --> 00:24:35,800
Speaker 9: last month where they called for humanitarian pauses different from

462
00:24:35,800 --> 00:24:39,760
Speaker 9: a ceasefires, but you know, so they did allow some

463
00:24:39,840 --> 00:24:42,399
Speaker 9: action to get through. But you know, it's looking pretty

464
00:24:42,440 --> 00:24:42,959
Speaker 9: bad on this one.

465
00:24:42,960 --> 00:24:43,480
Speaker 1: I have to say.

466
00:24:43,520 --> 00:24:45,920
Speaker 2: The IDF is driving into southern Gaza. We've been talking

467
00:24:45,960 --> 00:24:48,000
Speaker 2: about this for a couple of days now. There are

468
00:24:48,080 --> 00:24:52,000
Speaker 2: great concerns about civilian casualties that we've been hearing about

469
00:24:52,000 --> 00:24:55,080
Speaker 2: that as well. As a matter of fact, Anthony Blincoln

470
00:24:55,320 --> 00:24:59,000
Speaker 2: spoke about this in an unrelated news conference earlier today.

471
00:24:59,000 --> 00:25:00,280
Speaker 2: Listen to the Secretary of State.

472
00:25:00,480 --> 00:25:03,280
Speaker 8: It is imperative, it remains imperative that Israel put a

473
00:25:03,320 --> 00:25:06,920
Speaker 8: premium on civilian protection. And there does remain a gap

474
00:25:07,040 --> 00:25:09,960
Speaker 8: between exactly what I said when I was there, the

475
00:25:10,040 --> 00:25:13,840
Speaker 8: intent to protect civilians, and the actual results that were

476
00:25:13,840 --> 00:25:15,080
Speaker 8: seeing on the ground.

477
00:25:16,480 --> 00:25:18,680
Speaker 2: What do you make of that line, a gap between

478
00:25:18,720 --> 00:25:23,159
Speaker 2: intent and results? What does the White House want to see?

479
00:25:23,200 --> 00:25:26,320
Speaker 9: Well, the days he's referring to something very specific there,

480
00:25:26,359 --> 00:25:28,800
Speaker 9: which is that when he went to Israel last week,

481
00:25:29,200 --> 00:25:32,920
Speaker 9: he came out and said he got very specific assurances

482
00:25:33,000 --> 00:25:36,280
Speaker 9: from Israeli leaders that they would create safe zones, they

483
00:25:36,280 --> 00:25:39,480
Speaker 9: would warn people about when they were going to strike

484
00:25:39,560 --> 00:25:43,440
Speaker 9: certain areas, all with the intent of not doing what

485
00:25:43,480 --> 00:25:45,919
Speaker 9: they had done in northern Gaza to the south. He

486
00:25:45,960 --> 00:25:49,600
Speaker 9: had been very clear listening, you cannot cause the almost

487
00:25:49,640 --> 00:25:52,840
Speaker 9: total destruction of northern Gaza in the south. And he

488
00:25:52,920 --> 00:25:55,040
Speaker 9: came out and said, you know, listen, my trip was

489
00:25:55,080 --> 00:25:58,400
Speaker 9: successful because Israeli leaders assured me that they would put

490
00:25:58,400 --> 00:26:00,800
Speaker 9: these protections in place. That was the whole reason he

491
00:26:00,880 --> 00:26:04,679
Speaker 9: went to Israel on that trip. He's now saying, well,

492
00:26:04,840 --> 00:26:08,600
Speaker 9: I'm back in the US, they're prosecuting that campaign and

493
00:26:09,240 --> 00:26:12,080
Speaker 9: reality is not living up to the promises that they made.

494
00:26:12,160 --> 00:26:14,159
Speaker 9: To me, question is what is he going to do

495
00:26:14,200 --> 00:26:16,320
Speaker 9: about that? And so far the US has not really

496
00:26:16,359 --> 00:26:16,800
Speaker 9: done much.

497
00:26:16,880 --> 00:26:17,040
Speaker 3: Well.

498
00:26:17,040 --> 00:26:19,880
Speaker 2: He did balance that statement with some of the things

499
00:26:19,880 --> 00:26:23,040
Speaker 2: you just mentioned. He said they're doing a better job.

500
00:26:23,160 --> 00:26:27,640
Speaker 2: They're evacuating neighborhoods instead of cities, they're establishing the safe

501
00:26:27,720 --> 00:26:31,280
Speaker 2: zones you mentioned, they're focusing on a more narrow area.

502
00:26:32,760 --> 00:26:34,040
Speaker 2: What else did Israel.

503
00:26:33,800 --> 00:26:38,120
Speaker 9: Promise, Well, that's we don't exactly know what they promised,

504
00:26:38,200 --> 00:26:40,720
Speaker 9: but I think what he's referring there also is a

505
00:26:40,760 --> 00:26:43,840
Speaker 9: couple of instances where you have had these mass casualty

506
00:26:43,880 --> 00:26:47,359
Speaker 9: events striking buildings, where you've had dozens of people killed

507
00:26:47,359 --> 00:26:50,359
Speaker 9: at once. I mean, it's a very difficult balance for

508
00:26:50,400 --> 00:26:52,560
Speaker 9: the US because on the one hand, they're calling for

509
00:26:52,680 --> 00:26:55,520
Speaker 9: Israel to protect civilians. On the other hand, the US

510
00:26:55,600 --> 00:27:01,479
Speaker 9: is sending Israel these bunker buster bombs artillery shells that

511
00:27:01,520 --> 00:27:04,399
Speaker 9: are not cannot be narrowly targeted. So, you know, you

512
00:27:04,440 --> 00:27:06,639
Speaker 9: can make the argument that in some ways the US

513
00:27:06,720 --> 00:27:08,560
Speaker 9: is talking out of both sides of his amouth, saying hey,

514
00:27:08,600 --> 00:27:09,800
Speaker 9: you got to do this, But at the same time,

515
00:27:09,800 --> 00:27:12,280
Speaker 9: we're going to send you these two thousand pound bunker

516
00:27:12,320 --> 00:27:16,280
Speaker 9: buster bombs whose whole point is to not be terribly

517
00:27:16,320 --> 00:27:19,520
Speaker 9: discriminate in their actions, so I think, but what he's

518
00:27:19,560 --> 00:27:22,399
Speaker 9: saying there really is like you made those promises. We

519
00:27:22,440 --> 00:27:24,679
Speaker 9: are seeing some things on the ground, but you're not

520
00:27:24,920 --> 00:27:28,680
Speaker 9: doing enough, and we can't keep having these attacks where

521
00:27:28,720 --> 00:27:30,639
Speaker 9: dozens of people are killed all at once, you know,

522
00:27:30,720 --> 00:27:31,639
Speaker 9: innocent civilians.

523
00:27:31,760 --> 00:27:34,480
Speaker 2: It's really helpful, Nicki're reporting has been indispensable since this

524
00:27:34,560 --> 00:27:36,040
Speaker 2: all started, much like it has been the last two

525
00:27:36,080 --> 00:27:37,720
Speaker 2: years in Ukraine, and we thank you for shank you

526
00:27:37,720 --> 00:27:40,359
Speaker 2: with us. As always, he runs our national security team

527
00:27:40,720 --> 00:27:43,200
Speaker 2: here at Bloomberg and Washington, Nick Watdams as we add

528
00:27:43,200 --> 00:27:46,560
Speaker 2: the voice of General Ben Hodges back with us here

529
00:27:46,600 --> 00:27:49,960
Speaker 2: on Bloomberg's sound on former Commanding General US Army Europe.

530
00:27:50,200 --> 00:27:52,040
Speaker 2: It's good to see you. General. Thank you for coming

531
00:27:52,760 --> 00:27:55,560
Speaker 2: to Nick's point. I know you were listening to our conversation.

532
00:27:55,720 --> 00:27:59,719
Speaker 2: Is the US showing a double standard here sending the munitions,

533
00:28:00,280 --> 00:28:03,400
Speaker 2: the bunker busting bombs one hundred and fifty five millimeters

534
00:28:03,480 --> 00:28:06,080
Speaker 2: shells that Nick is referring to, but then also demanding

535
00:28:06,119 --> 00:28:09,200
Speaker 2: restraints and the preservation of civilian life. Are we asking

536
00:28:09,240 --> 00:28:09,680
Speaker 2: too much?

537
00:28:10,680 --> 00:28:12,520
Speaker 5: Well, I have to say I was very impressed with

538
00:28:12,640 --> 00:28:15,399
Speaker 5: Nick's reporting there. I mean that really was a good

539
00:28:15,920 --> 00:28:19,399
Speaker 5: description of the situation and the challenge, and also the

540
00:28:19,440 --> 00:28:24,800
Speaker 5: efforts by Irish Secretary of State to press Israel. It's

541
00:28:24,840 --> 00:28:28,080
Speaker 5: not that we're setting a double standard. It's that Israel

542
00:28:28,720 --> 00:28:33,520
Speaker 5: has failed to have a political outcome as part of

543
00:28:33,560 --> 00:28:37,920
Speaker 5: the overall strategic in state that they want for this war.

544
00:28:38,720 --> 00:28:41,360
Speaker 5: It's all kinetic. And if I put myself in the

545
00:28:41,400 --> 00:28:45,800
Speaker 5: shoes of an Israeli battalion commander or a company commander,

546
00:28:46,360 --> 00:28:50,440
Speaker 5: and my mission is to destroy Hamas without having a

547
00:28:50,560 --> 00:28:54,480
Speaker 5: political in state, that should be something like a two

548
00:28:54,560 --> 00:28:56,520
Speaker 5: state solution where we're going to have to live with

549
00:28:56,640 --> 00:29:01,800
Speaker 5: Arabs after this is over. It makes it extremely difficult

550
00:29:01,840 --> 00:29:04,400
Speaker 5: for soldiers to do their job, and so you end

551
00:29:04,480 --> 00:29:08,080
Speaker 5: up with people looking over your shoulder, whether it's the

552
00:29:08,120 --> 00:29:12,280
Speaker 5: media or lawyers telling you, well, you can't hit that building,

553
00:29:12,280 --> 00:29:14,360
Speaker 5: but you can hit that building, or you can't use this,

554
00:29:14,480 --> 00:29:17,800
Speaker 5: but you can use this. And I think the fatal

555
00:29:17,920 --> 00:29:21,400
Speaker 5: error that the nen Yahoo government is making here is

556
00:29:21,400 --> 00:29:26,640
Speaker 5: that they have not come up with a strategic instate

557
00:29:27,640 --> 00:29:32,240
Speaker 5: with a political component that will inform how the military

558
00:29:32,960 --> 00:29:33,800
Speaker 5: does its job.

559
00:29:36,160 --> 00:29:39,840
Speaker 2: General, you served in both the Afghanistan and Iraq wars.

560
00:29:40,360 --> 00:29:42,960
Speaker 2: We spent a lot of talk about urban warfare, about

561
00:29:43,000 --> 00:29:46,920
Speaker 2: what the IDF is facing and why in some cases

562
00:29:47,120 --> 00:29:51,840
Speaker 2: they don't find it appropriate to send boots into these neighborhoods,

563
00:29:52,160 --> 00:29:54,760
Speaker 2: striking from a distance or from above. In terms of

564
00:29:54,800 --> 00:29:58,960
Speaker 2: the air war, here is Gaza another Fallujah. How do

565
00:29:59,000 --> 00:29:59,560
Speaker 2: you look at it?

566
00:30:00,520 --> 00:30:05,840
Speaker 5: Well, this is much worse than Felujah for sure, partly because, yes,

567
00:30:05,920 --> 00:30:09,680
Speaker 5: because of the density of civilians that are packed in there,

568
00:30:10,280 --> 00:30:15,120
Speaker 5: and the Hamas unwillingness to let them or to continue

569
00:30:15,280 --> 00:30:19,800
Speaker 5: using them as shields, because they can see that the

570
00:30:19,880 --> 00:30:23,400
Speaker 5: objective given to the IDF by Prime Minster Nan Yahoo,

571
00:30:24,000 --> 00:30:27,120
Speaker 5: it's it's guaranteed that they're going to continue using force

572
00:30:27,160 --> 00:30:31,080
Speaker 5: against civilian targets. I'm sure that whatever Secretary of Lincoln

573
00:30:31,160 --> 00:30:35,400
Speaker 5: was told they were sincere. But the Prime Minister ultimately

574
00:30:35,480 --> 00:30:40,960
Speaker 5: is responsible, and soldiers are responsible. Even if Hamas uses

575
00:30:41,240 --> 00:30:45,040
Speaker 5: innocent people as shields, the burden of responsibility for protecting

576
00:30:45,040 --> 00:30:47,960
Speaker 5: this villion still falls, according to the law of armed

577
00:30:48,000 --> 00:30:52,840
Speaker 5: conflict in this case Israeli soldiers. So of course there

578
00:30:52,840 --> 00:30:56,760
Speaker 5: should be enormous global pressure on Hamas to stop doing this,

579
00:30:57,600 --> 00:31:00,920
Speaker 5: but don't. I don't sense any of that is coming.

580
00:31:01,360 --> 00:31:04,200
Speaker 5: And of course this creates a massive not only a

581
00:31:04,200 --> 00:31:09,560
Speaker 5: massive political problem for our president, but frankly worse, the

582
00:31:09,640 --> 00:31:13,040
Speaker 5: Kremlin is the biggest beneficiary of all of this. I mean,

583
00:31:13,280 --> 00:31:16,280
Speaker 5: Hamas accomplished in one day what Putin could not do

584
00:31:16,320 --> 00:31:18,720
Speaker 5: in two years, and that was to make the West

585
00:31:18,960 --> 00:31:22,760
Speaker 5: forget about Ukraine and so and the way. This thing

586
00:31:22,920 --> 00:31:25,960
Speaker 5: is such a mess, and it's it's so devastating for

587
00:31:26,080 --> 00:31:31,480
Speaker 5: innocent people, and you've got people focused on Israel and

588
00:31:31,600 --> 00:31:35,760
Speaker 5: not own helping Ukraine defeat Russia. So it's not just

589
00:31:35,800 --> 00:31:40,840
Speaker 5: about resources being diverted, but it's about institutional and emotional

590
00:31:41,040 --> 00:31:45,880
Speaker 5: energy that's being diverted. Iran is Russia's closest and only

591
00:31:45,920 --> 00:31:49,840
Speaker 5: real ally. Russia is Iran's closest and only real ally.

592
00:31:50,440 --> 00:31:53,160
Speaker 5: This is not a coincidence that Hamas has attacked Israel

593
00:31:53,480 --> 00:31:55,560
Speaker 5: right now when Russia needed it the most.

594
00:31:56,960 --> 00:32:01,640
Speaker 2: That's remarkable because it's certainly turned our tension here in

595
00:32:01,760 --> 00:32:03,880
Speaker 2: Washington as well. General. I don't have to tell you,

596
00:32:03,960 --> 00:32:08,280
Speaker 2: I'm sure this is partly why lawmakers don't feel as

597
00:32:08,320 --> 00:32:11,400
Speaker 2: motivated to fund the war in Ukraine. There seems to

598
00:32:11,440 --> 00:32:14,200
Speaker 2: be a much greater appetite to help Israel, which I

599
00:32:14,200 --> 00:32:16,200
Speaker 2: think you could argue needs the money less. What do

600
00:32:16,240 --> 00:32:16,680
Speaker 2: you think?

601
00:32:17,600 --> 00:32:22,680
Speaker 5: Yeah, I think you're exactly right in that. This is

602
00:32:22,720 --> 00:32:26,400
Speaker 5: where the President has got to lay out to the

603
00:32:26,480 --> 00:32:31,120
Speaker 5: Commress and to the American people why Ukraine matters to us.

604
00:32:31,240 --> 00:32:36,720
Speaker 5: Why our economy, our prosperity is tied to European security,

605
00:32:36,800 --> 00:32:41,800
Speaker 5: instability and prosperity. Russia's attack on Ukraine has disrupted energy

606
00:32:42,000 --> 00:32:46,720
Speaker 5: and food supplies. Inflation is driven in large part by

607
00:32:46,720 --> 00:32:50,320
Speaker 5: what Russia is doing now. So this is about us

608
00:32:50,440 --> 00:32:54,320
Speaker 5: our interests, not just Ukraine. And of course if Russia

609
00:32:54,320 --> 00:32:56,400
Speaker 5: has not stopped in Ukraine, they've made it very clear

610
00:32:56,480 --> 00:32:58,760
Speaker 5: they will continue, So you could end up with them

611
00:32:58,800 --> 00:33:02,040
Speaker 5: going against a NATO and then you've got US forces

612
00:33:02,080 --> 00:33:04,320
Speaker 5: are going to have to be involved, and of course

613
00:33:04,360 --> 00:33:07,720
Speaker 5: the Chinese are watching to see does the US, with

614
00:33:07,840 --> 00:33:11,560
Speaker 5: all of our allies, do we have the political will,

615
00:33:12,240 --> 00:33:17,640
Speaker 5: the industrial capacity, and the military capability to help Ukraine

616
00:33:17,840 --> 00:33:22,640
Speaker 5: defeat Russia, help Israel defeat Hamas, while still pushing Israel

617
00:33:22,680 --> 00:33:27,440
Speaker 5: to accept a two state solution deter Iran from expanding

618
00:33:27,600 --> 00:33:31,160
Speaker 5: or escalating this conflict, and then for China to see

619
00:33:31,200 --> 00:33:34,200
Speaker 5: that we still have enough leftover to deter them from

620
00:33:34,200 --> 00:33:38,160
Speaker 5: making a terrible miscalculation. So we've got to get organized

621
00:33:38,200 --> 00:33:41,640
Speaker 5: in the West. We've got all these allies, but we're

622
00:33:41,800 --> 00:33:45,360
Speaker 5: not addressing these challenges as a whole, and I think

623
00:33:45,400 --> 00:33:46,440
Speaker 5: that's what we've got to do.

624
00:33:47,840 --> 00:33:50,240
Speaker 2: General, more than one hundred and thirty hostages are still

625
00:33:50,280 --> 00:33:54,680
Speaker 2: being held by Hamas. Presumably they are still alive that

626
00:33:54,760 --> 00:33:58,400
Speaker 2: according to Israel, at what point do we see special

627
00:33:58,440 --> 00:34:01,520
Speaker 2: forces begin extracting them or do they simply not know

628
00:34:01,560 --> 00:34:02,080
Speaker 2: where they are?

629
00:34:04,120 --> 00:34:09,719
Speaker 5: Excellent question. I'm sure that the Israeli Defense force and

630
00:34:10,560 --> 00:34:15,279
Speaker 5: intelligence have more information on what's out there and who's

631
00:34:15,280 --> 00:34:17,799
Speaker 5: still alive and where they might be, then we will

632
00:34:17,800 --> 00:34:21,839
Speaker 5: know publicly. But it's still got to be very difficult Hamas.

633
00:34:22,120 --> 00:34:24,359
Speaker 5: I mean, Hamas doesn't even control all of the bad

634
00:34:24,400 --> 00:34:29,200
Speaker 5: guys in there, so it will be difficult to get

635
00:34:29,200 --> 00:34:33,040
Speaker 5: one hundred percent confidence that we know where everybody is

636
00:34:33,080 --> 00:34:35,320
Speaker 5: and that we can get them out. And of course,

637
00:34:35,760 --> 00:34:39,120
Speaker 5: you know, if it was my daughter or a friend

638
00:34:39,200 --> 00:34:41,680
Speaker 5: or somebody that was a hostage, I would be in

639
00:34:41,880 --> 00:34:45,120
Speaker 5: total agony wanting to do anything to get them out.

640
00:34:45,600 --> 00:34:48,399
Speaker 5: But if you can step back from it and put

641
00:34:48,440 --> 00:34:53,560
Speaker 5: yourself in the shoes of national leaders, hostages, even if

642
00:34:53,560 --> 00:34:55,799
Speaker 5: you rescued every one of them, hamask could go get more.

643
00:34:56,480 --> 00:34:59,000
Speaker 5: So at some point somebody is going to have to

644
00:34:59,000 --> 00:35:03,080
Speaker 5: make a really, really hard decision about do you continue

645
00:35:03,120 --> 00:35:06,759
Speaker 5: with the attack, how much risk do you take to

646
00:35:06,800 --> 00:35:09,360
Speaker 5: go in and try and extract hostages. I think the

647
00:35:09,400 --> 00:35:13,080
Speaker 5: Israelis will do everything in their power to get every hostage,

648
00:35:13,360 --> 00:35:17,520
Speaker 5: just like the United States would. But we have to

649
00:35:17,520 --> 00:35:21,560
Speaker 5: find that balance because terrorist organizations will stop in nothing

650
00:35:21,640 --> 00:35:25,080
Speaker 5: to continue getting hostages when they see the incredible leverage

651
00:35:25,120 --> 00:35:26,359
Speaker 5: that they get from having them.

652
00:35:27,680 --> 00:35:29,840
Speaker 2: I have to ask you, General about what appears to

653
00:35:29,840 --> 00:35:33,360
Speaker 2: be progress here and an effort to block military promotions

654
00:35:33,680 --> 00:35:36,080
Speaker 2: from being confirmed in the Senate. I'm referring to Tommy

655
00:35:36,080 --> 00:35:39,360
Speaker 2: Tubberville's blockade, the senator from Alabama that was a protest

656
00:35:39,880 --> 00:35:44,120
Speaker 2: against the Pentagon's abortion travel policy. He's decided, General to

657
00:35:44,160 --> 00:35:46,400
Speaker 2: a lot of them all go through except the four stars.

658
00:35:46,520 --> 00:35:49,360
Speaker 2: You know a little bit about this, and Tommy Tuberville

659
00:35:49,360 --> 00:35:51,440
Speaker 2: has suggested that four star generals don't have a heck

660
00:35:51,480 --> 00:35:53,280
Speaker 2: of a lot to do anyway, they've got big staffs

661
00:35:53,280 --> 00:35:55,239
Speaker 2: to get paid too much money. What does it mean

662
00:35:55,280 --> 00:35:57,680
Speaker 2: to hold up these eleven four stars in the meantime?

663
00:36:00,120 --> 00:36:04,360
Speaker 5: Such an abuse of his power there as a senator,

664
00:36:04,760 --> 00:36:09,400
Speaker 5: and it creates a cynicism about the Congress, which is

665
00:36:09,440 --> 00:36:16,120
Speaker 5: really unfortunate. I served three times in Army Congressional Liaison

666
00:36:16,200 --> 00:36:19,439
Speaker 5: as I was coming up, and of course members will

667
00:36:19,520 --> 00:36:25,279
Speaker 5: use their ability to block promotions, whether it's ambassadors, judges,

668
00:36:25,680 --> 00:36:29,239
Speaker 5: or flag officers for individual reasons. But I've never seen

669
00:36:29,280 --> 00:36:34,080
Speaker 5: it in many years, such a blanket abuse of this.

670
00:36:34,560 --> 00:36:37,040
Speaker 5: And of course every time I listened to the senator

671
00:36:37,080 --> 00:36:40,520
Speaker 5: from Alabama, it was clear he had no clue about

672
00:36:40,560 --> 00:36:42,440
Speaker 5: the impact of what he was doing or else he

673
00:36:42,480 --> 00:36:45,880
Speaker 5: absolutely didn't care, which is unfortunate for a senator on

674
00:36:45,920 --> 00:36:48,759
Speaker 5: the Senate Armed Services Committee and from a state that

675
00:36:48,840 --> 00:36:55,080
Speaker 5: has a significant military presence. So of course it damages

676
00:36:55,120 --> 00:36:58,400
Speaker 5: not only the families of all the people involved, but

677
00:37:00,880 --> 00:37:04,680
Speaker 5: it sends a statement that you okay having a senior officer,

678
00:37:04,680 --> 00:37:08,319
Speaker 5: whether it's an admiral or general in these positions, well,

679
00:37:08,400 --> 00:37:11,600
Speaker 5: it doesn't matter, and that undermines confidence that people have

680
00:37:11,719 --> 00:37:13,680
Speaker 5: in the whole system.

681
00:37:13,800 --> 00:37:15,800
Speaker 2: Well, general. I want to thank you for coming on today.

682
00:37:15,800 --> 00:37:20,160
Speaker 2: Ben Hodges, a voice of experience and authority when we

683
00:37:20,200 --> 00:37:22,759
Speaker 2: need it most. I'm Joe Matthew. This is Bloomberg.

684
00:37:28,000 --> 00:37:31,480
Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us

685
00:37:31,560 --> 00:37:34,719
Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the

686
00:37:34,800 --> 00:37:37,840
Speaker 1: iHeartRadio app, and the Bloomberg Business app, or listen on

687
00:37:37,960 --> 00:37:39,960
Speaker 1: demand wherever you get your podcasts.

688
00:37:41,920 --> 00:37:45,920
Speaker 2: Hackers have breached computers at less than ten water facilities

689
00:37:46,920 --> 00:37:49,239
Speaker 2: in different parts of the country. There's one specifically in

690
00:37:49,280 --> 00:37:55,200
Speaker 2: Pennsylvania that made news and led to a series of

691
00:37:55,239 --> 00:37:59,239
Speaker 2: reports on the extent of this threat. And it's where

692
00:37:59,280 --> 00:38:02,640
Speaker 2: we begin our conversation with and Newburger. I'm glad to

693
00:38:02,680 --> 00:38:04,080
Speaker 2: say we're going to go to the White House for

694
00:38:04,160 --> 00:38:07,879
Speaker 2: this because it's important to the administration, it's important to us.

695
00:38:07,920 --> 00:38:11,360
Speaker 2: The Deputy National Security Advisor for Cyber and Emerging Technology

696
00:38:11,400 --> 00:38:14,680
Speaker 2: and Newburger with us from a sunny North lawn and

697
00:38:14,719 --> 00:38:17,400
Speaker 2: it's great to see you and welcome back to Bloomberg.

698
00:38:17,760 --> 00:38:20,280
Speaker 2: How concerned are you and what should we know about

699
00:38:20,280 --> 00:38:23,520
Speaker 2: these apparent attacks on water facilities?

700
00:38:24,520 --> 00:38:29,320
Speaker 10: Thanks Joe. So companies critical services in this country face persistent,

701
00:38:29,600 --> 00:38:33,920
Speaker 10: significant cyber attacks. It's a top priority for the administration.

702
00:38:34,000 --> 00:38:37,880
Speaker 10: We're pushing out actionable information. We're pushing out guidelines on

703
00:38:37,920 --> 00:38:41,000
Speaker 10: how to secure against it. Some companies and state and

704
00:38:41,040 --> 00:38:43,319
Speaker 10: local governments have acted. We need everyone to take this

705
00:38:43,360 --> 00:38:46,320
Speaker 10: as a call to action to follow that cybersecurity advice

706
00:38:46,360 --> 00:38:48,680
Speaker 10: and really lock their digital doors against the threat.

707
00:38:50,120 --> 00:38:53,080
Speaker 2: Are you able to trace the source of these attacks?

708
00:38:53,640 --> 00:38:54,560
Speaker 2: What's prompting them?

709
00:38:55,760 --> 00:38:59,120
Speaker 10: Great question. So two particular sets of attacks we're concerned

710
00:38:59,120 --> 00:39:03,680
Speaker 10: about at this moment time. One is criminal cyber attacks

711
00:39:03,719 --> 00:39:07,759
Speaker 10: against the hospital chain. It had real impact rural clinics,

712
00:39:07,960 --> 00:39:12,439
Speaker 10: closed some hospitals in three states, turning away ambulances, and

713
00:39:12,840 --> 00:39:17,239
Speaker 10: canceling elective services. That's done by criminals, and the White

714
00:39:17,280 --> 00:39:20,279
Speaker 10: House has pushed out guidelines on how to tackle that.

715
00:39:20,800 --> 00:39:23,600
Speaker 10: Second set of attacks we're tracking is an increased by

716
00:39:23,760 --> 00:39:28,440
Speaker 10: Iran in cyber attacks against ten water systems in this country.

717
00:39:28,920 --> 00:39:32,600
Speaker 10: And in a similar way, there are basic cybersecurity practices

718
00:39:32,640 --> 00:39:36,680
Speaker 10: like changing defall passwords and limiting administrator account access that

719
00:39:36,760 --> 00:39:39,319
Speaker 10: could prevent those attacks being successful.

720
00:39:40,360 --> 00:39:42,680
Speaker 2: So that is officially, though the line from the White

721
00:39:42,680 --> 00:39:46,000
Speaker 2: House that Iran was behind these ten attacks against water

722
00:39:46,040 --> 00:39:50,120
Speaker 2: treatment facilities here in the United States, it.

723
00:39:49,960 --> 00:39:52,239
Speaker 10: Is, But I want to be clear, each and every

724
00:39:52,320 --> 00:39:57,000
Speaker 10: day American companies critical services are facing persistent cyber attacks,

725
00:39:57,480 --> 00:39:59,920
Speaker 10: and we absolutely need to do more to lock our

726
00:40:00,080 --> 00:40:03,440
Speaker 10: digital doors to defend against them. Yes, sometimes in periods

727
00:40:03,440 --> 00:40:06,040
Speaker 10: of crises we'll see an increase in a particular type

728
00:40:06,040 --> 00:40:09,040
Speaker 10: of attack, but every single day we have too many

729
00:40:09,360 --> 00:40:12,960
Speaker 10: unlocked doors and open windows in our digital cyberspace.

730
00:40:14,120 --> 00:40:14,440
Speaker 1: Yeah.

731
00:40:14,560 --> 00:40:19,319
Speaker 2: That specifically the plant in Pennsylvania that I mentioned outside Pittsburgh,

732
00:40:19,600 --> 00:40:23,080
Speaker 2: the Municipal Water Authority of all Equippa serves about fifteen

733
00:40:23,480 --> 00:40:27,840
Speaker 2: thousand people. We have no reason to believe that anyone

734
00:40:27,920 --> 00:40:29,920
Speaker 2: is at risk. Are they just trying to let us

735
00:40:29,960 --> 00:40:30,879
Speaker 2: know what they can do?

736
00:40:31,080 --> 00:40:35,040
Speaker 10: In absolutely no one is at risk. That attack had

737
00:40:35,200 --> 00:40:39,760
Speaker 10: minimal impact. The water system is operating the water system manually.

738
00:40:42,000 --> 00:40:44,800
Speaker 2: What's the response then, is there an answer from the

739
00:40:44,840 --> 00:40:46,560
Speaker 2: administration to an attack like this?

740
00:40:47,360 --> 00:40:50,040
Speaker 10: So there's an US and a them, and the first

741
00:40:50,080 --> 00:40:53,680
Speaker 10: response needs to be to absolutely lock our digital doors

742
00:40:53,680 --> 00:40:57,040
Speaker 10: against these attacks. So, for example, in the case of

743
00:40:57,080 --> 00:41:01,480
Speaker 10: the water system, just last year, EPA issued a rule

744
00:41:01,719 --> 00:41:05,280
Speaker 10: putting in place minimum cybersecurity practices, things like changing defall

745
00:41:05,360 --> 00:41:10,320
Speaker 10: passwords things like removing or limiting the accounts administrator access.

746
00:41:10,360 --> 00:41:13,560
Speaker 10: Have that rule face litigation and had to be pulled back,

747
00:41:13,600 --> 00:41:16,880
Speaker 10: but there is absolutely nothing preventing every water system in

748
00:41:16,880 --> 00:41:20,360
Speaker 10: this country. Doesn't cost any money to change defall passwords,

749
00:41:20,360 --> 00:41:22,640
Speaker 10: to put in place those basic cybersecurity practice. So that's

750
00:41:22,680 --> 00:41:25,359
Speaker 10: the first part. There's the US part of this, which

751
00:41:25,440 --> 00:41:27,960
Speaker 10: is to say we have to lock our digital doors.

752
00:41:28,160 --> 00:41:30,319
Speaker 10: And then of course there's the them piece. And from

753
00:41:30,320 --> 00:41:33,320
Speaker 10: a US government perspective, there are actions we're taking every day,

754
00:41:33,640 --> 00:41:38,480
Speaker 10: you know, taking down digital infrastructure, ensuring that we're making

755
00:41:38,640 --> 00:41:41,239
Speaker 10: we're following the trail of who is responsible for that

756
00:41:41,320 --> 00:41:42,560
Speaker 10: and handling it appropriately.

757
00:41:44,160 --> 00:41:46,200
Speaker 2: How about just remove the door. I know you want

758
00:41:46,200 --> 00:41:48,680
Speaker 2: to close the door, but should these facilities be online

759
00:41:48,680 --> 00:41:50,480
Speaker 2: at all? How about we take all this equipment off

760
00:41:50,560 --> 00:41:50,960
Speaker 2: the internet.

761
00:41:51,000 --> 00:41:54,520
Speaker 10: And you know, it's a great question. There are real

762
00:41:54,640 --> 00:41:59,400
Speaker 10: reasons to automate operations across critical services, whether it's water systems,

763
00:41:59,440 --> 00:42:02,799
Speaker 10: whether it's systems. We believe that can be done securely

764
00:42:02,960 --> 00:42:05,040
Speaker 10: and safely, and that's why the White House and the

765
00:42:05,120 --> 00:42:09,160
Speaker 10: US government, FBI, SISA have been pushing out practical cybersecurity

766
00:42:09,160 --> 00:42:11,799
Speaker 10: guidelines so we can get the benefit of new technology

767
00:42:12,080 --> 00:42:16,120
Speaker 10: improve the services. Critical services are available to American citizens,

768
00:42:16,120 --> 00:42:17,879
Speaker 10: but do so in a safe and secure way.

769
00:42:18,880 --> 00:42:21,720
Speaker 2: We're spending time talking with Anne Neuberger, who works inside

770
00:42:21,760 --> 00:42:24,600
Speaker 2: the National Security Apparatus in the White House with a

771
00:42:24,680 --> 00:42:28,000
Speaker 2: specific focus on cyber which many would say is the

772
00:42:28,040 --> 00:42:32,120
Speaker 2: new frontier here. And this is the question you probably

773
00:42:32,200 --> 00:42:34,920
Speaker 2: don't want to answer or cannot answer. Does the United

774
00:42:34,920 --> 00:42:38,400
Speaker 2: States have offensive capabilities to go after bad actors in

775
00:42:38,440 --> 00:42:41,480
Speaker 2: a place like Iran? When it comes to cyber.

776
00:42:42,880 --> 00:42:47,360
Speaker 10: Every capable nation in cyberspace is using every tool possible.

777
00:42:47,640 --> 00:42:50,840
Speaker 10: The first and most important tool is defense. Absolutely, the

778
00:42:50,920 --> 00:42:54,640
Speaker 10: US government also has capabilities when necessary to go on offense.

779
00:42:54,719 --> 00:42:58,160
Speaker 10: But I can't emphasize enough how much the most important

780
00:42:58,200 --> 00:43:01,120
Speaker 10: thing to do is to close our doors and lock

781
00:43:01,160 --> 00:43:03,239
Speaker 10: our windows. I think you know in some parts of

782
00:43:03,239 --> 00:43:05,960
Speaker 10: the country people feel safe leaving their car keys in

783
00:43:06,040 --> 00:43:10,799
Speaker 10: their car. In cyberspace, we face persistent criminal attacks each

784
00:43:10,800 --> 00:43:13,680
Speaker 10: and every day. We don't need to wait for sophisticated

785
00:43:13,719 --> 00:43:16,920
Speaker 10: countries because there is the basic cyber attacks that we

786
00:43:16,960 --> 00:43:20,000
Speaker 10: can defend against and be better protected against by following

787
00:43:20,080 --> 00:43:23,800
Speaker 10: the cybersecurity guidelines which US government is pushing out actively.

788
00:43:23,840 --> 00:43:27,760
Speaker 10: The resources we're making available. Were absolutely committed to ensuring

789
00:43:27,840 --> 00:43:31,799
Speaker 10: every American and every critical service is safe online. But

790
00:43:31,840 --> 00:43:34,480
Speaker 10: we need the partnership of those owners and operators to

791
00:43:34,520 --> 00:43:37,000
Speaker 10: work with us to put in place these practices to

792
00:43:37,080 --> 00:43:38,400
Speaker 10: ensure we're safe online.

793
00:43:39,320 --> 00:43:42,080
Speaker 2: So I need to change my one two three ABC password.

794
00:43:42,120 --> 00:43:44,759
Speaker 2: I guess is what you're going to tell me? And Newburger,

795
00:43:44,800 --> 00:43:47,759
Speaker 2: I'm on it. I just I wonder in your role,

796
00:43:47,840 --> 00:43:50,959
Speaker 2: because this is relatively new for a lot of our

797
00:43:51,080 --> 00:43:53,160
Speaker 2: viewers and listeners, what it is that you actually do

798
00:43:53,239 --> 00:43:56,279
Speaker 2: at the White House here in the balance of distributing

799
00:43:56,360 --> 00:44:01,320
Speaker 2: policy to actually pushing guidelines when it comes to managing

800
00:44:01,440 --> 00:44:04,480
Speaker 2: utilities like these or other public facilities that could be targets.

801
00:44:05,800 --> 00:44:11,440
Speaker 10: Absolutely, the President has made securing digital infrastructure and absolute priority,

802
00:44:11,480 --> 00:44:13,560
Speaker 10: and there's a few parts to that, right. One part

803
00:44:13,600 --> 00:44:16,279
Speaker 10: of that is tracking the threat understanding who are the

804
00:44:16,280 --> 00:44:19,440
Speaker 10: countries who are capable, what are the roles criminals are playing,

805
00:44:19,760 --> 00:44:23,640
Speaker 10: what's financially driven crime, who are the countries harboring those individuals.

806
00:44:23,640 --> 00:44:25,520
Speaker 10: That's one piece of it, so we really understand the

807
00:44:25,520 --> 00:44:27,920
Speaker 10: threats we face as a country. The second piece of

808
00:44:27,960 --> 00:44:29,640
Speaker 10: it is saying what do we need to do to

809
00:44:29,680 --> 00:44:33,080
Speaker 10: be most effective. There's the policy level, for example, the

810
00:44:33,120 --> 00:44:36,560
Speaker 10: minimum cybersecurity practices that the Administration is put in place

811
00:44:36,600 --> 00:44:40,400
Speaker 10: for pipelines, for aviation, for rail so that those sectors

812
00:44:40,600 --> 00:44:43,239
Speaker 10: are doing the basics they need to do so that

813
00:44:43,320 --> 00:44:46,160
Speaker 10: they can be confident their operations are safe online. And

814
00:44:46,200 --> 00:44:49,839
Speaker 10: then there's the resources, the guide books, the fiscal resources

815
00:44:49,880 --> 00:44:52,680
Speaker 10: that the Administration is made available as well to help

816
00:44:53,080 --> 00:44:56,160
Speaker 10: small and medium companies, state on local governments make the

817
00:44:56,200 --> 00:44:58,959
Speaker 10: most of the resources they have to be safe as well.

818
00:44:59,000 --> 00:45:02,320
Speaker 10: And then there's the international partnership. So last month, for example,

819
00:45:02,440 --> 00:45:06,560
Speaker 10: the end of October, actually we brought together fifty partners

820
00:45:06,600 --> 00:45:10,600
Speaker 10: forty eight countries, INTERPOL, the International Police Force, and the

821
00:45:10,640 --> 00:45:14,440
Speaker 10: European Union to talk about how we tackle the transnational

822
00:45:14,480 --> 00:45:17,880
Speaker 10: cybercrime threat together things like how do we trace crypto

823
00:45:18,239 --> 00:45:21,520
Speaker 10: the payments, the ransom payments that are fueling criminal activity

824
00:45:21,560 --> 00:45:24,719
Speaker 10: around the world, how do we identify the infrastructure and

825
00:45:24,800 --> 00:45:27,120
Speaker 10: take it down, and how do we ensure that countries

826
00:45:27,160 --> 00:45:29,640
Speaker 10: around the world who may be less capable know how

827
00:45:29,680 --> 00:45:32,520
Speaker 10: to do forensics, know the best and the most effective

828
00:45:32,560 --> 00:45:35,960
Speaker 10: cybersecurity practices. And finally, the role of tech companies in

829
00:45:36,000 --> 00:45:38,600
Speaker 10: building more secure tech to make it easier to use

830
00:45:38,640 --> 00:45:41,799
Speaker 10: that tech safely. So not only are we focused in

831
00:45:41,880 --> 00:45:43,640
Speaker 10: understanding the threat, doing what we need to do at

832
00:45:43,640 --> 00:45:46,840
Speaker 10: home with our partners, but also working around the world

833
00:45:46,920 --> 00:45:49,200
Speaker 10: because it's such a transnational threat.

834
00:45:49,880 --> 00:45:52,200
Speaker 2: Yeah, and from your perch at the White House, you

835
00:45:52,200 --> 00:45:54,560
Speaker 2: look down Pennsylvania Avenue and that big old building in

836
00:45:54,600 --> 00:45:56,919
Speaker 2: the US Capitol where they have a lot of work

837
00:45:56,960 --> 00:46:00,640
Speaker 2: to do, a lot of unresolved issues to manage before

838
00:46:00,640 --> 00:46:03,640
Speaker 2: a year end. And this could be anything from funding

839
00:46:03,719 --> 00:46:06,279
Speaker 2: our allies to the government certain renewals at the end

840
00:46:06,320 --> 00:46:08,719
Speaker 2: of the year. I wonder to what extent the actions

841
00:46:08,800 --> 00:46:12,920
Speaker 2: or a lack of action by this Congress impacts the

842
00:46:13,000 --> 00:46:14,960
Speaker 2: national security of our country.

843
00:46:16,400 --> 00:46:18,640
Speaker 10: The Hill is a key partner in so many initiatives,

844
00:46:18,719 --> 00:46:21,399
Speaker 10: So for example, in the area of artificial intelligence, an

845
00:46:21,400 --> 00:46:24,799
Speaker 10: emerging technology area that has real promise in helping US

846
00:46:24,800 --> 00:46:28,640
Speaker 10: build more secure code, in helping us find militia cyberactivity,

847
00:46:28,840 --> 00:46:32,360
Speaker 10: and also real risk in terms of potentially accelerating criminals

848
00:46:32,360 --> 00:46:36,440
Speaker 10: and countries finding and exploiting vulnerabilities. You see the work

849
00:46:36,480 --> 00:46:39,400
Speaker 10: that Leader Schumer is doing to convene to understand to

850
00:46:39,440 --> 00:46:43,160
Speaker 10: think about the regulation needed in that space. Building upon

851
00:46:43,280 --> 00:46:47,360
Speaker 10: the President's historic executive order, building upon the voluntary commitments

852
00:46:47,400 --> 00:46:49,520
Speaker 10: the White has negotiated with companies. So I think that's

853
00:46:49,560 --> 00:46:53,000
Speaker 10: an area where we're seeing and in cyber more broadly,

854
00:46:53,080 --> 00:46:55,400
Speaker 10: really by PARTI is in partnership to take on the

855
00:46:55,440 --> 00:47:00,279
Speaker 10: threats that Congress can uniquely take on and address well.

856
00:47:00,280 --> 00:47:02,160
Speaker 2: And I want you to know your area of expertise

857
00:47:02,239 --> 00:47:05,360
Speaker 2: is awfully important to us and our audience here at Bloomberg.

858
00:47:05,360 --> 00:47:07,479
Speaker 2: We'd love to stay in touch with you as these

859
00:47:07,520 --> 00:47:11,200
Speaker 2: threats continue to emerge. I'm Joe Matthew. This is Bloomberg.

860
00:47:13,000 --> 00:47:15,319
Speaker 2: Thanks for listening to the Sound On podcast. Make sure

861
00:47:15,320 --> 00:47:18,200
Speaker 2: to subscribe if you haven't already, at Apple, Spotify, and

862
00:47:18,280 --> 00:47:20,799
Speaker 2: anywhere else you get your podcasts. And you can find

863
00:47:20,880 --> 00:47:23,960
Speaker 2: us live every weekday from Washington, DC at one pm

864
00:47:24,000 --> 00:47:29,320
Speaker 2: Eastern Time at Bloomberg dot com.