1 00:00:02,360 --> 00:00:08,280 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news from Bloomberg World Headquarters 2 00:00:08,280 --> 00:00:10,920 Speaker 1: in New York. I'm Doug Prisner with special coverage of 3 00:00:10,960 --> 00:00:14,320 Speaker 1: the US House vote on a stopgap funding bill to 4 00:00:14,400 --> 00:00:18,320 Speaker 1: avert a government shutdown. This bill has just been defeated 5 00:00:18,800 --> 00:00:22,520 Speaker 1: after more than thirty Republicans voted against it. Government funding 6 00:00:22,560 --> 00:00:26,599 Speaker 1: will now lapse Friday night without Congressional action. By the way, 7 00:00:26,600 --> 00:00:29,360 Speaker 1: this bill did include a suspension of the federal debt 8 00:00:29,400 --> 00:00:32,280 Speaker 1: limit for two years, and it did have the support 9 00:00:32,600 --> 00:00:35,560 Speaker 1: of President elect Trump. For a closer look, Now, let's 10 00:00:35,600 --> 00:00:38,559 Speaker 1: bring in Bloomberg's Mike Dorning. He covers Congress for US 11 00:00:38,840 --> 00:00:42,240 Speaker 1: from our bureau in Washington, DC. Mike, was this really 12 00:00:42,320 --> 00:00:43,680 Speaker 1: a surprise the outcome here? 13 00:00:44,120 --> 00:00:47,159 Speaker 2: It wasn't at all a surprise. We've been expecting this 14 00:00:47,240 --> 00:00:50,440 Speaker 2: since this deal was announced. They weren't able to get 15 00:00:50,479 --> 00:00:53,639 Speaker 2: support from Democrats, and they weren't able to get support 16 00:00:53,960 --> 00:00:55,640 Speaker 2: from conservative Republicans. 17 00:00:56,080 --> 00:01:00,320 Speaker 1: It was late yesterday, though, that President Electrump can out 18 00:01:00,440 --> 00:01:04,440 Speaker 1: yet against It. Wasn't that after Elon Musk voiced his opinion. 19 00:01:05,040 --> 00:01:10,480 Speaker 2: Absolutely, you're right. Elon Musk just savaged the bill online 20 00:01:10,720 --> 00:01:13,760 Speaker 2: all day long Wednesday, and then By the end of 21 00:01:13,760 --> 00:01:18,000 Speaker 2: the day, Trump joined with him and came out against 22 00:01:18,040 --> 00:01:19,640 Speaker 2: the bipartisan deal. 23 00:01:19,880 --> 00:01:22,520 Speaker 1: So what was the biggest sticking point here? Was it 24 00:01:22,680 --> 00:01:26,040 Speaker 1: the suspension of the federal dead limit for two years? 25 00:01:26,600 --> 00:01:30,399 Speaker 2: Well, Trump wanted to suspend the debt limit because he 26 00:01:30,440 --> 00:01:32,920 Speaker 2: didn't want to do it with him as president. He 27 00:01:32,959 --> 00:01:36,040 Speaker 2: wanted to do it with Biden as president. And also 28 00:01:36,200 --> 00:01:39,080 Speaker 2: that is often something where you have to give something 29 00:01:39,160 --> 00:01:42,679 Speaker 2: up to Congress to get them to raise the debt limit, 30 00:01:42,760 --> 00:01:45,680 Speaker 2: and he didn't want to do that. So that's why 31 00:01:46,680 --> 00:01:48,600 Speaker 2: one of the reasons why a lot of Democrats didn't 32 00:01:48,640 --> 00:01:51,440 Speaker 2: vote for it, and definitely a reason why the conservative 33 00:01:51,440 --> 00:01:54,480 Speaker 2: Republicans voted against it. They most of them don't like 34 00:01:54,680 --> 00:01:55,800 Speaker 2: raising the debt limit. 35 00:01:56,080 --> 00:01:58,520 Speaker 1: So government funding, as we know well, laps Friday night 36 00:01:58,600 --> 00:02:01,240 Speaker 1: without congressional action. Where do we go from here. 37 00:02:01,440 --> 00:02:04,160 Speaker 2: Well, it's quite possible that they'll come up with some 38 00:02:04,520 --> 00:02:08,760 Speaker 2: temporary patch to keep things going a little longer. That 39 00:02:08,960 --> 00:02:11,720 Speaker 2: might be something that lasts into next year, but it 40 00:02:11,800 --> 00:02:15,160 Speaker 2: might just be something that lasts a little while. It's 41 00:02:15,160 --> 00:02:20,960 Speaker 2: also possible that a shutdown occurs. Right now, Speaker Johnson's 42 00:02:21,000 --> 00:02:23,680 Speaker 2: going to go back into his office and huddle with 43 00:02:23,800 --> 00:02:26,400 Speaker 2: Republicans and try to figure out their next step. 44 00:02:26,560 --> 00:02:30,360 Speaker 1: He was the negotiator of that earlier bipartisan agreement, and 45 00:02:30,400 --> 00:02:32,960 Speaker 1: I was reading today that maybe his leadership is now 46 00:02:33,000 --> 00:02:34,200 Speaker 1: in doubt. Is that a fact? 47 00:02:35,160 --> 00:02:39,360 Speaker 2: Well, this is definitely a failure by the speaker. The 48 00:02:39,639 --> 00:02:43,360 Speaker 2: job of a congressional leader is to kind of figure 49 00:02:43,360 --> 00:02:47,920 Speaker 2: out the parameters of what's acceptable, and he failed to 50 00:02:48,760 --> 00:02:51,880 Speaker 2: have a sense or incorporate a sense of what Trump 51 00:02:52,120 --> 00:02:56,519 Speaker 2: and Musk would tolerate. And as a result, either because 52 00:02:57,639 --> 00:03:00,919 Speaker 2: he didn't think through that that they would go far 53 00:03:01,720 --> 00:03:05,160 Speaker 2: as far as they did, or because maybe they've changed 54 00:03:05,200 --> 00:03:09,440 Speaker 2: their minds along the way. As a result, this spell apart. 55 00:03:09,800 --> 00:03:12,720 Speaker 1: So is President elect Trump still in control? Does he 56 00:03:12,760 --> 00:03:16,560 Speaker 1: have the upper hand on any deal that maybe worked 57 00:03:16,600 --> 00:03:18,400 Speaker 1: out before that Friday night deadline? 58 00:03:19,240 --> 00:03:23,720 Speaker 2: He has the ability, probably in most instances, to scuttle 59 00:03:23,760 --> 00:03:28,480 Speaker 2: a deal. So he essentially already has a veto power 60 00:03:28,680 --> 00:03:31,720 Speaker 2: over congressional Republicans at least now. 61 00:03:31,760 --> 00:03:34,240 Speaker 1: One of the things that Musk was saying in his 62 00:03:34,800 --> 00:03:38,680 Speaker 1: tweet about the earlier agreement was that he saw it 63 00:03:38,760 --> 00:03:41,520 Speaker 1: as being a crime, in that anyone who voted in 64 00:03:41,560 --> 00:03:44,840 Speaker 1: favor of it should be voted out of office in 65 00:03:45,040 --> 00:03:48,240 Speaker 1: two years, do you think that Musk's influence over the 66 00:03:48,280 --> 00:03:50,640 Speaker 1: process will remain as strong as it has been in 67 00:03:50,680 --> 00:03:52,280 Speaker 1: the last twenty four hours. 68 00:03:53,200 --> 00:03:56,640 Speaker 2: He will remain influential over the process if he chooses 69 00:03:56,680 --> 00:04:02,120 Speaker 2: to use that influence, because remember, he was the largest 70 00:04:02,320 --> 00:04:06,800 Speaker 2: political donor in the United States this past year. He 71 00:04:06,920 --> 00:04:09,880 Speaker 2: was also the richest man in the world. So if 72 00:04:09,880 --> 00:04:14,000 Speaker 2: you have Donald Trump, the leader of the Republican Party 73 00:04:14,400 --> 00:04:17,480 Speaker 2: and the richest man in the world, the biggest political 74 00:04:17,520 --> 00:04:21,359 Speaker 2: donor against you in a Republican primary, that's a big 75 00:04:21,440 --> 00:04:24,560 Speaker 2: problem for you. So you have to think twice before 76 00:04:24,600 --> 00:04:25,440 Speaker 2: you defy them. 77 00:04:25,600 --> 00:04:29,599 Speaker 1: Speaking with Bloomberg's Mike Dorning there in response to the 78 00:04:29,720 --> 00:04:33,279 Speaker 1: bill on stopgap funding to avert a government shutdown. It 79 00:04:33,360 --> 00:04:37,560 Speaker 1: has been defeated after more than thirty Republicans voted against it, 80 00:04:37,600 --> 00:04:42,119 Speaker 1: and now government funding will lapse Friday night without congressional action. 81 00:04:42,680 --> 00:04:45,280 Speaker 1: So Mike, back to you. In terms of what the 82 00:04:45,360 --> 00:04:49,880 Speaker 1: day will be like, Friday, will really be incumbent upon 83 00:04:50,279 --> 00:04:53,560 Speaker 1: Mike Johnson, Speaker of the House, to get leadership together, 84 00:04:53,720 --> 00:04:55,840 Speaker 1: to try to get people on the same page. First 85 00:04:55,880 --> 00:04:56,520 Speaker 1: thing in the morning. 86 00:04:57,560 --> 00:05:00,680 Speaker 2: He'll probably be already working on this time now. Part 87 00:05:00,680 --> 00:05:04,039 Speaker 2: of it is also maybe he's hoping that this will 88 00:05:04,640 --> 00:05:08,359 Speaker 2: get Trump to believe it's not possible to do a 89 00:05:08,440 --> 00:05:13,000 Speaker 2: dead limit increase this year, but he may not be 90 00:05:13,080 --> 00:05:15,240 Speaker 2: able to persuade Trump at that. It might be that 91 00:05:15,279 --> 00:05:20,000 Speaker 2: Trump would rather have a shutdown than forego a dead 92 00:05:20,040 --> 00:05:22,680 Speaker 2: limit increase before he comes into office. 93 00:05:22,720 --> 00:05:25,760 Speaker 1: And we know where mister Musk is, particularly with this 94 00:05:25,920 --> 00:05:30,359 Speaker 1: new committee sending up to look for more efficiencies in 95 00:05:30,400 --> 00:05:33,839 Speaker 1: the way in which the US government operates? Doge I 96 00:05:33,880 --> 00:05:36,719 Speaker 1: think as how it's being referred to, is there anything 97 00:05:36,760 --> 00:05:39,520 Speaker 1: to suggest that Musk was trying to make a point 98 00:05:39,680 --> 00:05:41,480 Speaker 1: in sabotaging this bill. 99 00:05:42,600 --> 00:05:45,200 Speaker 2: I think one of the things he did want to 100 00:05:45,240 --> 00:05:49,680 Speaker 2: show is that he's serious about cutting back what he 101 00:05:49,800 --> 00:05:54,120 Speaker 2: considers to be wasteful spending and show that the members 102 00:05:54,160 --> 00:05:58,479 Speaker 2: of Congress that he has some power to get them 103 00:05:58,720 --> 00:06:01,920 Speaker 2: to cut back spending. Because remember, his group is just 104 00:06:02,000 --> 00:06:05,160 Speaker 2: like an advisory group, It doesn't really have any power. 105 00:06:05,640 --> 00:06:09,520 Speaker 2: His power is twofold. His power is because he's one 106 00:06:09,520 --> 00:06:12,640 Speaker 2: of Trump's key advisors and he can influence the president. 107 00:06:13,120 --> 00:06:16,520 Speaker 2: And his power is because of his money and his 108 00:06:16,960 --> 00:06:22,160 Speaker 2: social media platform. So he was using both of those 109 00:06:22,240 --> 00:06:25,680 Speaker 2: leavers of power to gain concessions on this. 110 00:06:25,960 --> 00:06:28,160 Speaker 1: So, as we know, government funding will lapse at twelve 111 00:06:28,200 --> 00:06:30,839 Speaker 1: oh one a m. Saturday. Is there a risk that 112 00:06:30,920 --> 00:06:33,600 Speaker 1: we could get a partial government shutdown first thing in 113 00:06:33,640 --> 00:06:34,640 Speaker 1: the morning on Saturday. 114 00:06:35,360 --> 00:06:39,040 Speaker 2: There's definitely a risk, a high risk that will have 115 00:06:39,080 --> 00:06:42,000 Speaker 2: a government shut down first thing in the morning Saturday. 116 00:06:42,120 --> 00:06:46,000 Speaker 2: Now it's also possible that they come up with something 117 00:06:46,600 --> 00:06:49,080 Speaker 2: and you know, if they missed them Friday night at 118 00:06:49,120 --> 00:06:54,400 Speaker 2: midnight deadline, and you know, the government's formally, you know, 119 00:06:54,600 --> 00:06:57,640 Speaker 2: officially shut down for a few hours or for Saturday 120 00:06:57,640 --> 00:07:00,360 Speaker 2: and Sunday, is probably not going to have a big 121 00:07:00,400 --> 00:07:04,200 Speaker 2: effect on the country. The bigger thing that would have 122 00:07:04,240 --> 00:07:08,159 Speaker 2: an effect is a drawn out shutdown in which non 123 00:07:08,279 --> 00:07:13,680 Speaker 2: essential government services would stop and none of the employees 124 00:07:13,720 --> 00:07:14,400 Speaker 2: would be paid. 125 00:07:15,120 --> 00:07:17,600 Speaker 1: Mike will leave it there, Thank you so much, Bloomberg's 126 00:07:17,640 --> 00:07:21,360 Speaker 1: Mike Dorning. He covers Congress for us here on Bloomberg 127 00:07:21,720 --> 00:07:25,040 Speaker 1: Just to recap, the stopgap funding bill to avert a 128 00:07:25,080 --> 00:07:28,600 Speaker 1: government shutdown has been defeated. We'll have more on this 129 00:07:28,640 --> 00:07:30,840 Speaker 1: throughout the night here on Bloomberg Radio.