WEBVTT - Instant Reaction: Trump-Backed Funding Plan Fails

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio news from Bloomberg World Headquarters

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<v Speaker 1>in New York. I'm Doug Prisner with special coverage of

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<v Speaker 1>the US House vote on a stopgap funding bill to

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<v Speaker 1>avert a government shutdown. This bill has just been defeated

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<v Speaker 1>after more than thirty Republicans voted against it. Government funding

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<v Speaker 1>will now lapse Friday night without Congressional action. By the way,

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<v Speaker 1>this bill did include a suspension of the federal debt

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<v Speaker 1>limit for two years, and it did have the support

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<v Speaker 1>of President elect Trump. For a closer look, Now, let's

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<v Speaker 1>bring in Bloomberg's Mike Dorning. He covers Congress for US

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<v Speaker 1>from our bureau in Washington, DC. Mike, was this really

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<v Speaker 1>a surprise the outcome here?

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<v Speaker 2>It wasn't at all a surprise. We've been expecting this

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<v Speaker 2>since this deal was announced. They weren't able to get

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<v Speaker 2>support from Democrats, and they weren't able to get support

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<v Speaker 2>from conservative Republicans.

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<v Speaker 1>It was late yesterday, though, that President Electrump can out

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<v Speaker 1>yet against It. Wasn't that after Elon Musk voiced his opinion.

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<v Speaker 2>Absolutely, you're right. Elon Musk just savaged the bill online

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<v Speaker 2>all day long Wednesday, and then By the end of

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<v Speaker 2>the day, Trump joined with him and came out against

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<v Speaker 2>the bipartisan deal.

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<v Speaker 1>So what was the biggest sticking point here? Was it

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<v Speaker 1>the suspension of the federal dead limit for two years?

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<v Speaker 2>Well, Trump wanted to suspend the debt limit because he

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<v Speaker 2>didn't want to do it with him as president. He

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<v Speaker 2>wanted to do it with Biden as president. And also

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<v Speaker 2>that is often something where you have to give something

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<v Speaker 2>up to Congress to get them to raise the debt limit,

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<v Speaker 2>and he didn't want to do that. So that's why

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<v Speaker 2>one of the reasons why a lot of Democrats didn't

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<v Speaker 2>vote for it, and definitely a reason why the conservative

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<v Speaker 2>Republicans voted against it. They most of them don't like

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<v Speaker 2>raising the debt limit.

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<v Speaker 1>So government funding, as we know well, laps Friday night

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<v Speaker 1>without congressional action. Where do we go from here.

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<v Speaker 2>Well, it's quite possible that they'll come up with some

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<v Speaker 2>temporary patch to keep things going a little longer. That

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<v Speaker 2>might be something that lasts into next year, but it

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<v Speaker 2>might just be something that lasts a little while. It's

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<v Speaker 2>also possible that a shutdown occurs. Right now, Speaker Johnson's

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<v Speaker 2>going to go back into his office and huddle with

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<v Speaker 2>Republicans and try to figure out their next step.

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<v Speaker 1>He was the negotiator of that earlier bipartisan agreement, and

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<v Speaker 1>I was reading today that maybe his leadership is now

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<v Speaker 1>in doubt. Is that a fact?

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<v Speaker 2>Well, this is definitely a failure by the speaker. The

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<v Speaker 2>job of a congressional leader is to kind of figure

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<v Speaker 2>out the parameters of what's acceptable, and he failed to

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<v Speaker 2>have a sense or incorporate a sense of what Trump

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<v Speaker 2>and Musk would tolerate. And as a result, either because

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<v Speaker 2>he didn't think through that that they would go far

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<v Speaker 2>as far as they did, or because maybe they've changed

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<v Speaker 2>their minds along the way. As a result, this spell apart.

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<v Speaker 1>So is President elect Trump still in control? Does he

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<v Speaker 1>have the upper hand on any deal that maybe worked

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<v Speaker 1>out before that Friday night deadline?

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<v Speaker 2>He has the ability, probably in most instances, to scuttle

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<v Speaker 2>a deal. So he essentially already has a veto power

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<v Speaker 2>over congressional Republicans at least now.

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<v Speaker 1>One of the things that Musk was saying in his

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<v Speaker 1>tweet about the earlier agreement was that he saw it

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<v Speaker 1>as being a crime, in that anyone who voted in

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<v Speaker 1>favor of it should be voted out of office in

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<v Speaker 1>two years, do you think that Musk's influence over the

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<v Speaker 1>process will remain as strong as it has been in

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<v Speaker 1>the last twenty four hours.

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<v Speaker 2>He will remain influential over the process if he chooses

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<v Speaker 2>to use that influence, because remember, he was the largest

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<v Speaker 2>political donor in the United States this past year. He

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<v Speaker 2>was also the richest man in the world. So if

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<v Speaker 2>you have Donald Trump, the leader of the Republican Party

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<v Speaker 2>and the richest man in the world, the biggest political

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<v Speaker 2>donor against you in a Republican primary, that's a big

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<v Speaker 2>problem for you. So you have to think twice before

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<v Speaker 2>you defy them.

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<v Speaker 1>Speaking with Bloomberg's Mike Dorning there in response to the

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<v Speaker 1>bill on stopgap funding to avert a government shutdown. It

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<v Speaker 1>has been defeated after more than thirty Republicans voted against it,

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<v Speaker 1>and now government funding will lapse Friday night without congressional action.

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<v Speaker 1>So Mike, back to you. In terms of what the

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<v Speaker 1>day will be like, Friday, will really be incumbent upon

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<v Speaker 1>Mike Johnson, Speaker of the House, to get leadership together,

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<v Speaker 1>to try to get people on the same page. First

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<v Speaker 1>thing in the morning.

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<v Speaker 2>He'll probably be already working on this time now. Part

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<v Speaker 2>of it is also maybe he's hoping that this will

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<v Speaker 2>get Trump to believe it's not possible to do a

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<v Speaker 2>dead limit increase this year, but he may not be

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<v Speaker 2>able to persuade Trump at that. It might be that

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<v Speaker 2>Trump would rather have a shutdown than forego a dead

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<v Speaker 2>limit increase before he comes into office.

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<v Speaker 1>And we know where mister Musk is, particularly with this

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<v Speaker 1>new committee sending up to look for more efficiencies in

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<v Speaker 1>the way in which the US government operates? Doge I

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<v Speaker 1>think as how it's being referred to, is there anything

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<v Speaker 1>to suggest that Musk was trying to make a point

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<v Speaker 1>in sabotaging this bill.

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<v Speaker 2>I think one of the things he did want to

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<v Speaker 2>show is that he's serious about cutting back what he

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<v Speaker 2>considers to be wasteful spending and show that the members

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<v Speaker 2>of Congress that he has some power to get them

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<v Speaker 2>to cut back spending. Because remember, his group is just

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<v Speaker 2>like an advisory group, It doesn't really have any power.

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<v Speaker 2>His power is twofold. His power is because he's one

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<v Speaker 2>of Trump's key advisors and he can influence the president.

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<v Speaker 2>And his power is because of his money and his

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<v Speaker 2>social media platform. So he was using both of those

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<v Speaker 2>leavers of power to gain concessions on this.

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<v Speaker 1>So, as we know, government funding will lapse at twelve

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<v Speaker 1>oh one a m. Saturday. Is there a risk that

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<v Speaker 1>we could get a partial government shutdown first thing in

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<v Speaker 1>the morning on Saturday.

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<v Speaker 2>There's definitely a risk, a high risk that will have

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<v Speaker 2>a government shut down first thing in the morning Saturday.

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<v Speaker 2>Now it's also possible that they come up with something

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<v Speaker 2>and you know, if they missed them Friday night at

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<v Speaker 2>midnight deadline, and you know, the government's formally, you know,

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<v Speaker 2>officially shut down for a few hours or for Saturday

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<v Speaker 2>and Sunday, is probably not going to have a big

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<v Speaker 2>effect on the country. The bigger thing that would have

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<v Speaker 2>an effect is a drawn out shutdown in which non

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<v Speaker 2>essential government services would stop and none of the employees

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<v Speaker 2>would be paid.

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<v Speaker 1>Mike will leave it there, Thank you so much, Bloomberg's

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<v Speaker 1>Mike Dorning. He covers Congress for us here on Bloomberg

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<v Speaker 1>Just to recap, the stopgap funding bill to avert a

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<v Speaker 1>government shutdown has been defeated. We'll have more on this

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<v Speaker 1>throughout the night here on Bloomberg Radio.