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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.

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Speaker 2: Or listen on demand wherever you get your podcast.

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Speaker 3: We're keeping a couple of plates spinning here today. I'm

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Speaker 3: glad you joined us. We'll have the latest on the

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Speaker 3: debt ceiling, of course, and also the legal and political

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Speaker 3: future of Congressman George Santos. That's actually where we begin

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Speaker 3: right now with Bloomberg Sarah Fordon, who leads our legal

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Speaker 3: team here in Washington, DC. Welcome, Sarah, it's great to

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Speaker 3: see you. We just heard from the Republican leadership in

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Speaker 3: the House on this. Here's Congresswoman at least to find it.

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Speaker 4: This legal process is going to play itself out. Unfortunately,

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Speaker 4: this is not the first time a member of Congress

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Speaker 4: from either party has been indicted. There are a set

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Speaker 4: of rules, and as the Majority leader stated, he voluntarily

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Speaker 4: had stepped down from his committees.

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Speaker 3: So that legal process she refers to is unfolding as

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Speaker 3: we speak. Sarah, this is all about to happen. Actually,

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Speaker 3: whereas George Santos right now.

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Speaker 5: So George Santos is about to appear in a New

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Speaker 5: York courtroom in the town of Islip, where the ed

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Speaker 5: n Y Prosecutors have filed thirteen counts against him. These

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Speaker 5: are primarily false claims, false you know, getting campaign finance

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Speaker 5: charges and fraudulent use of public funds. So his lawyer

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Speaker 5: will appear with him in the courtroom and we will

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Speaker 5: have more information about what exactly is going to happen

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Speaker 5: to him next very soon.

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Speaker 3: These charges, though, are serious. A lot of folks last

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Speaker 3: night last evening when this first emerged, Sarah, we're talking

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Speaker 3: about campaign finance violations. We know that the DJ was

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Speaker 3: looking into that, but we're talking fraud, theft, money laundering.

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Speaker 3: This is serious business and I presume could carry hefty

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Speaker 3: penalties if he's found guilty.

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Speaker 5: These are very serious charges. He is exposed to as

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Speaker 5: many as twenty years in prison on the main top

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Speaker 5: line counts he's being charged of, primarily two criminal schemes.

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Speaker 5: One is soliciting funds for his campaigns based on fraudulent precedents,

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Speaker 5: and the other is unemployment insurance fraud. So he actually

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Speaker 5: collected twenty five thousand dollars in unemployment benefits when he

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Speaker 5: was actually employed.

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Speaker 3: Oh well, Now, of course you've got the legal side

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Speaker 3: of things. The political side is very different, Sarah, and

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Speaker 3: you're a creature of Washington. There's a reason why he

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Speaker 3: has not lost his job in the House, and he

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Speaker 3: could keep that job depending on what happens here. Kevin

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Speaker 3: McCarthy decides he needs that vote.

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Speaker 5: Well exactly. I mean, the vote counting is very you know,

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Speaker 5: down to just four votes. If four Republicans defect, then

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Speaker 5: the House cannot pass legislation. So Kevin McCarthy has said

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Speaker 5: that he would call for Santos to step down if

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Speaker 5: he's convicted. But beyond that, you know, there's a very

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Speaker 5: muted response at this point to what's going on with him.

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Speaker 3: Pretty incredible stuff, Sarah, Thank you for joining us. Sarah

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Speaker 3: Fordon leads the legal team here in Washington, DC, but

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Speaker 3: also wears a lot of hats and is going to

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Speaker 3: help us understand what happens here over the next twenty

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Speaker 3: four hours and beyond. As we turn to the other

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Speaker 3: major story on this day. After the meeting in which

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Speaker 3: Speaker Kevin McCarthy said made no progress.

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Speaker 6: Everybody in this meeting reiterated the positions they were at.

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Speaker 6: I didn't see any new movement. The President said the

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Speaker 6: staff should get back together. But I was very clear

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Speaker 6: with the President, we have now just two weeks to go.

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Speaker 6: If Chuck Schumer could pass something, we'd go to conference

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Speaker 6: right away and solve that. But I don't think Chuck

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Speaker 6: Schumer can pass anything. They haven't dealt with it.

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Speaker 3: Speaking of Chuck Schumer, he's also weighing in here from

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Speaker 3: the Senate floor this morning.

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Speaker 7: He was the only hold out during yesterday's meeting. President

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Speaker 7: Biden said that no matter what, default should be taken

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Speaker 7: off the table. Leader Jeffery said, default is off the table.

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Speaker 7: I committed to taking default off the table. Even Leader

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Speaker 7: McConnell said unequivocally that no matter what, the US will

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Speaker 7: not default. But Speaker McCarthy, Speaker McCarthy alone, refuse to

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Speaker 7: take the threat of catastrophic default off the table.

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Speaker 3: And this is where we begin with Gene Sperling for

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Speaker 3: the insider of you here from the White House, senior

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Speaker 3: advisor to the President, former director of the National Economic Council,

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Speaker 3: back with us here. It's great to have you back. Welcome.

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Speaker 3: We talked just a couple of weeks ago about this process.

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Speaker 3: We've made our way through the meeting. After what you

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Speaker 3: just heard last evening from the Speaker, from the Majority Leader,

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Speaker 3: from your boss, the president, are we closer or further

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Speaker 3: away from a possible default?

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Speaker 8: Well, there is no reason that that should even be

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Speaker 8: an option. Yeah, And I think as you heard the

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Speaker 8: Majority Leader say, you know, only the Speaker of the House,

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Speaker 8: you know, refused to say explicitly that that would not

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Speaker 8: happen under any circumstance. Everyone should acknowledge that. However, sincere,

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Speaker 8: however passionate they are about their priorities, you cannot tell

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Speaker 8: the rest of our democracy. If you don't go along

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Speaker 8: with what I want, we're going to put our nation

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Speaker 8: into default. You know, can you? I would feel the

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Speaker 8: same way if President Biden did it, If President mentioned

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Speaker 8: President Biden said, here's my budget. My budget raises taxes

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Speaker 8: on millionaires and billionaires. It's uh, you know, is going

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Speaker 8: to reduce medication the subsidies that go to big pharma.

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Speaker 8: And if you don't do what I want, I'm going

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Speaker 8: to put I'm not going to sign anything and put

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Speaker 8: the country into default. That is essentially what the Speaker

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Speaker 8: and the House Republicans have been saying so far. But

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Speaker 8: I think the positive part is that even though there

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Speaker 8: is that fundamental, you know and I think incredibly important disagreement,

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Speaker 8: the President brought the leaders together and said, let's start working.

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Speaker 8: Even if we don't have that resolve. We know that

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Speaker 8: we want to talk about what we can do on

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Speaker 8: the budget. We know there's an annual appropriations process, we

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Speaker 8: know there could be some issues we could talk about together.

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Speaker 8: Let's come together. And then the President said, and let's

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Speaker 8: get back right away on Friday. So I think and

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Speaker 8: everybody did agree to that. So you are seeing a

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Speaker 8: productive meeting with an ongoing process.

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Speaker 3: And well this is helpful because you know, you've got

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Speaker 3: a different view than a lot of people here, and

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Speaker 3: the headlines are easy to write, no progress, you know,

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Speaker 3: talk stall, whatever. But you've seen this movie before, at

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Speaker 3: least to some extent, Gene, and I wonder if simply

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Speaker 3: getting that next meeting and getting staff talking, you might

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Speaker 3: be involved in those talks. I'm curious about that is

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Speaker 3: actually a win yesterday.

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Speaker 8: Well, you know we're not there yet, it would, I mean,

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Speaker 8: what we would have liked to have heard is obviously

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Speaker 8: every one in that room say we're taking default off

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Speaker 8: the table. Nobody, no matter how hard they fight for

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Speaker 8: their budget, is going to say my way or I

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Speaker 8: put our nation into default. I think it's not only

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Speaker 8: unfortunate that Speaker McCarthy refused to say there will be

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Speaker 8: no hostage taking, refuse say the default.

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Speaker 9: Was off the table.

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Speaker 8: I think it's not just unfortunate that he didn't say

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Speaker 8: that or hasn't taken that position. It's unfortunate that that

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Speaker 8: is even an option that is still on the table.

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Speaker 8: You know, I know that there was often discussions together

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Speaker 8: of budgets and raising the debt limit, but twenty eleven

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Speaker 8: that was a national teaching moment. There we saw again

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Speaker 8: the House Republicans start saying my way, or we put

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Speaker 8: the nation into default. And we went right to the brink.

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Speaker 8: And even though we didn't go into default, look at

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Speaker 8: the harmacaust the stock Mart that went down probably seventeen percent,

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Speaker 8: consumer confidence went down twenty two percent. We were downgraded

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Speaker 8: for the first time ever. We weren't triple A for

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Speaker 8: the first time since like World War One, And there's

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Speaker 8: a lot of harm to that. But that said, right

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Speaker 8: as we you know, I mean, discussions will continue, and

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Speaker 8: I think what you're seeing is this president is convening,

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Speaker 8: he is asking member he is reminding members of Congress

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Speaker 8: that it is fundamentally a congressional duty to ensure that

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Speaker 8: you are not defaulting on our bills that were not

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Speaker 8: a deadbeat nation. But you also saw him leading and

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Speaker 8: bringing folks together and encouraging ongoing discussions and setting a

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Speaker 8: next discussion as quickly as Friday. So you know we

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Speaker 8: are we are far apart right now, but you're seeing

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Speaker 8: the President making a significant effort to get all of

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Speaker 8: the relevant parties talking to each other and reminding that

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Speaker 8: something has to pass the House and that to get

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Speaker 8: to his desk.

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Speaker 3: I have a couple specific sites.

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Speaker 8: The House Republican Bill where it says, here's something that

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Speaker 8: has zero chance of ever passing the Senate. Is not

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Speaker 8: really that helpful.

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Speaker 3: A couple of things I want to ask you about, specifically,

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Speaker 3: Gene Sperling, as the President was asked last evening, and

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Speaker 3: this gives us a sense of kind of where we

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Speaker 3: are in the conversation. The President was asked, among other things,

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Speaker 3: about using the fourteenth Amendment. Here's what he says.

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Speaker 9: I have been considering the fourteenth Amendments, and a man

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Speaker 9: I have enormous respect for Larry Tribe, who advised me

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Speaker 9: for a long time, thinks that it would be legitimate.

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Speaker 9: But the problem is it would have to be litigated

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Speaker 9: in the meantime without an extension, it would still end

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Speaker 9: up in the same place.

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Speaker 3: And if no one's seeking an extension, then genius, he's

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Speaker 3: considering it but clearly has no plans to invoke the

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Speaker 3: fourteenth Amendment.

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Speaker 2: Is that right?

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Speaker 8: Well, I would put it this way. I think that

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Speaker 8: what you're trying to do by resolving this, by taking

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Speaker 8: the fault off the table, is saying that the rock solid,

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Speaker 8: full faith and credit of the United States, which are founders,

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Speaker 8: particularly Alexander Hamilton, recognize what help generation after generation needs

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Speaker 8: to be protected. It needs to be immaculate. And so

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Speaker 8: what he's saying, I think is that, look, you know,

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Speaker 8: he's listening to constitutional scholars he respects, like Professor Tribe,

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Speaker 8: but he's also recognizing that that's not a great option

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Speaker 8: because there would probably be litigation in certainty. So if

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Speaker 8: that's you know that that could still put for even

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Speaker 8: a short period of time, the degree that the United

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Speaker 8: States pays its bills on time under question. And so

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Speaker 8: I think that that's why I think he's said, you

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Speaker 8: could still end up with the same dam. It turned

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Speaker 8: out that you could if you have a sustained period

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Speaker 8: where global markets were not certain what was going to

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Speaker 8: be legally permissible in the United States. You know that's

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Speaker 8: still a risk. We shouldn't get anywhere near Why would

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Speaker 8: we understand why would we have such a self inflicted

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Speaker 8: will work?

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Speaker 3: Well, it sounds like a bit of a message to

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Speaker 3: the credit agencies as we consider a possible downgrade. But

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Speaker 3: I just I don't have much more time, Gene. I

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Speaker 3: just want to get to a couple of things, because

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Speaker 3: the Speaker of the House essentially called the President a liar,

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Speaker 3: at least coming out of that meeting. It was indicated

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Speaker 3: by the President. He said as much in the meeting.

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Speaker 3: But when it came to money for cuts for veterans care,

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Speaker 3: this is something the White House has repeated that if

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Speaker 3: we actually made Kevin McCarthy's bill law, that it would

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Speaker 3: create dramatic cuts to veterans care. Here's what he said

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Speaker 3: about it in the driveway last night.

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Speaker 6: First of all, cutting the veterans the lie. Where in

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Speaker 6: the bill does I say we cut veterans. You'll find

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Speaker 6: next week when we do our appropriation bill, we increase

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Speaker 6: the funding of veterans.

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Speaker 3: But this is what I'm talking about.

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Speaker 6: That type of behavior is pure political rhetoric.

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Speaker 3: Then when he got back into the House he was

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Speaker 3: asked about it again. Here's how he put it in

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Speaker 3: the house.

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Speaker 6: Oh yeah, he brought up the veterans.

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Speaker 3: That's a lie, laughing and calling it a lie. Number one,

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Speaker 3: gene is it a lie? In two? Does that language

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Speaker 3: create a roadblock for us finding a deal here or

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Speaker 3: finding some common ground?

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Speaker 8: So let me answer both your questions. First, No, the

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Speaker 8: president's portrayal is accurate. And the Speaker's sense that somehow

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Speaker 8: you can have a twenty two across the board cut

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Speaker 8: and no one's going to feel any pain is what

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Speaker 8: is not being straight with the American people. So this

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Speaker 8: is pretty simple. Here's what the issue is. They come

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Speaker 8: out and say we're going to cut spending by twenty

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Speaker 8: two percent just the first year of the budget. It

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Speaker 8: could go goes deeper every single year, and then veterans

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Speaker 8: groups and others come out and say, hey, are we

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Speaker 8: going to be exempt from that? Are we going to

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Speaker 8: be protected? So they know that's an issue, and they

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Speaker 8: go past their budget and say they pass their budget

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Speaker 8: with no protection for veterans. So you know there's a

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Speaker 8: twenty two percent cut, how would you describe that to

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Speaker 8: the American people? With the information we have. The right

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Speaker 8: thing to do is assume it's going to be a

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Speaker 8: twenty two percent cut across the board, including for veterans'

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Speaker 8: medical care, which is the single largest part of domestic

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Speaker 8: discretionary spending. Now, I think that the President saying is

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Speaker 8: if the speaker wants to say, hey, I'm going to

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Speaker 8: protect veterans spending, but now I'm going to acknowledge that

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Speaker 8: that means I'm going to have a deeper, like thirty

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Speaker 8: percent cut in cancer research in education, then he can

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Speaker 8: do it. But he can't go out and have a

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Speaker 8: twenty two percent cut across the board and then pretend

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Speaker 8: and have no protection for veterans and say that there's

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Speaker 8: a more accurate way to describe it.

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Speaker 3: I've only got thirty seconds, Geen. Should the speaker be

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Speaker 3: calling the president?

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Speaker 8: Aliar the president? The President is going to represent the people,

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Speaker 8: and he's going to focus on having a productive discussion

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Speaker 8: that benefits the American people by preventing deep cuts to

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Speaker 8: working families and most of all, preventing the first ever

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Speaker 8: default in our country and That's what his focus is,

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Speaker 8: because this is a president who is wise and mature.

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Speaker 3: Jean, Thank you, Jeane Sperling. I always wish we had

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Speaker 3: more time, and I wish I could ask you more questions.

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Speaker 3: Senior advisor to the President. Getting us rolling here on

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Speaker 3: Bloomberg Radio, I'm Joe, Matthew and Washington. Yeah, this is Bloomberg.

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Speaker 1: You're listening to the Bloomberg Sound on podcast. I'll catch

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

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

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Speaker 2: 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 played Bloomberg eleven thirty.

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Speaker 3: President's taking the words of the street today, leaving the

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Speaker 3: Bubble on his way to New York. He'll actually be

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Speaker 3: speaking very shortly about the debt limit talks as he

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Speaker 3: tries to keep the ball in play here. It isn't play.

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Speaker 3: The staff talking with the other staff, and there's a

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Speaker 3: meeting set for Friday. We'll see what happens. But I

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Speaker 3: want to hear from the panel on this as we

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Speaker 3: assemble the panel for our Wednesday edition. Jeanie Shanzana was

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Speaker 3: with US Bloomberg Politics contributor and Democratic analyst in Lester

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Speaker 3: months in his back Republicans strategist principle at government relations

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Speaker 3: firm bg R Group. It's great to have you both here, Genie.

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Speaker 3: It's a little bit hard to tell exactly what's happening

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Speaker 3: at the White House talking to Gene Sperling there, he

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Speaker 3: was doing a little bit of filibustering, and I understand

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Speaker 3: that they've got a message that they're trying to get

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Speaker 3: a cross but that didn't give me any sense that

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Speaker 3: there would be any kind of a break in this

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Speaker 3: conversation anytime soon.

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Speaker 1: About you.

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Speaker 10: Yeah, I mean, and that's how I think most of

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Speaker 10: us felt last night as we heard, you know, the

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Speaker 10: sort of dueling press conferences or you know, speaking to

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Speaker 10: the press, and there seemed to be nothing new there.

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Speaker 10: The only you know, positive sign to be optimistic was

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Speaker 10: the as you mentioned, the meeting of the staff and

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Speaker 10: the meeting on Friday of the Big Four. Beyond that,

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Speaker 10: it's hard to see what has changed. Quite frankly, since

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Speaker 10: you know, several months ago, we know these positions. You know,

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Speaker 10: I did see a little bit of movement from the

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Speaker 10: President when he said during his press conference that he

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Speaker 10: may be open to something short term. You know, a

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Speaker 10: little head scratching because just hours earlier the White House

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Speaker 10: said that they were not open to that, as did

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Speaker 10: Kevin McCarthy. But so I thought that might be a

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Speaker 10: small positive. But beyond that, nothing has changed, and the

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Speaker 10: calendar is getting worse. We're two and a half weeks

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Speaker 10: away from going over the cliff, and it would take

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Speaker 10: minimum two weeks after a deal is done for this

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Speaker 10: to move through the House in the Senate. Those are

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Speaker 10: very scary odds.

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Speaker 3: Lester, pull us in off the ledge here. I think

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Speaker 3: you were a little more optimistic than we were last

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Speaker 3: time we talked about this. I wonder if your mood

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Speaker 3: has changed since that meeting yesterday, because everyone emerged and

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Speaker 3: seemed to be kind of upset. It obviously didn't go well.

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Speaker 3: It hardly lasted over an hour, and Speaker McCarthy called

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Speaker 3: the President a liar. That doesn't sound like we're moving

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Speaker 3: in the right direction.

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Speaker 11: Yeah, I think I'm the outlier here. I thought it

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Speaker 11: was very good news that A they met, B there's

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Speaker 11: a plan for going forward. We see we've kind of

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Speaker 11: established the time frame of when this needs to get done.

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Speaker 11: I do think that you know, early June date, frankly

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Speaker 11: is intentionally early to give their to give the system

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Speaker 11: a little slack to actually enact something. So I'm we

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Speaker 11: know what we have to do, we know the timeframe

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Speaker 11: to do it in staff is talking. That's a fantastic development.

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Speaker 11: And as and Joe, I think I was listening yesterday

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Speaker 11: to Bill Hogland explain that you've got like a one

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Speaker 11: hundred billion dollar delta here that you could into it. Yeah,

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Speaker 11: so this is this isn't super complicated, and we're we've

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Speaker 11: got the now the parameters of what this thing looks like.

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Speaker 11: I'm I am I don't want to say very optimistic.

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Speaker 11: I am optimistic that we're on the.

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Speaker 12: Right path here.

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Speaker 3: Well, okay, so Genie, how much of this is chest

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Speaker 3: something then you know, bluster and getting a lot of

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Speaker 3: news coverage versus actual negotiating And are the staff is

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Speaker 3: going to actually figure this out while everyone else is

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Speaker 3: acting like a big shot.

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Speaker 10: Well that's usually how it happens. So we hope. I think,

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Speaker 10: you know, I want to be optimistic, like Lester is.

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Speaker 10: The reality is though the calendar here, so if they

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Speaker 10: have taken off and Bill talked about this yesterday, this

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Speaker 10: idea of pushing this down the pike a little bit

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Speaker 10: to buy some time. We get dangerously close if June

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Speaker 10: first is indeed the eight or somewhere close to that,

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Speaker 10: which makes this tough. And again, we don't have to

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Speaker 10: go over the cliff for there to be you know,

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Speaker 10: serious damage to our economy, in the economy of the world.

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Speaker 10: And that's what's a scary proposition. And the other scary

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Speaker 10: part of this is both sides or all sides seem

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Speaker 10: to think it's to their political advantage to keep this going.

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Speaker 10: I was a little bit optimistic when I thought that

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Speaker 10: the president might be coming to my neck of the woods.

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Speaker 10: He's up in Valhalla, New York today, in Mike Lawler's district.

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Speaker 10: I was a little bit optimistic, thinking, Okay, he's gonna

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Speaker 10: follow you know, an old Thomas Jefferson idea, build a

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Speaker 10: majority coalition, take those moderates from the other side. That's

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Speaker 10: what Thomas Jefferson did so well, so many times back

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Speaker 10: in the day. But then we hear they didn't want

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Speaker 10: to come here and try to sort of schmooze Mike

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Speaker 10: Lawler over. They were quite frankly stunned when he said

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Speaker 10: he's gonna show up, they were gonna take it to him.

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Speaker 10: That's not the way you build a coalition. So to

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Speaker 10: me that I was mildly optimistic and then not so much. So,

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Speaker 10: you know, I hope that that uh Leicester is right,

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Speaker 10: that there's something to be positive about here, but it's hard.

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Speaker 10: You're hard pressed to see it where we are now.

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Speaker 3: Fair enough, lester, how much stock should we put in

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Speaker 3: the progress of staff members meeting here versus the principles,

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Speaker 3: who have a lot more to gain by getting in

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Speaker 3: the news.

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Speaker 11: Well, so there's like two things that kind of have

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Speaker 11: to happen here. One is the staff needs to sit

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Speaker 11: down and sketch out exactly where the details are that

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Speaker 11: have to be negotiated. You know what accounts within that

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Speaker 11: non defense discretionary spending, veterans versus other stuff are Where

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Speaker 11: are you going to be looking to make changes? Staff

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Speaker 11: can sketch all that out and give a decision matrix

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Speaker 11: to the principles. The principles to this is the harder job, frankly,

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Speaker 11: have to go out and test the political waters about

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Speaker 11: what their coalition can sustain. So the president is doing

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Speaker 11: that right, and his staff, I think are actually probably

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Speaker 11: doing the line share of it at the White House

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Speaker 11: are going out and pulsing Democrats and their supporters how

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Speaker 11: far can we go here? What's what's plausible? And they're

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Speaker 11: they're taking some soundings. Republicans are doing the same thing

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Speaker 11: inside the House and Senate. And that's that's in a

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Speaker 11: way the harder thing than those principles need to take

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Speaker 11: those soundings, match it up with what the staff has done,

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Speaker 11: and and that is you know, that's going to take

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Speaker 11: a few days, a couple of weeks probably to sort

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Speaker 11: all that out once they once they get going.

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Speaker 12: Here, which I think is going to start as soon

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Speaker 12: as Friday. So this is this does not seem like a.

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Speaker 11: Really out of bounds negotiation to me. This is this

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Speaker 11: is stuff that Washington does all the time. I think

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Speaker 11: we're on the right path.

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Speaker 3: What did you both and I'm encouraged by what I'm

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Speaker 3: hearing from you here last year? I wonder what you

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Speaker 3: both thought of the language coming out and the demeanor

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Speaker 3: coming out of that meeting last night. Juck Jumer seemed angry,

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Speaker 3: I'll just use that word. Maybe he wasn't, but he

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Speaker 3: was projecting some real frustration there. And so is Kevin

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Speaker 3: McCarthy to think that he would, you know, use the

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Speaker 3: word lies or liar in that conversation. The presidents certainly

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Speaker 3: heard that in the meeting. And just again this, this

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Speaker 3: is how he referenced that White House at least framed

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Speaker 3: cut to veterans care that would come under his bill.

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Speaker 6: Oh yeah, he brought up the veterans. It's a lie.

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Speaker 3: It's a laugh. Say it's a lie, Genie. It does

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Speaker 3: make you wonder how you move on from all of this, Yeah.

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Speaker 10: It does. And I think, you know, all of the

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Speaker 10: principles are able to sort of look beyond some of

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Speaker 10: the rhetoric that came out and it was pretty harsh,

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Speaker 10: and the President said it in his statement as well.

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Speaker 10: But the reality is is that Kevin McCarthy has got

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Speaker 10: to answer for just what Jeans Berling talked about this

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Speaker 10: non military discretionary aspect of the budget. If they're going

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Speaker 10: to cut twenty two percent and they're claiming veterans' medical care,

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Speaker 10: the largest part of that is not going to be impacted,

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Speaker 10: they have to say how that is going to happen.

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Speaker 10: And that's actually a good thing because it gets you

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Speaker 10: on a really concerted conversation about the budget. But the problem,

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Speaker 10: and I go back to this, is both sides can't

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Speaker 10: even agree what they're talking about. Republicans think they're talking

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Speaker 10: about a debt limit deal. Democrats think you're talking about

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Speaker 10: spending in budget and appropriations. So you know, you got

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Speaker 10: to agree on what you're talking about before you can

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Speaker 10: talk about specifics, and so that's where there is a rub.

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Speaker 10: But I agree with Gene, you know these details are important.

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Speaker 10: And quite frankly, Kevin McCarthy what he's able to do

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Speaker 10: with that last bill, it was impressive, but that was

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Speaker 10: the easiest thing Kevin McCarthy's going to have to do.

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Speaker 10: As it pertains to the debt ceiling of the budget,

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Speaker 10: the next part gets a lot harder for him to

437
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Speaker 10: keep this coalition together.

438
00:23:30,280 --> 00:23:33,840
Speaker 3: Is this just part of the negotiation here, Lester, Maybe

439
00:23:33,840 --> 00:23:35,720
Speaker 3: I need to toughen up a little bit. I just

440
00:23:35,720 --> 00:23:39,280
Speaker 3: can't imagine sitting in the Oval office and using language

441
00:23:39,320 --> 00:23:41,119
Speaker 3: like that and then going outside and saying the same thing.

442
00:23:41,160 --> 00:23:42,879
Speaker 3: But maybe you need one bad guy at the table.

443
00:23:42,880 --> 00:23:46,840
Speaker 3: If that's the good cop bad cop with McCarthy and McConnell.

444
00:23:47,600 --> 00:23:51,439
Speaker 11: Yeah, and we might have bad cop bad cop going on.

445
00:23:52,600 --> 00:23:55,640
Speaker 11: McCarthy and Schumer aren't actually angry, Just to be clear,

446
00:23:55,800 --> 00:24:00,880
Speaker 11: They're they're messaging their their caucuses, their coalition. They're they're

447
00:24:00,920 --> 00:24:04,120
Speaker 11: trying to refute the best talking points from the other side.

448
00:24:04,359 --> 00:24:06,520
Speaker 11: This is this is all part of the jockeying. And

449
00:24:06,560 --> 00:24:08,399
Speaker 11: then because they're going to have to go take the

450
00:24:08,480 --> 00:24:11,920
Speaker 11: deal to their to their group and get it approved,

451
00:24:12,000 --> 00:24:13,840
Speaker 11: so they need to they need to pave the ground

452
00:24:13,880 --> 00:24:14,080
Speaker 11: for that.

453
00:24:14,160 --> 00:24:16,359
Speaker 12: This is all, this is all part of this wonderful system.

454
00:24:16,440 --> 00:24:17,360
Speaker 12: I think it's terrific.

455
00:24:17,880 --> 00:24:21,000
Speaker 3: I love from Lester, Genie. Don't you want to give

456
00:24:21,080 --> 00:24:22,800
Speaker 3: Lester a hugg He's the only man who can see

457
00:24:22,840 --> 00:24:24,080
Speaker 3: across the valley right now.

458
00:24:24,440 --> 00:24:27,760
Speaker 10: Lester is be optimistic. We need Lester out there talking

459
00:24:27,760 --> 00:24:30,440
Speaker 10: about how this is a good thing. Keep it going.

460
00:24:30,840 --> 00:24:32,320
Speaker 5: It's politics everyway.

461
00:24:32,600 --> 00:24:36,200
Speaker 12: These people are earning their paychecks. Keep going. Yeah, let's go.

462
00:24:36,280 --> 00:24:38,399
Speaker 3: Well, okay, I've only got thirty seconds, though, Lester, what

463
00:24:38,440 --> 00:24:40,520
Speaker 3: would make you happy? What would keep this mood for you?

464
00:24:40,600 --> 00:24:42,160
Speaker 3: On Friday following that.

465
00:24:42,080 --> 00:24:44,320
Speaker 11: Meeting, I want I want to see a meeting that

466
00:24:44,400 --> 00:24:47,280
Speaker 11: lasts longer than an hour. I want to see another

467
00:24:47,520 --> 00:24:49,960
Speaker 11: scheduled meeting for the following week. I think be great

468
00:24:49,960 --> 00:24:52,840
Speaker 11: if the President decided to stay home and focus on this.

469
00:24:52,920 --> 00:24:54,959
Speaker 11: That would send a nice signal. He's also got this

470
00:24:55,000 --> 00:24:57,520
Speaker 11: border thing to worry about, So let's see some concrete

471
00:24:57,520 --> 00:24:59,600
Speaker 11: steps about actually getting in the same room together and

472
00:24:59,600 --> 00:25:00,560
Speaker 11: working with He.

473
00:25:00,840 --> 00:25:03,800
Speaker 3: Might want to buy travel insurance on that trip overseas.

474
00:25:04,200 --> 00:25:07,600
Speaker 3: Lester Munson Genie Shanzano a great conversation, and they're going

475
00:25:07,640 --> 00:25:10,120
Speaker 3: to stay with us. As we turned to our other

476
00:25:10,400 --> 00:25:12,960
Speaker 3: major story of the day, and that, of course, charges

477
00:25:13,000 --> 00:25:16,760
Speaker 3: filed against Congressman George Santos's being rained this hour. He's

478
00:25:16,840 --> 00:25:17,399
Speaker 3: under arrest.

479
00:25:18,480 --> 00:25:22,000
Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us

480
00:25:22,040 --> 00:25:25,159
Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the

481
00:25:25,280 --> 00:25:27,800
Speaker 1: iHeartRadio app, and the Bloomberg Business app.

482
00:25:27,840 --> 00:25:30,320
Speaker 2: Or listen on demand wherever you get your podcast.

483
00:25:31,480 --> 00:25:33,880
Speaker 3: Back to where we started the hour with the arrest

484
00:25:34,359 --> 00:25:38,320
Speaker 3: of Congressman George Santos. Pretty remarkable moment here is he's

485
00:25:38,400 --> 00:25:45,120
Speaker 3: charged by US prosecutors with fraud, theft, money laundering following

486
00:25:45,160 --> 00:25:49,520
Speaker 3: a five month investigation I began shortly after his election

487
00:25:49,600 --> 00:25:51,960
Speaker 3: in November, when he was still talking a pretty tough game,

488
00:25:52,000 --> 00:25:52,679
Speaker 3: not unlike now.

489
00:25:52,840 --> 00:25:56,360
Speaker 13: I'm not resigning. I have to leave Congress guy, it's

490
00:25:56,400 --> 00:25:59,160
Speaker 13: going to be by a pink slip by the voters

491
00:25:59,200 --> 00:26:00,680
Speaker 13: November twenty four.

492
00:26:00,720 --> 00:26:04,359
Speaker 3: And it might still end up that way. Let's reassemble

493
00:26:04,359 --> 00:26:05,920
Speaker 3: the panel for their take on all of this. He's

494
00:26:06,000 --> 00:26:08,320
Speaker 3: being a reign right now, and we get to talk

495
00:26:08,359 --> 00:26:12,760
Speaker 3: about it with Genie Shanzeno, Bloomberg Politics contributor, Democratic analyst,

496
00:26:12,800 --> 00:26:17,760
Speaker 3: and Lester Munson, Republican strategist partner at BGR Group. This

497
00:26:17,800 --> 00:26:21,160
Speaker 3: one hits close to home for you, literally, Genie, does

498
00:26:21,200 --> 00:26:25,119
Speaker 3: it change anything about his at least near term political future,

499
00:26:25,320 --> 00:26:26,800
Speaker 3: the term that he is now serving.

500
00:26:28,000 --> 00:26:30,679
Speaker 10: You know, he is right. You know, voters are the

501
00:26:30,800 --> 00:26:33,240
Speaker 10: main way in which we overturn the House. There is

502
00:26:33,280 --> 00:26:36,000
Speaker 10: a chance they could have a vote two thirds to

503
00:26:36,080 --> 00:26:38,440
Speaker 10: expel him, but of course, when you've got Kevin McCarthy

504
00:26:38,480 --> 00:26:41,560
Speaker 10: and other Republican leaders not willing to take that step,

505
00:26:41,880 --> 00:26:44,600
Speaker 10: he would remain in. And we have quite frankly seen

506
00:26:44,720 --> 00:26:48,160
Speaker 10: other members serve under indictment. Some of them come through

507
00:26:48,200 --> 00:26:52,560
Speaker 10: it fine, like Menendez. Others, you know, eventually get expelled,

508
00:26:52,640 --> 00:26:56,160
Speaker 10: particularly if they are convicted. So you know, in that sense,

509
00:26:56,160 --> 00:26:57,960
Speaker 10: it's a wait and see, But you know, I would

510
00:26:58,040 --> 00:27:00,520
Speaker 10: just tell you because I live in New York that

511
00:27:00,600 --> 00:27:04,199
Speaker 10: you have a very very rightly so frustrated group of

512
00:27:04,320 --> 00:27:07,119
Speaker 10: voters in his district and they are calling in no

513
00:27:07,280 --> 00:27:11,000
Speaker 10: uncertain terms for Kevin McCarthy to show him the door.

514
00:27:11,359 --> 00:27:13,520
Speaker 10: They are saying they have been left now for four

515
00:27:13,560 --> 00:27:18,199
Speaker 10: months without meaningful representation. There's a pretty organized group of

516
00:27:18,200 --> 00:27:22,320
Speaker 10: Republicans and Democrats, but Republicans paramount in there saying in

517
00:27:22,359 --> 00:27:25,320
Speaker 10: the New York third district, we are not being represented.

518
00:27:25,560 --> 00:27:27,800
Speaker 10: We don't care how tight the margin in the House is.

519
00:27:28,000 --> 00:27:30,879
Speaker 10: Get him out so we can have proper representation. And

520
00:27:30,920 --> 00:27:33,919
Speaker 10: we've heard other Republicans and Democrats come out from New

521
00:27:33,960 --> 00:27:37,439
Speaker 10: York and elswhere call for his expulsion. So I'm not

522
00:27:37,600 --> 00:27:40,560
Speaker 10: saying it's imminent, certainly, but there is a possibility it

523
00:27:40,600 --> 00:27:43,840
Speaker 10: does mount this pressure and eventually they act lester.

524
00:27:43,880 --> 00:27:45,720
Speaker 3: He was already in a lot of trouble. Is an

525
00:27:45,760 --> 00:27:50,359
Speaker 3: ethics investigation in the House. Speaker McCarthy's frequently asked about this,

526
00:27:50,440 --> 00:27:53,000
Speaker 3: along with other leaders. We heard today from at least

527
00:27:53,000 --> 00:27:55,159
Speaker 3: to Phonic Steve Sclease, they say, hey, they've got to

528
00:27:55,200 --> 00:27:57,800
Speaker 3: let the legal process unfold. He already stepped down from

529
00:27:57,800 --> 00:27:59,679
Speaker 3: his committees. What do you want us to do the

530
00:27:59,680 --> 00:28:03,640
Speaker 3: fact that the matter is, this is a mathematical equation here.

531
00:28:03,760 --> 00:28:06,639
Speaker 3: This is a math problem for Kevin McCarthy, right, And

532
00:28:06,640 --> 00:28:08,720
Speaker 3: as long as it's as tight as things are, George

533
00:28:08,720 --> 00:28:10,120
Speaker 3: Santos probably keeps his seat.

534
00:28:11,960 --> 00:28:13,640
Speaker 11: You know, I did some math of my own, Joe.

535
00:28:14,400 --> 00:28:19,480
Speaker 11: It turns out George Santos needs twenty one more counts

536
00:28:19,600 --> 00:28:23,520
Speaker 11: and then he'll have as many as Donald Trump, which

537
00:28:23,720 --> 00:28:24,840
Speaker 11: may be his goal here.

538
00:28:26,280 --> 00:28:29,680
Speaker 12: I do think it actually.

539
00:28:29,359 --> 00:28:32,720
Speaker 11: Behooves Kevin McCarthy and the Republicans to get rid of

540
00:28:32,800 --> 00:28:36,159
Speaker 11: George Santos as soon as possible. The precedent is to

541
00:28:36,240 --> 00:28:38,960
Speaker 11: wait for the conviction it is true, and that's what

542
00:28:39,320 --> 00:28:42,200
Speaker 11: Senate Democrats did with sender Menindez, which probably ended up

543
00:28:42,200 --> 00:28:44,160
Speaker 11: being the right thing to do. But in this case,

544
00:28:44,360 --> 00:28:49,760
Speaker 11: it's so obvious that Santos has these huge problems. The

545
00:28:49,880 --> 00:28:53,560
Speaker 11: longer he's around and the longer this story lingers, the

546
00:28:53,600 --> 00:28:55,960
Speaker 11: worse it is for Republicans. Yes, it makes the math

547
00:28:56,000 --> 00:28:58,200
Speaker 11: a little bit harder if you bounce them now, but

548
00:28:59,520 --> 00:29:02,080
Speaker 11: I think I'm long run, and the long runs, you know,

549
00:29:02,200 --> 00:29:06,280
Speaker 11: just another year and a few months. It's really better

550
00:29:06,320 --> 00:29:08,880
Speaker 11: for McCarthy to get rid of Santos now, so I

551
00:29:08,920 --> 00:29:11,800
Speaker 11: hope he reconsiders this delay tactic.

552
00:29:11,960 --> 00:29:13,640
Speaker 3: Remember at the State of the Union, Genie, he had

553
00:29:13,640 --> 00:29:16,200
Speaker 3: a little time towards Santos, a little time with Mitt

554
00:29:16,280 --> 00:29:19,160
Speaker 3: Romney's turned into a pretty epic back and forth. Romney

555
00:29:19,160 --> 00:29:20,920
Speaker 3: told him, you know, you have no business being here,

556
00:29:20,920 --> 00:29:24,600
Speaker 3: and this turned into a whole thing. But we actually

557
00:29:24,640 --> 00:29:26,840
Speaker 3: spoke with Mitt Romney, the Senator from Utah a little

558
00:29:26,840 --> 00:29:29,400
Speaker 3: bit earlier on today, our own Kaylee Lines will be

559
00:29:29,480 --> 00:29:31,120
Speaker 3: with us next hour, asked him his.

560
00:29:31,000 --> 00:29:33,520
Speaker 14: Thoughts on It seems that once again we've learned that

561
00:29:33,600 --> 00:29:36,680
Speaker 14: the wheels of justice grind slowly, but they grind fine,

562
00:29:37,600 --> 00:29:41,400
Speaker 14: and we'll see what happens. But clearly his misstatements and

563
00:29:41,920 --> 00:29:46,040
Speaker 14: outrageous claims are going to face a jury as well.

564
00:29:45,920 --> 00:29:48,880
Speaker 3: Not unlike what we heard from Elise Deephonic earlier today

565
00:29:49,080 --> 00:29:51,320
Speaker 3: in the House. Again part of the Republican leadership, this.

566
00:29:51,360 --> 00:29:53,920
Speaker 4: Legal process is going to play itself out. Unfortunately, this

567
00:29:53,960 --> 00:29:55,920
Speaker 4: is not the first time a member of Congress from

568
00:29:55,960 --> 00:29:58,440
Speaker 4: either party has been indicted. There are a set of rules,

569
00:29:58,480 --> 00:30:02,200
Speaker 4: and as the majority of stated he voluntarily had stepped

570
00:30:02,200 --> 00:30:03,320
Speaker 4: down from his committees.

571
00:30:03,720 --> 00:30:06,720
Speaker 3: Doesn't sound like they're talking Lester months in here, Genie,

572
00:30:06,760 --> 00:30:08,560
Speaker 3: what should the Republican response be.

573
00:30:09,160 --> 00:30:12,000
Speaker 10: The Republican response should be to do what the voters,

574
00:30:12,080 --> 00:30:14,640
Speaker 10: the Republican voters in his district want, which is to

575
00:30:14,680 --> 00:30:17,240
Speaker 10: get him out. This has been chaotic and a disaster

576
00:30:17,400 --> 00:30:20,840
Speaker 10: for them. The longer he maintains in there, quite frankly,

577
00:30:21,120 --> 00:30:23,320
Speaker 10: the better for people like Joe Biden to point to

578
00:30:23,360 --> 00:30:26,480
Speaker 10: the Republicans in the House and say, these are extremists.

579
00:30:26,520 --> 00:30:26,800
Speaker 13: Look it.

580
00:30:26,800 --> 00:30:29,600
Speaker 10: They've got a guy here, you know, filing for unemployment

581
00:30:29,600 --> 00:30:32,480
Speaker 10: benefits when he's got a job. You know, he's accused

582
00:30:32,520 --> 00:30:36,320
Speaker 10: of you know, false making multiple false statements, money laundry.

583
00:30:36,360 --> 00:30:38,560
Speaker 10: I mean, the list goes on and on, and not

584
00:30:38,680 --> 00:30:40,760
Speaker 10: to mention the lies. So they should get him out.

585
00:30:41,000 --> 00:30:43,160
Speaker 10: I'm not sure they will. I, you know, was a

586
00:30:43,160 --> 00:30:45,800
Speaker 10: little bit surprised, quite frankly, by Romney because I thought

587
00:30:45,800 --> 00:30:49,640
Speaker 10: his statement about Donald Trump's legal woes yesterday was right on.

588
00:30:50,080 --> 00:30:52,680
Speaker 10: I thought maybe he would say the same about George Santos,

589
00:30:52,680 --> 00:30:54,880
Speaker 10: and I was a bit surprised he didn't say get

590
00:30:54,960 --> 00:30:55,600
Speaker 10: him out now.

591
00:30:55,880 --> 00:31:00,640
Speaker 3: Mm hmm. This is a far cry from campaign finances violations,

592
00:31:00,640 --> 00:31:03,760
Speaker 3: which a lot of us expected last evening Lester. What

593
00:31:03,840 --> 00:31:06,000
Speaker 3: about the nature of the charges? Does this change the

594
00:31:06,000 --> 00:31:06,760
Speaker 3: way you look at it?

595
00:31:08,200 --> 00:31:10,840
Speaker 11: Yeah, it's well, I think it's worse, worse than I thought,

596
00:31:10,880 --> 00:31:13,640
Speaker 11: although it's not totally surprising, right, This guy's a fabulous

597
00:31:13,840 --> 00:31:16,840
Speaker 11: He appears to have just made up things out of

598
00:31:16,880 --> 00:31:18,640
Speaker 11: whole cloth or any of us.

599
00:31:18,560 --> 00:31:19,560
Speaker 12: Surprise that he's being.

600
00:31:20,840 --> 00:31:22,080
Speaker 11: By the way, I think one of the things he

601
00:31:22,200 --> 00:31:25,000
Speaker 11: was not charged with was was ripping off the go

602
00:31:25,200 --> 00:31:31,040
Speaker 11: fund me account for the for the dog, you know something. Yeah,

603
00:31:32,600 --> 00:31:35,400
Speaker 11: maybe so maybe there will be more charges against Santils

604
00:31:35,400 --> 00:31:37,080
Speaker 11: and you can say that he has almost as many

605
00:31:37,120 --> 00:31:37,800
Speaker 11: as Donald Trump.

606
00:31:38,680 --> 00:31:40,560
Speaker 12: I I don't think.

607
00:31:40,720 --> 00:31:43,960
Speaker 11: I can't imagine who is defending this gentleman at this

608
00:31:44,000 --> 00:31:48,840
Speaker 11: point except for himself and maybe blood relatives. He really

609
00:31:48,880 --> 00:31:50,160
Speaker 11: should go as soon as possible.

610
00:31:50,960 --> 00:31:53,600
Speaker 3: Great use of the word fabulous. By the way, that's

611
00:31:53,680 --> 00:31:56,000
Speaker 3: gonna just thinks it'll be in my head all it'll

612
00:31:56,000 --> 00:31:58,520
Speaker 3: just start coming out naturally, Genie. That's exactly what he is,

613
00:31:58,520 --> 00:31:59,480
Speaker 3: isn't it.

614
00:31:59,480 --> 00:32:02,520
Speaker 10: It is? And you know, to a rate that is stunning.

615
00:32:02,600 --> 00:32:04,800
Speaker 10: Even in a town where you do see a lot

616
00:32:04,840 --> 00:32:08,560
Speaker 10: of you know, overstatements and exaggeration, this has been stunning.

617
00:32:08,840 --> 00:32:12,239
Speaker 10: And let's not forget. The Feds don't file charges like this,

618
00:32:12,400 --> 00:32:15,040
Speaker 10: and he may be facing more. They don't file him

619
00:32:15,200 --> 00:32:18,200
Speaker 10: to lose. He is going to be brought down. And

620
00:32:18,280 --> 00:32:22,160
Speaker 10: this is somebody who was spending lavishly with money that

621
00:32:22,240 --> 00:32:25,600
Speaker 10: he got for his campaign. This is somebody who was

622
00:32:25,680 --> 00:32:28,520
Speaker 10: making false statements. This is you know, the list is so.

623
00:32:29,520 --> 00:32:32,880
Speaker 3: Spending lavishly in one hundred and ninety nine dollars increments. Hey,

624
00:32:32,880 --> 00:32:35,080
Speaker 3: do either of you think that he will not finish

625
00:32:35,160 --> 00:32:35,440
Speaker 3: his term?

626
00:32:35,520 --> 00:32:35,720
Speaker 12: Lester?

627
00:32:35,800 --> 00:32:37,200
Speaker 3: Does he finish this term?

628
00:32:37,720 --> 00:32:38,000
Speaker 15: I don't.

629
00:32:38,080 --> 00:32:39,840
Speaker 12: I don't see how he does. Okay, what do you

630
00:32:40,000 --> 00:32:41,840
Speaker 12: think think has gone well? Before the end?

631
00:32:42,440 --> 00:32:44,440
Speaker 10: I think he's going to be gone. Kathy Hokeel have

632
00:32:44,480 --> 00:32:46,040
Speaker 10: ten days to call a special election?

633
00:32:46,480 --> 00:32:49,240
Speaker 3: Excellent, Yes, that's right, ten days. That's what would happen.

634
00:32:49,720 --> 00:32:52,560
Speaker 3: Great conversation. Many thanks to both of you for the

635
00:32:52,640 --> 00:32:55,160
Speaker 3: humor and the insights. Genie Shanzano and Lester Months in

636
00:32:55,200 --> 00:32:58,320
Speaker 3: the conversation you won't hear anywhere else but on sound On.

637
00:32:58,480 --> 00:33:01,120
Speaker 3: I'm Joe Matthew in Washington. This is Bloomberg.

638
00:33:02,480 --> 00:33:05,840
Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch the

639
00:33:05,880 --> 00:33:09,760
Speaker 1: program live weekdays at one eastern on Bloomberg Radio, the

640
00:33:09,840 --> 00:33:13,160
Speaker 1: tune in alf Bloomberg dot Com and the Bloomberg Business app.

641
00:33:13,320 --> 00:33:16,160
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642
00:33:16,160 --> 00:33:17,400
Speaker 1: flagship New York station.

643
00:33:17,880 --> 00:33:20,680
Speaker 2: Just say Alexa play Bloomberg eleven thirty.

644
00:33:21,960 --> 00:33:24,080
Speaker 3: It's not very easy to get the President of the

645
00:33:24,160 --> 00:33:27,280
Speaker 3: United States on the phone. Have you ever tried? There

646
00:33:27,320 --> 00:33:30,040
Speaker 3: was a time when you could. All you had to

647
00:33:30,080 --> 00:33:35,480
Speaker 3: do was dial one one. That was the real number

648
00:33:35,520 --> 00:33:39,720
Speaker 3: for the White House when President Ruther BT. Hayes, Rutherford B. Hayes,

649
00:33:39,760 --> 00:33:41,800
Speaker 3: easy for me to say, had the first phone installed

650
00:33:42,200 --> 00:33:45,080
Speaker 3: in the Executive Mansion on this day in eighteen seventy seven.

651
00:33:45,240 --> 00:33:48,640
Speaker 3: I'm pretty sure it didn't ring like that dial one,

652
00:33:50,320 --> 00:33:52,240
Speaker 3: as there were not many who could call that line.

653
00:33:52,280 --> 00:33:55,120
Speaker 3: It was only connected at that time to the US

654
00:33:55,240 --> 00:33:58,920
Speaker 3: Treasury Department across the street. And it didn't work real

655
00:33:58,960 --> 00:34:01,280
Speaker 3: well either. You could only get a couple of words,

656
00:34:01,320 --> 00:34:04,560
Speaker 3: couldn't really hear the full sentences. But you could say

657
00:34:04,560 --> 00:34:08,239
Speaker 3: that Rutherford B. Hayes was ahead of his time. Just

658
00:34:08,280 --> 00:34:11,840
Speaker 3: don't ask Barack Obama when he was president in twenty twelve,

659
00:34:12,920 --> 00:34:19,360
Speaker 3: he spoke from Largo, Maryland about President's embracing innovation and

660
00:34:19,480 --> 00:34:22,320
Speaker 3: those who do not. You know, one of my predecessors,

661
00:34:23,200 --> 00:34:24,440
Speaker 3: uh Rutherveerg B.

662
00:34:24,600 --> 00:34:29,400
Speaker 16: Hayes, reportedly said about the telephone, it's a great invention,

663
00:34:30,040 --> 00:34:34,279
Speaker 16: but who would ever want to use one?

664
00:34:35,480 --> 00:34:38,520
Speaker 3: Yeah, that's why he's not on Mount Rushmore.

665
00:34:40,080 --> 00:34:44,000
Speaker 17: Because he's looking backwards, he's not looking forwards.

666
00:34:44,440 --> 00:34:49,400
Speaker 3: Good line, Good line about Mount Rushmore. The fact of

667
00:34:49,440 --> 00:34:52,320
Speaker 3: the matter is, though, as I read in the Washington

668
00:34:52,360 --> 00:34:54,960
Speaker 3: Post in an article that was written off of that

669
00:34:55,080 --> 00:34:59,440
Speaker 3: speech in twenty twelve, the quote cited by Barack Obama

670
00:35:00,600 --> 00:35:03,319
Speaker 3: does exist on the internet. But if the White House

671
00:35:03,320 --> 00:35:05,160
Speaker 3: staff had done a bit more research, they would have

672
00:35:05,200 --> 00:35:08,080
Speaker 3: found there is no evidence that Rutherford B. Hayes ever

673
00:35:08,160 --> 00:35:11,360
Speaker 3: said this. Not only that, of course, as I just

674
00:35:11,520 --> 00:35:15,040
Speaker 3: explained to you, he was very interested in new technology,

675
00:35:16,239 --> 00:35:21,040
Speaker 3: brought the first phone into the Executive Mansion Dial one

676
00:35:21,880 --> 00:35:25,960
Speaker 3: on this day in eighteen seventy seven. I'm Joe Matthew

677
00:35:25,960 --> 00:35:28,360
Speaker 3: in Washington. Kayley Lines is on the way in next

678
00:35:28,400 --> 00:35:31,319
Speaker 3: as we round the bend here and set up for

679
00:35:31,400 --> 00:35:33,480
Speaker 3: hour two and a lot to look forward to here

680
00:35:33,520 --> 00:35:36,880
Speaker 3: as we compare notes with Libby Cantrill, among others, waiting

681
00:35:36,920 --> 00:35:39,600
Speaker 3: for a deal to be struck here in Washington, hour

682
00:35:39,680 --> 00:35:42,840
Speaker 3: two of Sound On starts right now.

683
00:35:43,360 --> 00:35:46,839
Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch us

684
00:35:46,880 --> 00:35:50,000
Speaker 1: live weekdays at one Eastern on Bloomberg dot Com, the

685
00:35:50,120 --> 00:35:52,760
Speaker 1: iHeartRadio app, and the Bloomberg Business App.

686
00:35:52,719 --> 00:35:55,279
Speaker 2: Or listen on demand wherever you get your podcasts.

687
00:35:56,400 --> 00:35:59,279
Speaker 3: I'm Joe Matthew and I found Kayley Lines fresh off

688
00:36:00,080 --> 00:36:01,840
Speaker 3: a visit to Capitol Hill, where, boy, there are a

689
00:36:01,840 --> 00:36:04,120
Speaker 3: lot of questions today following the meeting last night, and

690
00:36:04,120 --> 00:36:06,680
Speaker 3: of course folks like Kaylee Lines get to press the

691
00:36:06,760 --> 00:36:10,359
Speaker 3: lawmakers to at least say something about this. And boy, Kaylee,

692
00:36:10,400 --> 00:36:12,000
Speaker 3: they must have all woken up this morning. Think what

693
00:36:12,080 --> 00:36:13,520
Speaker 3: am I going to say to Kaylee when she asked

694
00:36:13,560 --> 00:36:14,440
Speaker 3: me about the debt seiling.

695
00:36:14,920 --> 00:36:16,480
Speaker 17: Well, what they said to me, Joe, was a lot

696
00:36:16,520 --> 00:36:19,239
Speaker 17: of what they have been saying all along. Depending on

697
00:36:19,360 --> 00:36:21,160
Speaker 17: what side of the party line you were on, you

698
00:36:21,160 --> 00:36:24,600
Speaker 17: were just repeating basically the same message. I kept asking people,

699
00:36:25,280 --> 00:36:27,759
Speaker 17: are you concerned that we might not be able to

700
00:36:27,760 --> 00:36:30,759
Speaker 17: get this done by June? First? Considering it seems like

701
00:36:30,800 --> 00:36:33,120
Speaker 17: no progress was really made in that meeting at the

702
00:36:33,120 --> 00:36:37,680
Speaker 17: White House yesterday, and everybody said, yeah, we're concerned. Representative

703
00:36:37,760 --> 00:36:41,600
Speaker 17: Jerry Connolly said he's more worried about this particular debt

704
00:36:41,640 --> 00:36:44,200
Speaker 17: crisis issue than he has been when he's seen these

705
00:36:44,640 --> 00:36:47,759
Speaker 17: in the past. And yet I continually heard from Democrats

706
00:36:47,800 --> 00:36:51,160
Speaker 17: that clean debt ceiling bill, the President shouldn't negotiate, and

707
00:36:51,280 --> 00:36:53,799
Speaker 17: Republicans say the president needs to negotiate, He needs to

708
00:36:53,800 --> 00:36:56,120
Speaker 17: come to the table and stop playing hardball on this.

709
00:36:56,239 --> 00:37:00,440
Speaker 3: Essentially, here's Kaylee talking with Ben Carden, the Democratic Senator Maryland.

710
00:37:00,520 --> 00:37:02,440
Speaker 18: First of all, we shouldn't be even in this position.

711
00:37:02,560 --> 00:37:05,000
Speaker 18: So this is unlike a budget where we should be

712
00:37:05,400 --> 00:37:08,960
Speaker 18: negotiating and we'd sometimes miss deadlines. This is the full

713
00:37:09,000 --> 00:37:11,040
Speaker 18: faith and credit of the United States. This should be

714
00:37:11,040 --> 00:37:13,720
Speaker 18: off the table. We should have extended the debt ceilings

715
00:37:13,760 --> 00:37:16,080
Speaker 18: so we don't default on our debt, and we need

716
00:37:16,120 --> 00:37:18,680
Speaker 18: to get a budget done for FY twenty four. So

717
00:37:19,320 --> 00:37:21,040
Speaker 18: the course that we're following right.

718
00:37:20,960 --> 00:37:22,160
Speaker 12: Now is dangerous.

719
00:37:22,239 --> 00:37:24,799
Speaker 3: And you spoke as well with Mitt Romney. Yes, who's

720
00:37:24,840 --> 00:37:25,920
Speaker 3: singing a difference soon here.

721
00:37:26,040 --> 00:37:29,719
Speaker 14: The White House can't continue to stonewall this is too critical.

722
00:37:30,040 --> 00:37:32,280
Speaker 14: The House has passed a measure to raise the debt limit.

723
00:37:32,719 --> 00:37:35,320
Speaker 14: The White House either has to accept that or negotiate

724
00:37:35,360 --> 00:37:37,719
Speaker 14: for something they prefer but just saying we're not going

725
00:37:37,800 --> 00:37:39,840
Speaker 14: to talk, we're not going to negotiate, is really not

726
00:37:39,920 --> 00:37:42,440
Speaker 14: an option. The president actually leads the country. He has

727
00:37:42,440 --> 00:37:45,840
Speaker 14: a responsibility to keep us from going off a financial cliff,

728
00:37:46,040 --> 00:37:46,880
Speaker 14: and he's got to step in.

729
00:37:46,960 --> 00:37:48,680
Speaker 3: I'm really wondering if he makes that trip. But boy,

730
00:37:48,719 --> 00:37:52,360
Speaker 3: I'll tell you what, both parties incredibly disciplined and consistent

731
00:37:52,400 --> 00:37:52,960
Speaker 3: in messaging.

732
00:37:53,600 --> 00:37:56,080
Speaker 17: Very consistent in messaging. I mean I didn't talk to

733
00:37:56,120 --> 00:37:59,239
Speaker 17: anyone today who seems like they were strang No. And

734
00:37:59,280 --> 00:38:01,680
Speaker 17: I mean when I asked Mitt Romney, is Senator Romney

735
00:38:01,680 --> 00:38:04,640
Speaker 17: as well? If we do see the president willing to

736
00:38:04,680 --> 00:38:07,439
Speaker 17: negotiate on the budget and willing to bring spending cuts

737
00:38:07,480 --> 00:38:11,280
Speaker 17: along with it, is that enough? And his answer was basically,

738
00:38:11,480 --> 00:38:13,520
Speaker 17: I stand by McConnell on this. I'm not going to

739
00:38:13,600 --> 00:38:17,040
Speaker 17: negotiate for him. I am standing by the Senate Minority leader.

740
00:38:17,160 --> 00:38:20,080
Speaker 17: And McConnell has indicated up until this point show that

741
00:38:20,080 --> 00:38:21,800
Speaker 17: he's standing by Kevin McCarthy.

742
00:38:22,440 --> 00:38:24,560
Speaker 3: So you know, it's interesting though. At the same time, Katie,

743
00:38:24,600 --> 00:38:27,120
Speaker 3: we talked to insiders last hour. It was Lester Monthson

744
00:38:27,520 --> 00:38:30,680
Speaker 3: this hour, Libby Cantrell, who actually see glimmers of hope.

745
00:38:30,680 --> 00:38:32,960
Speaker 3: They seem to find a way to cut through this

746
00:38:33,080 --> 00:38:36,400
Speaker 3: noise and see, you know what's happening behind the curtain

747
00:38:36,400 --> 00:38:38,040
Speaker 3: here a little bit in Libby is with us right now,

748
00:38:38,040 --> 00:38:40,960
Speaker 3: Managing Director, head of Public Policy at PIMCO. And I

749
00:38:40,960 --> 00:38:43,960
Speaker 3: don't mean to misrepresent your take on this, Libby. You

750
00:38:44,000 --> 00:38:45,799
Speaker 3: tell us your thought after I read your note, though

751
00:38:45,800 --> 00:38:48,000
Speaker 3: it does seem like you see at least hope, at

752
00:38:48,080 --> 00:38:48,920
Speaker 3: least some progress.

753
00:38:49,880 --> 00:38:53,359
Speaker 19: Yeah good, yeah good, after I do see hope. You know,

754
00:38:53,400 --> 00:38:56,720
Speaker 19: I liken this in my note to passing a kidney stone,

755
00:38:57,880 --> 00:38:59,879
Speaker 19: but that feeling is like a kidney stone. We all

756
00:38:59,880 --> 00:39:01,480
Speaker 19: know it will pass. It is just a question of

757
00:39:01,520 --> 00:39:04,759
Speaker 19: how painful it will be. And I sorry for that

758
00:39:05,120 --> 00:39:09,040
Speaker 19: bi graphic image, but I think importantly we're while we

759
00:39:09,080 --> 00:39:12,440
Speaker 19: are in the painful zone right now, it will pass.

760
00:39:12,680 --> 00:39:15,160
Speaker 19: And you know, we have remained confident. We've been confident

761
00:39:15,640 --> 00:39:19,040
Speaker 19: about that since sort of the speculation has started since

762
00:39:19,080 --> 00:39:22,200
Speaker 19: since January and the speaker race, and we've remain confident.

763
00:39:22,200 --> 00:39:25,560
Speaker 19: And in fact, Joe, I'm actually more confident just given

764
00:39:26,080 --> 00:39:28,440
Speaker 19: despite what what you said about you know what folks

765
00:39:28,480 --> 00:39:30,840
Speaker 19: are saying, and I would say everyone's been you know,

766
00:39:30,960 --> 00:39:33,800
Speaker 19: very disciplined about adhering to their to their talking points.

767
00:39:34,160 --> 00:39:36,320
Speaker 19: If you actually look at the movement on the ground,

768
00:39:36,360 --> 00:39:38,960
Speaker 19: there is there is progress. And I think importantly, as

769
00:39:39,000 --> 00:39:42,200
Speaker 19: you mentioned, there's going to be a staff staff are meeting,

770
00:39:42,880 --> 00:39:46,000
Speaker 19: appropriating appropriate, Our leaders are also meeting. Those are the

771
00:39:46,040 --> 00:39:49,239
Speaker 19: folks of course who determine sort of the budget, the

772
00:39:49,680 --> 00:39:53,520
Speaker 19: budget spending limits and and and uh and targets and

773
00:39:53,520 --> 00:39:55,960
Speaker 19: what have you. And then of course the principles will

774
00:39:55,960 --> 00:39:59,000
Speaker 19: be meeting on Friday. That all from a market perspective

775
00:39:59,000 --> 00:40:02,640
Speaker 19: should be interpreted as actually your pretty good signs. And

776
00:40:02,719 --> 00:40:06,120
Speaker 19: I also think importantly the contours of a deal are

777
00:40:06,200 --> 00:40:10,280
Speaker 19: like pretty obvious. I just don't think so from getting

778
00:40:10,360 --> 00:40:13,760
Speaker 19: from here to there, it's going to be bumpy for sure,

779
00:40:14,040 --> 00:40:17,600
Speaker 19: like passing a kidney stone. But we remain confident that

780
00:40:17,640 --> 00:40:20,640
Speaker 19: we will see a resolution, and not only before June first,

781
00:40:20,640 --> 00:40:23,040
Speaker 19: which of course is I think the pretty legitimate X

782
00:40:23,120 --> 00:40:24,759
Speaker 19: date at this point is given that we've had more

783
00:40:24,840 --> 00:40:27,880
Speaker 19: data that's come in since Yell that letter that Secretary

784
00:40:27,960 --> 00:40:30,600
Speaker 19: Yellen has come as sent. But also I think May

785
00:40:30,920 --> 00:40:33,080
Speaker 19: twenty six is really the X date, because that's of

786
00:40:33,080 --> 00:40:36,200
Speaker 19: course when Congress is breaking for their memorial, their recess.

787
00:40:36,280 --> 00:40:38,600
Speaker 17: I was going to say, nobody wants the holiday ruined, right,

788
00:40:38,640 --> 00:40:40,400
Speaker 17: We're all going to be heading off to our barbecues

789
00:40:40,440 --> 00:40:43,719
Speaker 17: in summer celebrations, Libby, As you talk about how it is,

790
00:40:43,920 --> 00:40:46,320
Speaker 17: it is kind of a positive indication that the sides

791
00:40:46,400 --> 00:40:48,759
Speaker 17: are talking, that they are talking budget. It does make

792
00:40:48,800 --> 00:40:51,960
Speaker 17: me question, though, whether each side thinks they're talking about

793
00:40:52,000 --> 00:40:54,440
Speaker 17: the same thing, because hasn't the President always said he's

794
00:40:54,440 --> 00:40:56,880
Speaker 17: willing to be open to talking about the budget and

795
00:40:56,960 --> 00:40:59,640
Speaker 17: dealing with it in the appropriations process, but he still

796
00:40:59,640 --> 00:41:03,440
Speaker 17: wants a clean debt ceiling race. So I'm just right,

797
00:41:03,880 --> 00:41:05,480
Speaker 17: what really has r yes?

798
00:41:05,560 --> 00:41:07,880
Speaker 19: Right, how do you make kind of two mutually exclusive

799
00:41:07,960 --> 00:41:12,200
Speaker 19: things compatible, Because you're right, you know, the President Biden

800
00:41:12,200 --> 00:41:15,600
Speaker 19: has indicated yes, he will negotiate about spending, you know,

801
00:41:15,680 --> 00:41:18,560
Speaker 19: spending targets and spending cuts, but not in the context

802
00:41:18,560 --> 00:41:21,240
Speaker 19: of a death sealing increase. And of course that's exactly

803
00:41:21,280 --> 00:41:25,040
Speaker 19: what Speaker McCarthy wants. You know, you have seen just

804
00:41:25,120 --> 00:41:28,680
Speaker 19: over the last twelve hours Democrats being very specific how

805
00:41:28,719 --> 00:41:32,440
Speaker 19: they are starting negotiations on the budget, but they're separate

806
00:41:32,520 --> 00:41:35,160
Speaker 19: from the debt ceiling. I mean, it's sort of a

807
00:41:35,200 --> 00:41:37,480
Speaker 19: distinction without a difference, I would I would argue. And

808
00:41:37,520 --> 00:41:40,399
Speaker 19: then of course McCarthy is claiming that this is sort

809
00:41:40,440 --> 00:41:43,279
Speaker 19: of victory in terms of progress to his goal, and

810
00:41:43,320 --> 00:41:45,440
Speaker 19: I think that is that's going to be the trick here.

811
00:41:45,520 --> 00:41:50,200
Speaker 19: How can both sides characterize this as, you know, a

812
00:41:50,320 --> 00:41:53,839
Speaker 19: sort of a victory for their caucuses. And of course

813
00:41:53,840 --> 00:41:57,040
Speaker 19: I think that's clear for Speaker McCarthy if he gets concessions.

814
00:41:57,080 --> 00:41:59,520
Speaker 19: I think that we should also just put into context

815
00:41:59,520 --> 00:42:02,200
Speaker 19: these concentsis are not probably going to be dramatic spending

816
00:42:02,239 --> 00:42:04,400
Speaker 19: cuts like of course what he had proposed and passed

817
00:42:04,440 --> 00:42:06,920
Speaker 19: in the House. They're probably going to be spending casts

818
00:42:06,920 --> 00:42:10,640
Speaker 19: that will just limit the growth of spending. You might

819
00:42:10,680 --> 00:42:12,920
Speaker 19: be able to see the energy permitting get into the mix,

820
00:42:13,040 --> 00:42:15,520
Speaker 19: maybe some unused COVID funds, but it's going to be

821
00:42:15,560 --> 00:42:18,280
Speaker 19: relatively limited in terms of the winds and again, nothing

822
00:42:18,360 --> 00:42:20,200
Speaker 19: like what it was passed in the House. And then

823
00:42:20,200 --> 00:42:22,640
Speaker 19: on Democratic side, it's how can they solve this to

824
00:42:22,719 --> 00:42:27,560
Speaker 19: their caucus as adhering to that very red line that

825
00:42:27,600 --> 00:42:29,040
Speaker 19: they put out, which is that they're not going to

826
00:42:29,040 --> 00:42:31,719
Speaker 19: negotiate over the dead ceiling. That I think will be trickier.

827
00:42:32,160 --> 00:42:34,960
Speaker 19: But again, I think honestly all push comes to shoves.

828
00:42:35,000 --> 00:42:37,520
Speaker 19: There is a contour of a deal here. It's just

829
00:42:37,560 --> 00:42:39,360
Speaker 19: a question of kind of getting there, and then, to

830
00:42:39,400 --> 00:42:42,120
Speaker 19: your a very important point, selling it to enough of

831
00:42:42,160 --> 00:42:44,759
Speaker 19: your caucus that you can get two hundred and eighteen votes.

832
00:42:44,760 --> 00:42:46,680
Speaker 19: I think the Senate, I'm a little bit less worried about,

833
00:42:46,960 --> 00:42:49,560
Speaker 19: is really getting to that key to eighteen. I think

834
00:42:49,600 --> 00:42:51,960
Speaker 19: what you probably get is there a factionalized group of

835
00:42:51,960 --> 00:42:55,440
Speaker 19: Democrats and a factionized group of Republicans ultimately voting for this,

836
00:42:55,640 --> 00:42:58,080
Speaker 19: but you know, the folks on the extremes progressive and

837
00:42:58,160 --> 00:42:59,680
Speaker 19: more conservatives voting against it.

838
00:43:00,000 --> 00:43:02,200
Speaker 3: I do wonder what that will mean for Kevin McCarthy's

839
00:43:02,239 --> 00:43:05,120
Speaker 3: tenure as Speaker. But you're fading a couple of ideas here.

840
00:43:05,120 --> 00:43:07,960
Speaker 3: This is important, Libby number one. A short term deal,

841
00:43:07,960 --> 00:43:10,040
Speaker 3: and we heard from both sides on this apparently off

842
00:43:10,120 --> 00:43:12,000
Speaker 3: the table, even though the President said he might still

843
00:43:12,040 --> 00:43:14,200
Speaker 3: be open to it later on. But to your point,

844
00:43:14,320 --> 00:43:16,839
Speaker 3: getting one vote on a debt limit is hard enough,

845
00:43:16,880 --> 00:43:19,400
Speaker 3: getting two might be a bridge too far. Then we

846
00:43:19,480 --> 00:43:22,279
Speaker 3: turn to things like the trillion dollar coin or the

847
00:43:22,280 --> 00:43:26,560
Speaker 3: fourteenth Amendment, and the President actually entertained these ideas in

848
00:43:26,640 --> 00:43:29,080
Speaker 3: his news conference last evening. Listen, I have.

849
00:43:29,160 --> 00:43:32,360
Speaker 9: Been considering the fourteenth Amendments, and a man I have

850
00:43:32,480 --> 00:43:35,200
Speaker 9: enormous respect for Larry Tribe, who advised me for a

851
00:43:35,239 --> 00:43:38,799
Speaker 9: long time, thinks said it would be legitimate. But the

852
00:43:38,840 --> 00:43:42,000
Speaker 9: problem is it would have to be litigated and in

853
00:43:42,040 --> 00:43:45,040
Speaker 9: the meantime without an extension, it would still end up

854
00:43:45,040 --> 00:43:45,800
Speaker 9: in the same place.

855
00:43:46,000 --> 00:43:48,560
Speaker 3: So therefore not I'm not sure why he went there, Libby,

856
00:43:48,880 --> 00:43:51,879
Speaker 3: And I'm wondering, is the audience, the rating agencies? Does

857
00:43:51,920 --> 00:43:53,759
Speaker 3: he want S and P and Fitch to know that, Look,

858
00:43:53,800 --> 00:43:55,480
Speaker 3: there are tools here. I don't want to use them,

859
00:43:55,480 --> 00:43:56,360
Speaker 3: but I will if I have to.

860
00:43:57,520 --> 00:43:59,759
Speaker 19: Yeah, I mean that could be part of it. Part

861
00:43:59,800 --> 00:44:01,360
Speaker 19: of it I think could also be just you know,

862
00:44:01,440 --> 00:44:03,960
Speaker 19: reinforcing that he has maybe a bit more leverage here

863
00:44:04,040 --> 00:44:06,520
Speaker 19: than what Republicans think, you know. As I as I

864
00:44:06,560 --> 00:44:08,359
Speaker 19: wrote in my note today, I think it's actually much

865
00:44:08,360 --> 00:44:10,640
Speaker 19: more likely if push were to come show, if we

866
00:44:10,719 --> 00:44:13,680
Speaker 19: really were to get to the eleventh hour without any

867
00:44:13,719 --> 00:44:17,040
Speaker 19: sort of you know, resolution, that a discharge petition, which

868
00:44:17,080 --> 00:44:19,399
Speaker 19: is kind of another gimmicky tool, as we've talked about,

869
00:44:19,640 --> 00:44:22,160
Speaker 19: difficult to use. What have you that seems more likely

870
00:44:22,239 --> 00:44:25,160
Speaker 19: than either the invoking the fourteenth Amendment, which is President

871
00:44:25,160 --> 00:44:28,080
Speaker 19: Biden's point out, has a lot of legal vegaries and

872
00:44:28,120 --> 00:44:31,120
Speaker 19: would be litigated, and we honestly just cause a lot

873
00:44:31,160 --> 00:44:35,200
Speaker 19: of uproar in the markets. And I think, and I

874
00:44:35,200 --> 00:44:37,480
Speaker 19: should just interject here, I'm actually out in California for

875
00:44:37,560 --> 00:44:41,279
Speaker 19: our annual secular conference that PIMG has every year, where

876
00:44:41,280 --> 00:44:43,799
Speaker 19: we talk about longer term trends three to five years

877
00:44:43,840 --> 00:44:46,520
Speaker 19: and sort of de dollarization has been a big theme

878
00:44:47,480 --> 00:44:49,680
Speaker 19: and kind of where that, you know, will the US

879
00:44:49,719 --> 00:44:52,240
Speaker 19: retain the reserve currency. I do think it's like gimmicks

880
00:44:52,320 --> 00:44:55,520
Speaker 19: like the trillion dollar coin or the fourteenth Amendment invoked

881
00:44:55,680 --> 00:44:59,360
Speaker 19: that would really kind of call into question, you potentially

882
00:44:59,719 --> 00:45:02,760
Speaker 19: the very sort of super secular future of the reserve

883
00:45:02,800 --> 00:45:05,000
Speaker 19: currency status. So I just think he's going to be

884
00:45:05,000 --> 00:45:06,480
Speaker 19: loath to do it, and that's why I don't think

885
00:45:06,480 --> 00:45:08,400
Speaker 19: he will do it. And again, you know, we just

886
00:45:08,440 --> 00:45:11,239
Speaker 19: come back to the most practical outcome, which is likely

887
00:45:11,320 --> 00:45:13,640
Speaker 19: some sort of compromise on those uds.

888
00:45:13,600 --> 00:45:15,840
Speaker 17: Which that kind of brings me as we talk about

889
00:45:16,000 --> 00:45:18,279
Speaker 17: the dollar in whether or not it remains dominant to

890
00:45:18,440 --> 00:45:21,520
Speaker 17: just kind of how the markets factor into all of this, Libby,

891
00:45:21,520 --> 00:45:24,040
Speaker 17: in your base case, are you assuming that the market

892
00:45:24,080 --> 00:45:26,920
Speaker 17: starts panicking more and that ultimately is what puts pressure

893
00:45:27,920 --> 00:45:32,280
Speaker 17: into having a compromise, makes everybody come to the table

894
00:45:32,280 --> 00:45:34,200
Speaker 17: and make a deal because the markets are freaking out.

895
00:45:35,680 --> 00:45:37,480
Speaker 19: Yeah, so I do think it's important, of course to

896
00:45:38,040 --> 00:45:40,640
Speaker 19: distinguish which markets we're talking about, and of course we

897
00:45:40,680 --> 00:45:43,960
Speaker 19: are investors in the fixed income market primarily, so that

898
00:45:44,040 --> 00:45:45,919
Speaker 19: market has already kind of freaked out.

899
00:45:46,280 --> 00:45:48,320
Speaker 17: Yeah, you're definitely seeing it in those T bill you's.

900
00:45:48,200 --> 00:45:50,560
Speaker 19: See the technical expression exactly. And we talked about this before,

901
00:45:50,640 --> 00:45:53,120
Speaker 19: just in terms of the risk of version around you know,

902
00:45:53,120 --> 00:45:55,680
Speaker 19: the T bills that are expiring around the X state.

903
00:45:55,719 --> 00:45:57,799
Speaker 19: Of course, that was really moved up when we got

904
00:45:57,800 --> 00:46:01,400
Speaker 19: Secretary Yellen's letter and you saw the market react in kind.

905
00:46:01,400 --> 00:46:04,840
Speaker 19: So there is already, I think importantly, a dislocation in

906
00:46:04,880 --> 00:46:07,480
Speaker 19: that market, and of course what Treasury is doing in

907
00:46:07,600 --> 00:46:09,880
Speaker 19: terms of issuance and what have you. So this is

908
00:46:09,920 --> 00:46:13,200
Speaker 19: already in fourman kind of market behavior on the equity side,

909
00:46:13,200 --> 00:46:14,839
Speaker 19: which I know is what kind of everybody is there

910
00:46:14,920 --> 00:46:18,080
Speaker 19: focused on. Even though the fixed income market's bigger the

911
00:46:18,120 --> 00:46:20,359
Speaker 19: equity side, it has it. I mean, you've seen kind

912
00:46:20,360 --> 00:46:24,360
Speaker 19: of some some wobbliness for kind of other reasons, and

913
00:46:24,719 --> 00:46:26,600
Speaker 19: you know all these headlines. It kind of does trade

914
00:46:26,640 --> 00:46:29,239
Speaker 19: a bit. I do think some members of Congress on

915
00:46:29,320 --> 00:46:32,080
Speaker 19: both sides are hoping that you see some you know,

916
00:46:32,120 --> 00:46:34,600
Speaker 19: a bigger draw down in the equity markets. That would

917
00:46:34,600 --> 00:46:36,719
Speaker 19: be a forcing mechanism. And we may see that. And

918
00:46:36,760 --> 00:46:38,880
Speaker 19: we think we've talked about this before as well, just

919
00:46:38,920 --> 00:46:43,479
Speaker 19: in terms of historical debt sealing negotiations. Usually you don't

920
00:46:43,480 --> 00:46:46,880
Speaker 19: see the equity market really start to react until we

921
00:46:46,960 --> 00:46:48,960
Speaker 19: get closer to the X site. We're right around there.

922
00:46:49,000 --> 00:46:51,520
Speaker 19: It's about kind of two to three weeks before the

923
00:46:51,640 --> 00:46:53,840
Speaker 19: X state. That's when you start seeing some weakness in

924
00:46:53,880 --> 00:46:55,880
Speaker 19: the equity market. I do think there's a little bit

925
00:46:55,880 --> 00:46:58,600
Speaker 19: of a sanguineness. People think they've started seen this movie before.

926
00:46:58,800 --> 00:47:00,600
Speaker 19: We kind of know how this is going resolve. But

927
00:47:00,600 --> 00:47:02,600
Speaker 19: I do think if we get into that seven day

928
00:47:02,600 --> 00:47:05,319
Speaker 19: period without a resolution, you will start seeing kind of

929
00:47:05,320 --> 00:47:07,640
Speaker 19: a freak out, to use a technical expression.

930
00:47:08,440 --> 00:47:10,719
Speaker 3: So the real X date for congresss you write then

931
00:47:10,800 --> 00:47:13,040
Speaker 3: is May twenty six, And it's helpful for our listeners,

932
00:47:13,040 --> 00:47:16,239
Speaker 3: of course, many whom are invested to know what and

933
00:47:16,280 --> 00:47:19,400
Speaker 3: when they should be looking for this so far, Wall Street,

934
00:47:20,280 --> 00:47:23,120
Speaker 3: in many ways, to your point, is still of the

935
00:47:23,160 --> 00:47:26,120
Speaker 3: mind that they'll get this done call me back when

936
00:47:26,160 --> 00:47:29,160
Speaker 3: it matters. And you're saying that'd be next Friday or

937
00:47:29,200 --> 00:47:32,839
Speaker 3: two fridays away, the twenty sixth, that's right.

938
00:47:32,880 --> 00:47:34,960
Speaker 19: And of course, as you know Joe very well, in

939
00:47:35,040 --> 00:47:37,960
Speaker 19: terms of just congressional process, and they really do need

940
00:47:37,960 --> 00:47:40,920
Speaker 19: to reach a resolution before that because they're just the

941
00:47:40,960 --> 00:47:43,040
Speaker 19: Senate and all the procedural rules of what have you,

942
00:47:43,200 --> 00:47:46,040
Speaker 19: those things can be waived and expedited if there is

943
00:47:46,480 --> 00:47:48,319
Speaker 19: a deal. So I don't think we should focus on

944
00:47:48,400 --> 00:47:51,120
Speaker 19: process being the real inhibitor here. It really is coming

945
00:47:51,200 --> 00:47:53,520
Speaker 19: to a compromise. It really is sort of that two

946
00:47:53,520 --> 00:47:55,200
Speaker 19: week period, and I would say that kind of that

947
00:47:55,320 --> 00:47:59,040
Speaker 19: Monday before the Memorial Day weekend, you know, we should

948
00:47:59,080 --> 00:48:01,000
Speaker 19: start seeing quite a bit of traction, and if we

949
00:48:01,080 --> 00:48:03,200
Speaker 19: have it by then, then, you know, I do think

950
00:48:03,239 --> 00:48:05,759
Speaker 19: the markets will will start sort of internalizing that and

951
00:48:06,239 --> 00:48:08,959
Speaker 19: ingesting it accordingly. And then of course, as you guys

952
00:48:08,960 --> 00:48:11,960
Speaker 19: both bring up the radio agencies, you know, Fitch has

953
00:48:12,000 --> 00:48:14,359
Speaker 19: really been the only one I believe that has been

954
00:48:14,440 --> 00:48:18,239
Speaker 19: quite outspoken on this just in terms of putting the

955
00:48:18,480 --> 00:48:21,799
Speaker 19: credit rating on watch. If there were, you know, kind

956
00:48:21,800 --> 00:48:25,239
Speaker 19: of days before the X state, I would be I

957
00:48:25,239 --> 00:48:28,120
Speaker 19: would not be surprised for us to see additional kind

958
00:48:28,120 --> 00:48:30,880
Speaker 19: of credit rating agency statements on this in terms of

959
00:48:30,880 --> 00:48:32,719
Speaker 19: what their plan would be, and that could also be

960
00:48:32,719 --> 00:48:34,000
Speaker 19: a for forcing mechanism.

961
00:48:34,640 --> 00:48:38,439
Speaker 17: Libby. As we're speaking here, the minority leader in the Senate,

962
00:48:38,480 --> 00:48:40,799
Speaker 17: Mitch McConnell, is speaking to reporters and he says that

963
00:48:40,840 --> 00:48:45,480
Speaker 17: there will be eventual agreement on debt limit. Eventually, I

964
00:48:45,480 --> 00:48:48,279
Speaker 17: guess is the operative word there, Lebby just quickly as well,

965
00:48:48,320 --> 00:48:50,680
Speaker 17: because we have, of course, as Joe was talking about

966
00:48:50,680 --> 00:48:52,640
Speaker 17: at the beginning of this hour, a lot of different

967
00:48:52,640 --> 00:48:54,600
Speaker 17: stories to keep track of today, one of them being

968
00:48:54,640 --> 00:48:58,640
Speaker 17: the indictment on thirteen counts of Republican Congressman George Santos.

969
00:48:58,680 --> 00:49:00,879
Speaker 17: He is now in federal custody up in New York

970
00:49:01,160 --> 00:49:04,040
Speaker 17: and as we know, he was a critical vote for

971
00:49:04,239 --> 00:49:08,120
Speaker 17: Kevin McCarthy to even get the speakership. Depending on his

972
00:49:08,239 --> 00:49:11,239
Speaker 17: fate that changes the vote count. How do you kind

973
00:49:11,280 --> 00:49:14,200
Speaker 17: of factor that into all of this political victory all

974
00:49:14,280 --> 00:49:14,680
Speaker 17: going on?

975
00:49:15,600 --> 00:49:19,600
Speaker 19: Yeah, I mean good, it's a good point. Now he

976
00:49:20,160 --> 00:49:22,680
Speaker 19: I think what Speaker McCarthy has said is unless he's convicted,

977
00:49:22,800 --> 00:49:24,880
Speaker 19: that's when he would sort of call on him to resign,

978
00:49:24,960 --> 00:49:26,960
Speaker 19: and so I think, sort of short of that, he

979
00:49:27,000 --> 00:49:29,480
Speaker 19: will likely stay in office, although you know who knows.

980
00:49:30,280 --> 00:49:32,600
Speaker 19: I do think Republicans are very much aware that, of

981
00:49:32,640 --> 00:49:36,680
Speaker 19: course George Santo's comes from a very purplish district, one

982
00:49:36,680 --> 00:49:39,520
Speaker 19: that was held by Democrats before, and that could very

983
00:49:39,600 --> 00:49:43,399
Speaker 19: much flip into Democratic control and thereby they would lose

984
00:49:43,440 --> 00:49:45,160
Speaker 19: a critical vote. So I think he's going to be

985
00:49:45,280 --> 00:49:48,560
Speaker 19: very That's why he's been very careful, honestly about calling

986
00:49:48,600 --> 00:49:50,759
Speaker 19: for his resignation, and I think he will continue to

987
00:49:50,800 --> 00:49:53,399
Speaker 19: be but once if he were to get convicted, if,

988
00:49:53,480 --> 00:49:57,720
Speaker 19: of course, then I think that the calculus probably probably changes,

989
00:49:57,760 --> 00:49:59,719
Speaker 19: sort of to the chagrin of Speaker McCarthy, because of

990
00:49:59,760 --> 00:50:02,400
Speaker 19: course the majority is just so narrow in the House.

991
00:50:02,640 --> 00:50:03,400
Speaker 15: God knows.

992
00:50:03,760 --> 00:50:06,560
Speaker 3: This has been quite the clinic with Libby Cantrill. Libby,

993
00:50:06,600 --> 00:50:08,279
Speaker 3: thank you so much. We always look forward to the

994
00:50:08,280 --> 00:50:11,600
Speaker 3: conversation and appreciate your insights. Managing Director, head of Public

995
00:50:11,640 --> 00:50:14,160
Speaker 3: Policy at Pimkel. Those notes we always look for Kayley

996
00:50:14,239 --> 00:50:17,279
Speaker 3: because they seem to just land right where they need

997
00:50:17,360 --> 00:50:18,240
Speaker 3: you here in Washington.

998
00:50:18,680 --> 00:50:21,440
Speaker 17: Well, and especially for our Bloomberg audience, because Libby is

999
00:50:21,480 --> 00:50:25,160
Speaker 17: so good at kind of helping toe the line between

1000
00:50:25,160 --> 00:50:27,520
Speaker 17: what markets care about and ultimately what the policy is.

1001
00:50:27,560 --> 00:50:29,239
Speaker 17: And we know, as she was just talking about, the

1002
00:50:29,239 --> 00:50:31,840
Speaker 17: bond market is very much paying attention to this already.

1003
00:50:31,840 --> 00:50:33,960
Speaker 17: Whether the equity market wakes up to this rists and

1004
00:50:34,000 --> 00:50:37,239
Speaker 17: put some more pressure on policymakers, We're all still waiting

1005
00:50:37,280 --> 00:50:37,560
Speaker 17: for that.

1006
00:50:37,520 --> 00:50:40,320
Speaker 3: Shoe the truth from Donald Trump. I have no idea

1007
00:50:40,320 --> 00:50:43,000
Speaker 3: who this woman is, who made a false and totally

1008
00:50:43,040 --> 00:50:46,680
Speaker 3: fabricated accusation. Hopefully justice will be served on appeal. We're

1009
00:50:46,680 --> 00:50:49,399
Speaker 3: going to talk next with Dave Ehrenberg, the Palm Beach

1010
00:50:49,440 --> 00:50:52,600
Speaker 3: County State Attorney. Here on sound on, This is Bloomberg.

1011
00:50:54,120 --> 00:50:57,480
Speaker 3: You're listening to the Bloomberg Sound On podcast. Catch the

1012
00:50:57,520 --> 00:51:00,279
Speaker 3: program live weekdays at one Eastern on.

1013
00:51:00,280 --> 00:51:03,640
Speaker 1: Bloomberg Radio, the Tune in a Half, Bloomberg dot Com.

1014
00:51:03,320 --> 00:51:04,799
Speaker 2: And the Bloomberg Business App.

1015
00:51:04,920 --> 00:51:07,799
Speaker 1: You can also listen live on Amazon Alexa from our

1016
00:51:07,800 --> 00:51:10,440
Speaker 1: flagship New York station, Just Say Alexa.

1017
00:51:10,640 --> 00:51:12,560
Speaker 2: Play Bloomberg eleven thirty.

1018
00:51:13,480 --> 00:51:17,759
Speaker 3: Live from Washington with breaking news from New York and

1019
00:51:17,840 --> 00:51:21,800
Speaker 3: it's legal news. Of course, we're talking about George Santos, Kaylee,

1020
00:51:21,920 --> 00:51:25,040
Speaker 3: the congressman was arrested and of course, as we discussed earlier,

1021
00:51:25,120 --> 00:51:28,000
Speaker 3: charged with a lot more than what we expected here

1022
00:51:28,000 --> 00:51:31,480
Speaker 3: in is fraud, money laundering, theft. And now we've got

1023
00:51:31,520 --> 00:51:31,799
Speaker 3: a plea.

1024
00:51:32,160 --> 00:51:35,840
Speaker 17: Yeah, thirteen counts in total, and Congressman Santos pleaded not

1025
00:51:35,960 --> 00:51:39,800
Speaker 17: guilty to all thirteen of those federal charges he is facing.

1026
00:51:39,840 --> 00:51:42,160
Speaker 17: And he was just released on a five hundred thousand

1027
00:51:42,200 --> 00:51:46,640
Speaker 17: dollars bond after his arraignment, So he's going with innocence

1028
00:51:46,800 --> 00:51:49,280
Speaker 17: as the argument here, Joe. But of course this raises

1029
00:51:49,360 --> 00:51:53,520
Speaker 17: serious questions about the outcome of this case, whether ultimately

1030
00:51:53,560 --> 00:51:55,400
Speaker 17: he will be found guilty or not, and what that

1031
00:51:55,440 --> 00:51:56,920
Speaker 17: means for whether or not he is still going to

1032
00:51:56,960 --> 00:51:59,360
Speaker 17: be a sitting, voting member of the House of Representative.

1033
00:51:58,880 --> 00:52:01,680
Speaker 3: Coolutely on a half a minute billion dollar bond. This

1034
00:52:01,719 --> 00:52:04,560
Speaker 3: is incredible and it's something that we have to ask

1035
00:52:04,640 --> 00:52:06,960
Speaker 3: Dave Ehrenberg about. We actually had reached out to the

1036
00:52:06,960 --> 00:52:09,880
Speaker 3: Palm Beach County State Attorney to talk about Donald Trump,

1037
00:52:09,920 --> 00:52:11,680
Speaker 3: and we want to do that because that is a

1038
00:52:11,800 --> 00:52:14,799
Speaker 3: huge deal as well, which we discussed late yesterday this

1039
00:52:14,880 --> 00:52:18,640
Speaker 3: grand jury finding him liable of sexual assaults and defamation

1040
00:52:18,880 --> 00:52:22,080
Speaker 3: in the Egen Carol case. David, it's great to have

1041
00:52:22,160 --> 00:52:24,399
Speaker 3: you here. We thank you for joining us. I wonder

1042
00:52:24,480 --> 00:52:26,920
Speaker 3: your thoughts though on this George Santos case, just the

1043
00:52:27,040 --> 00:52:29,600
Speaker 3: nature of the case here. He is released on five

1044
00:52:29,680 --> 00:52:32,400
Speaker 3: hundred thousand dollars bond. Does he show up for work tomorrow?

1045
00:52:33,440 --> 00:52:35,840
Speaker 13: Yeah, He's going to pretend like nothing's happened, just like

1046
00:52:35,880 --> 00:52:39,000
Speaker 13: he does every days. His whole career is built on

1047
00:52:39,040 --> 00:52:43,440
Speaker 13: a house of cards. He is a fabulous, a liar,

1048
00:52:43,480 --> 00:52:45,920
Speaker 13: whatever you want to call him. And I think he

1049
00:52:45,960 --> 00:52:48,160
Speaker 13: needs to settle. He needs to take a plea as

1050
00:52:48,160 --> 00:52:51,080
Speaker 13: soon as he can, because in my world of prosecution,

1051
00:52:51,560 --> 00:52:53,319
Speaker 13: the first in is the first to win. You want

1052
00:52:53,360 --> 00:52:55,400
Speaker 13: to get an early deal, those are the best deals.

1053
00:52:55,800 --> 00:52:58,680
Speaker 13: I suspect he'll try to use his position in Congress

1054
00:52:58,680 --> 00:53:00,560
Speaker 13: to try to have a little leverage to say, hey,

1055
00:53:00,960 --> 00:53:03,359
Speaker 13: I will resign if you cut me a good deal.

1056
00:53:04,080 --> 00:53:07,800
Speaker 13: So he is not going to resign before plea negotiations

1057
00:53:07,840 --> 00:53:08,840
Speaker 13: are in full effect.

1058
00:53:09,760 --> 00:53:13,319
Speaker 17: Well, and we understand that the laws dictate that he

1059
00:53:13,400 --> 00:53:16,440
Speaker 17: can state in Congress while he fights those charges. Is

1060
00:53:16,480 --> 00:53:21,320
Speaker 17: that still true if he were to settle though, Well.

1061
00:53:21,120 --> 00:53:23,680
Speaker 13: If he settles as part of the plead deal, Klee,

1062
00:53:23,960 --> 00:53:26,480
Speaker 13: they will require him to resign from Congress, and then

1063
00:53:26,520 --> 00:53:30,000
Speaker 13: there will be in my view, some incarceration, some prison

1064
00:53:30,040 --> 00:53:33,680
Speaker 13: time ibany. Most of the counts he's facing now involve

1065
00:53:33,800 --> 00:53:37,560
Speaker 13: a maximum sentence of up to twenty years. So his

1066
00:53:37,840 --> 00:53:40,320
Speaker 13: goose is cooked. I mean, that's why I say he

1067
00:53:40,320 --> 00:53:42,640
Speaker 13: should settle, and because I think you're also going to

1068
00:53:42,680 --> 00:53:45,480
Speaker 13: see a superseding indictment, which is like an amended indictment

1069
00:53:45,520 --> 00:53:48,759
Speaker 13: that adds more because on the current indictment they say

1070
00:53:48,760 --> 00:53:51,720
Speaker 13: that he overstated his income on his financial disclosure reforms

1071
00:53:52,040 --> 00:53:55,560
Speaker 13: by around seven hundred and fifty thousand dollars. Now watch

1072
00:53:55,640 --> 00:53:59,840
Speaker 13: for that, because he loaned his campaign and amount, so

1073
00:54:00,360 --> 00:54:02,919
Speaker 13: that where did that money come from? If he didn't

1074
00:54:02,960 --> 00:54:05,720
Speaker 13: make it an income, who gave him that money? Stay tuned.

1075
00:54:05,719 --> 00:54:07,279
Speaker 13: I think that's going to be the subject of an

1076
00:54:07,360 --> 00:54:08,200
Speaker 13: upcoming indictment.

1077
00:54:08,520 --> 00:54:10,799
Speaker 3: Wow, all right, we have a lot to stay tuned for.

1078
00:54:10,960 --> 00:54:13,319
Speaker 3: It sounds like Dave. As I take a look at

1079
00:54:13,400 --> 00:54:18,600
Speaker 3: Donald Trump's truth social and his five hour ago post,

1080
00:54:18,880 --> 00:54:21,960
Speaker 3: I have no idea who this woman who made a

1081
00:54:22,040 --> 00:54:26,560
Speaker 3: false and totally fabricated accusation is hopefully justice will be

1082
00:54:26,600 --> 00:54:30,000
Speaker 3: served on appeal. This, of course, is following this news

1083
00:54:30,120 --> 00:54:35,560
Speaker 3: late yesterday found libel for sexually assaulting and defaming Egene Carroll,

1084
00:54:35,640 --> 00:54:39,319
Speaker 3: recalling his deposition Kayleie when he claimed he didn't even

1085
00:54:39,360 --> 00:54:41,640
Speaker 3: know again at that point who she even was.

1086
00:54:41,719 --> 00:54:43,040
Speaker 12: I still don't know this woman.

1087
00:54:43,400 --> 00:54:45,760
Speaker 13: I think she's a whack chab. I have no idea.

1088
00:54:45,880 --> 00:54:48,600
Speaker 20: I don't know anything about this woman other than what

1089
00:54:48,760 --> 00:54:51,160
Speaker 20: I read in stories and what I hear.

1090
00:54:52,239 --> 00:54:53,040
Speaker 3: I know.

1091
00:54:54,560 --> 00:54:55,399
Speaker 2: Nothing about her.

1092
00:54:55,560 --> 00:55:01,960
Speaker 20: She said that I did something to her that never

1093
00:55:02,040 --> 00:55:06,560
Speaker 20: took place. There was no anything. I know nothing about

1094
00:55:06,600 --> 00:55:07,800
Speaker 20: this nut Yet.

1095
00:55:07,840 --> 00:55:11,080
Speaker 3: All right, Dave, we obviously got the point there. He

1096
00:55:11,080 --> 00:55:12,799
Speaker 3: says he doesn't even know who she is. But he

1097
00:55:12,840 --> 00:55:15,400
Speaker 3: has been found liable, and I realized that this is

1098
00:55:15,400 --> 00:55:18,239
Speaker 3: a civil case. The contours are a bit different. What

1099
00:55:18,280 --> 00:55:19,360
Speaker 3: does this appeal look like?

1100
00:55:20,600 --> 00:55:22,640
Speaker 13: It's going to be an uphill battle for him. He's

1101
00:55:22,680 --> 00:55:25,320
Speaker 13: going to appeal based on some of the judge's rulings

1102
00:55:25,640 --> 00:55:29,680
Speaker 13: relating to DNA evidence relating to the two accusers of

1103
00:55:29,760 --> 00:55:33,520
Speaker 13: Trump who were unaffiliated with Egene Carroll, but said that

1104
00:55:33,600 --> 00:55:37,799
Speaker 13: they were the victims of something similar years ago. He

1105
00:55:37,880 --> 00:55:40,759
Speaker 13: will try to just question all the judges rulings, like

1106
00:55:40,840 --> 00:55:44,719
Speaker 13: allowing the access Hollywood recording into evidence. But I think

1107
00:55:44,800 --> 00:55:47,640
Speaker 13: ultimately he's going to lose on appeal because he has

1108
00:55:47,680 --> 00:55:50,360
Speaker 13: only himself to blame. He didn't introduce any evidence or

1109
00:55:50,400 --> 00:55:53,640
Speaker 13: put on a single witness. In fact, he ghosted the jury.

1110
00:55:54,000 --> 00:55:56,000
Speaker 13: And no one likes to be ghosted, you know, but

1111
00:55:56,400 --> 00:55:58,759
Speaker 13: especially not jurors who leave their jobs to go to

1112
00:55:58,840 --> 00:56:01,920
Speaker 13: court every day. And you have the defendant who doesn't

1113
00:56:01,920 --> 00:56:05,040
Speaker 13: even take it seriously enough to show up himself. That's

1114
00:56:05,160 --> 00:56:07,200
Speaker 13: a big reason why he lost, and that's why he'll

1115
00:56:07,200 --> 00:56:07,880
Speaker 13: lose on appeal.

1116
00:56:08,360 --> 00:56:10,640
Speaker 17: On the subject of the lack of evidence, though, I

1117
00:56:10,719 --> 00:56:13,840
Speaker 17: was on Capitol Hill earlier today asking some members of

1118
00:56:13,840 --> 00:56:16,880
Speaker 17: the Republican Party about this, and I asked Congressman Byron Donald,

1119
00:56:17,280 --> 00:56:21,560
Speaker 17: a Republican member from Florida, and I asked him what

1120
00:56:21,600 --> 00:56:24,560
Speaker 17: this means for the Republican Party. Listen to his answer.

1121
00:56:25,000 --> 00:56:27,520
Speaker 16: It doesn't mean anything for the Republican Party. I think

1122
00:56:27,520 --> 00:56:30,200
Speaker 16: it's broadly speaking, it's an issue of what's happening in

1123
00:56:30,239 --> 00:56:34,319
Speaker 16: Manhattan with their with their justice system. I mean, look,

1124
00:56:34,560 --> 00:56:40,120
Speaker 16: you know, sexual assault, whatever you rape whatever is very serious,

1125
00:56:40,280 --> 00:56:44,399
Speaker 16: very serious allegations. Many women are victimized, and that's something

1126
00:56:44,400 --> 00:56:48,120
Speaker 16: that should always be taken seriously. Well, what we see

1127
00:56:48,160 --> 00:56:50,640
Speaker 16: here with already with some of the elements that this

1128
00:56:50,719 --> 00:56:55,359
Speaker 16: is largely he said, she said from twenty five years ago,

1129
00:56:56,400 --> 00:56:57,640
Speaker 16: very difficult.

1130
00:56:58,360 --> 00:57:00,400
Speaker 17: So Dave, what's your response to that.

1131
00:57:01,760 --> 00:57:04,720
Speaker 13: Well, Congressman Donald's is part of the mag of movement,

1132
00:57:04,840 --> 00:57:08,200
Speaker 13: so you can't expect him to take an objective view

1133
00:57:08,239 --> 00:57:10,399
Speaker 13: of this. He is full fledged into Trump and Trump

1134
00:57:10,480 --> 00:57:13,160
Speaker 13: can do no wrong. Trump could shoot someone on Fifth Avenue,

1135
00:57:13,160 --> 00:57:16,920
Speaker 13: he would still support him. So it's not a legitimate

1136
00:57:17,840 --> 00:57:20,240
Speaker 13: audience to ask him questions about Donald Trump.

1137
00:57:20,440 --> 00:57:21,959
Speaker 15: I prefer Mitt Romney.

1138
00:57:21,640 --> 00:57:24,280
Speaker 13: Perhaps, who has that independent streak, and he tells you

1139
00:57:24,320 --> 00:57:27,280
Speaker 13: that Trump is unfit to be president again. So yeah,

1140
00:57:27,360 --> 00:57:30,920
Speaker 13: Trump will not lose support amongst his magabase like Byron Donald's.

1141
00:57:31,000 --> 00:57:34,280
Speaker 13: He will win the Republican nomination, doesn't matter what Ronda

1142
00:57:34,360 --> 00:57:37,000
Speaker 13: Sanrus is going to do. And eventually I think he's

1143
00:57:37,040 --> 00:57:39,200
Speaker 13: going to lose in the general election because look, these

1144
00:57:39,240 --> 00:57:42,440
Speaker 13: type of things will resonate amongst the women in the

1145
00:57:42,480 --> 00:57:44,040
Speaker 13: suburbs who are going to look at this and be

1146
00:57:44,080 --> 00:57:46,120
Speaker 13: a gas by it and they're the key swing shooters

1147
00:57:46,160 --> 00:57:47,480
Speaker 13: when it comes to a general election.

1148
00:57:48,160 --> 00:57:51,040
Speaker 17: But he wasn't just standing by Trump there. He also

1149
00:57:51,120 --> 00:57:54,360
Speaker 17: was kind of pointing a finger at the Manhattan judicial

1150
00:57:54,360 --> 00:57:57,000
Speaker 17: system and the prosecutors there. So as a state attorney,

1151
00:57:57,040 --> 00:58:00,120
Speaker 17: I just wonder how that complicates these cases, because, of

1152
00:58:00,160 --> 00:58:03,720
Speaker 17: course he was also indicted with Alvin Bragg's case against

1153
00:58:03,800 --> 00:58:06,520
Speaker 17: him in New York earlier this year. There are potentially

1154
00:58:06,560 --> 00:58:09,120
Speaker 17: more coming down the line. How much more difficult is

1155
00:58:09,160 --> 00:58:11,320
Speaker 17: this to navigate as a prosecutor when you have this

1156
00:58:11,440 --> 00:58:12,840
Speaker 17: narrative on the other side.

1157
00:58:14,280 --> 00:58:16,200
Speaker 13: Well, I do think that the case in Manhattan, the

1158
00:58:16,240 --> 00:58:19,520
Speaker 13: criminal case, is the least strong of the four. I

1159
00:58:19,560 --> 00:58:22,000
Speaker 13: think a lot of the concern people have over that

1160
00:58:22,040 --> 00:58:25,440
Speaker 13: case will get washed away once Trump is indicted by

1161
00:58:25,480 --> 00:58:27,960
Speaker 13: the federal government over the mar Lago documents, which is

1162
00:58:27,960 --> 00:58:31,800
Speaker 13: a very strong case, and perhaps on January sixth, and

1163
00:58:31,920 --> 00:58:35,000
Speaker 13: we'll be indicted in Fulton County, Georgia over the twenty

1164
00:58:35,120 --> 00:58:37,760
Speaker 13: twenty election Shenanigan. So I think a lot of the

1165
00:58:37,840 --> 00:58:41,560
Speaker 13: handwringing right now about Alvin Bragg will be washed away

1166
00:58:41,600 --> 00:58:44,000
Speaker 13: soon enough. But you know, it's always easy to attack

1167
00:58:44,080 --> 00:58:46,360
Speaker 13: prosecutors in a blue state. But keep in mind in

1168
00:58:46,400 --> 00:58:48,280
Speaker 13: this jury, which was not a criminal case but a

1169
00:58:48,280 --> 00:58:50,920
Speaker 13: civil one, this was a cross section of the community,

1170
00:58:50,960 --> 00:58:54,040
Speaker 13: including one juror who was a big fan of a

1171
00:58:54,160 --> 00:58:57,400
Speaker 13: right wing podcast, and even he went along with unanimous

1172
00:58:57,480 --> 00:58:59,920
Speaker 13: jury to find Trump liable for sexual abuse.

1173
00:59:00,320 --> 00:59:03,160
Speaker 3: Well, what's the timeline on this appeal, Dave? How does

1174
00:59:03,160 --> 00:59:05,960
Speaker 3: it coincide with the electoral calendar?

1175
00:59:07,520 --> 00:59:07,800
Speaker 12: Joe?

1176
00:59:08,280 --> 00:59:11,360
Speaker 13: Donald Trump has a strategy of delayed, delayed, delay, and

1177
00:59:11,480 --> 00:59:13,880
Speaker 13: he will employ that. He wants to push this out

1178
00:59:13,920 --> 00:59:16,960
Speaker 13: as far as possible beyond the twenty twenty four election,

1179
00:59:17,240 --> 00:59:19,200
Speaker 13: and I think he will appeals take a long time.

1180
00:59:19,400 --> 00:59:22,080
Speaker 13: Look the Harvey Weinstein appeal is still going on, and

1181
00:59:22,120 --> 00:59:25,160
Speaker 13: how long does that take it? Yeah, So this is

1182
00:59:25,200 --> 00:59:28,120
Speaker 13: our justice system. The fact that this was even able

1183
00:59:28,160 --> 00:59:30,280
Speaker 13: to go to court is something amazing because you remember

1184
00:59:30,280 --> 00:59:34,000
Speaker 13: the statue limitations had long expired, but the state of

1185
00:59:34,040 --> 00:59:37,120
Speaker 13: New York passed a one year extension in civil court

1186
00:59:37,440 --> 00:59:40,440
Speaker 13: for people who claim the victims of sexual assault to

1187
00:59:40,600 --> 00:59:44,880
Speaker 13: sue in civil court their perpetrator. You can't do it criminally,

1188
00:59:44,960 --> 00:59:46,960
Speaker 13: but civily you can. And that's how eating j and

1189
00:59:47,000 --> 00:59:48,640
Speaker 13: Carroll got into the courthouse.

1190
00:59:49,120 --> 00:59:51,400
Speaker 3: Said this morning that she felt like she was on

1191
00:59:51,480 --> 00:59:54,560
Speaker 3: top of the world when she spoke to Morning Joe. Dave,

1192
00:59:54,600 --> 00:59:57,120
Speaker 3: thank you, don't be a stranger. Really great to talk

1193
00:59:57,480 --> 01:00:00,720
Speaker 3: Dave Ehrenberg, Palm Beach County State Attorney. It's a pretty

1194
01:00:00,760 --> 01:00:03,040
Speaker 3: busy guy himself lately, Kayley.

1195
01:00:03,600 --> 01:00:05,840
Speaker 17: Yeah, indeed, and we're busy here too, Joe. I mean,

1196
01:00:05,840 --> 01:00:08,800
Speaker 17: this is just so many legal cases to keep the

1197
01:00:08,840 --> 01:00:12,400
Speaker 17: track of that, you know, we already have the charges for,

1198
01:00:12,720 --> 01:00:14,720
Speaker 17: or even in the case of the Eugene Carroll case

1199
01:00:14,760 --> 01:00:18,960
Speaker 17: an actual decision was made. There's still more potentially coming

1200
01:00:19,000 --> 01:00:20,840
Speaker 17: down the pipe too. That's what we have to consider.

1201
01:00:20,880 --> 01:00:24,600
Speaker 17: In Georgia January sixth, the documents, the Special Council.

1202
01:00:24,720 --> 01:00:27,640
Speaker 3: Here in Washington January sixth, Yeah, the biggest cases still

1203
01:00:27,680 --> 01:00:30,400
Speaker 3: have not actually come to the four which says a

1204
01:00:30,400 --> 01:00:32,280
Speaker 3: lot about where we are in the world here and

1205
01:00:32,320 --> 01:00:34,400
Speaker 3: to get back to where we started. As Kaylee told us,

1206
01:00:34,640 --> 01:00:37,919
Speaker 3: George Santos pleading not guilty. He's out, Kaylee, yep.

1207
01:00:38,240 --> 01:00:39,920
Speaker 17: Five hundred thousand dollars bonds, a.

1208
01:00:39,840 --> 01:00:41,160
Speaker 3: Million dollar bond. Remarkable.

1209
01:00:41,960 --> 01:00:45,440
Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us

1210
01:00:45,480 --> 01:00:48,640
Speaker 1: live weekdays at one eastern on Bloomberg Dot com the

1211
01:00:48,720 --> 01:00:51,840
Speaker 1: iHeartRadio app and the Bloomberg Business app or listening on

1212
01:00:51,880 --> 01:00:53,880
Speaker 1: demand wherever you get your podcasts.

1213
01:00:55,080 --> 01:00:58,360
Speaker 3: Well, so maybe there will be a short term solution, Kaylee,

1214
01:00:58,440 --> 01:01:01,200
Speaker 3: I'm just looking at Bloomberg intelligen and that's the thesis.

1215
01:01:01,240 --> 01:01:05,480
Speaker 3: After Speaker McCarthy yesterday said no more idea of a

1216
01:01:05,520 --> 01:01:07,440
Speaker 3: short term solution, the White House says, well, that's not

1217
01:01:07,520 --> 01:01:10,080
Speaker 3: our plan either. It's probably the way this is all

1218
01:01:10,080 --> 01:01:10,880
Speaker 3: going to end, right.

1219
01:01:10,880 --> 01:01:13,840
Speaker 17: Yeah, Joe, maybe it's not the plan when it's May

1220
01:01:13,960 --> 01:01:16,080
Speaker 17: ninth and we're trying to get to June first. But

1221
01:01:16,480 --> 01:01:20,120
Speaker 17: when it's May twenty fifth and it's almost Memorial Day weekend,

1222
01:01:20,200 --> 01:01:22,080
Speaker 17: you know, maybe that or or you know, I'm just

1223
01:01:22,120 --> 01:01:23,920
Speaker 17: picking a random date, but something closer.

1224
01:01:24,160 --> 01:01:26,400
Speaker 3: Maybe it just could be twenty sixth. Right, we get

1225
01:01:26,400 --> 01:01:28,360
Speaker 3: to the twenty sixth, if there's nothing there.

1226
01:01:28,240 --> 01:01:29,919
Speaker 17: Then maybe you start singing a different tune.

1227
01:01:29,960 --> 01:01:32,440
Speaker 3: President Biden was asked about it following the meeting. He

1228
01:01:32,440 --> 01:01:35,320
Speaker 3: held a little impromptu a news conference at the White

1229
01:01:35,320 --> 01:01:36,240
Speaker 3: House late yesterday.

1230
01:01:36,600 --> 01:01:38,440
Speaker 2: We're a short term delimity increase.

1231
01:01:38,480 --> 01:01:39,360
Speaker 8: Are you ruling that out?

1232
01:01:39,400 --> 01:01:39,800
Speaker 14: Is that not?

1233
01:01:39,880 --> 01:01:41,439
Speaker 15: Okay, I'm not ruling anything.

1234
01:01:41,560 --> 01:01:44,000
Speaker 9: I said. I come back and talk. I just brulied,

1235
01:01:44,040 --> 01:01:46,400
Speaker 9: there's one thing I'm rolling out is default, and I'm

1236
01:01:46,440 --> 01:01:48,280
Speaker 9: not going to vote. I'm not going to pass a

1237
01:01:48,320 --> 01:01:51,080
Speaker 9: budget as in fact caused massive cuts.

1238
01:01:51,240 --> 01:01:53,240
Speaker 3: Then again, he wouldn't rule out the fourteenth Amendment either,

1239
01:01:53,280 --> 01:01:55,080
Speaker 3: and he sort of talked himself out of that while

1240
01:01:55,080 --> 01:01:57,960
Speaker 3: he was answering the question. But check out Bloomberg intelligence

1241
01:01:57,960 --> 01:02:01,000
Speaker 3: here the thesis a short term death ceiling increase is

1242
01:02:01,080 --> 01:02:04,440
Speaker 3: a likely interim solution. And of course our friend at

1243
01:02:04,480 --> 01:02:08,200
Speaker 3: BI is Nathan Dean, senior government analystenings with us right now.

1244
01:02:08,200 --> 01:02:09,840
Speaker 3: It's great to see Nathan. Thank you for coming in.

1245
01:02:09,880 --> 01:02:10,840
Speaker 3: What makes you think this way?

1246
01:02:11,200 --> 01:02:13,240
Speaker 15: You know, it's just there's not enough time.

1247
01:02:13,320 --> 01:02:15,560
Speaker 21: I mean, this is posturing, and this is something that

1248
01:02:15,880 --> 01:02:18,400
Speaker 21: I think all the debt ceiling watchers knew this was

1249
01:02:18,400 --> 01:02:21,120
Speaker 21: going to happen. I mean, look, you know, everybody's going

1250
01:02:21,160 --> 01:02:23,080
Speaker 21: to state their position, and they're going to state their position,

1251
01:02:23,120 --> 01:02:24,640
Speaker 21: and then when people get tired of it, they're going

1252
01:02:24,720 --> 01:02:26,560
Speaker 21: to state their position, and then when the markets really

1253
01:02:26,560 --> 01:02:28,919
Speaker 21: get tired of it, then they're going to change. There's

1254
01:02:28,960 --> 01:02:31,280
Speaker 21: only you know, seven or eight days that Congress is

1255
01:02:31,320 --> 01:02:33,600
Speaker 21: here together, the House and the Senate and to be

1256
01:02:33,640 --> 01:02:35,600
Speaker 21: able to cobble together a package.

1257
01:02:35,200 --> 01:02:37,120
Speaker 15: At this point that kicks us the can.

1258
01:02:36,920 --> 01:02:39,440
Speaker 21: Down and say two years down the road with cuts

1259
01:02:39,480 --> 01:02:40,880
Speaker 21: and negotiations and so forth.

1260
01:02:40,920 --> 01:02:42,120
Speaker 15: It's just it's just not there.

1261
01:02:42,200 --> 01:02:43,920
Speaker 21: So I think what's going to happen is you're going

1262
01:02:43,960 --> 01:02:46,440
Speaker 21: to see, probably for the next week or so continued,

1263
01:02:46,480 --> 01:02:48,720
Speaker 21: we're not going to know shigate we need a debt

1264
01:02:48,760 --> 01:02:51,320
Speaker 21: sealing or clean debt ceiling and so forth. But you know,

1265
01:02:51,400 --> 01:02:53,959
Speaker 21: like everybody was saying May twenty fifth, May twenty six,

1266
01:02:54,280 --> 01:02:56,120
Speaker 21: people are going to want to get home to Memorial

1267
01:02:56,200 --> 01:02:59,520
Speaker 21: Day barbecues. And you know, I think is short term solution.

1268
01:03:00,560 --> 01:03:03,000
Speaker 21: You know, potentially putting us in September could be one

1269
01:03:03,040 --> 01:03:04,200
Speaker 21: of the best scenarios out there.

1270
01:03:04,400 --> 01:03:06,360
Speaker 17: So when you say short term, that's what you mean.

1271
01:03:06,720 --> 01:03:08,960
Speaker 17: Punt this until you have to deal with the budget anyway,

1272
01:03:09,000 --> 01:03:10,520
Speaker 17: not you know, a month, and try and get it

1273
01:03:10,560 --> 01:03:11,680
Speaker 17: done before the August recess.

1274
01:03:11,760 --> 01:03:11,920
Speaker 4: Yeah.

1275
01:03:12,000 --> 01:03:15,520
Speaker 21: Yeah, So I mean from a you know, process standpoint,

1276
01:03:15,520 --> 01:03:16,680
Speaker 21: there's really two bills here.

1277
01:03:17,120 --> 01:03:17,280
Speaker 15: You know.

1278
01:03:17,400 --> 01:03:19,760
Speaker 21: One, you need a clean debt ceiling raise so that

1279
01:03:19,880 --> 01:03:21,760
Speaker 21: you can have President Biden go out there and say

1280
01:03:21,800 --> 01:03:24,600
Speaker 21: we got a clean debt ceiling raise, and we didn't

1281
01:03:24,720 --> 01:03:27,680
Speaker 21: negotiate on that. But then maybe ten or fifteen minutes

1282
01:03:27,680 --> 01:03:29,400
Speaker 21: after that bill has passed, you're going to have a

1283
01:03:29,440 --> 01:03:32,400
Speaker 21: funding bill passed with a lot of cuts. Unused COVID

1284
01:03:32,400 --> 01:03:34,000
Speaker 21: money is one of the things that are most people

1285
01:03:34,040 --> 01:03:36,080
Speaker 21: are going to probably cling to right now. That will

1286
01:03:36,120 --> 01:03:38,960
Speaker 21: allow Speaker McCarthy to go out and say we actually

1287
01:03:39,000 --> 01:03:41,439
Speaker 21: had cuts. I mean, the end game here is going

1288
01:03:41,520 --> 01:03:43,480
Speaker 21: to be a solution that both sites can say that

1289
01:03:43,520 --> 01:03:46,240
Speaker 21: they have victory here. And this is just unfortunate, one

1290
01:03:46,240 --> 01:03:47,960
Speaker 21: of those things that we see every two to three

1291
01:03:48,040 --> 01:03:50,760
Speaker 21: years where you know it's going to be painful, it's

1292
01:03:50,800 --> 01:03:52,840
Speaker 21: going to be even more painful next week, and you're

1293
01:03:52,840 --> 01:03:56,640
Speaker 21: going to see markets get even more scared next week.

1294
01:03:56,680 --> 01:03:58,760
Speaker 21: But you know, it's just one of those stories where

1295
01:03:58,760 --> 01:04:00,960
Speaker 21: at the right before the dead line, when people begin

1296
01:04:01,040 --> 01:04:02,960
Speaker 21: to realize, oh my god, this may actually happen.

1297
01:04:03,120 --> 01:04:05,520
Speaker 15: You know, cooler, cooler heads prevail.

1298
01:04:05,880 --> 01:04:09,400
Speaker 3: Could a debt downgrade also prompt some action here or

1299
01:04:09,480 --> 01:04:13,360
Speaker 3: are we not as concerned about that in anticipation of

1300
01:04:13,720 --> 01:04:15,680
Speaker 3: potential default as we were in twenty eleven.

1301
01:04:15,760 --> 01:04:18,320
Speaker 21: You know, I would say that there's more of a

1302
01:04:18,400 --> 01:04:21,280
Speaker 21: concern from the market standpoint, and the debt downgrade, because

1303
01:04:21,520 --> 01:04:24,400
Speaker 21: we actually ran a survey in late March and we

1304
01:04:24,440 --> 01:04:29,760
Speaker 21: asked Bloomberg terminal clients. So these are both size by

1305
01:04:29,800 --> 01:04:32,680
Speaker 21: side and sell side analysts, what would you do if there.

1306
01:04:32,600 --> 01:04:34,760
Speaker 15: Was a potential downgrade in the fixed income market?

1307
01:04:35,120 --> 01:04:37,840
Speaker 21: One third set treasury yields would rise, one third set

1308
01:04:37,840 --> 01:04:40,480
Speaker 21: treasurey yields would fall, and one third set I have

1309
01:04:40,600 --> 01:04:41,680
Speaker 21: no idea.

1310
01:04:41,800 --> 01:04:43,800
Speaker 15: And so if we get to this scenario.

1311
01:04:43,440 --> 01:04:45,840
Speaker 21: Where there's a debt grade a downgrade, like you know,

1312
01:04:45,920 --> 01:04:48,680
Speaker 21: when S and P did it before, treasure yields actually

1313
01:04:48,800 --> 01:04:51,720
Speaker 21: rose because they viewed treasuries as the safe haven.

1314
01:04:52,160 --> 01:04:53,919
Speaker 15: You know, we asked the question what is the safe

1315
01:04:53,960 --> 01:04:55,240
Speaker 15: haven here? And we had a.

1316
01:04:55,280 --> 01:04:59,320
Speaker 21: Variety of different answers from crypto and bitcoin, gold, bitcoin,

1317
01:05:00,080 --> 01:05:03,160
Speaker 21: you know, non US equities, cash and so forth like that.

1318
01:05:03,320 --> 01:05:05,920
Speaker 21: So you know, if you believe this this question of

1319
01:05:05,960 --> 01:05:07,680
Speaker 21: one third thinks it's going to go up, one third

1320
01:05:07,760 --> 01:05:09,440
Speaker 21: thinks it's going to go down, and one third has

1321
01:05:09,480 --> 01:05:13,240
Speaker 21: no idea, then I would say potential debt downgrade actually

1322
01:05:13,320 --> 01:05:15,600
Speaker 21: has more of a concern from the market perspective because

1323
01:05:15,600 --> 01:05:16,600
Speaker 21: people just don't know what's.

1324
01:05:16,480 --> 01:05:17,240
Speaker 15: Going to be the reaction.

1325
01:05:17,600 --> 01:05:19,320
Speaker 17: Joe, you know, what happens when people say the word

1326
01:05:19,400 --> 01:05:22,200
Speaker 17: crypto on this show. I feel obligated as the anchor

1327
01:05:22,240 --> 01:05:25,120
Speaker 17: of Bloomberg Crypto to talk about it some more so, Nathan,

1328
01:05:25,400 --> 01:05:28,120
Speaker 17: you took me right to it. Obviously. The dead ceiling

1329
01:05:28,160 --> 01:05:30,800
Speaker 17: is taking up so much oxygen on Capitol Hill right now.

1330
01:05:30,840 --> 01:05:32,960
Speaker 17: I was up there this morning, and I was not

1331
01:05:33,080 --> 01:05:36,120
Speaker 17: in the House hearing between the House Financial Services and

1332
01:05:36,320 --> 01:05:40,280
Speaker 17: Agriculture Subcommittees on Digital Assets hearing this morning because I

1333
01:05:40,320 --> 01:05:42,680
Speaker 17: was chasing everyone down on the dead ceiling in Santos

1334
01:05:42,720 --> 01:05:46,240
Speaker 17: and Trump. But you were paying attention to that hearing.

1335
01:05:46,560 --> 01:05:48,920
Speaker 17: How likely is it that with all of this other

1336
01:05:49,040 --> 01:05:52,720
Speaker 17: bigger picture stuff going on, that Congress can actually get

1337
01:05:52,760 --> 01:05:54,520
Speaker 17: something like crypto legislation done?

1338
01:05:54,680 --> 01:05:56,800
Speaker 21: So we still think that, you know, we're giving in

1339
01:05:56,800 --> 01:05:58,800
Speaker 21: about a forty percent chance that something can happen in

1340
01:05:58,800 --> 01:06:01,600
Speaker 21: twenty twenty three, and this is non stable coins stable coins.

1341
01:06:01,640 --> 01:06:03,480
Speaker 21: We think that there is a higher chance of passage

1342
01:06:03,480 --> 01:06:06,280
Speaker 21: here in this hearing today was a joint subcommittee hearing

1343
01:06:06,280 --> 01:06:08,880
Speaker 21: between the House Financial Services Committee and House ad Committee.

1344
01:06:08,920 --> 01:06:11,040
Speaker 21: I bring that up because that's really exciting for somebody

1345
01:06:11,080 --> 01:06:11,280
Speaker 21: like me.

1346
01:06:11,400 --> 01:06:14,440
Speaker 17: It's you know, it's it's the SEC and CFDC both together.

1347
01:06:14,680 --> 01:06:16,440
Speaker 21: It never really the last time it happened was two

1348
01:06:16,440 --> 01:06:18,240
Speaker 21: thousand and nine.

1349
01:06:18,320 --> 01:06:20,800
Speaker 15: But you know, in that hearing it was very technical hearing.

1350
01:06:20,800 --> 01:06:24,000
Speaker 21: I mean, the policymakers were asking questions of okay, well,

1351
01:06:24,040 --> 01:06:26,120
Speaker 21: if it's not going to be a security, then how

1352
01:06:26,120 --> 01:06:27,640
Speaker 21: does it get you? You know, how is it going

1353
01:06:27,680 --> 01:06:30,400
Speaker 21: to be controlled? There were some questions of you know,

1354
01:06:30,440 --> 01:06:32,720
Speaker 21: why would you want the Commodity Futures Training Commission to

1355
01:06:32,720 --> 01:06:36,120
Speaker 21: own crypto? The answer being is the principles based regulator.

1356
01:06:36,160 --> 01:06:38,240
Speaker 21: The idea here is the regulation is a little bit

1357
01:06:38,320 --> 01:06:42,800
Speaker 21: more less burden sum. But you know, I will say

1358
01:06:42,840 --> 01:06:45,280
Speaker 21: two positive things for the crypto advocates who are listening

1359
01:06:45,280 --> 01:06:48,240
Speaker 21: to this is one, you know, we had just the

1360
01:06:48,320 --> 01:06:51,360
Speaker 21: usual naysayers, but there were a lot of serious questions asked.

1361
01:06:51,800 --> 01:06:54,040
Speaker 21: And two, when it came to stable coins, we didn't

1362
01:06:54,080 --> 01:06:57,000
Speaker 21: hear language that we had heard last hearing with ranking

1363
01:06:57,040 --> 01:07:01,760
Speaker 21: Member Maxine Waters about how there the negotiations were at

1364
01:07:01,760 --> 01:07:03,160
Speaker 21: a standstill and so forth she.

1365
01:07:03,120 --> 01:07:04,040
Speaker 17: Wanted to start from scratch.

1366
01:07:04,120 --> 01:07:05,000
Speaker 3: Yeah, back to the beginning.

1367
01:07:05,000 --> 01:07:07,480
Speaker 21: We didn't hear that here that language today. So I

1368
01:07:08,000 --> 01:07:10,360
Speaker 21: stand to think that the stable coin has a bill,

1369
01:07:11,000 --> 01:07:13,360
Speaker 21: may have a chance. Leader this year this crypto stuff, though,

1370
01:07:13,560 --> 01:07:16,400
Speaker 21: it's We're gonna have to see what future hearings play

1371
01:07:16,400 --> 01:07:18,040
Speaker 21: out because this is just the first of series.

1372
01:07:18,520 --> 01:07:20,480
Speaker 3: So what changed on stable coin the fact that they

1373
01:07:20,520 --> 01:07:22,760
Speaker 3: weren't getting as much attention, they weren't as many cameras

1374
01:07:22,800 --> 01:07:23,120
Speaker 3: on them.

1375
01:07:23,160 --> 01:07:24,840
Speaker 21: Well, I think what it is is that there is

1376
01:07:24,840 --> 01:07:27,680
Speaker 21: a regulatory gap for stable coins. You know, it's not

1377
01:07:27,800 --> 01:07:30,440
Speaker 21: regulated as a bank deposit, it's not regulated as a security,

1378
01:07:30,480 --> 01:07:34,120
Speaker 21: it's not regulated as a money market account or money

1379
01:07:34,120 --> 01:07:36,360
Speaker 21: market fund, and it's got to be regulated as something.

1380
01:07:36,840 --> 01:07:39,640
Speaker 15: And I think, what the I think there's broad agreement.

1381
01:07:39,200 --> 01:07:43,080
Speaker 21: On Capitol Hill that stable coins should be required currency fit.

1382
01:07:43,240 --> 01:07:45,280
Speaker 15: Stable coins, non algorithmic.

1383
01:07:44,720 --> 01:07:46,640
Speaker 21: But currency stable coins should be back to one hundred

1384
01:07:46,640 --> 01:07:48,880
Speaker 21: percent by high quality liquid assets. So if I take

1385
01:07:48,920 --> 01:07:51,120
Speaker 21: a dollar out of a stable coin, I know that

1386
01:07:51,160 --> 01:07:53,720
Speaker 21: there's a dollar backing me up. The problem is is

1387
01:07:53,760 --> 01:07:55,880
Speaker 21: where do you do with these non bank issuers. Because

1388
01:07:55,920 --> 01:07:58,880
Speaker 21: bank issuers would register with the Federal Reserve, non bank

1389
01:07:58,920 --> 01:08:02,360
Speaker 21: issuers would register with the State of Wyoming. And there

1390
01:08:02,360 --> 01:08:05,440
Speaker 21: are some Democrats that would think that no disrespect to

1391
01:08:05,480 --> 01:08:08,880
Speaker 21: the state of Wyoming. But there's some thought on Capitol

1392
01:08:08,920 --> 01:08:11,000
Speaker 21: Hill on the Democratic side that the state of Wyoming

1393
01:08:11,040 --> 01:08:12,960
Speaker 21: may not be the best person to ragulate to the

1394
01:08:13,000 --> 01:08:13,720
Speaker 21: stable points.

1395
01:08:14,880 --> 01:08:16,760
Speaker 3: Well, we're going to figure one of these out at

1396
01:08:16,760 --> 01:08:19,880
Speaker 3: some point soon. I figure maybe the debt ceiling first,

1397
01:08:20,120 --> 01:08:20,519
Speaker 3: you think.

1398
01:08:20,400 --> 01:08:22,160
Speaker 15: Nathan Oh, absolutely, by the end of the month.

1399
01:08:22,280 --> 01:08:24,280
Speaker 3: By the end of the month, look for the short

1400
01:08:24,360 --> 01:08:27,760
Speaker 3: term solution, Nathan Dean, Bloomberg Intelligence senior government analysts. We

1401
01:08:27,760 --> 01:08:30,559
Speaker 3: thank you as ever with Kaylee Lines. I'm Joe Matthew,

1402
01:08:30,600 --> 01:08:37,400
Speaker 3: This is Bloomberg. Thanks for listening to the Sound On podcast.

1403
01:08:37,479 --> 01:08:40,600
Speaker 3: Make sure to subscribe if you haven't already, at Apple, Spotify,

1404
01:08:40,640 --> 01:08:43,080
Speaker 3: and anywhere else you get your podcasts, and you can

1405
01:08:43,120 --> 01:08:46,120
Speaker 3: find us live every weekday from Washington, DC at one

1406
01:08:46,160 --> 01:08:50,120
Speaker 3: pm Eastern Time at Bloomberg dot com.