Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us
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Speaker 2: The Administration makes the case for funding Israel and Ukraine.
Speaker 2: Welcome to the fastest show in politics, as the debate
Speaker 2: over funding gets real on Capitol Hill, even as we
Speaker 2: watch both wars unfold in real time. We'll have the
Speaker 2: latest from both sides of the Atlantic and both ends
Speaker 2: of Pennsylvania. Avenue in a conversation with Michael O'Hanlon from
Speaker 2: the Brookings Institution, with analysis from our signature panel. Back
Speaker 2: together today, Rick Davis and Genie Shanzano Bloomberg Politics contributors.
Speaker 2: I'm Joe Matthew in Washington, where the debate around funding
Speaker 2: the wars happening between Israel and Hamas, Ukraine and Russia
Speaker 2: finally gets real with lawmakers coming back into town today,
Speaker 2: and it's taking place as Israel's military engages in fierce
Speaker 2: fighting with Hamas deep in the Gaza Strip today. The
Speaker 2: headline on the terminal no hostage deal in sight as
Speaker 2: army battles in Gaza. That is not the way. Benjamin
Speaker 2: dat Ya who sees it, of course, he talked about
Speaker 2: it in a news conference right around this time yesterday,
Speaker 2: putting the ground offensive on par with the mission to
Speaker 2: rescue hostages. Some say you can't have one without the other,
Speaker 2: including Benjamin dtnaho Are.
Speaker 3: A common assessment of all of the not only the
Speaker 3: cabinet members, but also all the security forces in the
Speaker 3: military is that the ground action actually creates the possibility
Speaker 3: not a certain thing, but the possibility of getting our
Speaker 3: hostages out because hamas will not do it unless they're
Speaker 3: under pressure. They simply will not do it. They only
Speaker 3: do it under pressure. This creates pressure.
Speaker 2: Now today, fast forward a few hours, members of the
Speaker 2: administration are making the case on Capitol Hill. We already
Speaker 2: told you that will likely be a vote on Thursday
Speaker 2: in the House of Representatives, specifically on is rarely funding,
Speaker 2: not Ukraine or any of the other matters that were
Speaker 2: put into this request from the White House. But lawmakers
Speaker 2: on the Senate Appropriations Committee, you're talking about how exactly
Speaker 2: they might be able to do both if possible. There
Speaker 2: to make the case the Secretary of State Anthony Blincoln.
Speaker 4: I also hear very much the passions expressed in this
Speaker 4: room and outside this room. All of us are committed
Speaker 4: to the protection of civilian life. All of us know
Speaker 4: the suffering that is taking place as we speak. All
Speaker 4: of us are determined to see it end.
Speaker 2: And this is a hearing that has not been coming easily,
Speaker 2: with Heckler's repeatedly interrupting the Secretary, not in the face
Speaker 2: of an intensifying strategic competition in the Indo Positis.
Speaker 5: Went around the world repeatedly through the hearing.
Speaker 6: If the witness was to spend Pattie.
Speaker 2: Murray trying to bring things to some semblance of order here,
Speaker 2: but as soon as they would put one Heckler out
Speaker 2: of the room, another would pop up.
Speaker 6: They's fire.
Speaker 5: Now, these are very children of.
Speaker 2: Godda, important moments as we consider both sides of the
Speaker 2: debate here that we're going to be exploring over the
Speaker 2: course of the hour. The Secretary of Defense also in
Speaker 2: that hearing today, talking about the extent to which this
Speaker 2: money for Ukraine, sixty billion dollars worth of white House
Speaker 2: is asking would come home to the US, and we'll
Speaker 2: go to defense contractors here when we.
Speaker 7: Send our friends munitions from our stockpiles the money to
Speaker 7: replenish our supplies strengthens our military readiness, and we invest
Speaker 7: in American industry and American workers. That also holds true
Speaker 7: for funding for Israel or you to procure a new
Speaker 7: equipment off the production line.
Speaker 2: Lloyd Austin speaking earlier today before the Senate Appropriations Committee.
Speaker 2: As we bring in Michael O'Hanlon, delighted to say he's
Speaker 2: back with us today on Bloomberg Radio and on YouTube
Speaker 2: the Brookings Institution Senior Fellow Director of Research in Foreign Policy. Michael,
Speaker 2: it's great to have you. Have a lot of questions
Speaker 2: for you, and I have been looking forward to this
Speaker 2: for a couple of weeks here, so thanks for making
Speaker 2: time for us today on Bloomberg. Let's begin with this
Speaker 2: idea of a ground offensive actually helping to unlock and
Speaker 2: free hostages. We saw one female soldier rescued an Israeli
Speaker 2: soldier rescued yesterday Benjamin ett Yah, who says it is
Speaker 2: the consensus in his administration and among military and intelligence
Speaker 2: officials there that this is the best chance to save
Speaker 2: hostages is by actually moving in on the ground with
Speaker 2: the military.
Speaker 6: Do you agree, No, I'm agnostic.
Speaker 8: I don't think that it's possible to reach that kind
Speaker 8: of a definitive conclusion. So I would disagree with anyone
Speaker 8: who has a strong opinion either way, to be honest
Speaker 8: with you, because I think it's entirely possible that Hamas
Speaker 8: would start executing hostages as Israeli troops got close, which
Speaker 8: would counter a Prime Minister net Nyahu's argument. But it
Speaker 8: is also possible that Hamas might feel desperation. Leaders who
Speaker 8: were previously well protected or hidden might feel that their
Speaker 8: own lives were at risk, and they might start thinking
Speaker 8: about doing a deal they would not previously have contemplated.
Speaker 8: But they took hostages for a reason. They took hostages
Speaker 8: to have some kind of negotiating leverage at some point.
Speaker 8: They may or may not have had a clear strategy
Speaker 8: for when and how to pursue that, but they could
Speaker 8: have obviously killed all those people the same way they
Speaker 8: mercilessly massacred the fourteen hundred on October seventh. So there
Speaker 8: is some kind of a negotiation somewhere in somebody's head,
Speaker 8: and I don't think we have enough evidence to be
Speaker 8: confident whether the prospect of that negotiation and that deal
Speaker 8: would be improved by you know, Israeli forces getting closer
Speaker 8: to Hamas hiding.
Speaker 6: Places or whether it would be work. It really could
Speaker 6: go either way as I see it.
Speaker 2: The head of Israel's National Security Council says there is
Speaker 2: no deal in sight to get more hostages freed. Does
Speaker 2: that speak to the calculation here? Do you think for
Speaker 2: the IDF to say, all right, then we're moving in.
Speaker 8: I suppose, But I also think that the IDF was
Speaker 8: desirous of going in very quickly. After October seventh, Israeli
Speaker 8: passions were understandably so high, and the fact that they
Speaker 8: waited a couple of weeks or more before doing large
Speaker 8: scale incursions is partly a reflection of the lack of
Speaker 8: a clear military strategy for what they would do on
Speaker 8: the ground once they were there.
Speaker 6: So I don't think it was the sort of.
Speaker 8: Thing where they had a well rehearsed plan that could
Speaker 8: be implemented at any given moment based primarily on the
Speaker 8: hostage issue, or are there such sort of you know,
Speaker 8: specific and.
Speaker 6: Discreet kinds of concerns.
Speaker 8: I think it was the reflection of the need to
Speaker 8: figure out how to do what they're about to do,
Speaker 8: and frankly, what the objectives even were because, as we
Speaker 8: all know, right after October seventh, Israeli leaders were saying.
Speaker 6: That if you're Hamas, you're a dead man walking.
Speaker 8: In other words, they were pledging the extermination of the
Speaker 8: entirety of the Hamas organization, which is an understandable reaction,
Speaker 8: but probably no more realistic than the United States saying
Speaker 8: on September twelfth, two thousand and one, that we are
Speaker 8: going to exterminate al Qaeda.
Speaker 6: It's a goal that you naturally.
Speaker 8: Think about and certainly that you aspire to emotionally, but
Speaker 8: it's probably not realistic. So that just reflects the Israelis
Speaker 8: were not really in a place initially to go in
Speaker 8: with any kind of a well developed and realistic plan.
Speaker 8: So that's the main reason I believe it's taken them
Speaker 8: time to launch this.
Speaker 2: We're are you on a potential end game and exit
Speaker 2: strategy here? If there is, when Michael, we're seeing more fighting,
Speaker 2: striking targets in Lebanon, is real going deeper into the
Speaker 2: Gaza strip. There's talk about a second or a third front,
Speaker 2: of course, and I wonder how likely do you think
Speaker 2: that is to see one break out of if it
Speaker 2: hasn't already.
Speaker 8: Yeah, it's a great question, and I've read just in
Speaker 8: today's newspapers contending points of view on that very issue
Speaker 8: by people who know Iran and Hesbolah better than I do.
Speaker 8: Just to be transparent, I consider myself a general defense
Speaker 8: analyst by the way, with sore eyes, so my apologies
Speaker 8: for the sunglasses, rather than an expert on Hesbela or Iran.
Speaker 6: But I could see that I would say.
Speaker 8: The chances of Hesbelah unleashing an all out attack on
Speaker 8: Israel are still less than fifty to fifty because Hesbelah
Speaker 8: is essentially followed to live and let live with Israel
Speaker 8: for seventeen years since the Big Fight of two thousand
Speaker 8: and six. And there are reasons why Hesbelas wanted to
Speaker 8: have the ability to strike Israel but has not actually
Speaker 8: implemented that capability or employed that capability, and those reasons
Speaker 8: don't necessarily change with what Hamas decided to do down
Speaker 8: in Gaza and your Gaza. So I think that Hesbelah's
Speaker 8: calculus is probably only moderately or modestly influenced by what's
Speaker 8: played out over the left last few weeks. But there
Speaker 8: are people who say it. Listen, Hesbela can't sit aside
Speaker 8: forever and watch it's sort of fellow you know, pro
Speaker 8: Iran anti Israel organization and Palestinian people suffer the way
Speaker 8: they have and seem powerless to do anything about it.
Speaker 8: So if this thing continues indefinitely, the argument is that
Speaker 8: Hezbollah will then feel some greater incentive to get involved itself,
Speaker 8: for no other reason than to sort of save its
Speaker 8: own pride and its place in the pecking order as
Speaker 8: supposedly the strongest anti Israel rejectionist group out there. But
Speaker 8: I think as to the question about an endgame, I'm
Speaker 8: sort of intrigued by the idea of a UN trusteeshe
Speaker 8: that brings in Palestinians of various stripes, you know, but
Speaker 8: not Hamas, and then ultimately transitions to a Palestinian state
Speaker 8: in Gaza and worry later about the Palestinian state in
Speaker 8: the West Bank. Or maybe maybe that peace process begins
Speaker 8: anew as soon as this war can be brought to
Speaker 8: will close, but in other words, not go back to
Speaker 8: a situation where either Hamas or Israel would be occupying
Speaker 8: and controlling the Gaza strip. But maybe instead of trying
Speaker 8: to get this one big, perfect two state solution, which
Speaker 8: is of course, so difficult and elusive. Maybe it's time
Speaker 8: to create a piece of that state or one state,
Speaker 8: and then see what happens later with the possibility of
Speaker 8: a second Palestinian state that may or may not ultimately merge.
Speaker 6: This is not an idea I've heard that many Middle.
Speaker 8: Eastern experts endorse, but I think it's worth adding into
Speaker 8: the mix because if you're going to think about a
Speaker 8: post Tamas government, you've got to think about how do
Speaker 8: you do that in a way that doesn't allow Hamas
Speaker 8: to just come back whatever's left of Hamas to regroup.
Speaker 8: And yet you don't want the United States to do this,
Speaker 8: you don't want Israel to do it. So it leaves
Speaker 8: the idea of a reasonably well armed UN trusteeship followed by, well,
Speaker 8: what comes next? I think a Palestinian state. So there's
Speaker 8: light at the end of the tunnel for the Palestinian
Speaker 8: people in the You know, not so much that I
Speaker 8: care about himas I don't, but I think the Palestinian
Speaker 8: people need that kind of a future vision to get
Speaker 8: through this.
Speaker 2: Spending some time with Michael O'Hanlon from the Brookings Institution
Speaker 2: and sharing ideas here on Bloomberg's sound on I wonder
Speaker 2: your thoughts about what's happening in Syria. We got a
Speaker 2: warning from the UN, Michael warning that the war is
Speaker 2: quote unquote spilling over into Syria.
Speaker 5: How real is that? What are we going to be
Speaker 5: talking about a couple of weeks from now.
Speaker 8: Well, of course there's an irony, you know, war spilling
Speaker 8: over into a country that's been at war itself.
Speaker 6: For twelve years.
Speaker 9: So true.
Speaker 8: So I have no doubt that the UN's right at
Speaker 8: one tactical level that when you have a region like
Speaker 8: this with weak governments and a lot of extremist groups,
Speaker 8: that they're undoubtedly is movement across borders. And certainly some
Speaker 8: of that movement is from Syria into Lebanon with weapons
Speaker 8: that Iron supplies to Hesbolah, And you know, there could
Speaker 8: be other kinds of movements.
Speaker 6: I'm sure it probably are. So in that sense, yes,
Speaker 6: the war is spilled over. It already had spilled over.
Speaker 8: These different countries are part of a generalized conflict zone.
Speaker 8: It may be more intense in some places than others,
Speaker 8: but is really a regional kind of.
Speaker 6: Calamity.
Speaker 8: And so it's just an expansion of what was already underway.
Speaker 8: I have no doubt that's occurring. It's not my top
Speaker 8: concern in this situation compared to everything.
Speaker 6: Else that's at risk.
Speaker 5: What is your top concern?
Speaker 8: Well, getting to your earlier questions about the possibility of
Speaker 8: Hesbela unleashing and all out second front, I think that's
Speaker 8: the main concern, not Syria being further destabilized, but Israel
Speaker 8: and Hesbela being at war.
Speaker 2: Michael, it's great to have you back. Michael O'Hanlon a
Speaker 2: senior fellow the Brookings Institution.
Speaker 5: He's director of Research.
Speaker 2: And foreign policy there and sharing insights with us here
Speaker 2: on Bloomberg Radio. I'm Joe Matthew in Washington. As we
Speaker 2: assemble our panel, We've got Rick and Genie back together today.
Speaker 2: I'm glad to say and awfully curious to hear what's
Speaker 2: on their mind. Bloomberg Politics contributors Davis and Genie Shanzeno.
Speaker 2: There's a lot to pick through there. Rick, I'll start
Speaker 2: with you on the matter of Hesbolah. To what extent
Speaker 2: should Israel be reinforcing that northern border and should the
Speaker 2: US be involved?
Speaker 10: Yeah, obviously, I think the northern border is a vulnerability
Speaker 10: for Israel and and and and the question is how
Speaker 10: much can they reinforce with the commitment of troops that
Speaker 10: they have as a move into Gaza and and and
Speaker 10: I think if there's any weakness there, the US should
Speaker 10: look at putting our own troops there on the northern
Speaker 10: border to ensure that there isn't an incursion into Israel
Speaker 10: from the north. You know, it's a sovereign country, Israel,
Speaker 10: it's a democracy. It's a country that we should and
Speaker 10: have a security agreement to defend.
Speaker 5: And it's great that we have.
Speaker 10: Aircraft carrier and off the coast to intercept missiles and
Speaker 10: things like that that they've been doing. But troops on
Speaker 10: the ground on the northern border is a real deterrent
Speaker 10: to both Hesblo and Oran's interest here. And so I
Speaker 10: think it would send a strong message and we certainly
Speaker 10: have the capacity.
Speaker 11: To do it.
Speaker 2: How worried are you, Genie and welcome back that US
Speaker 2: boots end up on the ground in Israel?
Speaker 5: Or is that what should happen?
Speaker 12: You know, I think it's a concern. I don't think
Speaker 12: that it is something that the administration is inclined to do,
Speaker 12: and they certainly will try to avoid at all cost.
Speaker 12: And I think that is the right move, but it
Speaker 12: is a concern. I mean, we have seen and we
Speaker 12: have heard to your point, how this is escalating and spreading.
Speaker 12: And if the US gets enmeshed in that and we
Speaker 12: see boots on the ground, that is going to be
Speaker 12: a whole different bawlgame. And already we are seeing the
Speaker 12: reaction from the United State's public and we are not
Speaker 12: on the ground at this point. So imagine if we
Speaker 12: get to that point what the reaction of the US
Speaker 12: public will be. And it will change the game for
Speaker 12: the twenty four elections should that happen, and.
Speaker 2: Certainly changed the debate I suspect in Congress. We're going
Speaker 2: to go there next with Rick and Jeannie. I'm Joe Matthew.
Speaker 5: This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch the
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Speaker 2: President Biden sends the big guns up to Capitol Hill
Speaker 2: to make the case for the money one hundred and
Speaker 2: six billion dollars. Yeah, it's a lot of money. Of course,
Speaker 2: it goes to a lot of places. The supplemental budget
Speaker 2: requests that we've talked about aimed at Israel, Ukraine, Taiwan,
Speaker 2: and our southern border. And as I mentioned, the secretaries
Speaker 2: are making the case today, Anthony Blincoln along with the
Speaker 2: Secretary of Defense Lloyd Austin. Behind them are the Senate leaders,
Speaker 2: the Democrat and the Republican. Here's Chuck Schumer earlier today
Speaker 2: on the floor.
Speaker 13: I'm deeply troubled that yesterday House Republicans released a partisan
Speaker 13: and woefully inadequate package with no aid to Ukraine, no
Speaker 13: humanitarian assistance for Gaza, no funding for the Indo Pacific,
Speaker 13: and in addition, poison pills that increase the deficit and
Speaker 13: help wealthy tax cheats avoid paying their fair share poison pills.
Speaker 2: He's talking about. The offsets are going to take money
Speaker 2: out of the irs to pay for the money going
Speaker 2: to Israel. That's the plan, at least from the new
Speaker 2: Republican speaker. Mike Johnson talked about it in another interview
Speaker 2: on Fox.
Speaker 14: My intention is to call Leader Schumer over there and
Speaker 14: have a very direct and thoughtful conversation about this. I
Speaker 14: understand their priority is to bulke up the IRS. But
Speaker 14: I think if you put this to the American people
Speaker 14: and they weigh the two needs, I think they're going
Speaker 14: to say, standing with Israel and protecting the innocent over
Speaker 14: there is in our national interest and is a more
Speaker 14: immediate need than IRS agents.
Speaker 5: Let's reassemble the panel.
Speaker 2: Rick Davis and Jeanie Shanzano joined Bloomberg Politics contributors Because
Speaker 2: this is the real stuff. Lawmakers are actually coming back
Speaker 2: into town well tomorrow at least for the House to
Speaker 2: get this debate started. They're already doing this though, in
Speaker 2: front of the Appropriations Committee in the Senate, and that's
Speaker 2: what matters. Rick, Anthony Blinken, and Lloyd Austin are making
Speaker 2: the case here for what the administration sees, and even
Speaker 2: Mitch McConnell used this word intertwined national security threats.
Speaker 5: Are they succeeding, you know, I think.
Speaker 10: They're succeeding with those people who are already likely to
Speaker 10: be supportive of the Ukraine funding measure. That's really the
Speaker 10: test kit here. Everybody is pretty supportive of Israel and
Speaker 10: funding for them. So how do we how do we
Speaker 10: drag through this process Ukraine funding, you know, attached to
Speaker 10: the Israeli funding, and that's their pitch, and and and
Speaker 10: so I think it's working with people who are already
Speaker 10: predisposed to want to do that. I'm not sure it's
Speaker 10: being compelling to those who are either on the fence
Speaker 10: or opposed. And a lot of it is a process conversation, right,
Speaker 10: you know, just connecting these two things, I think this
Speaker 10: administration would be well suited to make a stronger case
Speaker 10: specifically for the Ukraine funding and what it's for and
Speaker 10: how it's going to be protected, you know, and how's
Speaker 10: it going to be handled in the process, so that
Speaker 10: Republicans who are getting heat to change their mind and
Speaker 10: be against Ukraine funding have some better standing. But that's
Speaker 10: getting lost in the you know, incredible amount of reporting
Speaker 10: around Israel, and so I think they've they've got to
Speaker 10: really focus in on this Ukraine spending and what is
Speaker 10: for and how it'll be administered.
Speaker 2: Well, as we discussed, Joe Biden has a friend in
Speaker 2: Mitch McConnell. When it comes to making that case. You
Speaker 2: can send the Secretary of State up there all you want,
Speaker 2: but how about the Republican from Kentucky. Here he was
Speaker 2: in Louisville making that very case, Genie.
Speaker 9: So this is not solely about helping Ukraine. It's also
Speaker 9: about getting us ready for the bigger challenges we have
Speaker 9: ahead out in Asia.
Speaker 7: Right now.
Speaker 9: Our efforts are making a difference both in Ukraine and
Speaker 9: here at home. But the Biden administration's hesitation along the
Speaker 9: way as really, in my view, kind of prolonged the bloodshed.
Speaker 9: This is a moment for swift and decisive action to
Speaker 9: prevent further loss of life and to impose real consequences
Speaker 9: on the tyrants who terrorize the people of Ukraine and
Speaker 9: of Israel.
Speaker 2: He puts them together in the same sentence. So he's
Speaker 2: always got a kind of jab his old friend Joe
Speaker 2: Biden while he's at it. What he's really doing, though,
Speaker 2: Genie is selling the administration's proposal here, isn't he?
Speaker 12: He is, and he has been doing that very vocally.
Speaker 12: Yesterday that speech, well, the introduction of the Ukrainian ambassador
Speaker 12: in Louisville, that was just another example of Mitch McConnell
Speaker 12: publicly making the case. He did something rare a few
Speaker 12: weekends ago. He went on the Sunday talk shows, and
Speaker 12: he made the same case that these should be tied together.
Speaker 12: You know, he is the public face of the Biden
Speaker 12: administration's efforts here, but the reality is he has not
Speaker 12: been effective in selling this to his own party because
Speaker 12: you just look at what Mike Johnson has done now
Speaker 12: with this fourteen billion dollar proposal and the payoffs he
Speaker 12: is trying to use it. It's quite a heck of
Speaker 12: an opening act that this new speaker has got himself
Speaker 12: into a bill that could been pessed with flying colors
Speaker 12: by part of and support while we wait for the
Speaker 12: next shoe to drop with the next cr he's decided
Speaker 12: to step in and say, we're going to get it
Speaker 12: pay for from the IRA in terms of the money
Speaker 12: that was designed for the IRS. And by the way,
Speaker 12: if he's interested in cost savings, you don't cut IRS agents.
Speaker 12: That is going to cost more. They are going to
Speaker 12: score that as a higher cost. So he can't even
Speaker 12: make the case with a straight face that this is
Speaker 12: about cost saving. This is about him trying to placate
Speaker 12: the right of his party, and he's doing so at
Speaker 12: the expense of necessary funding for Israel. And oh, by
Speaker 12: the way, he left out Ukraine the border and Taiwan
Speaker 12: in the process.
Speaker 2: What do you make of this IRS move here, Rick,
Speaker 2: we knew that the new Republican speaker was going to
Speaker 2: seek offsets, but to take the money from IRS. It's
Speaker 2: great politics, right, I'm sure this actually is playing pretty
Speaker 2: well with the Republican base, But it would do with geniesuggesting. Right,
Speaker 2: if your intent on lowering deficits, you don't cut IRS
Speaker 2: funding and limit the tax receipts coming in, do you.
Speaker 5: Well?
Speaker 10: The Biden administration had a hard time making the case
Speaker 10: that eighty billion dollars of additional IRS payments we're going
Speaker 10: to somehow result in big tax revenue increases. And so
Speaker 10: if the Biden administration had trouble selling that, then the
Speaker 10: Republicans aren't going to have that much trouble selling that.
Speaker 10: A small fraction of that being used for the war
Speaker 10: in Israel is probably not going to get much traction, right.
Speaker 5: I mean, And by the way, we kind of.
Speaker 10: Like the fact that Congress is actually looking for offsets,
Speaker 10: you know, to pay for these supplementals. I mean, supplementals
Speaker 10: have been burdening the deficit for a long time, and
Speaker 10: I think it's actually good ethic to have this conversation.
Speaker 10: If I were the Democrats, I'd say, fine, let's fund
Speaker 10: that and let's add ten billion dollars to the UK spending.
Speaker 10: I mean, like there's a better way to do it
Speaker 10: than to somehow go out there. If I'm a Democrat
Speaker 10: and defending more IRS agents, geez, I mean, I does
Speaker 10: someone tell Schumer that it's an election year?
Speaker 5: He calls it a poison pill?
Speaker 2: Genie, which approach do you prefer?
Speaker 6: You know?
Speaker 12: The reality is is that again, if you cut the
Speaker 12: funding for the IRS agents, that'll be scored as cost inducing,
Speaker 12: not cost reducing. So anybody who is serious about cutting
Speaker 12: and who is serious about offsets would not suggest that
Speaker 12: the place to find those is cutting IRS agents. So yes,
Speaker 12: I agreed, we need to do something about spending, and
Speaker 12: these supplementals are expensive, But why don't we go back
Speaker 12: and do something else, like visit the twenty seventeen tax
Speaker 12: cuts that we're given to those billionaires. Why don't we
Speaker 12: do something more effective to actually cutting as opposed to
Speaker 12: adding on, which is exactly what the Republicans are doing.
Speaker 12: I mean, this is confounding. If you just think about
Speaker 12: the numbers, it will cost more to take those agents away.
Speaker 12: The money that the government gets come solely from taxes.
Speaker 12: If they aren't able to collect, we don't get the money.
Speaker 12: As a people and a government, we need it collected.
Speaker 12: We need IRS agents to do that. Defunding them in
Speaker 12: this way is not an effective way to do anything
Speaker 12: except score political points. So it's a political game that
Speaker 12: the new Speaker and the Republican Party have decided to play,
Speaker 12: but not at all effective from any sort of cost
Speaker 12: saving perspectives.
Speaker 5: But this isn't about really reality, is it, Rick? This
Speaker 5: is about politics.
Speaker 2: You can you can win an election on defunding the IRS,
Speaker 2: on eliminating the IRS. I think that might be part
Speaker 2: of Ronda Santis's platform.
Speaker 10: We won't even get into how many supplementals and the
Speaker 10: billions and hundreds of billions of dollars that were passed
Speaker 10: when Crafts controlled the House of Representatives and not any
Speaker 10: effort was made to cut federal spending to pay for them.
Speaker 10: So let's just put that out there as a comparison
Speaker 10: of the new administration of Mike Johnson the Speaker. Look,
Speaker 10: I mean, it's it. The reality is this is not
Speaker 10: enough money to make a dent in anybody's wallet, and
Speaker 10: the federal government.
Speaker 5: Uh.
Speaker 10: And and the message to taxpayers is pretty clear by Republicans,
Speaker 10: which is we're going to find pay fors. And and
Speaker 10: there's not a there's not a voter I know who's
Speaker 10: going to look underneath the spending patterns of the I
Speaker 10: R s and figure out that it costs you a
Speaker 10: dollar ten for every dollar you cut out of the
Speaker 10: I R S.
Speaker 5: I mean, uh, I get it.
Speaker 10: You know, good policy, bad politics.
Speaker 2: Yeah, there is Rick Davis knows and Genie Shanzeno. That's
Speaker 2: why there are signature panel and they're up next with
Speaker 2: more in the aftermath. If we call it that of
Speaker 2: this UAW auto workers strike historic in size, but it
Speaker 2: might just be the beginning. We'll have more on that ahead.
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Speaker 2: Big victory lap from the UAW President Sean fain Fist
Speaker 2: bumping all three of the Big Three, or at least
Speaker 2: his own members, that massive, historic in fact strike against
Speaker 2: the Big three automakers for GM Stlantis now seemingly over.
Speaker 2: The deals have not been ratified, but as we told yesterday,
Speaker 2: tentative deals now officially struck with all three. The GM
Speaker 2: was the most recent yesterday, with the headline now on
Speaker 2: the terminal UA doub score's biggest wage hike this century
Speaker 2: in the year of union wins. He's definitely feeling it
Speaker 2: as I read the story from Bloomberg workers getting record
Speaker 2: breaking wage hikes thanks to strategic strikes and stunning contract wins.
Speaker 2: Of course, the most recent would be Sean fains.
Speaker 15: We'd not always secured a record contract. We have begun
Speaker 15: to turn the tide on the war on the American
Speaker 15: working class, and we truly are saving the American dream.
Speaker 2: Saving the American dream, and as he said yesterday, rebuilding
Speaker 2: the American economy. Noting that there's a lot more where
Speaker 2: this came from. The resolution of these strikes could be
Speaker 2: just the beginning of a much greater movement that we
Speaker 2: could argue begin with UPS and the Teamsters several months ago.
Speaker 2: The actors are still at it in Hollywood. The Culinary
Speaker 2: Workers Union in Las Vegas could be ready to tip off,
Speaker 2: and there are others here to the point where he's
Speaker 2: calling for a combined, nationwide organized labor strike on May
Speaker 2: day of twenty twenty eight, when these contracts expire. Let's
Speaker 2: reassemble our panel for their take. Rick Davis and Genie Shanzano,
Speaker 2: Bloomberg Politics Contributors was talking to Lale Brainerd's last evening
Speaker 2: on Balance of Power. Genie in My question was whether
Speaker 2: the administration had let the genie out of the bottle here,
Speaker 2: because this, in fact, maybe the tip of the iceberg
Speaker 2: on what could be many labor actions that coincide with
Speaker 2: an economic slowdown.
Speaker 5: What do you think?
Speaker 12: I do think it's possible, but I don't think there
Speaker 12: is any question but that this strike, the way it
Speaker 12: looks like it is going to be resolved in these
Speaker 12: tentative agreements, is an enormous win for the workers. It's
Speaker 12: I think, a good win for the auto industry as
Speaker 12: a whole, and it's surely a really, really good win
Speaker 12: for the president. He put a lot on the line
Speaker 12: going out there and standing on that line for as
Speaker 12: the first president to do that. He has made a
Speaker 12: lot of promises to labor. He doesn't we don't see
Speaker 12: a lot of those numbers reflected in the polls for sure,
Speaker 12: but this is one of the many successes I think
Speaker 12: we're going to see the President point to and of
Speaker 12: course I think, you know, let's give credit to on
Speaker 12: fame probably one of the most effective UAW leaders ever
Speaker 12: in the uaw's history, and one of the most notable
Speaker 12: new style labor leaders we've seen in this country for
Speaker 12: so long. He really has made his mark. And there's
Speaker 12: no question that as we see this trickle down, say
Speaker 12: to the ev companies and others, that impact might be expanded.
Speaker 12: So a good day all around if this works out
Speaker 12: the way we think these tentative agreements will work out.
Speaker 2: So Rick, you could argue that these deals, these wage
Speaker 2: increases specifically, would not be necessary without the increase in
Speaker 2: inflation that this administration has been trying to fight. But
Speaker 2: we just saw Joe Biden on an actual picket line
Speaker 2: and we were told that that was a history making
Speaker 2: moment and that this was victory for this administration. Could
Speaker 2: it bite back in the form of additional labor actions
Speaker 2: that could create economic interruptions in the midst of an
Speaker 2: election year.
Speaker 10: Yeah, I don't think it's an accident that we've had
Speaker 10: had these massive labor strikes during his presidency. He likes
Speaker 10: to tout the fact that he's the most pro union
Speaker 10: president of all time. He as you point out, actually
Speaker 10: went down to a picket line, But he's intervened in
Speaker 10: previous strikes, you know, on the side of the unions.
Speaker 10: I mean, corporate in America knows exactly what they're getting
Speaker 10: with Donald Trump and and and so or with Joe Biden.
Speaker 10: But but I was just going to say, what's interesting
Speaker 10: in the most recent Bloomberg Battleground States poll in seven
Speaker 10: states they were going to matter in November, is Donald
Speaker 10: Trump's picking up union support. He is the highest level
Speaker 10: of union support of any president or any Republican running
Speaker 10: for president in the last two decades. So whatever he's
Speaker 10: doing to support these unions isn't necessarily translating to strength
Speaker 10: on the ballot with union households. So you know, sure
Speaker 10: there's going to be a battle royal go going on
Speaker 10: related to unionization in America courtesy of Joe Biden's presidency,
Speaker 10: and we'll see where it goes from here, But it
Speaker 10: doesn't seem to be that politically viable strategy.
Speaker 2: What do you think of this genie to union members
Speaker 2: rank and file, those who are actually walking picket lines.
Speaker 2: The UAW vote Biden because he showed up and was
Speaker 2: on their side, or do they vote Trump because he
Speaker 2: showed up, albeit at a non union shop, and felt
Speaker 2: their pain.
Speaker 12: You know, I think workers feel it's a win that
Speaker 12: both of the leading candidates are trying to vie for
Speaker 12: their support. I don't know where they end up in
Speaker 12: twenty four, but if I was advising Joe Biden, I
Speaker 12: would tell his team to do everything they can to
Speaker 12: get Sean Fain the UAW endorsement and to get Sean
Speaker 12: Fain working for them, because that is a guy who
Speaker 12: has an effective message that appeals to workers. And I
Speaker 12: think this is what's so exciting when you watch what
Speaker 12: he has been able to do so far, is that
Speaker 12: he has been able to reach workers in a way
Speaker 12: that we haven't seen other UAW leaders do in the past.
Speaker 12: Maybe it's because he's the first democratically elected It's hard
Speaker 12: to tell, but it's certainly a lesson that the Biden
Speaker 12: campaign team can take because their ability of the Biden
Speaker 12: team and Democrats as a whole, sadly, to tell the
Speaker 12: story about why their policies are in the best interests
Speaker 12: of these workers has been utterly shut out by Trump
Speaker 12: and the Republicans who have done a much better job
Speaker 12: on that front. So kudos to them. But Democrats should
Speaker 12: take a lesson and try very hard to emulate Sean
Speaker 12: Fain's ability to make these cases, because he does it
Speaker 12: very well, and he's done it effectively six weeks this
Speaker 12: strike is taken. That's remarkable to imagine.
Speaker 2: It is, Rick, we just have a minute left. Does
Speaker 2: he have a future in elected politics? Would you run
Speaker 2: Sean Faine as a Democrat?
Speaker 5: Yeah, he's a dangerous guy.
Speaker 10: I agree with Jeannie. He's got very good capability to
Speaker 10: unicate this concept of a standing strike.
Speaker 5: I thought was brilliant.
Speaker 10: You can't argue with his results, and I just as
Speaker 10: soon he get out of union politics and get into
Speaker 10: national politics where we have a fair shot at him,
Speaker 10: a fair shot.
Speaker 2: How about a future labor secretary in a second Biden term.
Speaker 10: I'd have to leave that to Genie's judgment. You know,
Speaker 10: anything that gets him out of the union organizing business
Speaker 10: would be good for me.
Speaker 5: What do you think it was, Marty Walsh? Why not
Speaker 5: Sean Fain? Jeanie, I think.
Speaker 16: It's a brilliant idea.
Speaker 12: Joe Matthew I know hopefully Biden is listening. They make
Speaker 12: this move soon. It's brilliant idea, he'd be remarked.
Speaker 2: I gottaware he's got to wear the white Camo golf shirts.
Speaker 2: Though you can't change the attire if you come to Washington,
Speaker 2: Sean Fain, I'm Joe Matthew with Rick and Jeanie morihead.
Speaker 5: This is Bloomberg.
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Speaker 2: Welcome to our two of Bloomberg Sound On. I'm Joe
Speaker 2: Matthew in Washington. Join now by Kaylee Lyons. Kayy, It's
Speaker 2: great to see you as lawmakers come back into town
Speaker 2: and the real debate begins over the very topic that
Speaker 2: we have been talking about for a couple of weeks. Now, well,
Speaker 2: we were trying to get a speaker in place, and
Speaker 2: that is the supplemental funding request from the White House,
Speaker 2: which sounds really boring. When people use jargon like that
Speaker 2: in Washington. It's the many billions of dollars the President
Speaker 2: is asking for for Israel, for Ukraine.
Speaker 16: And some other matters, many many billions, a lot of billions,
Speaker 16: five billions, it's a lot of money. We're talking triple
Speaker 16: digits here. And as you say, there are multiple parts
Speaker 16: to this funding for Israel, for Ukraine, for Taiwan, even
Speaker 16: border security. Trying to throw a little sweetener in there
Speaker 16: for Republicans and yet doing it all as one big
Speaker 16: package is not something the House of Representatives at the
Speaker 16: very least seems very eager to do. We know that
Speaker 16: they're working on a separate Israel bill fourteen billion dollars
Speaker 16: in change of funding, but there's an offset, Joe, and
Speaker 16: that's stripping money from the irs.
Speaker 1: Yeah.
Speaker 5: So we're going through this apparently every day with Mike Johnson.
Speaker 2: Now the Speaker has to choose slightly different language every
Speaker 2: way to say the same thing he's not bringing on
Speaker 2: all the floor. It's going to be Israel only. The
Speaker 2: one thing that remains the same with all of these
Speaker 2: interviews is they're all on Fox.
Speaker 5: Here's the latest interview on Fox.
Speaker 14: Humor over there and have a very direct and thoughtful
Speaker 14: conversation about this. I understand their priority is to bulke
Speaker 14: up the IRS, but I think if you put this
Speaker 14: to the American people and they weigh the two needs,
Speaker 14: I think they're going to say, standing with Israel and
Speaker 14: protecting the innocent over there is in our national interest
Speaker 14: and is a more immediate need than IRS agents IRS agent.
Speaker 5: So this is where things get interesting.
Speaker 2: We didn't really talk a lot about offsets yesterday, but
Speaker 2: this is what this has everyone in bunched up today
Speaker 2: in Washington, is that they want to take money from
Speaker 2: the IRS. Yes, that had been earmarked by the Biden administration,
Speaker 2: by the way, a woefully hated, if you want, but
Speaker 2: woefully underfunded agency, like the phones don't work or anything,
Speaker 2: copiers are out of ink, toner, take that money, pay
Speaker 2: for Israel, and the we zero things out on Capitol Hill.
Speaker 5: Democrats don't like that idea at all.
Speaker 16: Yeah, And I just wonder if the math really is
Speaker 16: zeroing out because the RS is this is how you
Speaker 16: get the revenue. So I wonder if net net it
Speaker 16: becomes a not zero sum game but actually potentially a
Speaker 16: negative someone and I feel like we should ask maybe
Speaker 16: an expert about.
Speaker 2: That we have one. By the way, we're going to
Speaker 2: talk to Senator Rick Scott about this. I'm pretty sure
Speaker 2: I know where he's going to come down on this one.
Speaker 2: But Alex Zurden is with US Capital Peak Strategies, has
Speaker 2: spent the life doing this stuff, or at least a career.
Speaker 5: Alex.
Speaker 2: It's wonderful to see you. Thanks for being at the
Speaker 2: table here. I'm having trouble with the logic a little bit.
Speaker 2: Rick Davis was arguing for offsets. We get that you
Speaker 2: want to spend billions of dollars, but to take money
Speaker 2: from the money generating machine, money that's actually being counted on,
Speaker 2: I guess to Kaylle's point might be counter intuitive.
Speaker 17: That's right, and thank you Joe and Kayley so much
Speaker 17: for having that. Absolutely there's an idea here. You have
Speaker 17: to spend money to make money, and I think that's
Speaker 17: the example with resourcing the IRS. It has been chronically
Speaker 17: underfunded for quite a while, and so what we need
Speaker 17: to do and what Congress passed and the President's sign
Speaker 17: was budget for it modernization to get out those problems
Speaker 17: that you described. We're not on paper anymore. Unfortunately, the
Speaker 17: IRS is working in too many manual processes, they're having
Speaker 17: too many technical issues. And this was a glide path
Speaker 17: over a number of years to improve resources for the IRS,
Speaker 17: which is the largest independent bureau at the Treasury Apartment
Speaker 17: and is where the US government collects tax revenue.
Speaker 16: Okay, So if the IRS hypothetically had, say, fourteen billion
Speaker 16: dollars less to work with, what actually happens inside the
Speaker 16: IRS at that point, or maybe maybe a better question
Speaker 16: is what won't happen.
Speaker 17: Yeah, they're arguing that it is more efficient for a
Speaker 17: tax collection, that they are able to improve the ability
Speaker 17: for tax collection, so they're able to recoup more money
Speaker 17: and leakage in tax inefficiencies, recover more money for the
Speaker 17: government for money that people, companies, other entities owe to
Speaker 17: the government, they actually collect that money.
Speaker 2: Well, people talk about the IRS, and you know, we
Speaker 2: went through this whole thing with armed guards or armed
Speaker 2: agents knocking down your door last year, which was of course,
Speaker 2: that did not turn out to be true or have
Speaker 2: anything to do with the eighty billion dollars that the
Speaker 2: IRS needed. Can you imagine, I mean, just as a
Speaker 2: bit of a tangent here, how awful it would be
Speaker 2: to work there. I mean, you're dealing with what like
Speaker 2: windows ninety five machines that don't turn on, and the
Speaker 2: you're dealing with really horrible resources and you're being asked
Speaker 2: to do, you know, pretty dry work here. These aren't
Speaker 2: people knocking down doors. They're actually processing your tax reserves,
Speaker 2: which sounds like tedious.
Speaker 5: Labor, and we need somebody to do it right.
Speaker 16: Absolutely.
Speaker 17: And the people I've worked with when I was at
Speaker 17: Treasury in different parts of government, there or public servants.
Speaker 17: They are civil servants, not there for the money. They're
Speaker 17: there to help improve tax collection and improve public services
Speaker 17: for everyday Americans, for all three hundred thirty million plus Americans.
Speaker 11: And those are the people who I met.
Speaker 17: IRS does have a small component for law enforcement IRS
Speaker 17: criminal investigations, and they do critical work, and they investigate
Speaker 17: cryptocurrency tax evasion. They go after some of the worst
Speaker 17: of the worst criminal tax evators. So it's a necessary function,
Speaker 17: but a small part of what the overall bureau does.
Speaker 16: Okay, So to bring this conversation full circle, as you
Speaker 16: talk about criminals, we also should talk about terrorists, or
Speaker 16: at least designated terrorists by the US, because ultimately this
Speaker 16: IRS conversation is tied to the Israel and himas conversation.
Speaker 16: We actually are just getting headlines out from the White
Speaker 16: House press briefing in which Admiral Kirby is the spokesperson
Speaker 16: for the nsc IS talking. He says no indication that
Speaker 16: Hamas has gotten any of the aid sent to Gaza,
Speaker 16: and this speaks to the difficulty in trying to get
Speaker 16: humanitarian aid in for innocent civilians while also not trying
Speaker 16: to contribute in any way to the designated terrorist organization
Speaker 16: and its activities. How hard is this kind of financing?
Speaker 16: Right now, you exactly hit the nail on the head.
Speaker 17: This is a constant balance for imposing sanctions against foreign
Speaker 17: terrorist organizations like Hamas. Hamas has been designated since nineteen
Speaker 17: ninety seven by the State Department, two thousand and one
Speaker 17: by Treasury, and yet they've been able to assemble this
Speaker 17: horrific militia, kill thousands of civilians and murder innocence and
Speaker 17: take hostages, even with some of the most robust safeguards
Speaker 17: in the world to combat terrorism financing. Meanwhile, the people
Speaker 17: in Gaza are suffering, and so there's a need to
Speaker 17: balance strict counter terrorism financing measures economic sanctions against Hamas.
Speaker 17: Palastan Islamic jihad while ensuring that the safe, responsible delivery
Speaker 17: of aid and aid resources get to those in need.
Speaker 17: And this is attention We've seen here in Gaza, We've
Speaker 17: seen it in Afghanistan where I've worked in the past.
Speaker 17: We see it in many conflict zones around the world.
Speaker 5: Well, so how do they move that money? How is
Speaker 5: that money delivered?
Speaker 2: We're sitting next to the crypto expert here and I'm
Speaker 2: going to I'm sure Kaylee has more informed questions that
Speaker 2: I'm going to ask. But to what extent do we
Speaker 2: think and I've seen several reports about this, to what
Speaker 2: extent was crypto used in funding Hamas and this attack?
Speaker 17: So we're seeing evidence that Hamas and other terrorist groups
Speaker 17: have raised money through crypto. It's not a significant amount
Speaker 17: of money relative to the other sources of funding. But
Speaker 17: according to Sender Loomis, I've also thought about this, there's
Speaker 17: no diminimus amount for allowing terrorism financing. Any amount even
Speaker 17: one dollar, as Senator Loomis said, is unacceptable, and I
Speaker 17: take that position as well. So these organizations have raised
Speaker 17: money though from Iran, and at least sixty to one
Speaker 17: hundred million dollars a year are the reported estimates from
Speaker 17: US Israeli sources. But Hamas controls territory in Gaza. They
Speaker 17: raise at least three to four hundred million dollars a
Speaker 17: year through taxation, through extortion, through other ways that they
Speaker 17: control physical territory. They control the ground like ISIS, like
Speaker 17: other terrorist groups. So it's really unique in that respect.
Speaker 17: They were designated many years ago as a different type
Speaker 17: of insurgent organization rogue terrorist organization. Now they governed, they
Speaker 17: controlled territory, They oppress people in tax and extort them.
Speaker 16: Yeah, as Joe knows, I've been talking a lot about
Speaker 16: this over the course of the last several weeks, being
Speaker 16: surrounded always by conversation in the crypto space, and there
Speaker 16: was a Wall Street Journal article that a lot of
Speaker 16: Senators latched onto that has been partially corrected. A lot
Speaker 16: of pushback from the industry on the dollar figures really
Speaker 16: at play here when it comes to crypto specifically as
Speaker 16: a method of Hamas financing. But something else I hear
Speaker 16: from a lot of people in the crypto industry is
Speaker 16: that what's different about this is it is inherently traceable
Speaker 16: because we're talking about transactions on a blockchain, and actually
Speaker 16: that should make it easier to go after these people
Speaker 16: or prevent this kind of financing versus say things that
Speaker 16: happen in fiat currencies like the US dollar. What do
Speaker 16: you say to that.
Speaker 11: It's a bit of a mix.
Speaker 17: There are aspects of cryptocurrency transactions that are very transparent,
Speaker 17: that are on the open blockchain and publicly accessible. There
Speaker 17: are number of transactions that occur though within exchanges or
Speaker 17: within more opaque sources of transactional platforms, and that makes
Speaker 17: it a lot harder to detect. Also, people are not
Speaker 17: necessarily saying they're transacting in the name of Hamas or
Speaker 17: I'm sent money to Hamas, and so you can be
Speaker 17: sending money openly in the open, but it may be
Speaker 17: obscuring the origins or destinations of those funds, which is
Speaker 17: classic money laundering and terrorism financing typologies.
Speaker 5: So to what extent then can our treasury?
Speaker 2: Can the government interfere with monies going to Hamas.
Speaker 17: So Treasury has taken a number of recent actions. They
Speaker 17: designated a new network of Hamas related investments. They also
Speaker 17: designated the first crypto exchange in Gaza about two weeks
Speaker 17: ago as well. So Treasury is taking this incredibly seriously.
Speaker 17: But it's not just the US alone. The US strategy
Speaker 17: for combating terrorism financing globally and imposing sanctions is to
Speaker 17: work with partners, and so you've seen senior Treasury officials
Speaker 17: on the road in Europe, in Middle Eastern capitals as well,
Speaker 17: to create more of an international coalition because most of
Speaker 17: this activity is not occurring in the US but rather
Speaker 17: in countries in the Middle East, and fundraising unfortunately also
Speaker 17: occurring in Europe.
Speaker 11: It's benefiting hamas.
Speaker 16: So if you had one recommendation, what should be done
Speaker 16: most easily or most immediately in terms of combating the
Speaker 16: financing of terrorism. I don't know if easy is a
Speaker 16: proper word to use here, because it might be very hard.
Speaker 16: But what would it be?
Speaker 17: Yeah, never easy in this context, But I think shutting
Speaker 17: down loopholes particularly and more compliant jurisdictions in Europe and
Speaker 17: the Middle East to actually take homos terrorism financing more
Speaker 17: seriously as a legal and policy matter, those would be
Speaker 17: the first places to start, and we're seeing Treasury in
Speaker 17: the field doing that right now.
Speaker 2: We're talking about money flows. It's kind of interesting on
Speaker 2: both sides of this. To what extent do you view
Speaker 2: this based on your experience as kind of a financial
Speaker 2: war here. I realized there's a hot war that's being
Speaker 2: fought in Gaza. But we're talking about money's billions of
Speaker 2: dollars coming from all corners of the world here to
Speaker 2: influence the outcome of this, specifically in Israel, but we
Speaker 2: could talk about the same in Ukraine.
Speaker 17: Absolutely, So the economic picture is part of the puzzle,
Speaker 17: but it is diplomatic, is military and nature. Sanctions are
Speaker 17: most effective when they are part of a broader policy
Speaker 17: goal and policy outcome to change behavior, not just on
Speaker 17: their own. They're never going to change the conflict on
Speaker 17: their own here. There have been sanctions against Tamas for
Speaker 17: the better part of two decades and they've had some
Speaker 17: disruptive effects. But Hamas is also able to import a
Speaker 17: large amount of military supplies from places like Iran. They're
Speaker 17: able to get diplomatic support from allies and partners of
Speaker 17: Theirs in the region, and so the economic piece is important,
Speaker 17: but I don't think it's dispositive here, especially in the
Speaker 17: midst of an active conflict.
Speaker 5: I'm glad you come talk to us today.
Speaker 2: Alex Surtain Capital Peak Strategies, longtime advisor for the National
Speaker 2: Economic Council, bringing his experience from Treasury here to our
Speaker 2: table at Bloomberg. Thanks for the insights today and come
Speaker 2: back and see us again. Fascinating conversation, Kaylee, as we
Speaker 2: bring things back to Capitol Hill now, so the Russell wrote,
Speaker 2: Hunda and the Senator from Florida, as we told you,
Speaker 2: standing by Senator Rick Scott. It's great to see you
Speaker 2: and thanks for coming back to talk to us on Bloomberg. Senator,
Speaker 2: I'd like to start with the matter of funding the
Speaker 2: war effort in Israel, something that we were just talking
Speaker 2: about here, and the Republican Speaker of the House less
Speaker 2: than a week on the job, says he wants to
Speaker 2: bring this to the floor this week as a standalone measure,
Speaker 2: stripping it from funding for Ukraine, Taiwan and the border
Speaker 2: as the White House has requested. Do you support that
Speaker 2: approach or is there going to be a standoff here
Speaker 2: now with the Senate in the House.
Speaker 11: I completely support what the speakers doing. They're totally different issues.
Speaker 11: I think there's unbelievable support for Israel and we need
Speaker 11: to support Israel and what Hamas has done there beheading babies,
Speaker 11: burning babies, raping young girls and burning them is just despicable.
Speaker 11: So absolutely we need to do it, and we need
Speaker 11: to do it as quickly as we can. With regard
Speaker 11: to Ukraine, I've supported Ukraine Aid, but what we have
Speaker 11: to do is let's go back and let's look at
Speaker 11: where we are, how we're going to win, how the
Speaker 11: money is going to be spent. I think there's a
Speaker 11: lot of questions on Ukraine.
Speaker 16: So on the Israel funding and your support of what
Speaker 16: Speaker Johnson is doing here, could you get more specific?
Speaker 16: Are you supportive of the idea of splitting that funding
Speaker 16: out from a wider supplemental package or are you also
Speaker 16: supportive of the idea of offsets being necessary, of taking
Speaker 16: more than fourteen billion dollars from the IRS in order
Speaker 16: to fund that aid for Israel.
Speaker 11: Well, number one, I support separate in it out. We
Speaker 11: ought to be doing. We should have done Israeli aid
Speaker 11: last week, So let's get that done right away. I
Speaker 11: think it's the right thing to do to start saying
Speaker 11: how are we going to pay for these things? I'll
Speaker 11: support whatever the House wants to do. There's conversations about
Speaker 11: paying with it by reducing the number of new iOS agents,
Speaker 11: which I've not found one person my state that's interested
Speaker 11: in another iOS agent. But there's other ways to do it.
Speaker 11: But I think it's important to continue to focus on
Speaker 11: fiscal responsibility, so I'm glad the Speaker is doing that.
Speaker 11: So I completely support the Speaker. And by the way,
Speaker 11: the only way this is going to pass is that
Speaker 11: the Republicans in the House pass it. So we need
Speaker 11: just what the Speaker's trying to do. If we want
Speaker 11: to get any Israeli ai done, then separately we can
Speaker 11: have the conversation about Ukraine, the border, Taiwan, things like that.
Speaker 2: I know you're not a big fund a big fan
Speaker 2: of the IRS, Senator, I remember talking about that request
Speaker 2: for eighty billion dollars for the agency over the last year.
Speaker 5: Is that the right way to pay for this?
Speaker 11: Absolutely? I haven't found one person in this country that
Speaker 11: says they want to have more IRS agents, And maybe
Speaker 11: somebody's applying for a job, they might want it, but no,
Speaker 11: we that was a complete waste of money. But there's
Speaker 11: other wastes of money too, So I think as we
Speaker 11: look at whatever aid we're doing, we ought to say,
Speaker 11: how are we going to pay for this? We have
Speaker 11: thirty three plus trading dollars for the debt. We have
Speaker 11: high inflation, high interest rates. We have to wake up
Speaker 11: to this. We ought to wake up the week. We've
Speaker 11: got to get our fiscal house in order, and that's
Speaker 11: part of the way to do it.
Speaker 16: You say, whatever aid we're doing, Senator, And I just wonder,
Speaker 16: considering this is an emergency funding request. We don't typically
Speaker 16: see offsets for emergency funding requests. And I just wonder,
Speaker 16: are you worried about the precedent that may be said
Speaker 16: here if one day we're talking about emergency funding not
Speaker 16: for a war that's happening abroad, but for say a
Speaker 16: humanitarian or natural disaster at home, like a hurricane in
Speaker 16: the state of Florida.
Speaker 11: Well, first, I support Israeli A I do think the
Speaker 11: right thing to do is figure out a logical way
Speaker 11: to pay for these things and whatever it is. I mean,
Speaker 11: that's what your federal government ought to be doing. We
Speaker 11: are to prioritize, just like you do with your family.
Speaker 11: You say yourself, if I have an emergency, how am
Speaker 11: I going to pay for it? That's what we all do.
Speaker 11: Your federal government ought to be your state government's, every
Speaker 11: government ought to be doing the exact same thing.
Speaker 2: Well, Senator, I have to ask you about what you're
Speaker 2: hearing from the leadership here, namely Mitch McConnell, who's frankly
Speaker 2: sounding a lot like Chuck Schumer. And I'm not trying
Speaker 2: to start a fight here, but when it comes to
Speaker 2: tying Israel and Ukraine funding, here's what he said yesterday
Speaker 2: in Louisville.
Speaker 5: It's a quick remark, and we'll have you respond.
Speaker 9: This is not just a test for Ukraine, tests for
Speaker 9: the United States and for the free world. And the
Speaker 9: path toward greater security for all of us is simple
Speaker 9: help Ukraine when the war.
Speaker 2: I wonder if you agree with Mitch McConnell when it
Speaker 2: comes to Ukraine specifically, and might in fact vote for
Speaker 2: a standalone Ukraine funding bill, But you said you had
Speaker 2: problems with that, and I'm wondering where we might be
Speaker 2: able to find common ground if it exists. Do you
Speaker 2: want to see an audit of Ukraine funding? Do you
Speaker 2: want a different measure of accountability? What are you telling,
Speaker 2: Senator McConnell.
Speaker 11: Well, first off, what the Biden administration is proposed has proposed,
Speaker 11: is the fact that they want to give, they want
Speaker 11: to tie Israeli aid to money for sanctuary cities. Well,
Speaker 11: we have sanctuary cities because we have an open border.
Speaker 11: So all these things are separate issues that we ought
Speaker 11: to be dealing with, and we ought to deal with
Speaker 11: them separately. Now, with regard to Ukraine, I want to
Speaker 11: know how the money has been spent. I want to
Speaker 11: look at how every dollar has been spent. That's what
Speaker 11: my voters are telling me. I've been supportive of lethal
Speaker 11: aid all along, but I want to have I want
Speaker 11: to know what the plan is to win. It looks
Speaker 11: like the Biden administration is planning just have a long war,
Speaker 11: not to win. If we are going to help Ukraine,
Speaker 11: let's help Ukraine win.
Speaker 16: So when you say let's help Ukraine win and you
Speaker 16: want to know, you know ultimately you have some questions
Speaker 16: that you would like answered here. Do you do you
Speaker 16: worry that in the attempt to get those answers, or
Speaker 16: that the answers cannot be that specific because this is
Speaker 16: a war we're talking about and it's inherently unpredictable in nature.
Speaker 11: Well, at least we ought to try. We ought to
Speaker 11: try to get the information we had to know exactly
Speaker 11: where the money is gone that we've spent that's not
Speaker 11: that shouldn't be hard to do, Otherwise they've lost track
Speaker 11: of the money. We ought to know exactly what the
Speaker 11: Bide administration's plan to win is. That shouldn't be hard
Speaker 11: to do, doesn't means it might not change down the
Speaker 11: road as the war changes. But there's information. But you know,
Speaker 11: this idea that we just going to say, oh, we're
Speaker 11: doing this, We're going to throw all this money at problems,
Speaker 11: I mean, that makes no sense to me. I mean,
Speaker 11: we need to be responsible with taxpayer money and I plan.
Speaker 11: I've said that all along. But these are all different issues.
Speaker 2: The argument from Leader McConnell, and for that matter, I
Speaker 2: guess the Leader Schumer and President Biden for that matter,
Speaker 2: is that they are intertwined. That was the word that
Speaker 2: Mitch McConnell used yesterday, that these are national security threats
Speaker 2: that have everything to do with each other.
Speaker 5: Are you starting to.
Speaker 2: Doubt that case, Senator when it comes to Ukraine.
Speaker 11: Well, first off, let's remember this. We have a Republican
Speaker 11: speaker in the House and he has said he's going
Speaker 11: to do the Israeli Aid independently. So whatever we want
Speaker 11: to do over here, all we're doing is if we
Speaker 11: try to do something that's a global solution. Is we're
Speaker 11: undermining what our Republican speaker in the House does, and
Speaker 11: we're in the majority in the House, so what we
Speaker 11: ought to be doing is listen to them, take what
Speaker 11: they give this. If we want to make that better,
Speaker 11: us do that. But let's go support a new Republican
Speaker 11: speaker in the House to get what he wants done.
Speaker 11: And we can still do Ukraine AID. Don't say we're
Speaker 11: never going to do Ukraine A, but we've been talking
Speaker 11: about this for months and nobody wants to give us
Speaker 11: the information so we can make an informed decision.
Speaker 16: Okay, I understand what you're saying about the Republicans. Do
Speaker 16: you have control of the House, But the fact is
Speaker 16: the Democrats do have control of the Senate. So not
Speaker 16: just on this issue, but also all of the funding
Speaker 16: battles to come. Knowing we're facing down this deadline of
Speaker 16: November seventeenth, how hard do you think it is going
Speaker 16: to be able to reconcile the two chambers here in
Speaker 16: what they want to do.
Speaker 11: Well, hopefully we'll be able to reconcile it. It takes
Speaker 11: sixty votes to pass up in the SIDENTCE, so it
Speaker 11: takes Republican support to get something done over here, and
Speaker 11: my belief is we are to start by supporting the
Speaker 11: new Republican speaker in the House. So my goal is
Speaker 11: tot's start passing the proparation's bills. I don't know why
Speaker 11: we haven't done this before. I'm a business guy. You
Speaker 11: have a budget, you follow your budget, and you live
Speaker 11: within your means doing that. Up here, we don't even
Speaker 11: talk about that. We didn't even start talking about the
Speaker 11: budget until sometime in September and the fiscal year in
Speaker 11: September thirty. That doesn't make any sense to me. I've
Speaker 11: been up here five years. It's every year because the
Speaker 11: leadership here wants to do these gigantic omnibus that nobody
Speaker 11: knows what's in it that we've never read.
Speaker 2: I want to ask you about the new speaker. Senator,
Speaker 2: you were, of course a member of the House. You
Speaker 2: know what it's like in a different culture than that
Speaker 2: of the Senate. Do you know Mike Johnson and what
Speaker 2: comes from that whole exercise with Steve Scalise, Tom Emmer,
Speaker 2: Jim Jordan. I know that you've worked with all of them.
Speaker 2: That public display of chaos that some might say, although
Speaker 2: Tom Emmer said it was a great display of democracy,
Speaker 2: what did the Republican Party get for all that drama?
Speaker 11: Oh they got a great leader. Here's what they got.
Speaker 11: It's no different, no different than what why I ran
Speaker 11: against Mitch McConnell year ago. I ran because I think
Speaker 11: we ought to work as a team. We ought to say,
Speaker 11: what's how do we as a team do the right
Speaker 11: things for the American public to our voters. And I
Speaker 11: think that's exactly what happened in the House. They picked
Speaker 11: somebody that they think will be a great team leader,
Speaker 11: but everybody's going to have a voice, and that's exactly
Speaker 11: exactly what they wanted. I had a great working relationship
Speaker 11: with Kevin McCarthy and Steve Scalice and Tom Emmer and
Speaker 11: Jim Jordan. They're wonderful people. But what the House wanted
Speaker 11: was somebody that, you know, felt they felt more cupable,
Speaker 11: would give everybody a voice.
Speaker 16: Senator, do you really think the Republican conference in the
Speaker 16: House is a team right now? When there were eight
Speaker 16: members who kicked out the former speaker and there's just
Speaker 16: a lot of disjointedness in general.
Speaker 11: Well, first off, everybody ought to be representing their district,
Speaker 11: and everybody in the Centate ought to be representing their state,
Speaker 11: and we ought to find common ground. And it shouldn't
Speaker 11: be you know, there's Democrats should have the same positions
Speaker 11: I have because it's good for their state. Their Republics
Speaker 11: might not have the same position because they might think
Speaker 11: it's something's better for their state. That's how we ought
Speaker 11: to be governing ourselves up here. But absolutely, my experience
Speaker 11: with the House is they want to work as a team.
Speaker 11: If you look at what they did earlier this year,
Speaker 11: when a lot of people in the House had never
Speaker 11: voted for a debt ceiling deal, they voted for a
Speaker 11: debt ceiling deal that was going to make some structural changes.
Speaker 11: They were frustrated when that's not what ultimately passed, but
Speaker 11: that's what passed out of the House first. So absolutely
Speaker 11: there's a team over in the House and I look
Speaker 11: forward to working with them.
Speaker 2: Senator, I have to ask you about what's happening on
Speaker 2: the campaign trail. Of course, your governor in Florida is
Speaker 2: running for the Republican nomination, and Ron DeSantis has been
Speaker 2: running into some issues on the campaign trail when it
Speaker 2: comes to polling.
Speaker 5: When it comes to fundraising a.
Speaker 2: Campaign trail dominated clearly by Donald Trump. I wonder if
Speaker 2: you think it's time for the governor to come home
Speaker 2: and focus on business in Florida.
Speaker 11: Well, I would never suggest that they get out of
Speaker 11: a race. I remember when I got into a primary
Speaker 11: back into twenty ten, everybody in DC told me to
Speaker 11: get out of the race. So now we never do that.
Speaker 11: But if you look at the polling numbers right now,
Speaker 11: Donald Trump has a commanding lead. It's very difficult to
Speaker 11: beat in a prior president, somebody that when he left office,
Speaker 11: he can say we had a great economy, we had
Speaker 11: secure border, we weren't at war. Some of the major
Speaker 11: issues we have now he'd actually dealt with. So I
Speaker 11: think it's hard to beat Donald Trump. But you know,
Speaker 11: if you want to run for any office, including president,
Speaker 11: do you ought to go run and see how will
Speaker 11: you do.
Speaker 16: Yeah, that's a very good point. And of course there's
Speaker 16: a lot of other Republicans running for president at this point,
Speaker 16: though it does look like Donald Trump remains the front runner.
Speaker 16: What influence does Trump have whether or not he retakes
Speaker 16: the oval office, remaining on the Republican Party in both
Speaker 16: the Senate and the House. Do you think how influential
Speaker 16: is he in those halls?
Speaker 11: Well, I think all of us are trying to represent
Speaker 11: what we believe in and our voters. And I know
Speaker 11: that's you know my experience with President Trump and other Republicans,
Speaker 11: that's what they're doing, and so I think we all,
Speaker 11: hopefully we all have some impact on what's going on
Speaker 11: out there. I'd do my best to try to represent
Speaker 11: the twenty two million people that live in Florida.
Speaker 2: Senator Rick Scott, we appreciate the time as always, sir,
Speaker 2: Come back and see us again soon on Bloomberg of course,
Speaker 2: the Republican from Florida joining us live from Capitol Hill
Speaker 2: here on the radio, on the satellite, and on YouTube.
Speaker 5: You can find us on YouTube right now.
Speaker 2: If you've got a little fomo search Bloomberg Global News,
Speaker 2: you could have been watching the Senator in the Russell
Speaker 2: Rotunda that whole time, framed by the beautiful marble of
Speaker 2: Capitol Hill.
Speaker 5: Kaylee, interesting conversation with the Senator.
Speaker 2: Everyone's being very careful, and when I say everyone, I
Speaker 2: mean establishment Republicans on Capitol Hill.
Speaker 16: Yes, but he was pretty firm on he supports Mike
Speaker 16: Johnson and what he's trying to do in the House
Speaker 16: when it comes to Israel funding, both on the idea
Speaker 16: of treating it separately but also the idea of offsetting
Speaker 16: it by pulling more than fourteen billion dollars in funding
Speaker 16: from the IRS. He seemed very sotive of the speaker
Speaker 16: in that regard.
Speaker 2: But for sure, and maybe I should qualify that to say,
Speaker 2: careful to overstep while he's establishing himself. Nobody wants to
Speaker 2: say anything that might rattle the speaker or make things
Speaker 2: look like there was.
Speaker 5: A problem selecting a speaker.
Speaker 2: Tom Emmer said it the greatest ever moment to democracy.
Speaker 5: Yeah, I'm not sure that it'll go down as such.
Speaker 5: Thanks for listening to The Sound On podcast.
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Speaker 5: Time at Bloomberg dot com.