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Speaker 2: Let's get to it without further delay.
Speaker 3: I'll turn it over to my colleague Saliah Mosen, who
Speaker 3: is live at the Treasury Department with the new Secretary,
Speaker 3: Scott Besson.
Speaker 2: Selia, thank you, Kayleie.
Speaker 4: I'm here with US Treasure Secretary Scott Besson and Washington.
Speaker 4: Mister Secretary, thank you for joining me. Good to see you, Uh,
Speaker 4: mister Secretary. We are inside the cashroom at the Treasure Department.
Speaker 4: It is almost impossible to overstate how important the work
Speaker 4: that is done in this building is to the US
Speaker 4: financial system. Yet right now there is widespread concern about
Speaker 4: the DOGE team's access to sensitive payments systems. Are you
Speaker 4: worried at all that that access and that tinkering of
Speaker 4: the payment systems could affect the Treasury's market or cause
Speaker 4: any disruption?
Speaker 5: Good well, Seleiah, thank you for asking me about that,
Speaker 5: because there's a lot of misinformation out there. First of all,
Speaker 5: when you say the Doge team, these are Treasury employees.
Speaker 5: It are two Treasury employees, one of whom I personally
Speaker 5: interviewed in his final round. There is no tinkering with
Speaker 5: the system. They are on read only. They are looking.
Speaker 5: They can make no changes. It is an operational program
Speaker 5: to suggest improvement. So we make one point three billion
Speaker 5: payments a year. And this is two employees who are
Speaker 5: working with a group of long standing employees.
Speaker 4: The letter that the Treasure Department sent earlier this week
Speaker 4: talked about how the team currently does not have access
Speaker 4: to change the system. Have they, at any point this
Speaker 4: year had the ability to make changes.
Speaker 5: Absolutely not. This is no different than you would have
Speaker 5: at a private company. And by the way, the ability
Speaker 5: to change the system sits over at the Federal Reserve,
Speaker 5: so it doesn't even lie in this building. So they
Speaker 5: could make suggestions on how to change the system. But
Speaker 5: we don't even run the system.
Speaker 4: And if they ask for if they request the ability
Speaker 4: to change the system, would you grant that.
Speaker 5: No. Again, they have no ability to change the system.
Speaker 5: I have no ability to grant that change. That they
Speaker 5: can make suggestions then it would go to the Federal Reserve,
Speaker 5: and just like any large ERP system, there would be tests.
Speaker 5: There would be this, there would be that, and then
Speaker 5: the Fed will determine whether these changes are robust or not.
Speaker 4: As the Secretary of Treasure, you also oversee the IRS.
Speaker 4: Do you know what kind of access the team has
Speaker 4: to IRS data or individual taxpayer data?
Speaker 5: Well, I'm glad you asked two, because look, thers, the
Speaker 5: privacy issue is one of the biggest issues, and over
Speaker 5: the past four years we've seen a lot of leaks
Speaker 5: out of there. The IRS systems are quite poor. When
Speaker 5: I started in college in nineteen eighty I learned the
Speaker 5: program in COBAL. I think there are twelve different systems
Speaker 5: at the IRS that still run on COBAL. But as
Speaker 5: of now, there is no engagement at the RS.
Speaker 4: And if they request that access, would you sign off
Speaker 4: on that request?
Speaker 5: They haven't, so we'll take that when it comes to it.
Speaker 5: I think there is a lot to do there, but
Speaker 5: the president was elected with a big agenda and to
Speaker 5: the extent that getting the IRS in better shape is
Speaker 5: part of that. Sure, because look, with the IRS, what
Speaker 5: am I concerned about? I am concerned about collections. I'm
Speaker 5: concerned about privacy, and I am concerned that the system
Speaker 5: is robust and customer.
Speaker 4: Service, But do you think that if they ask for
Speaker 4: access that is something you would consider signing off on.
Speaker 5: There are a lot of things I'd consider, But look,
Speaker 5: we're in the middle of the tax filing season right now.
Speaker 5: We even with the government buyouts that are being that
Speaker 5: expire at midnight tonight, we have been mandated that the
Speaker 5: IRS customer facing employees that they're not eligible for that
Speaker 5: until May fifteenth, So I don't imagine anything's going to
Speaker 5: go onto the IRS until then or beyond.
Speaker 4: Elon Musk just a few half an hour ago tweet
Speaker 4: it out that Treasury needs to stop approving certain payments.
Speaker 4: Has your staff tried to block any payments here at Treasury?
Speaker 5: We have not, and I'm glad you asked that too.
Speaker 5: And just to put in perspective, Elon and I are
Speaker 5: completely aligned in terms of cutting waste and increasing accountability
Speaker 5: and transparency for the American people. I believe that this
Speaker 5: Dove program in my adult life is one of the
Speaker 5: most important audits of government or changes to government structure.
Speaker 5: We have seen that. When I was in my twenties,
Speaker 5: we had the Grace Report, and there's some great suggestions
Speaker 5: that came out of that never implemented under Clinton and Gore.
Speaker 5: I think it was to government efficiency or reduce government.
Speaker 5: Nothing happened. So President Trump came in. There's a big
Speaker 5: agenda and I think that there are gigantic cost savings
Speaker 5: for the American people here, and I think it's unfortunate
Speaker 5: the way the media wants to lampoon what is going on.
Speaker 5: These are highly trained professionals. This is not some roving
Speaker 5: band going around doing things. This is methodical and it
Speaker 5: is going to yield big savings.
Speaker 4: At any point, would you heed what Musk just tweeted
Speaker 4: and stop payments from coming through Treasury.
Speaker 5: Well, most of that happens above us, that it comes
Speaker 5: from the Department and the agencies. We are doing a
Speaker 5: complete review and I want to emphasize to you and
Speaker 5: everyone watching that it is an operational review, It is
Speaker 5: not an ideological review. We want to make sure that
Speaker 5: the American people are getting the best practices, and I
Speaker 5: don't think that's happening right now.
Speaker 4: The systems here at Treasury they're known to be a
Speaker 4: little antiquated, but very very sensitive, but also they're working.
Speaker 4: I'm hearing, you know Bloomberg, we hear a lot about
Speaker 4: investors being concerned that this could hit markets in some
Speaker 4: way or start to cause a loss of confidence. What
Speaker 4: as a long time hedge fund and investor like, do
Speaker 4: you have a response to those concerns.
Speaker 5: People shouldn't be concerned that at Treasury we move deliberately
Speaker 5: and we fix things. That's the way we work. So
Speaker 5: everyone should know that all the payments are going to
Speaker 5: be made, they're going to be in good order, and
Speaker 5: at the end of this review, they're going to be
Speaker 5: substantial savings for the American taxpayer.
Speaker 4: Mister Secretary, you have experience in currency markets, and now,
Speaker 4: as in your new role, you oversee US currency policy.
Speaker 4: I'd like to ask you what does a strong dollar
Speaker 4: mean to you?
Speaker 5: Well, first of all, the strong dollar policy is completely
Speaker 5: intact with President Trump, and I was very happy at
Speaker 5: his Economic clob of New York speech in August when
Speaker 5: he re emphasized the importance of maintaining the dollar reserve
Speaker 5: currency status. But let's think about what does a strong
Speaker 5: dollar mean. It really means four things. One that when
Speaker 5: we think about a fiat currency, a piece of paper
Speaker 5: is credibility. So a strong dollar is credibility and a
Speaker 5: rule of law that is backing it up too. It
Speaker 5: means a composite price in the screen the Bloomberg Currency Index,
Speaker 5: that is the dollar moving up against that three. It
Speaker 5: is a bilateral price. So what's important to remember is
Speaker 5: the dollar is either weak or strong versus something else.
Speaker 5: So we want the dollar to be strong. What we
Speaker 5: don't want is other countries to weaken their currencies to
Speaker 5: manipulate their trade. And then fourth that we want to
Speaker 5: have the best policies that create the environment for a
Speaker 5: strong dollar.
Speaker 4: Let's talk about other nations and how they manage their currencies.
Speaker 4: The President has asked for a tariff study from several
Speaker 4: of his cabinet officers or incoming cabinet officers Doe April first,
Speaker 4: and the Treasury piece of that is to assess how
Speaker 4: to handle when foreign nations manipulate their currencies. Do you
Speaker 4: see any evidence of manipulation in foreign exchange rate markets
Speaker 4: right now?
Speaker 5: Well, we'll wait till the study comes out. But I
Speaker 5: think just intuitively, you and I could agree that when
Speaker 5: you see the accumulation of these large surpluses, that there
Speaker 5: is not a free form trading system that's going It
Speaker 5: could be due to the level of the currency. It
Speaker 5: could be due to trade restrictions, It could be due
Speaker 5: to some interest rate repression policy. So it could be
Speaker 5: any of those.
Speaker 4: Are there any countries that you're monitoring or watching specifically
Speaker 4: right now? I know the President in the past has
Speaker 4: labeled China as a currency manipulator. Do you see any
Speaker 4: other nations that need to be closely watched.
Speaker 5: Well, I think we'll see on April first. And as
Speaker 5: you know that China's the most imbalanced, unbalanced economy in
Speaker 5: the history of the world, and they are and a
Speaker 5: deep recession right now. Their experience in deflation and they're
Speaker 5: trying to export their way out of that. And we
Speaker 5: can't allow that. We want fair trade, and part of
Speaker 5: that is taking a strong position on the currency and
Speaker 5: the terms of trade.
Speaker 4: Yesterday, the Treasure Department had its first quarterly refunding since
Speaker 4: you were confirmed. Do you have any plans of looking
Speaker 4: at how the Treasury's debt issue and strategy comes together?
Speaker 5: Well, I think the good news is that the trajectory
Speaker 5: of the borrowing is dropping, so I was very happy
Speaker 5: to see that. It's one of the few good surprises
Speaker 5: I was left by the previous administration. So the trajectory
Speaker 5: is good and the government's well financed into the third quarter,
Speaker 5: and I believe that as we as it becomes apparent
Speaker 5: that the present's agenda is working, that we'll see a
Speaker 5: great deal of non inflationary growth and I think that
Speaker 5: that will help us calibrate what the debt policy should be.
Speaker 5: But I don't see any changes in the issuance for
Speaker 5: the foreseeable future.
Speaker 4: And what about the process. Do you think that tea
Speaker 4: BAC is the most effective way of getting feedback from markets?
Speaker 5: Well, I want to think all the members of tea
Speaker 5: BAC who are here this week, they are a very
Speaker 5: elite group. I think that maybe over time we need
Speaker 5: to think about the style of engagement. It is turned
Speaker 5: into more of a research think tank than direct market engagement,
Speaker 5: and that's going to require some changes from both sides.
Speaker 5: I believe when TEABAC was originally started, it was supposed
Speaker 5: to be a market feedback mechanism, a little less of
Speaker 5: a think tank, and we've been assigning research projects, So
Speaker 5: I think there's some recalibration on both sides. But I
Speaker 5: think that whatever we do, t BAC will still exist.
Speaker 4: Mistress Secretary you said yesterday in an interview that the
Speaker 4: Trump administration is more focused on long term gields than
Speaker 4: what the Federal Reserve is doing, which is a bold statement.
Speaker 2: I want to ask, how.
Speaker 4: Do you plan to keep a lid on yields considering
Speaker 4: the deluge of debt issuance that is coming down the
Speaker 4: pike and also some of the inflationary risks that are ahead.
Speaker 5: Well, one of the things I wanted to emphasize is
Speaker 5: that we are not focused on whether the Fed is
Speaker 5: going to cut not cut. What we are focused on
Speaker 5: is lowering rates, So we are less focused on the
Speaker 5: specific of rate cuts and how do we get the
Speaker 5: whole curve down. I mentioned that the tenure I believe
Speaker 5: is the important price to focus on its mortgages. It's
Speaker 5: long term capital formation. So and look, I think with
Speaker 5: the President's policies of energy, dominance, deregulation, and non inflationary growth,
Speaker 5: I think that the tenure is going to naturally come down.
Speaker 5: And then look, on top of it, what if we
Speaker 5: do get some big savings on the spending side from
Speaker 5: the dose programs. Like let's think of a naive formula
Speaker 5: government equals spending minus taxes. For my entire career and beyond,
Speaker 5: maybe even back to pre FDR the government equal spending
Speaker 5: minus taxes the S The Republicans we like spending, We
Speaker 5: just wanted to raise it less. The Democrats want to
Speaker 5: raise it more taxes. Democrats want tax increases. We want
Speaker 5: tax cuts. What nobody's singing about is what if the
Speaker 5: S actually went down? What if it actually goes down
Speaker 5: because of everything we're doing right now?
Speaker 4: But what about the inflation concerns that are stumming from
Speaker 4: the tariffs and tariff threats.
Speaker 5: Look that I'm not sure that where this narrative the
Speaker 5: tariffs for the country putting on the tariffs is inflationary,
Speaker 5: that we could have a small one time price adjustment
Speaker 5: that as we saw in Trump one point zero, that
Speaker 5: the deregulation and the other policies we stayed right around
Speaker 5: the Fed's target level. So I'm unconcerned about that. I
Speaker 5: think especially that China, now given all their excess capacity,
Speaker 5: will no matter the level of the tariffs, will end
Speaker 5: up eating quite a bit.
Speaker 4: There's a lot of uncertainty around tariffs. We see them
Speaker 4: threatened or signaled, and that they're taken back. It appears
Speaker 4: as if this administration might be unfriendly to businesses.
Speaker 5: Is that right?
Speaker 6: Really?
Speaker 5: I think it's just the opposite. I think this is
Speaker 5: the most pro business administration in history, and everything we
Speaker 5: are doing is going to increase the after tax return
Speaker 5: capital and as a result, working Americans will have very
Speaker 5: high real wage growth. That what we've seen over the
Speaker 5: past four years is the government and government adjacent sectors
Speaker 5: providing the employment growth. And why have we experienced a
Speaker 5: supportability crisis? First there was a massive spending met by
Speaker 5: increased regulation, which caused inflation, and then government and government
Speaker 5: adjacent jobs do not call real wage growth because they
Speaker 5: move up at CPI. So I think that we are
Speaker 5: going to not only be business friendly, but very very
Speaker 5: friendly for working Americans.
Speaker 4: We're seeing companies already under some stress from the tariff threats,
Speaker 4: China is investigating Google, and also, as you know, are
Speaker 4: well aware that business is like to be able to
Speaker 4: plan ahead. But with so much policy uncertainty, that predictability
Speaker 4: factor is gone. That all points to a little bit
Speaker 4: of a tougher environment.
Speaker 5: Well, look, I think the best thing we can do
Speaker 5: for predictability is make the tax cuts and jaw back permanent.
Speaker 5: That would be the single best thing we could do
Speaker 5: for predictability, We can go back to the one hundred
Speaker 5: percent expensing and add some new features that I think
Speaker 5: business is going to be very happy with. But again,
Speaker 5: the most important thing is that it filters down to
Speaker 5: working wages, which is what we saw the President Trump's
Speaker 5: first administration. Hourly workers did better than supervisory workers.
Speaker 4: Well, let me ask you about the tax plan. Then,
Speaker 4: on the campaign trail, Trump floated no taxes on tips
Speaker 4: and cutting the corporate rate and a lot of other proposals.
Speaker 4: How are you going to juggle which campaign promises are
Speaker 4: high on that the priority list for the bill, considering
Speaker 4: how costly everything would be.
Speaker 5: Well, that we're just starting the process now and that
Speaker 5: we'll do what President Trump will give us his priorities.
Speaker 5: But I can tell you the real priority is fixing
Speaker 5: this affordability crisis for the American people. And when you
Speaker 5: think about no tax on tips, no tax on Social Security,
Speaker 5: no tax on overtime, potentially putting back in auto loan deductibility,
Speaker 5: all of those benefits accrue to the bottom fifty percent
Speaker 5: of income earners in America. They have really taken it
Speaker 5: between the eyes for the past four years, and that's unsustainable.
Speaker 4: Before I let you go, mister secretary, I want to
Speaker 4: ask you if you have had your traditional weekly meeting
Speaker 4: with FED Chair Powell.
Speaker 5: Yet we did that. I did an away game over
Speaker 5: the FED. We had a very nice breakfast. Chair Peal
Speaker 5: and I don't know each other well, so it is
Speaker 5: very constructive.
Speaker 4: How do you view that relationship involving the two agencies
Speaker 4: and buildings are supposed to work very closely together, And
Speaker 4: you've had some criticism in the past.
Speaker 5: Of his work, and as I said at my hearing,
Speaker 5: everything I'm going to talk about is things the Fed's
Speaker 5: done in the past prospectively monetary policy. I will not
Speaker 5: comment on, and I'm sure he's going to do the
Speaker 5: right thing so there'll be no criticism.
Speaker 4: All right, Well, mister secretary, thank you so much for joining.
Speaker 4: Kaylee back to.
Speaker 3: You, all right, Bloomberg Salaya Mosten live at the Treasury
Speaker 3: Department with the newly minted Treasury Secretary Scott Besson. A
Speaker 3: wonderful interview taking place here on Bloomberg TV and radio.
Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catch
Speaker 1: us live weekdays at noon and five pm. He's Durn
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Speaker 1: You can also listen live on Amazon Alexa from our
Speaker 1: flagship New York station Just Say Alexa played Bloomberg eleven thirty.
Speaker 3: Because we just heard from the Treasury Secretary Scott Besson.
Speaker 3: In his view and presumably the administration's view overall, the
Speaker 3: best thing for economic predictability, he says, is to make
Speaker 3: the twenty seventeen tax cuts permanent. This, of course, is
Speaker 3: one of the legislative objectives of President Trump and of
Speaker 3: this Republican controlled Congress. The question is how exactly they
Speaker 3: do that and when and how big is the bill?
Speaker 2: And it's those questions they're working through. Today.
Speaker 3: Is Donald Trump convened House Republicans at the White House
Speaker 3: to talk about the way forward on the budget. It's
Speaker 3: a complicated process. A budget reconciliation package can be a
Speaker 3: big thing, or it can be two pretty big things,
Speaker 3: as the Senate would prefer. Lindsey Graham saying he's losing
Speaker 3: patience with the House and he's going to go ahead
Speaker 3: and pursue a budget resolution on part of this, the
Speaker 3: border and defense and energy, and the Senate wants to
Speaker 3: get to taxes later. The question is whether the House
Speaker 3: can get it back together on its e idea for
Speaker 3: a one big, beautiful bill before that happens. So for more,
Speaker 3: let's turn to our political panel. Rick Davis is with
Speaker 3: me Stone Court, Capital partner and Republican strategist, alongside Democratic
Speaker 3: strategist Caitlin Legacki.
Speaker 7: Rick.
Speaker 3: Obviously, the Speaker of the House, Mike Johnson, had laid
Speaker 3: out a pretty ambitious timeline for trying to get one
Speaker 3: big package done. The more time that passes without forward progress,
Speaker 3: is it the greater likelihood that this thing does get
Speaker 3: split into parts?
Speaker 8: Yeah? I actually, you know, based on where everybody is today,
Speaker 8: I think there's literally no chance at the House of
Speaker 8: Representatives on this timetable that you just described the Speaker
Speaker 8: Johnson has, which includes getting and all these things done,
Speaker 8: the debt limit, the budget for this year, you know,
Speaker 8: all the reconciliation work that he's talking about doing, including
Speaker 8: an extension or making permanent the TCJA, all that by April.
Speaker 8: I don't think so. I mean, it's herculean task in
Speaker 8: Washington to do something like that. So I think what
Speaker 8: you see is what you get, which is the Senence
Speaker 8: already moving their budget, their border and their Defense bill
Speaker 8: that Donald Trump clearly wants and endorses as quickly as
Speaker 8: it can and leave time then throughout the course of
Speaker 8: the rest of the year to get done the work
Speaker 8: of making those tax tests permanent and increasing those taxests
Speaker 8: by other policy measures that Donald Trump hasn't even really
Speaker 8: endorsed or outlined yet.
Speaker 3: Well, so, Caitlin, here's the thing about what's making this
Speaker 3: difficult in the House. It's that there's hardline conservatives who
Speaker 3: want to see steep spending cuts and that's not really
Speaker 3: in line with what leadership thinks is realistic when you
Speaker 3: consider moderate members and the fact that the Senate needs
Speaker 3: to be on board with these ideas as well. If
Speaker 3: the Senate moves first and splits these things into giving
Speaker 3: the border win to the President and potentially a border
Speaker 3: win to those hardline conservatives, why then, if it's to
Speaker 3: a second tax package, would those same hardline conservatives be
Speaker 3: willing without other incentives to do things.
Speaker 2: That could add to the deficit.
Speaker 3: If one gets past how hard much harder does number
Speaker 3: two become.
Speaker 6: It's incredibly difficult. I mean, Democrats had this problem with
Speaker 6: the Infrastructure Bill and then the Build Back Better Act
Speaker 6: during President Biden's term. But I think the reason that
Speaker 6: this gets much much more difficult if you split this
Speaker 6: into two bills is then Republicans are going to be
Speaker 6: in a position where they have to trade making the
Speaker 6: tax cuts permanent in exchange for other budgetary offsets. The
Speaker 6: thing about reconciliation bills is that they have to be
Speaker 6: paid for, and so where there's risk there is that
Speaker 6: the biggest chunks of federal spending are things like veterans benefits,
Speaker 6: social Security, medicare things that are incredibly popular and will
Speaker 6: be politically very toxic if Republicans dismantle those programs or
Speaker 6: slash their funding in exchange for corporate tax cuts. So
Speaker 6: that's the line they're going to have to walk.
Speaker 3: Well, So if you're trying to walk that line, Rick,
Speaker 3: obviously you can see where the difficulties lie in there.
Speaker 3: And Seleiah was just talking about this with Secretary Besstt,
Speaker 3: this notion that there are a lot of tax ideas
Speaker 3: that have been put forward when it comes to reduce
Speaker 3: or no tax on tips, on social Security, on overtime.
Speaker 3: Is it going to be a matter of just whittling
Speaker 3: down what tax stuff can ultimately get through. Could we
Speaker 3: end up in a world where actually all that happens
Speaker 3: is an extension of the twenty seventeen package could be.
Speaker 8: And I think you've got to remember too on the
Speaker 8: political dynamic in the House, and this includes Democrats. If
Speaker 8: they let this tax cuts expire from twenty seventeen, it'll
Speaker 8: be the greatest tax increase in the history of the
Speaker 8: United States. There are a lot of vulnerable Democrats in
Speaker 8: Trump districts who are not going to vote for the
Speaker 8: large or sit back and vote against tax cuts that
Speaker 8: would rest bolt in an increase in their constituency tax
Speaker 8: taxes significantly. And so it's not just this Republican versus
Speaker 8: Democratic dynamic. And that's why I think having a standalone
Speaker 8: tax bill to vote on before the end of the year,
Speaker 8: as people ramp up for elections next year, that they're
Speaker 8: going to think twice if you're a Democrat about voting
Speaker 8: against this Trump tax policy. And look, you're not going
Speaker 8: to get some of these Republicans no matter what I mean,
Speaker 8: no matter if you even find offsets for this. These
Speaker 8: are people who don't support Donald Trump's agenda, regardless of
Speaker 8: what it is. These are folks who supported opponents to
Speaker 8: him in the primary they're not on board like the
Speaker 8: majority of the Republican caucus, and you're going to have
Speaker 8: to find Democrats to offset that. And if you pile
Speaker 8: everything into one big package, it's going to be much
Speaker 8: more complicated because then you're pressuring also, you know, sort
Speaker 8: of Biden district Republicans. Remember what's looming over top of all,
Speaker 8: this is the saltes.
Speaker 3: Ay Yes.
Speaker 2: Buzzword here on Bloomberg TV and Radio.
Speaker 3: Yes, the salt cap will feature in these conversations. Rick
Speaker 3: Davis and Caitlin Lagaki our political panel here on Balance
Speaker 3: of Power today.
Speaker 2: Thank you so much.
Speaker 3: I'll be joined straight ahead by Republican Congressman Mike Flood
Speaker 3: of Nebraska.
Speaker 2: I'll be back for more on Bloomberg.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
Speaker 1: us live weekdays at noon and five pm. He's durn
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Speaker 1: You can also listen live on Amazon Alexa from our
Speaker 1: flagship New York station Just Say Alexa played Bloomberg eleven thirty.
Speaker 3: Some of the headlines we got out of that interview
Speaker 3: between Bloomberg's Laya Mosen and Treasury Secretary Scott Besson that
Speaker 3: we just listened to live here on Bloomberg TV and Radio.
Speaker 3: In addition to talking about the dollar, we learned a
Speaker 3: few other things, including that he's met with the Chair
Speaker 3: of the Federal Reserve, Jerome Powell. He's not, though, interest
Speaker 3: in commenting on monetary policy, or for that matter, concerned
Speaker 3: about whether the fet is going to cut or not.
Speaker 3: They're looking at other ways to bring rates lower, a
Speaker 3: lot of that having to do with fiscal policy and
Speaker 3: cutting government spending. On that note, he also addressed the
Speaker 3: Department of Government Efficiency and the access they have been
Speaker 3: given to the treasury payment systems, the Treasury Secretary, saying
Speaker 3: that dogs will not be allowed to change the treasury
Speaker 3: system and has absolutely had no power to do so,
Speaker 3: and that people should not be concerned about treasury payments
Speaker 3: being made. He also was asked about tax policy, and
Speaker 3: he said the most important thing for economic predictability is
Speaker 3: to make the twenty seventeen tax cuts permanent. That, of course,
Speaker 3: is something that Congress is working on, although it's not
Speaker 3: clear how exactly or when that is going to happen
Speaker 3: and what all could go into this ultimate tax package.
Speaker 3: His axios is now reporting that At a meeting at
Speaker 3: the White House today between the President and House Republican
Speaker 3: leaders and members, he talked about some of his other
Speaker 3: campaign promises too, no tax on tips, on overtime, on
Speaker 3: Social Security. It's a lot to get done, and again
Speaker 3: the question is how as there's growing impatience in Congress
Speaker 3: for this budget reconciliation process to really get started. As
Speaker 3: we heard on Balance of Power yesterday from Republican Congressman
Speaker 3: Byron Donald's of Florida, here was his take.
Speaker 9: When it comes to tax policy, most of the Tax
Speaker 9: Cut and Jobs Act is not new policy that we
Speaker 9: got to work our way through. We are extending most
Speaker 9: of that policy and having new conversations on no tax
Speaker 9: on tips, no tax on overtime, no tax on social Security,
Speaker 9: the ECCA, and some other new tax pieces that we're
Speaker 9: going to have to figure out. But the political lift
Speaker 9: is not in explaining the policies, it's moving it through
Speaker 9: the two chambers. And my view, two bills is the way.
Speaker 5: To go at this point.
Speaker 3: Two bills is the way to go. He says, that's
Speaker 3: not what House leadership has been advocating for. One big,
Speaker 3: beautiful bill is the preference of the House. Although the
Speaker 3: Senate does like that two bill strategy and a budget.
Speaker 3: Chair Lindsey Graham is saying he's going to move ahead
Speaker 3: on that next week. So the clock is ticking for
Speaker 3: House leadership and we want to go now live to
Speaker 3: the House. Joining me from Capitol Hill is another voice
Speaker 3: to add to this conversation. Republican Congressman Mike Flood of
Speaker 3: Nebraska is joining us here on Bloomberg TV and radio.
Speaker 3: He is the vice chair of the Main Street Caucus. Congressman,
Speaker 3: welcome back. It's always great to have you. Can you
Speaker 3: just tell it like it is as you understand it now?
Speaker 3: Is there a one bill plan that is looking like
Speaker 3: it is making progress forward?
Speaker 7: Well, we've said for a long time, most of us
Speaker 7: in the House have said one bill makes sense. Listen,
Speaker 7: We've got to get everybody on the same page. The
Speaker 7: more bills you have, the more uncertainty you interject into
Speaker 7: this whole process. You know, we're talking about tax cuts,
Speaker 7: border energy independence, and spending cuts. Out of those four things,
Speaker 7: there's a million things that could go wrong, and each
Speaker 7: one of the four policy objectives, I think the only
Speaker 7: way to go forward, like the President said, like our
Speaker 7: Speaker has said, like our Appropriations chair has said one
Speaker 7: big bill, and you know what, quite frankly, it's frustrating
Speaker 7: that we can't land on an answer. Even if it
Speaker 7: was two bills. Somebody make the call and go forward.
Speaker 7: We can't be messing around with this. In my opinion,
Speaker 7: it should be one bill. That's where House leadership has been,
Speaker 7: That's where Jason Smith, the chairman of the Ways and
Speaker 7: Means Committee, has been, and I'm hopeful that we get there.
Speaker 7: But I'll tell you the way it is right now.
Speaker 7: And I was on the phone last night with House Leadership,
Speaker 7: some members of House leadership. They were still working at
Speaker 7: eleven thirty, back and forth trying to figure out how
Speaker 7: they could make this meeting at the White House very
Speaker 7: productive today. And I actually think they made some good
Speaker 7: progress last night in the Speaker's office. I really credit
Speaker 7: folks like Mike Johnson and Chip Roy. They are working
Speaker 7: this out, trying to get to yes, and I'm confident
Speaker 7: we'll get there. It's always messy, but democracy is messy
Speaker 7: and our process is messy, but the result will be good.
Speaker 3: So who is most contributing to the mess right now? Congressman?
Speaker 3: Is it the hardline conservative in your conference? You are
Speaker 3: pushing for steeper spending cuts or it is or is
Speaker 3: it anti senators like Senator Lindsay Graham who are trying
Speaker 3: to get ahead of your chambers work.
Speaker 7: You know, in my opinion, the House of Representatives wants
Speaker 7: deeper spending cuts that maybe the Senate does. Right now,
Speaker 7: that's just me reading the situation. I'm interested in spending
Speaker 7: cuts that change the trajectory of our thirty six trillion
Speaker 7: dollar deficit. I want to see big things done because
Speaker 7: I want to put this whole crisis with our debt
Speaker 7: behind us. Not everybody has the same interest there. So
Speaker 7: from where I sit, it's not whether we extend the
Speaker 7: tax cuts or the border or energy independence. Everything we're
Speaker 7: talking about now really concerns how deep do we cut?
Speaker 7: What do we cut, and how does it look and
Speaker 7: how do we explain it to the American people?
Speaker 3: Well, so, can you shed a little more light on
Speaker 3: what the discussion is around what and how deep will
Speaker 3: be cut? Considering it does seem that there isn't much
Speaker 3: appetite to cut mandatory spending. And yet if you're trying
Speaker 3: to get spending cuts of the size that some of
Speaker 3: your colleagues want, you might have to tap into somewhere.
Speaker 5: Well, absolutely, we.
Speaker 7: Do have to tap into mandatory spending. That said, in reconciliation,
Speaker 7: you can't touch social Security. The President has said he
Speaker 7: does not want to see any cuts to the benefits
Speaker 7: delivered to patients for Medicare, and I'm now hearing medicaid. However,
Speaker 7: there are things that we can do. There are provider
Speaker 7: taxes that are paid by health care providers and then
Speaker 7: they get a rebate back on that. That's not a
Speaker 7: fee for service. There's different types of funding for social
Speaker 7: safety net programs. There's things that we don't think work
Speaker 7: very well that have been funded for years. There's also
Speaker 7: student loans and should we put a cap on some
Speaker 7: of those things. There's a variety of ways to cut.
Speaker 7: You'll see a menu of options that will come out
Speaker 7: in March, and it will be littered with a collection
Speaker 7: of ideas, some of which Americans are going to really
Speaker 7: not before. But hey, if we don't sacrifice, if we
Speaker 7: don't understand that this is going to be a painful process,
Speaker 7: nothing's going to change. And I guess my message to
Speaker 7: the American people is we as a nation, as Americans,
Speaker 7: have to recognize that this is such a big problem
Speaker 7: our debt, that we're going to have to say no
Speaker 7: to some programs that we like but we simply can't afford.
Speaker 7: And it's easier said than done. I'm ready to go there.
Speaker 7: I've been preparing my constituents for such a thing. We
Speaker 7: need the buy in of the American people to say,
Speaker 7: you know what, this is short term pain for long
Speaker 7: term national security, not living under this crippling thirty six
Speaker 7: trillion dollar debt.
Speaker 3: Well, and we know the debt reduction efforts aren't just
Speaker 3: within your Chamber or Congress. It's also actively underway at
Speaker 3: the Department of Government Efficiency through the efforts of Elon Musk,
Speaker 3: and already we're seeing movement there and through executive orders
Speaker 3: as well as any of this front running the ability
Speaker 3: to get these spending cuts on paper in the reconciliation process. Though,
Speaker 3: congressoon how does this all fit together?
Speaker 7: Well, I think there are some things that Doge can
Speaker 7: tell us about that we can do in the reconciliation.
Speaker 7: Others will be executive branch options. I'm glad of your
Speaker 7: reporting today. I had the same conversation with our Treasury
Speaker 7: Secretary and Monday night I asked him, does Elon Musk
Speaker 7: or DOGE have direct access to the federal payment system.
Speaker 7: He said, no, they have a read only access of
Speaker 7: past expenditures. That's no different than a state auditor having
Speaker 7: access to all the expenditures in a state budget. I
Speaker 7: don't see why that is so alarming. But I did
Speaker 7: make clear to the Treasury Secretary that we're counting on
Speaker 7: him to do a good job. We're counting on him
Speaker 7: to protect American's private information. And I also told him
Speaker 7: that at the end of the day, Article one of
Speaker 7: the US Constitution gives Congress the power of the purse,
Speaker 7: and ultimately, if these things are going to get solved,
Speaker 7: it has to go through Congress.
Speaker 3: Well, in Congress also, of course, has oversight responsibility. Should
Speaker 3: Elon Musk be added to that. Does he need to
Speaker 3: come testify in Congress as to what exactly DOJE is doing,
Speaker 3: have some form of the legislative branch holding him accountable.
Speaker 7: Well, I'll tell you what. Right now, he's acting at
Speaker 7: the behest of the president who just won a national
Speaker 7: election on this very issue of cutting government spending. I
Speaker 7: also understand that Elon must can't make any changes to
Speaker 7: the federal payment system, so he's going to read only capacity.
Speaker 7: People are going to react to whatever he puts on
Speaker 7: his platform called X. But ultimately, and I've heard this
Speaker 7: from the President, I've heard this from the President's people.
Speaker 7: There's only one person that speaks for this administration, and
Speaker 7: that is President Trump himself. And President Trump has said
Speaker 7: there are things we are going to a green wand
Speaker 7: with Elon, there's things we might not do. I think
Speaker 7: there's an appropriate level of oversight. Again, Elon is only
Speaker 7: entitled to a read only version of federal expenditures. That's
Speaker 7: not crippling democracy in any way. That's finding out what's
Speaker 7: been going on with this huge bureaucracy. Quite frankly, a
Speaker 7: lot of the folks that I represent are like, finally
Speaker 7: someone's looking into this, and I'm I'm excited about where
Speaker 7: we can go. As as a member of Congress, I
Speaker 7: want to compliment what DOJE is doing by making those
Speaker 7: cuts permanent.
Speaker 3: Well, Congressman, I'd like to ask you about what else
Speaker 3: your branch is going to have to achieve in the
Speaker 3: not so distant future. Here, we've obviously begun our conversation
Speaker 3: on reconciliation, but there are still funding measures that need
Speaker 3: to somehow get passed, if not another continuing resolution by
Speaker 3: mid next month, a debt sealing deadline that is going
Speaker 3: to be looming as we get closer and closer to
Speaker 3: the X date with each passing day. How do those
Speaker 3: things get done? And frankly, are you able to do
Speaker 3: it alone as Republicans or do you need Democratic support?
Speaker 7: Well, I'm one of four hundred and thirty five, but
Speaker 7: I think we should put the debt sealing conversation and
Speaker 7: the policy in our reconciliation package and get that passed
Speaker 7: if we can do it in a timely manner. You know,
Speaker 7: we've got to deal with the government funding expiration on
Speaker 7: March fourteenth. One of the things I want is I
Speaker 7: want to see us implement our twenty twenty four budget priorities.
Speaker 7: We should not be living under a budget that was
Speaker 7: signed by Joe Biden. It was also authored by Senate
Speaker 7: Democrats with House Republicans want. I want a twenty twenty
Speaker 7: four budget that's put in place until we get to
Speaker 7: our twenty twenty five budget, that has our priorities in it,
Speaker 7: our focus. I don't want another simple continuing resolution just
Speaker 7: to kick the can down the table. And if I
Speaker 7: were an appropriator, I would think that would be a
Speaker 7: slap in the face. They spent all last year putting
Speaker 7: a budget together, and we're going to simply just do
Speaker 7: a kick the can down the hill maneuver with another
Speaker 7: continuing resolution. Listen, we're here to govern, We've put the
Speaker 7: time in. Let's make that our funding policy for twenty
Speaker 7: twenty four and get that done.
Speaker 9: Well.
Speaker 3: As you allude to kicking the can, though, at least
Speaker 3: in most recent history, that can can't be kicked without
Speaker 3: democratic feet also taking part in the can kicking. It
Speaker 3: has had to be a bipartisan initiative, Congressman, And based
Speaker 3: on the the kind of temperature in the House right
Speaker 3: now and how displeased Democrats seem to be with what
Speaker 3: some of what has gone on in the last few weeks,
Speaker 3: are you confident that those votes will still be provided
Speaker 3: to make up for Republicans who very well might not
Speaker 3: vote for some of these policies that we're talking about here.
Speaker 7: Well, you know we're talking about continuing budget funding. This
Speaker 7: isn't a vote on reconciliation. I know that Tom Cole,
Speaker 7: our Appropriations chairman, talks with his counterparts on a bipartisan
Speaker 7: basis in the Senate, and certainly here in the House,
Speaker 7: appropriators have their own language. They know how to work
Speaker 7: through these funding issues. They've done this for years on
Speaker 7: years and years. I'm confident that we can work on
Speaker 7: a bipartisan basis. Listen, outside of reconciliation. If we're going
Speaker 7: to make any progress the next two years, we're going
Speaker 7: to have to work with fifty three Senators and seven
Speaker 7: Democrats at a minimum to make the government run. And
Speaker 7: so that should come as no surprise. We can achieve
Speaker 7: that we've done it before. It will require some compromise,
Speaker 7: but you know what, I've voted for those continuing resolutions.
Speaker 7: I've been part of the bipartisan effort to put them
Speaker 7: together as the vice chair of the Main Street Caucus,
Speaker 7: you know, almost eighty five members strong. We are the
Speaker 7: ones that come to work every day, that make sure
Speaker 7: that America is open for business, that our bills are paid,
Speaker 7: and that we are responsibly governing. And I can tell
Speaker 7: you we will get past March fourteenth. The government will
Speaker 7: be funded, We'll figure out our plan on the debt
Speaker 7: service or the debt limit, and ultimately we're going to
Speaker 7: have to find some way forward with the Senate and
Speaker 7: maybe even some members of the House Democrats.
Speaker 3: All right, Well we'll leave it on that note. Republican
Speaker 3: Congressman Mike Flood of Nebraska joining me live from Capitol
Speaker 3: Hill today. Thank you so much helping us work through
Speaker 3: a lot of these fiscal conversations.
Speaker 7: Thanks for listening to the Balance of Power podcast. Make
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