WEBVTT - Republican Senator Thom Tillis Talks Kevin Warsh, Federal Reserve

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>The Senator Standing file. Let's get to him right now.

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<v Speaker 2>Senator Tom Taillis from North Carolina joins a small for more. Senator,

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<v Speaker 2>welcome to the program. So you have been vouning to

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<v Speaker 2>block any nomination to the Federal Reserve until the DJ

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<v Speaker 2>wraps up its investigation. We have some news this morning.

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<v Speaker 2>As you know, Kevin Walsh has been nominated by the

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<v Speaker 2>President of the United States to succeed CHAIRM and Power.

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<v Speaker 2>Does it change anything for you, sir, No, it does.

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<v Speaker 1>I am pleased with the nominee. I think that by

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<v Speaker 1>most accounts he is well regarded. But we still have

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<v Speaker 1>to clear the current matter. Look, they're pursuing a on

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<v Speaker 1>the basis of criminal intent testimony and a banking committee

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<v Speaker 1>hearing that clearly had no criminal intent. So to me,

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<v Speaker 1>you got some assistant US attorney with a dream in

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<v Speaker 1>the DC district that should really determine whether or not

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<v Speaker 1>this frivolous prosecution is worth holding up a FED board seat.

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<v Speaker 2>So we have some time between now and May four

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<v Speaker 2>that investigation to go away and for the confirmation process

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<v Speaker 2>to open up. Have you given thoughts to what would

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<v Speaker 2>happen if we don't have that time we get to May,

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<v Speaker 2>this is still lingering and the chairman steps away. What

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<v Speaker 2>happens that it's helping the feder reserve.

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<v Speaker 1>Well, I think that we all need to understand we

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<v Speaker 1>still have a working quorum of members, whether or not

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<v Speaker 1>they have an acting chair as a decision that the

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<v Speaker 1>President and assume the Treasury Secretary and others can look at.

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<v Speaker 1>But that's not my problem. We're here because of them,

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<v Speaker 1>We're not here because of me, and so I think

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<v Speaker 1>they should work expeditiously if they really do. I'm not

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<v Speaker 1>an attorney. I watch a lot of crime shows, but

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<v Speaker 1>doesn't look like there was any criminal intent here. They

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<v Speaker 1>have to determine whether or not it's worth grinding this out.

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<v Speaker 1>Like I said, I didn't put us here. Some assisted

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<v Speaker 1>US attorney the DC District decided to put us here,

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<v Speaker 1>and they've got to determine if they have a case

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<v Speaker 1>it's worth pursuing.

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<v Speaker 3>Senator Tillis, has anyone from the administration or the Department

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<v Speaker 3>of Justice reached out to you about the process of

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<v Speaker 3>how this could go down or giving you confidence that

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<v Speaker 3>this will be dropped in time for the confirmation hearing

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<v Speaker 3>to go forward?

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<v Speaker 1>Well, Lisa, I'd never talked about my conversations with any members.

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<v Speaker 1>People always ask me what goes on at lunch. I

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<v Speaker 1>just don't have those conversations. But my public statements stand

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<v Speaker 1>for themselves.

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<v Speaker 4>Is closing the investigation enough a Senator?

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<v Speaker 5>Or do you need other assurances that you think this

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<v Speaker 5>administration is going to respect the FED independence?

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<v Speaker 1>Well, right now, I think you do that by making

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<v Speaker 1>a judgment. Look, we've got two cases here, right, We've

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<v Speaker 1>got the cookcase and we have the Power case. Both

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<v Speaker 1>of those to me are instances of independence, and I'm

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<v Speaker 1>staying focused on that one goal. I'm not really persuaded

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<v Speaker 1>or even willing to entertain any discussions that take me

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<v Speaker 1>off that goal.

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<v Speaker 4>Okay, but you just mentioned the Lisa Cook case.

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<v Speaker 5>Do you also need to see that wrapped up either

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<v Speaker 5>by the Supreme Court in order to move forward?

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<v Speaker 1>Yeah? I do. I mean, because look, I mean we're

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<v Speaker 1>talking about what looks like a paperwork error or if

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<v Speaker 1>there was, if there was a mistake long before she

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<v Speaker 1>was confirmed for the board. It's like, my goodness, guys,

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<v Speaker 1>I mean, I don't know, maybe Paulty or somebody thought

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<v Speaker 1>that that was cute. I didn't, so just to.

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<v Speaker 5>Be clear, it is not just the DOJ investigation to

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<v Speaker 5>the FED that you need wrapped up. You also need

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<v Speaker 5>the Supreme Court case wrapped up. So it's two issues

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<v Speaker 5>right now and blocks for you to move forward with Kevin.

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<v Speaker 1>Warsh Yeah, well no, let me let me buy far

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<v Speaker 1>kate these one is moving forward with another that the

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<v Speaker 1>case that will prevent me considering any board nominee is

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<v Speaker 1>the Powell case. But I will not move forward. So

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<v Speaker 1>for the for the chair, which we know expires in February.

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<v Speaker 1>The other case we have, you know, the Myron term

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<v Speaker 1>is about to expire because he was filling up basically

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<v Speaker 1>six weeks I'm sorry, six months. We've got the Cook seat.

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<v Speaker 1>Those are ones that are really going to be I'll

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<v Speaker 1>take a look at the candidate. I'll take a look

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<v Speaker 1>at how it would affect the board. Look, this is

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<v Speaker 1>all in my opinion, this is all about sending a

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<v Speaker 1>signal to the markets and to the business community that

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<v Speaker 1>FED independence is critically important. And going after the chair

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<v Speaker 1>I think took a stool out of the foundation of

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<v Speaker 1>people's confidence, or a lag out of the stool. In

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<v Speaker 1>the case of Cook, I do believe that it's another

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<v Speaker 1>example of a trend, and the Senate has to stand

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<v Speaker 1>in the breach. We have to make sure that the

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<v Speaker 1>Fed maintains its independence and we cannot reward any bad

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<v Speaker 1>behavior that seems like it's surely motivated. How about the

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<v Speaker 1>substance of the allegations, but by the interest and trying

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<v Speaker 1>to undermind the FED independence.

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<v Speaker 2>Senator, what's your understanding as to whether the Federal Reserve

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<v Speaker 2>is cooperating with that investigation? Some conflicting reports over the

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<v Speaker 2>past few days. What you'll read on the situation.

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<v Speaker 1>I you know, I'm not really sure, Jonathan. I'm going

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<v Speaker 1>to leave that that's a better question to ask the

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<v Speaker 1>administration of the DOJ.

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<v Speaker 2>What if we get the opportunity to speak to them,

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<v Speaker 2>I'm sure we'll ask. I've got the opportunity to ask

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<v Speaker 2>you about the man and not just the process. You

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<v Speaker 2>said this morning, and you've said it again that Kevin

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<v Speaker 2>Walsh is a qualified nominee with a deep understanding of

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<v Speaker 2>monetary policy. For those familiar with Kevin Walsh in his

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<v Speaker 2>time at the Federal Reserve back in the financial crisis,

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<v Speaker 2>they have considered him to be on the more hawkish

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<v Speaker 2>side of the spectrum on the FMC, and there is

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<v Speaker 2>some debate this morning, Senator about what Kevin Walsh actually

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<v Speaker 2>stands for. Given that we know the president wants lower

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<v Speaker 2>interest rates, what's your understanding of what he stands for.

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<v Speaker 1>Well, you know, I with Sir Powell, I haven't agreed

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<v Speaker 1>with all of the opinions. I'm not an economist or

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<v Speaker 1>his positions, and sometimes I may be more hawkers than

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<v Speaker 1>share Powell. So coming in, I think Walsh is a

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<v Speaker 1>good independent. He's got an extraordinary reputation in a community

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<v Speaker 1>of economists and people focused on the FED. I don't

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<v Speaker 1>think that he would want to destroy his reputation by

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<v Speaker 1>being independent. You know, you could have hawkish members like

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<v Speaker 1>Waller and others, and I'm fine with them on the

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<v Speaker 1>board to stretch the thinking. But I don't believe he

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<v Speaker 1>comes in is more or less going to do the

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<v Speaker 1>bidding of the administration, which is critically important and incidentally,

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<v Speaker 1>I should say it's critically important for the health and

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<v Speaker 1>hygiene of the administration.

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<v Speaker 3>Senator tell Us, does this give you any more confidence

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<v Speaker 3>that actually the independence of the Federal Reserve will not

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<v Speaker 3>be undermined, that this actually is going to be a

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<v Speaker 3>proper process. Once some of the roadblocks you're talking about

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<v Speaker 3>are going to be cleared.

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<v Speaker 1>Yeah, I think so, Lisa. And look, this is this

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<v Speaker 1>is actually democracy and institutional separation at its finest. We

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<v Speaker 1>have a disagreement, and we have a mechanism in place

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<v Speaker 1>for resolving this and moving on. I hope that no

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<v Speaker 1>one in the administration takes personal offense to this. I'm

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<v Speaker 1>doing my job, Senator.

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<v Speaker 4>Do you have any understanding of the timeline?

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<v Speaker 1>Well, you know, the investigations can go on forever. I mean,

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<v Speaker 1>you could see one scenario where Chair Powell has two

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<v Speaker 1>years left on his term even after he comes off

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<v Speaker 1>the board. So I mean you could see this going

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<v Speaker 1>on for two years or in my case, three hundred

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<v Speaker 1>and thirty nine.

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<v Speaker 5>Days, because three hundred and thirty nine days that's when

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<v Speaker 5>you're going to be retiring. And I know, Lisa, as

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<v Speaker 5>you have had any conversations, I want to ask you

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<v Speaker 5>about those conversations. But have you, guys seen any indications

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<v Speaker 5>from anyone that they do want to wrap up the

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<v Speaker 5>DOJ investigation as soon as possible?

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<v Speaker 1>Well, you know, I think, Andrew, I think that the

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<v Speaker 1>fact that they're putting for this nominee knowing that it

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<v Speaker 1>would be impossible to get him through with the current

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<v Speaker 1>position that I've taken, it suggests to me that maybe

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<v Speaker 1>they are trying to find a way to deal with this.

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<v Speaker 1>It could be adjudicated expeditiously, or it could be just

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<v Speaker 1>determining that they also agreed that there was no criminal

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<v Speaker 1>intent and the chairs testimony and the banking committee that

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<v Speaker 1>I participated in.

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<v Speaker 2>Senator, just quickly, have you spoken to the White House?

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<v Speaker 2>Have they reached out? You know?

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<v Speaker 1>Like I said, I have ongoing discussions, so the President

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<v Speaker 1>I probably communicate once or twice a week at least

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<v Speaker 1>through texts. So I have ongoing discussions. I'm not going

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<v Speaker 1>to talk about the content of them, Jonathan. Kind of

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<v Speaker 1>like groundhog Day, I'm going to answer the same question

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<v Speaker 1>every day the same way.

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<v Speaker 4>Good movie I heard, Senator.

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<v Speaker 2>We appreciate your time, Thanks for jumping on the cod

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<v Speaker 2>Thank you, sir, Thank you very much. Senator Tom tillis

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<v Speaker 2>there on his way to the gym. The Senator made

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<v Speaker 2>me watch groundhog Day.