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Speaker 2: Before Trump can get to his agenda on Friday, he
Speaker 2: has a lot to do here in Washington in the
Speaker 2: next few days. He will of course be attending former
Speaker 2: President Jimmy Carter state funeral tomorrow, and ahead of that,
Speaker 2: this evening, he is expected to meet at the Capitol
Speaker 2: with Senate Republicans as lawmakers look for some clarity on
Speaker 2: what exactly the legislative path forward is he would like
Speaker 2: to pursue. There's a little bit of a difference between
Speaker 2: the Senate and the House here, and it's on the
Speaker 2: House that we'd like to focus with our next guest,
Speaker 2: the former chair of the House Financial Services Committee, someone
Speaker 2: who once held the Speaker's gavel for a brief period
Speaker 2: of time in twenty twenty three, is here with us now,
Speaker 2: former Congress and Patrick mcchenery of North Carolina here in
Speaker 2: our Washington, d C. Studios. So nice to see you
Speaker 2: on the other.
Speaker 3: Side, Yes, and nice to be in studio as well.
Speaker 2: It's lovely to have you as you are now on
Speaker 2: the outside looking in, anticipating what is about to happen.
Speaker 2: Now that Republicans do have entire control of Washington, how
Speaker 2: easy is it actually going to be to be able
Speaker 2: to exercise that control when it comes to some of
Speaker 2: these big ticket items we're talking about, tax reform, immigration reform,
Speaker 2: energy policy.
Speaker 3: Big ticket items, major consequences, high stakes, narrow majorities. This
Speaker 3: is going to be a hell of a grind. That
Speaker 3: is the only way to describe it. We saw an
Speaker 3: opening day with a speaker's vote. We had fifteen votes
Speaker 3: for Speaker McCarthy's election. He got through it without help.
Speaker 3: That yet a faction within the House think that they
Speaker 3: were playing with the same dynamics as two years ago,
Speaker 3: and Speaker Johnson had his cart, which was the President
Speaker 3: elect Donald Trump, saying that this is an imperative to
Speaker 3: elect the speaker. So we saw the dynamic shift and
Speaker 3: the power shift here in a significant way. That President
Speaker 3: Trump's power and popularity and the mechanics of good leadership
Speaker 3: in the House can lead to results. And so I
Speaker 3: think we're going to have a I think you're going
Speaker 3: to get the big ticket items done. It's going to
Speaker 3: be the secondary issues that are going to be much
Speaker 3: much harder, and we need to lower I think Republicans
Speaker 3: need to lower their expectations on being able to achieve
Speaker 3: that in a timely manner.
Speaker 4: I'm struck by the singular experience that Mike Johnson is
Speaker 4: having right now. You're one of the only people in
Speaker 4: the world and that is what it's like to stand
Speaker 4: in that rostrum look across the floor of the House
Speaker 4: of Representatives. We know that he's going to have an
Speaker 4: even smaller majority in this new Congress than he had before.
Speaker 4: But bring us back to that view. When you're in
Speaker 4: the rosterum and you're looking at that room in front
Speaker 4: of you and the Republican conference. We hear a lot
Speaker 4: about the five families. What did it look like to you?
Speaker 4: Did you see these factions spread out in front of
Speaker 4: you as you were.
Speaker 3: I spent most of my career in the House focusing
Speaker 3: on the mechanics the COO role, not the CEO role,
Speaker 3: not the chairman role, but the mechanics of the day
Speaker 3: to day and how to deliver on this So when
Speaker 3: I look out, I see the groups of people, how
Speaker 3: they're sitting, where they're sitting, their disposition, who are they
Speaker 3: talking to. Who is the person who's not supposed to
Speaker 3: be in that row talking to somebody in that row?
Speaker 3: Why are these two people that I know hate each other,
Speaker 3: have personally told me they cannot stand each other, but
Speaker 3: they're laughing and hugging about something that's probably not good, right,
Speaker 3: It's a dangerous thing. So when you look out at
Speaker 3: the mechanics of this and what you saw from a
Speaker 3: Speaker Bayner and a Speaker McCarthy in particular, is they
Speaker 3: knew the granular details of this stuff, and Speaker Ryan
Speaker 3: came in with a different view, and I would say
Speaker 3: that Speaker Johnson comes in with a different view. They're
Speaker 3: at the higher level of policy, the mechanics. They have
Speaker 3: not been steeped in. That's not their first order capacity.
Speaker 3: So they lead in a different way than those that
Speaker 3: understand the tactical day to day. And we're in an
Speaker 3: environment now where President Trump has this overarching has this
Speaker 3: umbrella that enables policy to be made within those powers
Speaker 3: and within those contours. If he is definitive and certain,
Speaker 3: we're in this situation now where it just as a
Speaker 3: primary example, where if the president says he wants one
Speaker 3: reconciliation package, there'll be one reconciliation package. And if he
Speaker 3: says there are two, there will be two. And if
Speaker 3: he says maybe one, maybe two, you may get none.
Speaker 3: And so he has to be definitive in what he wants,
Speaker 3: in his expectations and then demand that congressional leaders perform
Speaker 3: to that. An uncertainty means nothing happens.
Speaker 2: Okay. So when we look at as Joe is alluding
Speaker 2: to the many different factions here, the people you might
Speaker 2: find suspicious if they were sitting together the Freedom Caucus,
Speaker 2: for example, which caused a lot of trouble for Speaker McCarthy.
Speaker 2: That's why you had to step in for a few
Speaker 2: weeks there to hold the gavel yourself. Are those the
Speaker 2: same people that you see as most likely to ultimately
Speaker 2: bow to what the former president and president elect is
Speaker 2: going to want, because they're the ones who are likely
Speaker 2: to push back on a debt sealing increase, on the
Speaker 2: idea of tax cuts without at least somewhat offsetting spending cuts.
Speaker 3: Well, they're the ones that are most outspoken, and they're
Speaker 3: currently getting the most attention, but you have those that
Speaker 3: are on the moderate end of the Republican Party that
Speaker 3: are not getting attention, and they're the ones that will
Speaker 3: have significance sway over the contours of legislation as well.
Speaker 3: It is not just you know, you mentioned the five families,
Speaker 3: and it is to say that you can neatly divide
Speaker 3: this Republican Conference into five factions. They're more than that.
Speaker 3: I mean, it's a myriad of challenges the speaker faces
Speaker 3: and you have one off challenging individuals that because of personality,
Speaker 3: because of their lack of understanding how the place works,
Speaker 3: may be problems on a weekly basis here. So it
Speaker 3: is far more complicated, complicated than the Freedom Caucus. Though
Speaker 3: the Freedom Caucus is currently shown with the nine votes
Speaker 3: that they withheld to Speaker Johnson that they have the
Speaker 3: power to throw him out of the speakership. What they
Speaker 3: also submitted to is is an understanding that President Trump
Speaker 3: would force them to submit, and so they gave that
Speaker 3: up on the first vote. They made their show, but
Speaker 3: they did not extract any additional pain or get anything
Speaker 3: in result for that, other than to show they do
Speaker 3: have the capacity to take the speaker out. So it's
Speaker 3: a complicated thing, complicated beast. But this is why we
Speaker 3: like this, why I love following this stuff. This is
Speaker 3: why you know, this is far more interesting than any
Speaker 3: other sporting competition. You know, there's a little fomo, but
Speaker 3: it also is a little more liberating because I don't
Speaker 3: feel that weight in the pressure of that moment to perform.
Speaker 3: But it is absolutely fascinating. It's going to be a
Speaker 3: fascinating Congress to watch.
Speaker 4: I can't imagine how you remember that period of time
Speaker 4: when you were holding the gavel. But I think the
Speaker 4: point that you're making here is that even after Mago
Speaker 4: wins the election, House, Senate, White House, the power may
Speaker 4: in fact lie in the middle.
Speaker 3: It does, and inevitably outside of a reconciliation package, you
Speaker 3: need to have almost with a reconciliation package, you'd have
Speaker 3: to have near unanimous Republican support that is competent.
Speaker 4: Why won't he say what he wants like Johnson's begging
Speaker 4: for it? Just give us direction to your point.
Speaker 3: That has always been the bag of President Trump from
Speaker 3: legislative leaders that is the first term and is now
Speaker 3: in his second term. This is part of how he
Speaker 3: operates and when people seek clarity. He may withhold that
Speaker 3: that may be a purposeful act, and I think on
Speaker 3: the most part it is. In other regards, it may
Speaker 3: be the fact that it doesn't see or his advisors
Speaker 3: don't see the need for him to step in.
Speaker 4: Yet.
Speaker 2: He has obviously a long list of things he would
Speaker 2: like to see accomplished that he would like to see
Speaker 2: the US turn into, including something you're very familiar with
Speaker 2: as it pertains to crypto. He wants the US to
Speaker 2: be now the bitcoin capital of the world. You obviously
Speaker 2: worked very hard on crypto legislation when you were Chair
Speaker 2: of House Financial Services. You had to do so through
Speaker 2: bipartisan negotiations that may be less mandatory now if you
Speaker 2: will now that it will be full Republican control. How
Speaker 2: do you see the nature of any kind of market
Speaker 2: structure legislation, for example, that's going to move forward from
Speaker 2: here changing and how will it affect not just the
Speaker 2: incoming SEC chair Paul Atkins, but whoever takes Dars Benham's
Speaker 2: spot at the CFTC.
Speaker 3: Well, so let's step back what we got with our
Speaker 3: market structure legislation called FIT twenty one, which was first
Speaker 3: of his kind on crypto giving it a regulatory definition
Speaker 3: of what is a digital asset and a regular tour
Speaker 3: and actually two regulators because we're America and we do
Speaker 3: things in a more complicated what But Fit twenty one
Speaker 3: was the result of biparson negotiations and the House of
Speaker 3: Representatives without the help of a Senate banking chair. Now
Speaker 3: we have Tim Scott, a Senate banking chair. That is
Speaker 3: a world of difference from Democratic Senator cher Brown and
Speaker 3: a pro administration. And I was working in an adversarial administration,
Speaker 3: highly adversarial administration, and yet I had one third of
Speaker 3: the Democratic Party joined me, including the number two and
Speaker 3: number three House Democrat, former Speaker Pelosi, significant members Jim
Speaker 3: Himes of Connecticut, serious legislators across the left of center
Speaker 3: ideology joined with House Republicans with an administration that did
Speaker 3: not want them to do that. So I think the
Speaker 3: opportunity for Crypto legislating it goes way up because the
Speaker 3: environment is shifted, and Crypto has shown that they have
Speaker 3: capacity at the ballot box and they're willing to help
Speaker 3: their friends and go after their enemies. That is real
Speaker 3: power in Washington. They've expressed it. And if they're here
Speaker 3: to stay and here to play. They can have massive
Speaker 3: results over this Congress in future congresses.
Speaker 4: A big change coming to the FED. Are you going
Speaker 4: to get dinner with Michael Barr no time?
Speaker 3: Well I have that. I think Michael Barr resigning his
Speaker 3: vice chair to the FED is very good for a
Speaker 3: system of independent monetary policy and very good for the
Speaker 3: Federal Reserve. I think the likelihood that incoming President Trump
Speaker 3: would fire the head of regulation at the FED is
Speaker 3: number one warranted and number two likely to succeed in
Speaker 3: the courts. And so for Michael Barr to step aside
Speaker 3: is actually as a direct result of this election number one,
Speaker 3: and number two the direct result of his mismanagement of
Speaker 3: the new set of regulations in bank capital standards that
Speaker 3: he couldn't even see through before the election. So I
Speaker 3: think this is a welcome and good thing for the
Speaker 3: American economy, a welcome and good thing for financial stability
Speaker 3: and banking in the United States, and very good for
Speaker 3: our global leadership as well. I think the Federal Reserve
Speaker 3: Board does a fine job of overseeing their full powers
Speaker 3: when the board is in charge, and when they silo
Speaker 3: this off and hand it off to one individual on
Speaker 3: the board, they make mistakes, or that person keeps their
Speaker 3: does not keep their eye on the ball, like Michael
Speaker 3: Barr did not keep his eye on the ball in
Speaker 3: March with the March of twenty twenty three with the
Speaker 3: regional banking crisis. So I think it's a welcome and
Speaker 3: good thing, and I wish him well as a member
Speaker 3: of the Board of Governors, and I'm grateful that he
Speaker 3: has gone with those additional powers of being vice chair.
Speaker 2: Talking about the supervisory role of the FED here specifically,
Speaker 2: but you in that answer talked about the independent monetary
Speaker 2: policy setting role as well, and I wonder if you're
Speaker 2: confident about that independence in this incoming administration when just
Speaker 2: yesterday Donald Trump was at mar A Lago saying interest
Speaker 2: rates are far too high. Do you not think he's
Speaker 2: going to try to put some pressure here?
Speaker 3: He always does, and he always will every president, well,
Speaker 3: every president has, every president has FDR tinkered with the
Speaker 3: gold supply during the Great Depression. LBJ physically assaulted the
Speaker 3: chair of the Federal Reserve, right, So he's not doing that.
Speaker 3: It mean tweets that does not make monetary policy, and
Speaker 3: the Board of Governors at the Federal Reserve have long
Speaker 3: terms as Congress designed so they can have this longer
Speaker 3: term view. And I think Jay pal has done a
Speaker 3: fabulous job. Is share the FED. I think he's done
Speaker 3: a fabulous job. He's reining in what got out of
Speaker 3: control and inflation, and they're hitting their marks. But this
Speaker 3: president will speak his mind publicly where other presidents privately complained.
Speaker 3: And that is a big distinction between now and what
Speaker 3: was that.
Speaker 4: We spent a lot of time in our conversation. You've
Speaker 4: been very generous with your time talking about pretty recent history.
Speaker 4: You spent twenty years doing this. I'm glad to see
Speaker 4: the bow tie is still here. So what's next for
Speaker 4: Patrick McHenry? This is going to be a massive life
Speaker 4: change for you.
Speaker 3: It is it is this would've done my whole adult life,
Speaker 3: public policy campaigns and elections. I still want to remain
Speaker 3: involved in these big debates on financial policy. I think
Speaker 3: it's important that Americas stay at the fore front of
Speaker 3: the world of finance and we remain competitive. I have
Speaker 3: a deep interest in digital asset and cryptocurrency policy and
Speaker 3: affecting outcomes, but financial inclusion in fintech are these other
Speaker 3: areas of opportunity that I think we need to expand on.
Speaker 3: So like to stay involved in the public policy debate,
Speaker 3: but more meaningfully in the economic consequences of our economy
Speaker 3: and participating in that in a real way.
Speaker 4: Now, and you'll stay in touch with us.
Speaker 3: Absolutely. This is the best place.
Speaker 4: It is important to us.
Speaker 3: Well, this is the best place to know what is
Speaker 3: happening day to day, moment to moment with the markets
Speaker 3: and here in Washington. So thank you all. Thanks for
Speaker 3: having me Hi Pray sir, thanks.
Speaker 4: For being absolutely patchick. You Henry, former Congressman Republican with
Speaker 4: us at the table here in Washington.
Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catch
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Speaker 2: A great conversation with the former Chair of the House
Speaker 2: Financial Services Committee, Patrick McHenry, who was discussing something that
Speaker 2: is very relevant today and that is the path forward
Speaker 2: on budget reconciliation. This is something Donald Trump is going
Speaker 2: to be talking about with Senate Republicans in Washington this evening,
Speaker 2: and I believe what former Congressman mckenry told us Joe
Speaker 2: was essentially, as long as Trump is clear, that is
Speaker 2: what will happen. As long as Donald Trump, which is
Speaker 2: kind of where he is now, is suggesting one bill
Speaker 2: to bills, I'm down for anything he said. If he
Speaker 2: doesn't decide, that may be the one thing that makes
Speaker 2: sure nothing nothing happens.
Speaker 4: That's why Mike Johnson and John Thune want an answer,
Speaker 4: and we're wondering if they get one today. Let's assemble
Speaker 4: our panel because they have feelings about this too. Rick
Speaker 4: Davis is with US Republican strategist and partner at Stone
Speaker 4: Court Capital, Bloomberg Politics contributor, joined by Democratic strategist Christy Setzer,
Speaker 4: founder New Heights Communications. Great to have you both with
Speaker 4: us here, Rick, How important is it for Donald Trump
Speaker 4: to be clear with John Thune with Senate Republicans when
Speaker 4: they meet later on today? The clock is ticking here.
Speaker 4: If they want something out of the gate, they need
Speaker 4: to start writing legislation.
Speaker 5: Yeah, It's obviously been in Donald Trump's interest to try
Speaker 5: and push the envelope on timing. You know, we just
Speaker 5: talked about getting some of his confirmed Senate confirmed secretaries
Speaker 5: in day one. Well, he wants to have the same
Speaker 5: kind of impact legislatively. He wants day one that the
Speaker 5: Senate and the House has stepping off on his agenda.
Speaker 5: And what's really interesting to me is the fact that
Speaker 5: the president elects White House selection for immigration, Stephen Miller,
Speaker 5: has come out publicly saying he sided with Thune and
Speaker 5: we ought to do immigration first and get the rest
Speaker 5: of this stuff done in a second reconciliation package later.
Speaker 5: So when you start seeing people around Donald Trump articulating
Speaker 5: a clear strategy on what they think ought to get
Speaker 5: done and they're the ones advising Donald Trump, I think
Speaker 5: it leads you to a path that could likely be
Speaker 5: an outcome today, which is Donald Trump puts his hand
Speaker 5: on Majority Leader Thun's shoulder and says, you've got the ball,
Speaker 5: get this thing rolling. I want immigration, energy, and a
Speaker 5: few other things first and and and will handle tax
Speaker 5: cuts and other fiscal issues later. If that happens, then
Speaker 5: everyone salutes and steps off. There'll be no more debate.
Speaker 2: Okay, Well, I'm guessing the only people saluting, really though,
Speaker 2: will be Republicans Christy, not Democrats. And I do wonder
Speaker 2: the role, if any, you see them playing in here.
Speaker 2: By nature, reconciliation means that just the majorities can get
Speaker 2: this thing through. You don't need sixty votes in the Senate,
Speaker 2: for example. So do they have any leverage in this
Speaker 2: conversation as Chuck Schumer relevant to how John Thune pursues this.
Speaker 1: Yeah.
Speaker 4: Sure.
Speaker 6: We talked in the last segment about how Democrats right
Speaker 6: now are just going to try to control the things
Speaker 6: that they can, which include one sort of the controlling
Speaker 6: the media narrative a little bit. Obviously, as this process
Speaker 6: is going on, you're certainly going to see members of Congress,
Speaker 6: members of the Senate headed to cable networks to talk
Speaker 6: about what they would like to see in this process.
Speaker 6: And then they're also going to have some control, some
Speaker 6: leverage about you know, small process things. What can they delay,
Speaker 6: what can they emphasize, that sort of thing. So it's
Speaker 6: not that I necessarily think that Democrats have too much
Speaker 6: of a preference of what gets addressed first, whether it's
Speaker 6: immigration in the border or you know, tax cuts for example.
Speaker 6: But I do think to the extent that you know,
Speaker 6: Rick was emphasizing how Donald Trump has been quick out
Speaker 6: of the gate with you know, naming potential cabinet nominees,
Speaker 6: with legislation, wanting a big, beautiful bill, et cetera. Sure
Speaker 6: that shows that he is active, but it also shows
Speaker 6: not just your priorities, but your values. And I think
Speaker 6: that there is a lot of opportunity for Democrats right
Speaker 6: now to control the conversation about what are Donald Trump's values.
Speaker 6: We're going to talk about tax cuts. It's giving a
Speaker 6: huge benefit to people like Elon Musk and Jeff Bezos
Speaker 6: and Mark Zuckerberg and not you, right, So that is
Speaker 6: the leverage that Democrats bring right now.
Speaker 4: Boy, I can't imagine, guys, would people think, listening to
Speaker 4: this common every day, who's going to go first? Or
Speaker 4: they could be one or two bills? My goodness, we've
Speaker 4: been talking about this for days and you start wondering
Speaker 4: exactly why it matters. Rick. But with regard to the border,
Speaker 4: if this in fact did come down to two different
Speaker 4: swings at reconciliation and they want to get to the
Speaker 4: border first, could they not get some help from Democrats
Speaker 4: on that? Aren't there Democratic members in both chambers, frankly,
Speaker 4: but more so in the House who would like to
Speaker 4: be associated with border security.
Speaker 5: Sure, you saw a virtual stampede toward being more assertive
Speaker 5: on border security before the last election, because I think
Speaker 5: members of the Democratic Party started reading the surveys and
Speaker 5: realizing this itself is much more than just border security.
Speaker 5: And Donald Trump has said openly he'd be willing to
Speaker 5: engage with Democrats on what to do about Dreamers and
Speaker 5: work requirements and expanding H one B visa. And I mean,
Speaker 5: there's a lot to talk about on a bipartisan example,
Speaker 5: And we just saw a bipartisan bill come out of
Speaker 5: the United States Senate right before the election, parenthetically that
Speaker 5: Donald Trump had killed. But there is appetite for a
Speaker 5: bipartisan deal. I would say the one thing that is
Speaker 5: probably going to get in the way of anything significant
Speaker 5: like that is deportations. There'll be things in this bill
Speaker 5: that Donald Trump's going to want to have to make
Speaker 5: and ease his path to massive deportations. And I can't
Speaker 5: imagine a scenario where Democrats would sign on to any
Speaker 5: bill that has that kind of punitive provisions in it. So, yeah,
Speaker 5: there are lots of good things to do on a
Speaker 5: bipartisan basis. Things have been done in that way in
Speaker 5: the Senate kudos to them. We'll see if Donald Trump
Speaker 5: picks up where that left off and takes it one
Speaker 5: step further.
Speaker 2: So there may be some area for bipartisan cooperation on immigration, perhaps, Christy.
Speaker 2: But I also wonder about tax policy, because obviously there's
Speaker 2: going to be a massive tax reform debate, whether that
Speaker 2: is encompassing on this wider package or is indeed a
Speaker 2: separate reconciliation bill. When you think about issues that are
Speaker 2: likely to come up, like the salt cap, for example,
Speaker 2: something Donald Trump will be discussing with salt relevant Republicans
Speaker 2: at mar A Lago this week. That is something that Democrats,
Speaker 2: Chuck Schumer included, have long been pushing for. Is it's
Speaker 2: typically blue states that are most affected by that. Are
Speaker 2: there going to be Democratic votes showing up for a
Speaker 2: tax package that includes that or is able to maintain
Speaker 2: the tax cuts that were put into place for inclusive
Speaker 2: of middle income families in twenty seventeen.
Speaker 6: I do think that, I do think that is an
Speaker 6: area on the salt tax where they can peel off
Speaker 6: some Democrats, including yes, including Schumer and others in general,
Speaker 6: though that one provision does complicate an issue on which
Speaker 6: generally speaking there's unity for Democrats, and it is a
Speaker 6: really good issue for us in that, you know, in
Speaker 6: terms of messaging. I mean, obviously I mentioned earlier that
Speaker 6: just generally speaking, I don't believe that people voted to
Speaker 6: give a huge tax cut to you know, millionaires and millionaires.
Speaker 6: They voted because they thought that they themselves would benefit
Speaker 6: from those tax cuts. So there's certainly kind of opportunity
Speaker 6: for Democrats to explain what's going on with that and
Speaker 6: how it's going to play out. There's also a bit
Speaker 6: of an opportunity for an education campaign on you know,
Speaker 6: on how much this is all going to cost. It's
Speaker 6: going to add four trillion at least to the you know,
Speaker 6: to the budget, to the deficit over the next ten years.
Speaker 6: That's a problem, and how do we want to pay
Speaker 6: for it? Right, So that's actually where we get into
Speaker 6: the meat of the conversation. We're going to see huge
Speaker 6: Republican divisions on how to pay for it and where
Speaker 6: the kinds of ways that for example, the House Freedom Caucus,
Speaker 6: those issues that they would like to entertain about how
Speaker 6: to you know, uh, how to pay for it include
Speaker 6: cuts to programs that are deeply popular, Medicaid, Medicare, and
Speaker 6: again there's going to be real consequences to groups that
Speaker 6: actually just put Donald Trump back into office, among seniors,
Speaker 6: poor people, veterans, etc. So I do believe that they
Speaker 6: will be able to kind of pick off a few
Speaker 6: through issues like the salt tax. But for the most part,
Speaker 6: this is one where I think you're actually going to
Speaker 6: see a lot of democratic unity.
Speaker 2: It's going to be.
Speaker 4: Quite the patio of mar A Lago this weekend, Rick,
Speaker 4: there are large groups of Republican lawmakers who are headed
Speaker 4: to Florida for a confab. Governors will be there Thursday
Speaker 4: night Saturday. The Salty Republicans as we're calling them, will
Speaker 4: be there, The Freedom Caucus will be there. They all
Speaker 4: have their own interests, in their own ideas. What will
Speaker 4: come from these meetings at mar A Lago if nothing
Speaker 4: less than a congressional agenda.
Speaker 5: Yeah, my guess is it's more here's what we think
Speaker 5: we can accomplish, rather than give us your ideas on
Speaker 5: what you want to do as members. It's usually the
Speaker 5: way it works with the White House. But I guess
Speaker 5: this is mar Lago, the winter White House, you know,
Speaker 5: in about two weeks. So the reality is that I've
Speaker 5: been hearing Republicans, the salty Republicans, really minimizing the exposure
Speaker 5: on the salt tax. Many of them have taken up
Speaker 5: this queue that, wow, if we could just get a
Speaker 5: marriage penalty provision in there that gets rid of that,
Speaker 5: that would be great. It's not very expensive. It gives
Speaker 5: us something to say that we won I think if
Speaker 5: you have these kinds of attitudes going in, you're going
Speaker 5: to come out with some agreements that are going to
Speaker 5: put salt revisions on the tax code. So the reality is,
Speaker 5: if they don't do all these things and the tax
Speaker 5: code doesn't get passed for some reason, then the salty
Speaker 5: Republicans have a huge victory. All those provisions that took
Speaker 5: away theirsult tax go back into effect. So the reality
Speaker 5: is they do have some leverage. But I get My
Speaker 5: guess is they will come out of mar A Lago
Speaker 5: charged up. They'll be happy with what they hear from
Speaker 5: the incoming White House team, and that will start some
Speaker 5: of this momentum. As you can see, he's building momentum
Speaker 5: for early legislative successes, and I think it's a really
Speaker 5: good use of what has otherwise been really pretty dead
Speaker 5: time in a presidential transition.
Speaker 2: How early though, is early RACA Ultimately he does tell
Speaker 2: John Thune, look, get me that first earliest win and
Speaker 2: wait for taxes later. How late in the year do
Speaker 2: you anticipate that would be that the tax package actually
Speaker 2: gets through in a second budget reconciliation bill.
Speaker 5: Yeah, well, it depends upon obviously what else is coming
Speaker 5: up that needs funding. So you know, typically these reconciliation
Speaker 5: bills take on a life of their own when they're
Speaker 5: attached to fiscal measures. Right, so budget funding for the government.
Speaker 5: September is always a dicey month. It will be shocking
Speaker 5: to me that we have regular order this year and
Speaker 5: that we will have all the appropriations bills done before
Speaker 5: the end of September and we can fully fund the
Speaker 5: government for the first time in a few decades. So
Speaker 5: that will be actually one moment in time where you're
Speaker 5: going to have to fund the government. It's a must
Speaker 5: pass bill. You slap what reconciliation in there, and you
Speaker 5: got a big fat tax cut, and you know, you'll
Speaker 5: see a lot of Republicans cheering for that kind of
Speaker 5: effort and a lot of Democrats really angry that they're
Speaker 5: going to miss an opportunity to vote on some good
Speaker 5: things in the budget because they've attached to tax cuts.
Speaker 5: So I always think that that would be one of
Speaker 5: the first opportunities on a must pass legislation that you'd
Speaker 5: see reconciliation number two.
Speaker 2: All right, Rick Davis, stone Court, Capital partner and Bloomberg
Speaker 2: Politics contributor together today with Christy Setzer, founder of New
Speaker 2: Heights Communications and Democratic Strategists. Thank you both.
Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catchs
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Speaker 4: We turn our attention to what's happening right now in
Speaker 4: southern California, Kaylee. The images have been just remarkable. We
Speaker 4: were just looking at some of the tape from last
Speaker 4: evening when the Getty Villa was just surrounded, it was engulfed,
Speaker 4: and we're seeing these wildfires get incredibly close to downtown
Speaker 4: Los Angeles. If you're with us on Bloomberg TV or
Speaker 4: on YouTube right now, this is the Palisades that's adjacent
Speaker 4: to Santa Monica. Some incredibly beautiful homes and some rather
Speaker 4: famous and wealthy people live there, Kayley, and it's getting
Speaker 4: ever closer to some very concentrated population centers.
Speaker 2: Yeah, we know that the fires already have killed two people.
Speaker 2: More than eleven hundred structures have been destroyed, many homes
Speaker 2: just simply burned to the ground as people have, of
Speaker 2: course rushed to evacuate to safety. All of this being
Speaker 2: intensified and spread by really powerful winds that are making
Speaker 2: it very difficult for firefighters to get this thing under control.
Speaker 2: So we wanted to get an update now and turn
Speaker 2: to David Baker, who's Bloomberg Climate and Energy reporter coming
Speaker 2: to us from San Francisco today as we look down
Speaker 2: south in your state, David, is there any indication that
Speaker 2: these are going to be able to be controlled anytime soon?
Speaker 2: With winds like this, it's.
Speaker 7: Going to be very difficult for firefighters to get a
Speaker 7: handle on these fires until the winds abate, and they
Speaker 7: have not really abated. The worst of them may be
Speaker 7: past us, but that is not one hundred percent sure.
Speaker 7: This windstorm event is supposed to last into Thursday, maybe
Speaker 7: into Friday, and there's the possibility of another windstorm coming
Speaker 7: in early next week with no rain in between.
Speaker 4: Give us a sense geographically, David, of where this is
Speaker 4: happening and how close it's getting to areas of La
Speaker 4: the lot of people know, I mean, the Palisades are
Speaker 4: It's an area on a lot of on a lot
Speaker 4: of tours people know. Obviously the peer in Santa Monica.
Speaker 4: Where are you most concerned about?
Speaker 7: Most concerned about the Palisades Malibu, which is downwind of
Speaker 7: the Palisades, and the fire is burning right towards there.
Speaker 7: They had a bad fire back in December that sort
Speaker 7: of presaged all of this. But I'm also very, very
Speaker 7: concerned about Pasadena. When you look to sort of the
Speaker 7: northeast of downtown La Pasadena has a major fire on
Speaker 7: its hands. We just got an update from CalFire on
Speaker 7: the size of that one. It is now past ten
Speaker 7: thousand acres and it is burning right into the edge
Speaker 7: of that city. It's a beautiful place if you've been there.
Speaker 7: It's nestled right up against the San Gabriel Mountains. But
Speaker 7: that's part of the problem here. These winds are racing
Speaker 7: down the mountains and just tearing through that area. We
Speaker 7: don't know what sparked that fire, but now that it
Speaker 7: is going, it is raging there, and I am very
Speaker 7: concerned about that spot.
Speaker 2: Well, very concerning indeed, and obviously our thoughts are with
Speaker 2: everyone who are in these areas in which they may
Speaker 2: find themselves in danger as we think about how ultimately
Speaker 2: these fires will be brought under control. It's not just
Speaker 2: whether or not the winds calm down, but of course
Speaker 2: water and other things that it will take to actually
Speaker 2: fight the flames. There has been a lot of criticism
Speaker 2: thrown out today David by the President elect Donald Trump,
Speaker 2: by Elon Musk, for example, about decisions Gavin Newsom has
Speaker 2: made when it comes to water, Trump specifically saying that
Speaker 2: he refused to sign a water restoration declaration that would
Speaker 2: have allowed access to millions of gallons of water. Can
Speaker 2: you just walk us through the extent to which that
Speaker 2: is true or if it's playing any real role in
Speaker 2: the attempts to fight these fires.
Speaker 7: With these fires when they are erupt the state throws
Speaker 7: pretty much everywhere resource it has at them in terms
Speaker 7: of access to water. I have not heard any on
Speaker 7: the ground reports about problems with getting access to water. Plus,
Speaker 7: the state does actually have and is using tankers that
Speaker 7: fly out over the ocean's skin, oop up water and
Speaker 7: just dump it where it's needed. We know they were
Speaker 7: in use yesterday. We saw them flying off the coast
Speaker 7: of Santa Monica, so we know those are out there,
Speaker 7: and with fires like this once they get going, the
Speaker 7: big issue is how much water actually fell from the
Speaker 7: sky in the last six months before the fire started.
Speaker 7: Here in southern California, you're seeing virtually no rain since
Speaker 7: early last spring, whereas in northern California where I am,
Speaker 7: we've had atmospheric rivers and even a little bit of flooding.
Speaker 7: They've had nothing down there, and that's the big issue here.
Speaker 4: Well, it's great to spend some time with you, David,
Speaker 4: appreciate your joining us. Bloomberg Climate and Energy reporter David
Speaker 4: Baker with us from San Francisco. Thanks for listening to
Speaker 4: the Balance of Power podcast. Make sure to subscribe if
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