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Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us

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Speaker 1: live weekdays at one Eastern on Bloomberg dot Com, the

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Speaker 1: I Heard Radio app, and the Bloomberg Business app. We're

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Speaker 1: listening on demand wherever you get your podcast. Sixty six

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Speaker 1: dollars a barrel. It's time to start refilling the spr No,

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Speaker 1: so the push and pull on the idea of tighter

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Speaker 1: banking regulations has intensified quite a bit here in the

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Speaker 1: last twenty four hours on Capitol Hill, Senator Elizabeth Warren

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Speaker 1: and a group of Democrats, including Congresswoman Katie Porter on

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Speaker 1: failing a bill to restore the elements of Dodd Frank

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Speaker 1: that were removed during the Trump administration. The bank failures

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Speaker 1: our nation experience this weekend were entirely avoidable if Congress

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Speaker 1: in the Fed had done their jobs and kept strong

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Speaker 1: oversight of big banks in place. And now we must

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Speaker 1: act quickly to prevent the next crisis by repealing the

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Speaker 1: dangerous Trump era provisions that made banks weaker. Remembering that

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Speaker 1: we've heard from Republicans over the last three days and

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Speaker 1: even some Democrats on this broadcast, including a man named

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Speaker 1: Barney Frank. Remember he talked to Bloomberg Radio on Monday,

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Speaker 1: and we brought you some of those comments. They said

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Speaker 1: keeping the original Dodd Frank law intact would not likely

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Speaker 1: have prevented the failures of SVB and Signature Bank. He

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Speaker 1: had another layer today, and that is sweets. With the

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Speaker 1: headline on the terminal, the Treasury Department now actively reviewing

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Speaker 1: the US financial sector's exposure to credit sweets, according to

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Speaker 1: people familiar with the matter. With the smell of contagion

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Speaker 1: in the air again today, this is where we begin

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Speaker 1: with Congressman Brendan Boyle, the Democrat from Pennsylvania, ranking member

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Speaker 1: on the House Budget Committee, and he's back with us now. Congressman,

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Speaker 1: we do appreciate your time today. Are you watching this

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Speaker 1: news today with credit sweets? Is it increasing your concerns

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Speaker 1: about banking? Well, it's great to be with you. I've

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Speaker 1: been following it since early this morning, and obviously the

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Speaker 1: tumult first in the European marks, and then the futures,

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Speaker 1: and then finally you know, once the markets we opened

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Speaker 1: at nine thirty. Yeah, it is. It is further worrying.

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Speaker 1: You know that piece of legislation that I was listening

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Speaker 1: to Senator Warren in the clip played earlier. I voted

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Speaker 1: against that bill five years ago to loosen standards, to

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Speaker 1: loosen the Dodd Frank regulations for precisely this reason. And

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Speaker 1: I would point out that, with all due respect to

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Speaker 1: what apparently former Congressman Barney Frank may have said, actually

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Speaker 1: SPB at around two hundred billion would have faced stress

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Speaker 1: tests had that legislation not been repealed five years ago.

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Speaker 1: One of you would have prevented the failure. I do, yeah,

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Speaker 1: so I mean complete, I'm completely contradicting what he said.

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Speaker 1: And specifically, one of the stress tests was to analyze

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Speaker 1: a scenario in which you had a steep rise in

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Speaker 1: federates in a short period of time. It is precisely

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Speaker 1: that scenario that has brought about the collapse of SVB.

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Speaker 1: That stress test would have caught it had it been

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Speaker 1: in place. Some of the analysis has pointed out that

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Speaker 1: this bill does not address interest rate risk in the

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Speaker 1: held to maturity portfolio. You're saying it does. Congressmen or

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Speaker 1: regulators would have found that while exploring other elements of

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Speaker 1: the stress test correct they would have found it because

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Speaker 1: SPB at about two hundred billion would have come under

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Speaker 1: those sort of stress tests because the original Dodd Frank

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Speaker 1: regulation was any bank fifty billion dollars or more. The

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Speaker 1: bill that passed five years ago lifted it from fifty

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Speaker 1: billion to two hundred and fifty billion. Therefore SVB didn't

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Speaker 1: have to undergo the same sort of scrutiny. There were

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Speaker 1: I believe seventeen Democrats in the Senate, more than thirty

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Speaker 1: in the House that voted for those changes. Do you

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Speaker 1: think the bill has a chance. Well, let's let's not.

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Speaker 1: I ignore the other part of that is that it

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Speaker 1: was a Republican controlled House, Republican controlled Senate, and a

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Speaker 1: Republican in the White House who brought about the bill

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Speaker 1: and was passed overwhelmingly with Republican votes. So, you know,

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Speaker 1: I'm reminded, and I might be roughly paraphrasing here, but

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Speaker 1: I'm thinking back to a quote that Ben BERNACKI said

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Speaker 1: some time ago, when these regulations came about and we

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Speaker 1: went through everything in two thousand and nine and then

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Speaker 1: the years following, he said, you know, the greatest enemy

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Speaker 1: we face is forgetting that really the greatest struggle sometimes

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Speaker 1: is memory and that once we go through a crisis

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Speaker 1: and we put in place regulations to prevent it, as

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Speaker 1: years go by, and further events take place, and two

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Speaker 1: thousand and eight seems a distant memory. People tend to

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Speaker 1: forget why these regulations were put in place in the

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Speaker 1: first place, and I think that's what happened in twenty eighteen.

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Speaker 1: We heard today from the man known as doctor Doom. Congressman.

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Speaker 1: That would be economist Noriel Rubini, who is very concerned

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Speaker 1: about the credit Swiss situation, and he suggests that it

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Speaker 1: could be too big to bail out. Here's what he

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Speaker 1: told us. Well, they can be active today even if

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Speaker 1: they have a system that is delegated. However, the problem

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Speaker 1: is that trying to Swiss by some standards, might be

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Speaker 1: too big to fail but also too big to be saved.

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Speaker 1: Is not clear that, unlike the United States, the federal

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Speaker 1: systems enough resources to engineer a bailout. And what they need,

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Speaker 1: certain is more capital. And the question is whether they're

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Speaker 1: going to get that capital or not, otherwise bad things

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Speaker 1: can happen. Congressman, you suggests this could be another Lehman Brothers,

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Speaker 1: Do you see it that way? Well, I see why

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Speaker 1: he has the nickname doctor easy to hear. Yes, so

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Speaker 1: you know what what I will say, And kind of

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Speaker 1: more comfortable commenting on is for my position now, Thanking Member.

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Speaker 1: We're senior Democrat on the Budget Committee. You know, last

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Speaker 1: week we had the President in my district unveiling the

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Speaker 1: budget proposal. We've had a counterproposal from the Republican Freedom

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Speaker 1: of Caucus, those on the other side of the aisle,

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Speaker 1: threatening to use the debt ceiling as leverage. I think

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Speaker 1: the events of the past several days show exactly why

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Speaker 1: we do not need any drama when it comes to

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Speaker 1: the debt ceiling. We do not need any drama this

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Speaker 1: year when it comes to the budget and these proposed

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Speaker 1: deep cuts from the other side. I've been arguing for

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Speaker 1: some months now that we needed a clean increase in

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Speaker 1: the debt ceiling, that we needed to calm this economy

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Speaker 1: and calm the markets as much as possible. I was

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Speaker 1: arguing that before. I think that there's far more evidence

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Speaker 1: for what I'm saying now. Well, it's not lost on

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Speaker 1: us that President Biden went to your districts to unveil

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Speaker 1: his budget and that you are central to solving this issue. Congressman.

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Speaker 1: It's been suggested that what we're seeing happen now might

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Speaker 1: actually move up the X date, and that this debt

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Speaker 1: ceiling matter has to be handled even sooner than you

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Speaker 1: first thought. Is that right? Well, in two things. The

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Speaker 1: first is, after the IRS gets in the April fifteenth

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Speaker 1: tax filings, which sometimes literally includes as manual opening the

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Speaker 1: envelopes and paper returns and seeing what exactly the figures are,

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Speaker 1: then right around a couple weeks after that, we will

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Speaker 1: have a much better idea. Treasury will have a much

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Speaker 1: better idea on what the exact X date is. So

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Speaker 1: that's the first point. The second point is the sooner

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Speaker 1: we raise the debt ceiling, the better. We do not

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Speaker 1: need to inject another variable into this entire situation when

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Speaker 1: we already have such uncertainty when it comes to various banks.

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Speaker 1: We've heard from Kevin McCarthy. Of course, he doesn't want

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Speaker 1: to even deal with a clean debt ceiling bill. He

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Speaker 1: wants an agreement on spending cuts. Where is that now

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Speaker 1: or things too noisy right now for negotiations to be happening. Well,

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Speaker 1: the President unveiled his budget, as you pointed out last week,

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Speaker 1: Come here to my district in Philadelphia. Where is Kevin's budget?

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Speaker 1: Where is the House Republican budget? We've seen a very

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Speaker 1: extreme proposal from a caucus within the House Republicans, the

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Speaker 1: Freedom Caucus, which would call for cuts of at least

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Speaker 1: twenty percent to all programs except for defense. We're still

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Speaker 1: waiting to see the Republican budget. It was supposed to

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Speaker 1: be unveiled and even voted on this month. Now we're here,

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Speaker 1: we might be April. We here, it might be May.

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Speaker 1: So if he wants these things, he has to unveil

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Speaker 1: a budget, and a budget that can command two eighteen

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Speaker 1: votes on their side. So we're still eagerly awaiting. That

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Speaker 1: sounds to me like that's no progress so far. Well,

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Speaker 1: I am waiting for the white smoke to appear atop

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Speaker 1: the Capitol on when exactly we will have a budget proposal.

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Speaker 1: I know this other side keeps talking about what they

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Speaker 1: find so egregious in the Biden budget. Well show us

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Speaker 1: your plan. I'm looking over there out the window of

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Speaker 1: the Bloomberg Bureau. I don't see any smoke coming out

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Speaker 1: of the dome. Just to let you know right now,

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Speaker 1: when you come back to town, though, and this does

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Speaker 1: begin in earnest, how does this banking story that we're

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Speaker 1: living through in real time impact the budget debate? Because

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Speaker 1: I'm sure that deficits are going to be a major

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Speaker 1: issue here as we look at the impact of rising

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Speaker 1: interest rates. Well, I am hopeful that it will kind

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Speaker 1: of act to sober some folks up who perhaps we're

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Speaker 1: looking at the debt ceiling debate. You know, some have

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Speaker 1: openly talked about using that as leverage to get what

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Speaker 1: they want. I think that with the seriousness of what

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Speaker 1: we might be in the early stages of going through

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Speaker 1: right now, I hope that this prompts them to think

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Speaker 1: twice and I think three times about whether or not

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Speaker 1: that would be such a good idea. I also have

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Speaker 1: to say that, and I've expressed this before, I've been

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Speaker 1: concerned that the FED was moving too fast too soon.

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Speaker 1: I know they have been driving on this reaching this

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Speaker 1: two percent inflation goal, but we've had so many rate

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Speaker 1: hikes in such a short period of time it can

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Speaker 1: bring about unintended consequences. There is not much precedent for

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Speaker 1: what j Pal and the FED is doing, so I

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Speaker 1: would hope, and I respect the independence of the FED.

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Speaker 1: They're going to independently make that decision, but I can

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Speaker 1: certainly voice the viewpoint that I have and others share

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Speaker 1: that what they're doing to the market right now is

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Speaker 1: deeply worrying. It's certainly by their own figures, will have

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Speaker 1: a negative effect on employee. So I hope that they

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Speaker 1: are prudent in this situation and make the appropriate decision

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Speaker 1: next week and not keep going forward when it comes

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Speaker 1: to these raid heights. Way after what we're seeing today,

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Speaker 1: that just might happen. A Congressman, Yeah, really appreciate you're

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Speaker 1: joining us as always. Congressman Brendan Boyle with us here

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Speaker 1: on Bloomberg Sound On, the gentleman from Pennsylvania and the Democrat,

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Speaker 1: the top Democrat on the Budget Committee. As we assemble

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Speaker 1: our panel. Genie Schanzano is here Bloomberg Politics contributor and

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Speaker 1: Democratic analyst, joined today by John Hart, Republican strategist co

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Speaker 1: founder of C three Solutions, is back with us. Great

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Speaker 1: to have both of you here, Genie, after what you

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Speaker 1: just heard, it's like the earth is shifting under the

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Speaker 1: feet of budget writers and policymakers and regulators. Nobody knows

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Speaker 1: what's going on right now. They really don't. And you know,

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Speaker 1: I think it's fascinating between your conversation with Shared Brown

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Speaker 1: yesterday and you're hearing it with Representative Boyle and others.

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Speaker 1: Elizabeth Warren, You're seeing not just interpret parady fighting and

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Speaker 1: Trump party fighting. You know, a lot of blame to

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Speaker 1: go around, and not even you know as of yet,

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Speaker 1: and it's still early basic agreement on questions such as

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Speaker 1: if Dodd Frank had been in place, would it have

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Speaker 1: you know, assisted in and and you know saved SVB

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Speaker 1: and some of these other banks that have experienced that.

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Speaker 1: You just got one answer just disagrees completely with the

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Speaker 1: other answer. So you know, we're seeing that over and

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Speaker 1: over again, and those things have to be teased out

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Speaker 1: before they plot ahead with regulations. John Hart bail us out.

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Speaker 1: When will the smoke clear enough for to get for

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Speaker 1: us to get real answers to these questions. Well, I

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Speaker 1: don't think it's gonna happen anytime soon. Sadly, it's going

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Speaker 1: to get a lot worse before it gets better. Probably.

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Speaker 1: You know, I think there's two caucuses in Congress. There's

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Speaker 1: there's the dam Caucus, but then there's the daydream Caucus.

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Speaker 1: And I'm worried that the daydream Caucus, the people who

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Speaker 1: are sleepwalking through these these issues, are are going to

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Speaker 1: invite much more economic pain than we realize and you

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Speaker 1: know the way I describe these issues as Look, there's

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Speaker 1: really two theories of wealth creation in Washington. One theory

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Speaker 1: holds that wealth is the measure of what people value,

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Speaker 1: what they choose to buy. The other is modern monetary

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Speaker 1: theory or or in empty light, if you will, which

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Speaker 1: is that government can just decide what the value of

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Speaker 1: something is. And and Ken Griffin I think had a

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Speaker 1: great comment, you know, the founder of Citadel. Yes, he

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Speaker 1: said that your capitalism is breaking down before our eyes,

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Speaker 1: before our eyes. I think I think he's I think

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Speaker 1: he's onto something. And that's Does that mean you're using

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Speaker 1: the word bailout? John Well, yeah, I think it was

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Speaker 1: a bailout, and I think it was a mistake. I

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Speaker 1: think I think they should not have done the bailout

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Speaker 1: of SVB and let the consequences be what they are

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Speaker 1: and to get it work it through the system, because

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Speaker 1: I think we're inviting more pain down the road than

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Speaker 1: we would have experienced otherwise. Does this War Importer Bill,

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Speaker 1: for lack of a better name of Genie stand a chance,

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Speaker 1: I'm guessing the answers know of the Republican House, Yeah,

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Speaker 1: the answers absolutely no, it's going to face an uphill

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Speaker 1: battle even in the Senate, as you have Democrats on

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Speaker 1: both sides of this. We've heard Joe Mansion come today

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Speaker 1: or yesterday and say, you know, he may have questioned

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Speaker 1: his vote, but it doesn't stand at chance. But she

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Speaker 1: is going to make as much as she can of

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Speaker 1: it regardless. We'll continue this conversation also with an eye

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Speaker 1: on what happened yesterday over the Black Sea, an important

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Speaker 1: development in geopolitics that will touch on with our panel.

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Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch the

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

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

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Speaker 1: You can also listen live on Amazon Alexa from our

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Speaker 1: flagship New York station just Say Alexa, playing Bloomberg eleven thirty.

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Speaker 1: The US will continue flying the drones over the Black

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Speaker 1: Sea and an international airspace for that matter, in the

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Speaker 1: wake of this Russian aircraft interference with one of our

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Speaker 1: drones that took place yesterday sent the drone into the drink,

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Speaker 1: and today Defense Secretary Lloyd Austin says it's a hazardous

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Speaker 1: episode that is part of a pattern of aggressive risky

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Speaker 1: and unsafe actions, and of course we've heard stories like

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Speaker 1: this before. John Kirby, speaks for the National Security Apparatus

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Speaker 1: in the White House today, says, this is why we talk.

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Speaker 1: There's a deconfliction line between US European Command and the

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Speaker 1: Russian Ministry of Defense when it comes to the eastern

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Speaker 1: flank airspace of our NATO allies. So we have ways

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Speaker 1: of communicating with the Russians directly, and that's a good thing.

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Speaker 1: That's one way to try to minimize the risk of miscalculation.

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Speaker 1: But still tensions are high and now higher because of

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Speaker 1: what happened yesterday. As we reassemble our panel with their

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Speaker 1: view on things. Genie Chanzano, Democratic analyst and Bloomberg Politics

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Speaker 1: contributor is here along with John Hart, Republican strategist co

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Speaker 1: founder of C three Solutions. John, I'm not sure your

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Speaker 1: thought when this first broke yesterday, because we've just for

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Speaker 1: decades had issues with very close encounters in intercepts with

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Speaker 1: Russian aircraft. This one is significant that though, as it

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Speaker 1: happened over the Black Sea and they're dumping fuel on

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Speaker 1: our drone, we ended up putting it down there. It

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Speaker 1: looks like we're never going to get it back because

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Speaker 1: it's deep in the water. So it's not an intelligence issue,

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Speaker 1: but it is one that could be seen as escalatory.

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Speaker 1: How do you look at it, Well, it's absolutely escalatory.

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Speaker 1: I think you know what's happening on the right. I

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Speaker 1: think it's very significant because you've got a debate between

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Speaker 1: Monda Santis, Nicki Haley and others about the future of

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Speaker 1: our involvement in Ukraine. I think this episode brings all

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Speaker 1: those issues to the surface. Russia is a belligerent state.

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Speaker 1: Putin is really trying to revive the Soviet Empire, and

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Speaker 1: I think it's incredibly naive for anybody on the right

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Speaker 1: or the left to not understand the nature of Russian

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Speaker 1: aggression and freedom is at stake. It isn't just about

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Speaker 1: helping Ukraine. It's about helping Poland, it's about helping our

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Speaker 1: allies in Europe, and it's about helping ourselves. So I

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Speaker 1: think if you want to put American dietes in freedom, first,

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Speaker 1: you need to do everything you can to make it

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Speaker 1: plain to Putin that this is a very dangerous game.

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Speaker 1: He's plan It sounds like you're our plans. To hear

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Speaker 1: from Rhonda Santis on Ukraine over there, I think, I

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Speaker 1: think it's a mistake. I understand. I think, you know,

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Speaker 1: there's a shadow primary happening on the right between what

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Speaker 1: I call Reaganism and Trumpism. So Reaganism isn't just an

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Speaker 1: appeal to the Reagan era. It's more of a reboot

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Speaker 1: of our American founding constitutional conservative principles, and I think

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Speaker 1: that's really who Round Santis is at his core. But

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Speaker 1: he's trying to appeal to Trump voters, and the Santis

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Speaker 1: is more likely to be pulled apart as a candidate

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Speaker 1: than to hold those two factions together. So I think

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Speaker 1: it's a very risky, unnecessary move for him to make

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Speaker 1: at this point to to come out, you know, somewhat

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Speaker 1: against Ukraine support, because ultimately it's not in our national

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Speaker 1: security interest and let's talk a little bit for him

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Speaker 1: to navigate the primary. I want to be more specific

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Speaker 1: about what was said. Rhonda Santis was asked, along with

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Speaker 1: a number of presumptive and actual presidential candidates by Fox

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Speaker 1: News for The Tucker Show to answer the Ukraine questionnaire,

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Speaker 1: knowing that Tucker is not a fan of what we're

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Speaker 1: doing there. Quote. While the US has many vital national interests,

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Speaker 1: Rhonda Santis says, becoming further entangled in a territorial dispute

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Speaker 1: between Ukraine and Russia is not one of them. Making

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Speaker 1: reference to Joe Biden's virtual blank check. Yet, we recall

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Speaker 1: Rhonda Santis back on April seventeenth, twenty seventeen, when he

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Speaker 1: said this, I think that he's been a threat for

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Speaker 1: a long time. You know, Clinton tried to work with him,

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Speaker 1: Bush tried to work with him, Obama tried to reset.

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Speaker 1: Trump was very positive about Putin, and I think that

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Speaker 1: reality is set in that this is not going to

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Speaker 1: work out that way, and you're better off dealing with

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Speaker 1: Putin by being strong. I mean, we've tried to deal

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Speaker 1: with some of this in the Congress a couple of

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Speaker 1: years ago. We authorize lethal aid for Ukraine so that

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Speaker 1: they resist some of the Russian incursion. The Obama administration

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Speaker 1: fought us on that, but I think that's the type

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Speaker 1: of thing when when Putin sees he can gain an inch,

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Speaker 1: he's apt to take a mile. So, Genie, you fast

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Speaker 1: forward six years and you're maybe running for president, Why

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Speaker 1: is he changing his toon? Who is that man? You

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Speaker 1: were just playing? Joe Matthew Sank. This was the name yesterday, Sank,

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Speaker 1: the sanct Ammonius. You know, we are feeling the effects

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Speaker 1: on the Republican side of Mitch McConnell's absence while he

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Speaker 1: heals from his fall. He has described this neo isolationism

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Speaker 1: as dangerous and naive, and that is the view of

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Speaker 1: most Republicans in the Senate, and I would guess probably

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Speaker 1: a majority still in the House on the Republican side.

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Speaker 1: I don't understand politically Ron de Santis coming out and

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Speaker 1: doing this. He seems to be listening to sort of

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Speaker 1: the Twitter noise, this very loud part of the Republican

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Speaker 1: Party who are opposed to Ukraine. There are valid questions

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Speaker 1: to ask about funding of Ukraine. Those are valid. We

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Speaker 1: need to make sure the aid is going where we

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Speaker 1: think it's going. But for him to jump out on

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Speaker 1: this cliff, and you know, what's what's what's difficult to understand.

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Speaker 1: He went further than Donald Trump. If you listen to Trump,

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Speaker 1: what does Trump say? He says, oh, Putin wouldn't have

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Speaker 1: done this if I was there, I'll bring peace to

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Speaker 1: the area. And De samp has jumped right over him

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Speaker 1: and says no, We're just not going to give them

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Speaker 1: what they need to win. So it makes no sense,

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Speaker 1: it makes no you know, for him to do this.

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Speaker 1: And the latest poll only nine percent of Republicans think

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Speaker 1: that foreign policy is the most important issue going in.

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Speaker 1: My question, John, what do you think about that? Why?

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Speaker 1: Why agree with Donald Trump on such an important issue

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Speaker 1: that isolates a lot of Republican voters. Well, I think

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Speaker 1: he's you know, he's trying to win the Republican primary,

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Speaker 1: and I think it's it's a miscalculation. Uh, it hurts

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Speaker 1: his brand because when he hears those two clips or

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Speaker 1: statement on the clip is he sounds like a politician

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Speaker 1: and all the convoters want an outsider. They want somebody

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Speaker 1: who's not of the swamp. And when you try to

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Speaker 1: please all factions and parse your words, you alienate everybody

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Speaker 1: in the process. And it's it's particularly it's troublesome because

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Speaker 1: we've seen a pretty strong majority of support from the

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Speaker 1: American people for helping Ukraine and they understand the connection

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Speaker 1: to our freedom. But that is eroding, and Putin is

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Speaker 1: betting and hoping that that support will erode fast enough

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Speaker 1: to sustain his engagement. So it's and we're it becomes

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Speaker 1: a self defeating loop here where if we if we

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Speaker 1: predict our support's going to win, it does win, and

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Speaker 1: it empowers Putin and you get it. Just does it right?

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Speaker 1: Just it doesn't make any sense. And you know the

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Speaker 1: conventional wisdom of the race as it is today is

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Speaker 1: that it's going to be Trump into Santis. But if

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Speaker 1: you look at two thousand and seven, this was Rudy

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Speaker 1: Giuliani's race to lose. And of course he said, you know,

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Speaker 1: twenty eleven it was hockeby South Carolina just wasn't there

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Speaker 1: for him. John M. Yeah. So, Lindsey Groan, you mentioned

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Speaker 1: the Reagan wing versus the Trump wing. Lindsey Graham kind

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Speaker 1: of dug into that in a conversation about this Ukraine

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Speaker 1: incident on Fox. Here's what he said, Well, it should

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Speaker 1: hold him accountable and say that if you ever get

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Speaker 1: near another US set flying in international waters, your airplane

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Speaker 1: would be shot down. What would Ronald Reagan do right now?

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Speaker 1: He would he would start shooting Russian planes down if

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Speaker 1: they were threatening our assets. I'm not sure. I'm not

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Speaker 1: sure that's actually true, Jeanie. But you know, if we

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Speaker 1: if we sent a Russian drone into the drink. They

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Speaker 1: might have shot back, What do you what are you

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Speaker 1: supposed to do? How do you prevent it from happening again?

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Speaker 1: You know, I have to say Lindsay Graham is right

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Speaker 1: to say that Ron DeSantis, I think has dug himself

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Speaker 1: into a position where he is essentially just Donald Trump light.

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Speaker 1: Why would Republican voters even go for him? He should

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Speaker 1: be differentiating yourself on some things. He's leading on the

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Speaker 1: woke issue. He's leading Donald Trump there. He should lead

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Speaker 1: on this, and he should do so in a way

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Speaker 1: that increases his bona fides. You know, he wants to

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Speaker 1: sell himself as a manager. He managed out of the hurricane,

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Speaker 1: and he's managed Florida. We'll manage on national security. So

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Speaker 1: he has gotten himself into a hole here. He should

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Speaker 1: follow Lindsay Graham's lead. But now, how does he backtrack

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Speaker 1: from what he told Tucker Carlson? Was this a woke drone? John?

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Speaker 1: I don't think so. I think. I'm sorry, it's a

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Speaker 1: real problem, but no, I don't think. I think. I

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Speaker 1: think Prudin represents the unwold not to be said there.

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Speaker 1: John Hart and Jeanie Schanzano with us here on Bloomberg

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Speaker 1: Sound On. John, thank you for being here in the insights.

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Speaker 1: It's always great to have you, the co founder of

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Speaker 1: C three Solutions. You're listening to the Bloomberg sound On podcast.

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

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Speaker 1: the Tune in a Half, Bloomberg dot Com, and the

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Speaker 1: Bloomberg Business App. You can also listen live on Amazon

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Speaker 1: Alexa from our flagship New York station Just Say Alexa

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Speaker 1: playing Bloomberg eleven thirty. I think they had to talk

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Speaker 1: budget here in Washington, if I'm counting properly. Here three

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Speaker 1: different panels holding hearings on Capitol Hill. There's one in

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Speaker 1: particular that we've got an eye on, or at least

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Speaker 1: we did. When LANDA. Young was testifying before the Senate

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Speaker 1: Budget Committee, things got pretty hot and heavy over the entitlements,

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Speaker 1: and that's been a recurring theme here. I'm Joe Matthew

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Speaker 1: and Washington along with Kaylee Lyons. You remember the State

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Speaker 1: of the Union address. Joe Biden says the line about them.

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Speaker 1: I have played it so many times, I won't put

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Speaker 1: you through it again. But the idea of sunsetting social

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Speaker 1: Security and medicare got boozed from the crowd because it

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Speaker 1: was Rick Scott's pamphlet and we already knew the leadership

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Speaker 1: wasn't going there. Yeah, they basically said, not true, mister President.

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Speaker 1: You heard the Marjorie Taylor Green calling him a liar.

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Speaker 1: I believe in that little exchange. But Senator Mitt Romney

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Speaker 1: of Utah not too far off of that in the

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Speaker 1: hearing today when he was talking to Owen B Director Landia. Yeah,

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00:25:00,960 --> 00:25:03,040
Speaker 1: of course she brought it to him. But listen to

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Speaker 1: how this went, Senator, I have heard of proposals. No, no,

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Speaker 1: you've you've heard of proposals from a current senator currently

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Speaker 1: or congressman currently proposing to cut benefits to Social Security. Yes,

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Speaker 1: have they changed their position? Maybe? Yes? Members who are

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00:25:21,119 --> 00:25:24,520
Speaker 1: current I said, as anyone current I mean in the

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Speaker 1: last several months or the last year, as any anyone

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Speaker 1: Republican Democrat proposed social Security benefits. So now you're asking

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00:25:31,840 --> 00:25:35,520
Speaker 1: if people change their position, maybe there are are you

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00:25:35,720 --> 00:25:37,960
Speaker 1: Are you aware of anyone there is a wreck? Are

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Speaker 1: you aware of anyone? Excuse me? Are you aware of anyone?

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00:25:41,480 --> 00:25:45,560
Speaker 1: Are you aware of anyone proposing cutting Social Security? Your

449
00:25:45,560 --> 00:25:49,120
Speaker 1: first question, current members have well known policies out there

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00:25:49,160 --> 00:25:51,760
Speaker 1: to cut social Security and Medicare. That was simply wrong,

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00:25:51,800 --> 00:25:55,720
Speaker 1: a little bit simply wrong, he says. Kayley, They weren't

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Speaker 1: done there. Why have you not proposed in your budget

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Speaker 1: any action to protect social security? Sentator, I look forward

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00:26:01,880 --> 00:26:06,280
Speaker 1: to seeing plans that are very question Why have you

455
00:26:06,359 --> 00:26:10,040
Speaker 1: noted that those? Why you not that so security? This

456
00:26:10,080 --> 00:26:13,040
Speaker 1: president is always everyone's favorite part of Washington where they

457
00:26:13,080 --> 00:26:16,080
Speaker 1: just talk over each other for an extended period of time,

458
00:26:16,119 --> 00:26:18,840
Speaker 1: and that sort of symbolic of where we are in government,

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Speaker 1: isn't it. Jack Fitzpatrick does this all day with the

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00:26:22,200 --> 00:26:24,119
Speaker 1: hearings like this. In fact, I'm guessing he was in

461
00:26:24,119 --> 00:26:27,000
Speaker 1: the room for this one from Bloomberg Government, our budget

462
00:26:27,000 --> 00:26:31,119
Speaker 1: guru here on sound On with some specific news about

463
00:26:31,119 --> 00:26:34,640
Speaker 1: programs that actually are being cut proposed cuts in Joe

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Speaker 1: Biden's budget. Jack, it's great to have you back. Why

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Speaker 1: is the administration going through this exercise though on Social

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Speaker 1: Security and medicare, knowing that we're going to get back

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Speaker 1: and forth conversations like these, Well, I mean, really they're

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00:26:46,560 --> 00:26:49,280
Speaker 1: they're kind of staying out of the conversation. As you

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Speaker 1: heard Romney. Senator Romney mentioned I was actually a little

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Speaker 1: surprising that the administration in their budget proposal had a

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Speaker 1: proposal for Medicare solvency to increase the taxes that support

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Speaker 1: Medicare on the top earners. But nothing nothing similar to that. Nothing,

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00:27:06,760 --> 00:27:11,159
Speaker 1: not really any proposal on Social Security. Then again, you know,

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00:27:11,280 --> 00:27:13,399
Speaker 1: at this point, both sides have said, look, we're not

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00:27:13,440 --> 00:27:16,719
Speaker 1: going to use the debt limit debate to get into that. Uh,

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00:27:16,840 --> 00:27:20,080
Speaker 1: they've gotten until about twenty thirty five to shore up

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00:27:20,080 --> 00:27:22,560
Speaker 1: the solvency of Social Security. The earlier you do it

478
00:27:22,640 --> 00:27:24,879
Speaker 1: and the more runway you give for yourself, the better.

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00:27:25,560 --> 00:27:28,879
Speaker 1: But clearly that's been taken off the table, and it has,

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00:27:28,880 --> 00:27:31,760
Speaker 1: as you can tell from that exchange, kind of devolved

481
00:27:31,880 --> 00:27:36,040
Speaker 1: into almost a shouting match over you know, does it

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00:27:36,160 --> 00:27:38,400
Speaker 1: count as a cut from Republicans if they say they

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00:27:38,520 --> 00:27:40,960
Speaker 1: might want to increase the age of eligibility or is

484
00:27:41,000 --> 00:27:44,399
Speaker 1: that savings rather than a cut? So really it has

485
00:27:44,440 --> 00:27:47,280
Speaker 1: it's something that the administration is sort of staying out

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00:27:47,280 --> 00:27:49,560
Speaker 1: of now that they've successfully removed it from the debt

487
00:27:49,560 --> 00:27:53,239
Speaker 1: limit talks. And all we're left with is, uh, you know,

488
00:27:53,440 --> 00:27:56,720
Speaker 1: the talking over each other. Well, and there's been a

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00:27:56,720 --> 00:27:59,800
Speaker 1: lot of talking around show me the alternative, at least

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00:27:59,800 --> 00:28:02,399
Speaker 1: that what the Biden administration has been saying to Republicans

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00:28:02,600 --> 00:28:05,399
Speaker 1: in the House specifically, do we know what the shape

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00:28:05,400 --> 00:28:07,080
Speaker 1: of that alternative is going to look like? They want

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00:28:07,119 --> 00:28:09,200
Speaker 1: to balance the budget, have they given suggestions of how

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00:28:09,200 --> 00:28:11,200
Speaker 1: they realistically want to do it? If there are certain

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00:28:11,240 --> 00:28:14,720
Speaker 1: things that are untouchable. Yeah, they have not gotten to

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00:28:14,800 --> 00:28:17,480
Speaker 1: the details yet. When you say they want to balance

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00:28:17,520 --> 00:28:21,040
Speaker 1: the budget, you are correct. Now, will they actually put

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00:28:21,080 --> 00:28:24,320
Speaker 1: out a budget resolution that projects to balance in the

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00:28:24,320 --> 00:28:28,200
Speaker 1: next ten years? That would be extremely difficult, giving especially

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00:28:28,240 --> 00:28:30,600
Speaker 1: given the things that Republicans have said are off the table.

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00:28:30,920 --> 00:28:35,119
Speaker 1: If they're not cutting Social Security or Medicare, and I

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00:28:35,160 --> 00:28:37,440
Speaker 1: suppose we'll see if they put things in there that

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00:28:37,600 --> 00:28:41,280
Speaker 1: reduce expenditures but they don't consider cuts. But if they're

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00:28:41,280 --> 00:28:46,400
Speaker 1: also not cutting defense spending or Veterans affairs spending, which

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00:28:46,400 --> 00:28:49,240
Speaker 1: even conservative members on the Appropriations Committee have said that's

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00:28:49,280 --> 00:28:53,040
Speaker 1: off the table, you'd really have to get into probably

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00:28:53,200 --> 00:28:57,360
Speaker 1: eliminating certain departments if it's narrowed down to the things

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00:28:57,360 --> 00:28:59,880
Speaker 1: that Republicans really don't like. Now, they're going to work

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00:28:59,880 --> 00:29:03,680
Speaker 1: on a budget resolution, unclear exactly when that's going to

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00:29:03,720 --> 00:29:06,560
Speaker 1: come out. Might be April. I heard Congressman Brendan Boyle

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00:29:06,640 --> 00:29:09,520
Speaker 1: earlier speculating that it might take Republicans a little while

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00:29:10,360 --> 00:29:13,160
Speaker 1: they have difficult decisions to make. But you know, I

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00:29:13,160 --> 00:29:15,360
Speaker 1: don't think we can even necessarily take them at their

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00:29:15,400 --> 00:29:17,960
Speaker 1: word that they can come up with a plan to

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Speaker 1: balance the budget fully unless they sort of go back

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00:29:22,080 --> 00:29:23,920
Speaker 1: on some of those promises of things they've set are

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00:29:23,960 --> 00:29:27,320
Speaker 1: off the table. Jack's budget briefing this morning actually outlines

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Speaker 1: cuts proposed by the Biden administration. This is back to

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00:29:30,680 --> 00:29:34,720
Speaker 1: the Biden budget here. What a lead here, Jack? Border security?

520
00:29:34,880 --> 00:29:39,480
Speaker 1: That should set off some alarms. NASA Helio physics projects?

521
00:29:39,600 --> 00:29:41,760
Speaker 1: Am I saying it right? I had to google Helio?

522
00:29:42,120 --> 00:29:44,280
Speaker 1: Did your editor let you keep that in the lead?

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00:29:44,360 --> 00:29:47,320
Speaker 1: That's incredible? By the way, the Integrated Study of the Sun,

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00:29:47,400 --> 00:29:50,440
Speaker 1: it's planets in space environment as a dynamic system. Is

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00:29:50,440 --> 00:29:54,400
Speaker 1: that also how you define it? Jack? I believe it's

526
00:29:54,440 --> 00:29:59,080
Speaker 1: the upper atmosphere largely, it's Patrick Moonlighting is Bill Night

527
00:29:59,200 --> 00:30:03,000
Speaker 1: the science dif I get to cover some some weird stuff.

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00:30:03,000 --> 00:30:06,760
Speaker 1: But you mentioned border security, and yeah, it's an interesting

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00:30:06,920 --> 00:30:10,320
Speaker 1: scenario in which, you know, Republicans are calling for very

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00:30:10,360 --> 00:30:14,680
Speaker 1: steep cuts to discretionary spending on non defense, which includes

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Speaker 1: the Department of homemand Security. But at the same time,

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Speaker 1: actually in the hearing the Senate budget hearing today, Roger Marshall,

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00:30:20,680 --> 00:30:25,680
Speaker 1: who pressed Director Young on the you know, the plan

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00:30:25,800 --> 00:30:28,000
Speaker 1: to balance the budget or not balance the budget, then

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00:30:28,120 --> 00:30:32,160
Speaker 1: turned to criticizing the proposal to slightly cut the top

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00:30:32,200 --> 00:30:35,480
Speaker 1: line for the Department of homemand Security. And yes, within that,

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00:30:35,960 --> 00:30:37,360
Speaker 1: you can see that there's going to be a fight

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00:30:37,400 --> 00:30:39,240
Speaker 1: because it within that that calls for a cut to

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00:30:39,480 --> 00:30:43,120
Speaker 1: the US border patrol. It's not what Republicans want on that.

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Speaker 1: But it's a tough position because Republicans are saying, you know,

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00:30:46,000 --> 00:30:48,920
Speaker 1: we want cuts that are very significant, we want to

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00:30:48,920 --> 00:30:51,560
Speaker 1: balance the budget, and then there are some cuts here

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00:30:51,640 --> 00:30:54,080
Speaker 1: or there, and they decide that probably the biggest one

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00:30:54,120 --> 00:30:56,720
Speaker 1: on some border security stuff is something they actually don't want.

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Speaker 1: We've got a bit of breaking news here on the

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00:30:59,720 --> 00:31:03,520
Speaker 1: bank situation before we get to that. Jack is there,

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00:31:03,520 --> 00:31:07,000
Speaker 1: as Chuck Schumer is now also a calling for more

548
00:31:07,080 --> 00:31:10,800
Speaker 1: strict regulations. He says, we need strong legislation on banking REGs.

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00:31:10,880 --> 00:31:13,640
Speaker 1: We know that there's a bill that Elizabeth Warren and

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00:31:13,720 --> 00:31:16,560
Speaker 1: Katie Porter are putting forth. Nobody actually sees a path

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00:31:16,640 --> 00:31:20,240
Speaker 1: for that to pass, right. You know, it's difficult to

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00:31:20,280 --> 00:31:24,640
Speaker 1: say now because of the facts of a divided government,

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00:31:24,680 --> 00:31:28,160
Speaker 1: and obviously a Democratic Senate and a Republican House are

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00:31:28,160 --> 00:31:31,040
Speaker 1: going to approach this differently. We may have to see

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00:31:31,280 --> 00:31:34,840
Speaker 1: to what extent this turns into an issue that forces

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00:31:34,960 --> 00:31:38,240
Speaker 1: their hand. Congress can do things in a bipartisan way

557
00:31:38,280 --> 00:31:41,800
Speaker 1: if there is a really serious crisis. I don't think

558
00:31:41,840 --> 00:31:45,720
Speaker 1: we're at the point where there's a Kumbayam moment and

559
00:31:46,200 --> 00:31:49,120
Speaker 1: all the divisions of Congress have fallen away. And that's

560
00:31:49,280 --> 00:31:51,360
Speaker 1: a fortunate thing because it takes more or less a

561
00:31:51,400 --> 00:31:54,320
Speaker 1: disaster to get this kind of Congress to work together.

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00:31:54,960 --> 00:31:58,440
Speaker 1: So short of something that really shakes Washington out of

563
00:31:58,480 --> 00:32:01,480
Speaker 1: its usual way of business, I think it's safe to

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00:32:01,520 --> 00:32:05,360
Speaker 1: be skeptical about a major bill on this right now. Jack.

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00:32:05,400 --> 00:32:08,120
Speaker 1: Thank you, great work, Jack Fitzpatrick. Thanks for listening to

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Speaker 1: the Sound On podcast. Make sure to subscribe if you

567
00:32:10,520 --> 00:32:13,440
Speaker 1: haven't already, at Apples, Spotify, and anywhere else you get

568
00:32:13,440 --> 00:32:16,480
Speaker 1: the podcasts and you can find us live every weekday

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00:32:16,520 --> 00:32:20,200
Speaker 1: from Washington, DC at one pm Eastern time. Bluebirth dot

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Speaker 1: com