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Speaker 2: It was a pretty strong jobs report today. I'm not
Speaker 2: necessarily sure we can characterize this one as a blowout,
Speaker 2: but still an upside surprise on the non farm payrolls
Speaker 2: figure and on wages, and a downside surprise on unemployment,
Speaker 2: which held at three point seven percent. And of course,
Speaker 2: the low unemployment rate holding below four percent for a
Speaker 2: twenty third consecutive month is something that President Biden has
Speaker 2: touted repeatedly and touted once again today. He actually put
Speaker 2: out a statement that said, quote, this report confirms that
Speaker 2: twenty twenty three was a great year for the American worker.
Speaker 2: But if it was a great year for the American
Speaker 2: worker and potentially a great report for the president, was
Speaker 2: it the same for the Federal Reserve or for markets
Speaker 2: that are betting that the Fed is going to be
Speaker 2: cutting rates in the not so distant future. Let's get
Speaker 2: to take on that now. And pleased to say, barat
Speaker 2: Ramamurti is joining me. He is now Senior Advisor for
Speaker 2: Economic Strategy at the American Economic Liberties Project, but he's
Speaker 2: also former Deputy Director of the National Economic Council. Barat,
Speaker 2: thanks so much for being here. Do you still look
Speaker 2: at this labor market and see an economy in need
Speaker 2: of rate cuts?
Speaker 3: Well, I think, as you described it, it was a solid,
Speaker 3: not spectacular jobs report. I think it's important always to
Speaker 3: look at the revisions in addition to what the report
Speaker 3: said for the last month, and if you look at
Speaker 3: the downward revisions over the past couple of months, I
Speaker 3: look at the three month trend what you have as
Speaker 3: solid but not spectacular numbers, and I think again that
Speaker 3: is broadly speaking, what you would expect to see at
Speaker 3: this stage of the cycle. There's relatively little sign of
Speaker 3: weakness in the labor market, and while inflation is clearly
Speaker 3: trending downwards, it's not at target yet. And for those reasons,
Speaker 3: I am somewhat skeptical that the FED is going to
Speaker 3: cut starting in March. I know that that's what the
Speaker 3: expectations are. I'm a little bit more skeptical of that now.
Speaker 3: I think that they should because I think it's good
Speaker 3: to be proactive on this front. But I'm skeptical that
Speaker 3: they will.
Speaker 2: Okay, I'm not sure that many market participants, at least
Speaker 2: today necessarily join you in that view. We have seen
Speaker 2: some pulling back of expectations really since the FED release
Speaker 2: minutes earlier this week that indicate maybe they aren't thinking
Speaker 2: hikes or cuts rather are coming imminently. And yet that
Speaker 2: does seem to be where the market is for the
Speaker 2: American voter, for the American worker. Is it more optimal
Speaker 2: to have this continued strength in the labor market if
Speaker 2: it means interest rates stay high, or is it actually
Speaker 2: better to see some of that weakness coming through but
Speaker 2: that also brings lower borrowing costs with it.
Speaker 3: Yeah, that's interesting question. I think that people underrate the
Speaker 3: importance of having a strong job market. People think of
Speaker 3: it as well. Maybe a couple million additional people are unemployed,
Speaker 3: but everybody else is basically the same. That's not really
Speaker 3: true when you have additional slack in the labor market
Speaker 3: that affects people up and down the income spectrum. When
Speaker 3: there's a tighter labor market, companies have to compete harder
Speaker 3: to make sure that they retain workers and that they
Speaker 3: attract workers. That creates upward pressure on wages across the
Speaker 3: income spectrum, and so I think everyone benefits from a
Speaker 3: tighter labor market. Of course, reduction in interest rates would
Speaker 3: lead to improvements and things like housing affordability and the
Speaker 3: cost of credit. I think it really affects people different
Speaker 3: people in the income spectrum differently. I think for folks
Speaker 3: who are on the market for housing, for folks who
Speaker 3: are looking for credit, the lower rates could mean some
Speaker 3: amount of increasing affordability. But I think really at the
Speaker 3: end of the day, we shouldn't be rooting for an
Speaker 3: increase in the unemployment rate. It really is extraordinarily valuable
Speaker 3: to have the kind of tight labor market that we've
Speaker 3: had for the last almost two years at this point.
Speaker 2: Well, and something that has kept that labor market tight
Speaker 2: is participation that was lower. And I wonder what you
Speaker 2: make of the participation figures today fell to sixty two
Speaker 2: and a half percent. That's the lowest level we've seen
Speaker 2: in almost a year.
Speaker 3: Is that concerning, Yeah, a little bit. I think that
Speaker 3: the participation figures can always be a little bit noisy.
Speaker 3: It's always good to look at longer term trends. When
Speaker 3: I was in the White House, we tend to look
Speaker 3: at three month and six month averages rather than month
Speaker 3: to month. I would say that it's a blinking yellow
Speaker 3: light at this point. I'm not ready to declare that
Speaker 3: there's some sort of clearly negative trend happening yet, but
Speaker 3: you're right. Ultimately, what you want to see, and what
Speaker 3: we have seen over the course of this recovery is
Speaker 3: that the prospect of good jobs has attracted a lot
Speaker 3: of people off the sidelines and into the labor force,
Speaker 3: and that increase in labor supply has been a helpful
Speaker 3: element of bringing inflation down in a very healthy way.
Speaker 3: And so you don't want to see that trend reverse.
Speaker 3: I'm not ready to declare that that trend is reversing yet,
Speaker 3: but it is something to keep an eye on as
Speaker 3: we go into future jobs reports.
Speaker 2: Okay, so let's talk about the trend in inflation. How
Speaker 2: much do you think the Red Sea and what's happening
Speaker 2: there are the disruptions to transport, the elongating of these
Speaker 2: vessels journeys around the coast of Africa, higher freight costs
Speaker 2: as a result, maybe even higher fuel prices, depending on
Speaker 2: actually what happens in the Middle East. How great a
Speaker 2: risk is that to the inflation story.
Speaker 3: It's certainly a risk. I mean, look during the pandemic
Speaker 3: and then the aftermath of the pandemic, we saw how
Speaker 3: exactly these types of supply side disruptions can contribute to
Speaker 3: rather sharp increases and inflation. Or during the pandemic we
Speaker 3: saw in some cases a ten x increase in the
Speaker 3: cost of ocean shipping, which then flowed through to the
Speaker 3: increases in the cost of all sorts of products that
Speaker 3: American companies and American consumers rely upon. I think you
Speaker 3: could see to a lesser degree that kind of upward
Speaker 3: pressure on prices because of these disruptions. It's one of
Speaker 3: many reasons why it would be useful to try to
Speaker 3: resolve that as quickly as possible.
Speaker 2: Yeah, and of course you speak of supply chains. Progress
Speaker 2: made on supply chains is something that this White House
Speaker 2: has frequently touted, just as they have frequently touted the
Speaker 2: low unemployment rate, all of the job growth that has
Speaker 2: happened under Biden's presidency, and yet it hasn't, as you
Speaker 2: well know, reflected necessarily in polling in his economic approval rating.
Speaker 2: Now that you're outside the White House looking in, what
Speaker 2: do they need to change to actually get that to resonate.
Speaker 3: Honestly, I don't think that they need to change course
Speaker 3: very much. I think that what you are seeing in
Speaker 3: terms of the disconnect in economic data and economic sentiment
Speaker 3: is mostly explained by the fact that there's always going
Speaker 3: to be a lag. Look, we in the White House
Speaker 3: celebrated when wages started rising higher than inflation and real
Speaker 3: wages turn positive. But if you're an ordinary person out there,
Speaker 3: you're not going to switch on a dime the second
Speaker 3: that real wages take over from negative to positive. You
Speaker 3: want to see a sustained set of time. When inflation
Speaker 3: is coming down, your take home pay is clearly allowing
Speaker 3: you to pay for the things that you need at
Speaker 3: the grocery store and at the pump. And I think
Speaker 3: what you're starting to see now, now that there's been
Speaker 3: several months of real wage gains inflation is starting to
Speaker 3: recede a bit, is that the sentiment data is ticking up.
Speaker 3: You see it in the consumer board information, you see
Speaker 3: it in the Michigan sentiment data, you see it in
Speaker 3: some of the polling data about the presence economic approval.
Speaker 3: All of that stuff is starting to tick up. And
Speaker 3: I would be surprised if it doesn't continue to tick
Speaker 3: up over the next several months as the salience of
Speaker 3: inflation receipts.
Speaker 4: Well.
Speaker 2: The ticking up, though, of those confidence metrics, probably is
Speaker 2: reliant on the fact that we actually don't get a recession.
Speaker 2: That the landing is soft. Do you think that's fully
Speaker 2: assured at this point.
Speaker 3: I'm hesitant to say that anything is fully assured. If
Speaker 3: there's one thing I learned from my time at the
Speaker 3: White House is that you have to expect the unexpected.
Speaker 3: But I would say that all of the data that
Speaker 3: we have available to us right now about the state
Speaker 3: of the labor market, about consumer spending, about business investment,
Speaker 3: all seems to suggest that we are going to have
Speaker 3: a soft landing.
Speaker 1: Now.
Speaker 3: There are things that can disrupt it, as you just noted,
Speaker 3: some of the disruptions on the shipping side could send
Speaker 3: inflation moving in the wrong direction. You could have other
Speaker 3: geopolitical events that could end up pushing us in the
Speaker 3: wrong direction. But based on the data that we have
Speaker 3: available to us right now, we're certainly on a path
Speaker 3: to a soft landing. I know that Secretary Yellen made
Speaker 3: a similar point just earlier today, so I would have
Speaker 3: a lot of optimism on that front. And if in
Speaker 3: fact we can secure that soft landing, and what we
Speaker 3: have over the next several months is inflation at or
Speaker 3: near the target, continued steady job growth, I would be very,
Speaker 3: very surprised if you don't see a consumer sentiment and
Speaker 3: economic sentiment go up quite a bit in the months
Speaker 3: to come.
Speaker 2: How much does fiscal risk factor though, into ultimately economic outcomes.
Speaker 2: Knowing Congress is getting ready to return to Washington next week,
Speaker 2: there's going to be a big fight over appropriations ahead,
Speaker 2: with the thread of not just to shut down, but
Speaker 2: potentially a one percent cut across the border, sequester come
Speaker 2: aprol If they really can't sort this out, how concerned
Speaker 2: should we be from an economic standpoint?
Speaker 3: I think from a macroeconomic perspective, we shouldn't be overly concerned.
Speaker 3: If you look at analyzes of past shutdowns. For example,
Speaker 3: I was working on Capitol Hill back in twenty thirteen
Speaker 3: when there was a month long shutdown, the data tends
Speaker 3: to suggest that that has a pretty limited impact macroeconomically. Now,
Speaker 3: of course, there is a significant impact on people's lives,
Speaker 3: on millions of federal employees, on people who rely on
Speaker 3: certain forms of government services who are not going to
Speaker 3: get those in a shutdown. And if you see some
Speaker 3: sort of prolonged locked in reduction in government spending over
Speaker 3: the long term, that would be a risk. I don't
Speaker 3: think we're at any risk of that happening. If we're
Speaker 3: going to have some sort of one week two week
Speaker 3: shutdown as people sort out these issues, I don't think
Speaker 3: that that's much of a risk for a macroeconomic perspective.
Speaker 2: All right, but Rama Murti, thank you so much for
Speaker 2: joining the program on this job's day. He's a senior
Speaker 2: advisor for economic strategy at the American Economic Liberties Project
Speaker 2: and of course, former deputy director of the NEC. Reflecting
Speaker 2: on today's jobs Day, let's get the reflections now of
Speaker 2: our wonderful Bloomberg Politics contributors Rick Davis and Jeanie Shanzeno
Speaker 2: are with me, So Genie, I'll post the same question
Speaker 2: to you that I essentially asked brought a moment ago.
Speaker 2: Is Biden actually able to use the jobs report like
Speaker 2: this to his advantage when he hasn't been able to
Speaker 2: tout the strength of the economy successfully much at all.
Speaker 5: He's got to keep reminding people that the numbers look
Speaker 5: very good, and at the same time to acknowledge that,
Speaker 5: as you were just talking about, there is a lag
Speaker 5: and so they may not be feeling that yet due
Speaker 5: to the inflation pressure. So you know, it is a
Speaker 5: very hard line for the president to walk. But it
Speaker 5: is an astonishingly good report, you know, twenty three months Kaylee,
Speaker 5: you mentioned it's stunning numbers that are much better, I
Speaker 5: think than anybody could have expected.
Speaker 4: And hearing j.
Speaker 5: Yellen talk about the fact that this soft landing may
Speaker 5: be in the offing, that is all very good. It
Speaker 5: hasn't translated politically yet, unfortunately for the president, but the
Speaker 5: team feels fairly confident in the coming months as that
Speaker 5: we beat that lag, that they may be able to
Speaker 5: benefit from it politically. But it's a hard message to
Speaker 5: sell when people are still feeling inflation as they go
Speaker 5: to the store and elsewhere.
Speaker 2: Well, and Rick, knowing that Biden has really struggled in
Speaker 2: terms of actually getting voters to recognize his economic accomplishments,
Speaker 2: is that why we're seeing such a big deal made
Speaker 2: Perhaps actually you could even call it a kicking off
Speaker 2: fully of his election year campaign efforts in Valley Forge,
Speaker 2: Pennsylvania to talk about Donald Trump being a threat to democracy?
Speaker 2: Is this really his best remaining strategy?
Speaker 6: Yeah? Look, obviously that link to his announced you know,
Speaker 6: his speech today linked to January sixth, the anniversary that
Speaker 6: it draws you to that conclusion to talk about democracy
Speaker 6: under threat. But the reality is he can't give enough
Speaker 6: speeches about the economy. As Genie points out, he is
Speaker 6: not considered credible on this. He's got one of the
Speaker 6: lowest presidential rates on managing the economy. Trump beats him significantly,
Speaker 6: and he's got to fix that if he wants to get.
Speaker 7: A second term.
Speaker 6: The good news is, has pointed out in today's report,
Speaker 6: He's got plenty to talk about. But I've yet to
Speaker 6: see this administration really fan out around the country to
Speaker 6: promote what he likes to call bidnomics, and one speech
Speaker 6: a month is not going to get it done.
Speaker 2: Well, Rick, how much would he be helped by FED cuts?
Speaker 2: Knowing how familiar you are with timing in campaigns and
Speaker 2: how it may work for you or against you, At
Speaker 2: what point will mine's already been made up enough on
Speaker 2: the economy that therefore even FED cuts aren't going to
Speaker 2: change the mind of a voter or I guess that's
Speaker 2: just my question. Does it matter when the cuts come
Speaker 2: or people will already have made decisions by the point
Speaker 2: that they do.
Speaker 7: Yeah, it matters.
Speaker 6: We're seeing right now is what we historically have seen
Speaker 6: in campaigns, which is a pretty significant lag between any
Speaker 6: kind of good news and an improvement in the ballot,
Speaker 6: improvement in the public image of the present around something
Speaker 6: like the economy. It seems voters are always negatively inclined.
Speaker 6: If there's something bad happens, they change your mind immediately,
Speaker 6: But when good things are happening, it takes a month,
Speaker 6: you know, three, four, five, six months to really internalize
Speaker 6: the improvement. So the sooner the Fed could act, if
Speaker 6: they do on rate cuts, the better it would be
Speaker 6: for Biden. He has not got much credibility on inflation
Speaker 6: and fighting it. He you know, more voters will tell
Speaker 6: you in a focus group that they didn't take it
Speaker 6: seriously than the fact that you know they're they're doing
Speaker 6: what they need to do to tackle it. And so
Speaker 6: the same will apply. If the Fed starts to cut
Speaker 6: right soon, there'll be a lag, but that lag will
Speaker 6: actually I.
Speaker 7: Think inord to the benefit of the Biden campaign.
Speaker 2: All Right, Rick Davis and Genie Schanzena will be sticking
Speaker 2: with me. Just a note on how voters are feeling
Speaker 2: about the economy any producer. James points out the Suffolk
Speaker 2: USA poll earlier this week, thirty percent said they think
Speaker 2: we're in a recession. Only twenty nine percent said they
Speaker 2: think it's an economic recovery, twenty one percent stagnation, and
Speaker 2: sixteen percent depression. So not necessarily encouraging for the incumbent administration.
Speaker 2: But coming up, we're not going to talk about the incumbent.
Speaker 2: We're going to talk about the Republicans trying to kick
Speaker 2: him out of the Oval office in this twenty twenty
Speaker 2: four cycle.
Speaker 4: That's next. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch the
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Speaker 2: Welcome back to the fastest show in politics and talk
Speaker 2: about things going fast. Iowa already is almost upon us.
Speaker 2: We are in the middle of now a ten day countdown.
Speaker 2: It is just ten more days until the all important
Speaker 2: Iowa caucuses, where yes, it is highly likely that former
Speaker 2: President Donald Trump is going to win. Polls show him
Speaker 2: ahead by a significant margin, pulling it north of fifty
Speaker 2: percent in a lot of polls. So I'm not sure
Speaker 2: we can call it a real contest yet. The question
Speaker 2: is can Nicky Haley or Ronda Santis put up a
Speaker 2: strong enough showing in Iowa that it becomes more of
Speaker 2: a contest. They certainly are competing fiercely for the second
Speaker 2: place position here, and they were each making their cases
Speaker 2: last night in CNN town halls. Interestingly, though, they took
Speaker 2: more barbs at Donald Trump than each other, which is
Speaker 2: a bit of a reversal from what we've seen so
Speaker 2: far this cycle. Here's Ronda Santis last evening.
Speaker 8: Do you think Donald Trump is not pro life?
Speaker 9: Course not?
Speaker 10: I mean, when you're saying that pro life protections are
Speaker 10: a terrible thing by definition, you are not pro life.
Speaker 10: When you say that you want to have a federal
Speaker 10: law at eighteen weeks or twenty weeks that would override
Speaker 10: a state like Iowa that has enacted pro life protections.
Speaker 10: That would mean more abortions not less abortions.
Speaker 2: He went on to also criticize the former president for
Speaker 2: failing to keep his promises on the border wall as
Speaker 2: well as spending. Meanwhile, here's Nicki Haley on Trump.
Speaker 8: For me, it's not about guilt or innocence. It's about
Speaker 8: what's in the best interest for the country. And I
Speaker 8: don't think our country will move forward with an eighty
Speaker 8: year old president sitting in jail. That allows our country
Speaker 8: to continue to be divided. We have to move on
Speaker 8: past that.
Speaker 2: She also said chaos follows Trump and that the country
Speaker 2: can't take another four years of chaos. So on that note,
Speaker 2: let's bring back Rick Davis and Jeanie Shanzeno, our Bloomberg
Speaker 2: Politics contributors. So, Rick, what do you make of their
Speaker 2: hits at Trump last night? Were they strong enough?
Speaker 6: Yeah? I mean this first time we've seen them both,
Speaker 6: as you point out, lean in against Trump and not
Speaker 6: lean into each other. So I think they've figured out
Speaker 6: who's actually winning the election so far.
Speaker 7: So that's instructive too. I think that the attacks are
Speaker 7: nothing new.
Speaker 6: They've kind of reprised these throughout their campaign, but the
Speaker 6: fact that they've ramped up many of them in the
Speaker 6: same event is indication that they're feeling a little bit
Speaker 6: of the pinch. I would say much more important for
Speaker 6: DeSantis to contrast with Nikki Haley, because if there's any
Speaker 6: chance that he gets a quote ticket out of Iowa,
Speaker 6: it means he's got to come in second. I can't
Speaker 6: imagine a scenario where he comes in third and is
Speaker 6: currently pulling anemic figures in New Hampshire and the two
Speaker 6: of those things in combination are at deathblow to his campaign.
Speaker 6: Wouldn't surprise me that he has an election night in
Speaker 6: Iowa like Howard Dean did in two thousand and four,
Speaker 6: where there's a little bit of screaming occurs.
Speaker 2: Okay, I want to get back to how the margin
Speaker 2: of second may matter here and what that ultimately means
Speaker 2: for New Hampshire. But Genie, first, I want to ask
Speaker 2: you about something else Nikki Haley frankly had to talk
Speaker 2: about last night, which was her Civil War gaff, the
Speaker 2: idea that she did not attribute slavery as a cause
Speaker 2: of the Civil War previously, and part of her response,
Speaker 2: she said, and this is a quote, if you grow
Speaker 2: up in South Carolina, literally in second and third grade,
Speaker 2: you learn about slavery, You grow up and you have
Speaker 2: you know, I had black friends growing up. Does that
Speaker 2: help her get out of the hole or dig it deeper?
Speaker 5: Digsit deeper. You know, this was a huge misstep by
Speaker 5: Nikki Haley a few weeks ago. She keeps getting asked
Speaker 5: about it, and you know, I thought she actually performed
Speaker 5: pretty well last night. But as you wake up and
Speaker 5: you see the Twitter feeds and you see what's being
Speaker 5: reposted and shared from the night, that line that you
Speaker 5: just mentioned Kaylee about I have black friends, that's really
Speaker 5: what we're left with. And so that is a problem
Speaker 5: for us, for her, and so you know, is it
Speaker 5: going to be a wound she can't recover from. Absolutely not.
Speaker 5: But I think in many people's minds it's indicative of
Speaker 5: what DeSantis and Christy and now Donald Trump as he's
Speaker 5: hitting her more forcefully as he sees her rising in
Speaker 5: the polls in New Hampshire have said is that she
Speaker 5: is trying to be all things to all people and
Speaker 5: that she is not authentic, not saying what she actually believes.
Speaker 5: I think there was actually like a nine year old
Speaker 5: kid in New Hampshire who asked her the other day,
Speaker 5: you know something about her being a flip flopper like
Speaker 5: John carry I don't know how a nine year old
Speaker 5: remembers John Carrey, but that's what's in people's minds, and
Speaker 5: so I do think it's problematic for her. I thought, again,
Speaker 5: she did a good job on the night, but when
Speaker 5: you know, in this media eraror when everything is shared
Speaker 5: that's the clip we're seeing of her, it does become
Speaker 5: a bit of a problem for her.
Speaker 2: So it raises the question of how strong a showing
Speaker 2: she might actually be able to put up in ten
Speaker 2: days time. So Rick, to return to you on the
Speaker 2: question of obviously Donald Trump is going to lead Iowa
Speaker 2: barring something completely unforeseen. It's about number two and how
Speaker 2: close number two is to Trump number one? Right, what
Speaker 2: kind of margin does Nicki Haley actually need to make
Speaker 2: New Hampshire actually in play.
Speaker 6: Yeah, First of all, she's already got New Hampshire in play. Right,
Speaker 6: in all the most current polling, she's hovering around ten
Speaker 6: percent behind Trump. That is way up from just six
Speaker 6: months ago. So New Hampshire is a race today. And
Speaker 6: so what she's trying to do is figure out what
Speaker 6: she can do to add to that momentum, which is
Speaker 6: why she's placed a massive thirty.
Speaker 7: Million dollar buy in Iowa.
Speaker 6: And with all due respect to social media, when you've
Speaker 6: got thirty million dollars worth of commercials pounding away in
Speaker 6: three media markets in Iowa, you're controlling the message. And
Speaker 6: the message that she had is that she's electable, she
Speaker 6: can beat Biden, and that's what Republicans want to hear.
Speaker 6: They care a little bit less about the Santis and
Speaker 6: Nikki Haley than they do about Joe Biden. And so
Speaker 6: if you tell them that you can beat Biden and
Speaker 6: you show it in the polling data that's circulating, you've
Speaker 6: got credibility. And so she's actually waging a pretty credible
Speaker 6: argument and it undermines Donald Trump's arguments of electability.
Speaker 7: So it works both in New Hampshire and Iowa. So
Speaker 7: if she does.
Speaker 6: Sort of surprise everybody and come in second in Iowa,
Speaker 6: she will get a boost going into the New Hampshire campaign,
Speaker 6: and then the question is what can she do with it?
Speaker 6: If DeSantis comes in second place. It's pretty much what
Speaker 6: he has said all along that he was going to do.
Speaker 6: In fact, he's actually said he was going to win Iowa,
Speaker 6: which was a mistake. But then the question is going
Speaker 6: to be where's he go from here? Because he has
Speaker 6: no campaign in New Hampshire, has no campaign in South Carolina.
Speaker 7: There aren't a lot of.
Speaker 6: Super Tuesday states that are good for DeSantis, and so
Speaker 6: he'll have to come up with a narrative on election
Speaker 6: night that says somehow he can go from here to
Speaker 6: you know, from Iowa in second place to a victory somewhere,
Speaker 6: and at least at least Nicky can point to the
Speaker 6: fact that she is closer to Trump than any candidate
Speaker 6: has been since Ron DeSantis got into the race in
Speaker 6: New Hampshire. So all eyes will shift immediately from Iowa
Speaker 6: to New Hampshire and we'll see whether or not it's
Speaker 6: it's impact that Iowa election has anything to do with
Speaker 6: the New Hampshire outcome.
Speaker 2: Well, we'll also see, Genie, if there are just fewer
Speaker 2: candidates in play come New Hampshire. It's not just a
Speaker 2: question of whether Ron DeSantis moved on past Iowa. But
Speaker 2: there are other players in this game as well. Chris
Speaker 2: Christy in the vaig Ramaswami, how likely is it in
Speaker 2: your mind that we see a consolidation of the field
Speaker 2: before we actually get up there to Manchester.
Speaker 5: We really should. I mean, if you think about Chris
Speaker 5: Christie's campaign, it was predicated on ensuring that Donald Trump
Speaker 5: is not the nominee of the party. Well, if that's
Speaker 5: the case and he has zero paths, and really he
Speaker 5: has less than zero path to victory here, then you
Speaker 5: would think he would bow out and allow his supporters
Speaker 5: to go where they go. You know, maybe Nikki Haley,
Speaker 5: maybe they look elsewhere. But you know, I think we
Speaker 5: should see something like that if he was true to
Speaker 5: what he said. And of course, Vivek Ramaswami, he's barely
Speaker 5: showing in the polls at this point. He really does
Speaker 5: seem to be playing for a vice presidential or cabinet
Speaker 5: spot at this point. I don't know if he's going
Speaker 5: to need to make a statement because he already seems
Speaker 5: out of it. But you know, I do think that
Speaker 5: the really interesting question is going to be for Donald Trump,
Speaker 5: who keeps talking about his fifty sixty point forty point
Speaker 5: victory and lead in the polls, and what happens if
Speaker 5: either of these candidates in the Santas or Haley does
Speaker 5: better than expected. It's a dangerous game Donald Trump is
Speaker 5: playing by making that case. And you know, he's gonna
Speaker 5: have to eat that if one of them or both
Speaker 5: of them does far better than expected, which is possible
Speaker 5: given to Santas' ground game in Iowa. And what Rick
Speaker 5: was thus talking about with Nicky Haley's money in Iowa,
Speaker 5: that she has to spend on the media.
Speaker 2: Yeah, ninety nine counties visited for Ronda Santis. Donald Trump
Speaker 2: himself hasn't really spent much time in Iowa at all,
Speaker 2: though he will be there next week when he's counterprogrammed
Speaker 2: counterprogramming the Haley DeSantis debate with a Fox Town Hall.
Speaker 2: So obviously all of us are going to be tuned in.
Speaker 2: We got to talk about Congress returning to Washington next.
Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch us
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Speaker 2: Chip Roy, of course, Republican from Texas. I actually spoke
Speaker 2: with him on Balance of Power last night and asked
Speaker 2: him about this idea that it's either shut down the
Speaker 2: border or shut down the government.
Speaker 4: And this is what he told me.
Speaker 9: We need to pass HR two or we need to
Speaker 9: withhold funding until we get it. I mean, if you
Speaker 9: read federal's papers, if you look at the founding of
Speaker 9: our country, our job, Article one is to hold the
Speaker 9: funding and to use it to force an administration that
Speaker 9: is ignoring the law to do their job. Here's my question,
Speaker 9: what would people have us do? Just say whatever you
Speaker 9: want to do, allehandra maiorchis whatever you want to do,
Speaker 9: Joe Biden blatantly ignore the law while people die. And
Speaker 9: to all my Republican colleagues who are going around going, oh,
Speaker 9: we might have a shutdown, what happens with the government,
Speaker 9: you go talk to the people of Texas or people
Speaker 9: in your community.
Speaker 2: That was Congressman Chip Roy. Let's get another view now
Speaker 2: from another Republican member of the House, Congresswoman Nicole mally
Speaker 2: Takis of New York. I'm pleased to say is with
Speaker 2: us now? Congresswan, thank you so much for being here.
Speaker 2: Do you agree with this strategy shut down the government
Speaker 2: if you don't get what you want at the border?
Speaker 11: Well, look, I think it's a lot more complicated than that.
Speaker 11: I mean, I believe in good faith negotiation. I think
Speaker 11: we have to try to use our leverage, right in
Speaker 11: this process to push the Senate to make real advances
Speaker 11: in border security, which means we have to revert to
Speaker 11: some of the policies of the previous administration.
Speaker 12: But we need to have a negotiation.
Speaker 11: I would say we passed HR two, right, that was
Speaker 11: the House Republicans' priorities, and basically it's what customs and
Speaker 11: border protection.
Speaker 12: If you spoke with their union, that's what they're saying
Speaker 12: they want.
Speaker 11: Okay, they want technology, they want tools and resources, manpower,
Speaker 11: but they also want policies that restore the order at
Speaker 11: the southern border, that undo President Biden's executive orders. It
Speaker 11: addresses some of the asylum issues, it addresses some of
Speaker 11: the issues with visas, and I think it would be
Speaker 11: really the It would be a tremendous, tremendous resolution to
Speaker 11: what we're seeing at the southern border. Now the Senate
Speaker 11: doesn't want to pass our bill, then the Senate should
Speaker 11: pass its own bill. Let the Senate pass its own
Speaker 11: bill of what it sees as priorities relating to the border,
Speaker 11: and then let's negotiate and reconcile the differences.
Speaker 12: We passed our bill in May, and.
Speaker 11: Yet we have Senator Schumer refusing to not only allow
Speaker 11: our bill to the floor for a vote, which I
Speaker 11: strongly believe if Schumer brought Hr Two Order Security Act
Speaker 11: to the floor for a vote.
Speaker 12: It would pass. He refuses to allow a vote. All
Speaker 12: we're asking for is an up and down vote if
Speaker 12: it doesn't pass, and we got to start from.
Speaker 11: Scratch or pass your own bill, and then let's reconcile
Speaker 11: those differences. But what we're seeing happening is so unsustainable,
Speaker 11: it is so distructed to communities like ours. Here in
Speaker 11: New York City, the mayor is screaming saying that this
Speaker 11: is going to bankrup new York City. They're going to
Speaker 11: freeze hiring police officers across the board cuts, and yet
Speaker 11: Senator Schumer represents New York City, refuses to take any action.
Speaker 11: So we have to use whatever leverage we have. I
Speaker 11: don't want to shut down the government.
Speaker 12: But we need to. We need to demand that border
Speaker 12: security be part of this resolution.
Speaker 11: We're not going to continue to give money to Homeland Security.
Speaker 12: To simply process paperwork. They actually need to secure the border.
Speaker 2: Okay, So, Congress, when you speak of negotiation and this
Speaker 2: idea that the Senate should come up with something of
Speaker 2: their own and pass it first. Yet there are many
Speaker 2: members of your conference who are saying HR two essentially
Speaker 2: or nothing, that HR two ultimately is all they settle for.
Speaker 2: So if you're Mike Johnson, the House Speaker, is that
Speaker 2: all he can settle for? You think, actually, knowing what
Speaker 2: happened to the prior speaker, Kevin McCarthy, he's going to
Speaker 2: be able to pass something passed by Democrats in the
Speaker 2: Senate in this House of Representatives.
Speaker 11: Well, look, HR two I think is an ideal piece
Speaker 11: of legislation. However, you know, I'm a Republican from New York.
Speaker 11: I'm in an overwhelming Democrats state, and I know that
Speaker 11: we have to negotiate with the Democrats, as much as
Speaker 11: I may not like it sometimes to get anything done.
Speaker 11: And so what I would say is HR two is
Speaker 11: the Republican starting point. But that's why we need Senator
Speaker 11: Schumer to either allow a vote on our bill okay,
Speaker 11: which again I think it would pass if you brought
Speaker 11: up even though they control the Democrats control the Senate,
Speaker 11: or pass your own bill, and then we can reconcile
Speaker 11: the differences and we would have to give a little, Yes,
Speaker 11: we'd have to give a little but certainly as long
Speaker 11: as our main provisions right that would make sure people
Speaker 11: are not released in the interior of this country, making
Speaker 11: sure that people have to wait in the next safe
Speaker 11: country as they apply for asylum and go through an
Speaker 11: orderly process, so our courts are not backlogged to the
Speaker 11: point where they are right now, which is a ten
Speaker 11: year wait, making sure that we add more judges to
Speaker 11: alleviate this backlog, making sure that we're not taking these
Speaker 11: individuals who are paying the drug cartels to cross our
Speaker 11: southern border before the people who have.
Speaker 12: Come legally and have been waiting in the system for years.
Speaker 11: Right now, the way the system Joe Biden has it
Speaker 11: set up is the border crossers are being heard first,
Speaker 11: and so the people who have been waiting patiently, doing
Speaker 11: everything right, following the rules, didn't pay the drug cartels
Speaker 11: to come here, They're getting pushed to the back and
Speaker 11: getting years long delays. And I know this because I've
Speaker 11: been working personally with many cases constituents, and I've had
Speaker 11: to cut through his bureaucracy and red tape for them.
Speaker 11: And it's very unfair that the President's prioritizing the people
Speaker 11: pay the drug cartels to be smuggled here as opposed
Speaker 11: to the ones who have been waiting in the system.
Speaker 11: So I would simply say, is I understand that as
Speaker 11: a give and take here, but it's hard to negotiate
Speaker 11: with the Senate when they've passed nothing. We need to
Speaker 11: see what their priorities are, right, That's how it works.
Speaker 11: We show you our cards, you show us yours, and
Speaker 11: then we try to reconcile the differences and get a
Speaker 11: piece of legislation passed.
Speaker 2: So, Congresswoman, there's the Senate in the House obviously in
Speaker 2: play here as well as the White House, because Biden's
Speaker 2: ultimately going to have to sign this legislation, and knowing
Speaker 2: that Biden does need a win on border policy politically,
Speaker 2: do you think there is another actor here for House
Speaker 2: Republicans in the man who is very likely going to
Speaker 2: be running against him in the general election in twenty
Speaker 2: twenty four. How much influence does Donald Trump have on
Speaker 2: the people in the House making these decisions right now?
Speaker 9: Well?
Speaker 12: I don't think he.
Speaker 11: I think the House Republicans want border security. That is
Speaker 11: our number one priority. We want to see reasonable policy,
Speaker 11: and yes, we have legislation to add more visas for
Speaker 11: people that want to come and work and provide for
Speaker 11: their families in industries that we need workers right to
Speaker 11: address our labor shortage, and it should be strategic.
Speaker 12: And we should be doing that.
Speaker 11: But this idea that we're just going to allow ten
Speaker 11: million people to enter our country, two million of which.
Speaker 12: We don't know who they are, where they are, or
Speaker 12: what their intention are.
Speaker 11: That's the number that CBP estimated has entered our country
Speaker 11: is very dangerous.
Speaker 12: When we know.
Speaker 11: Fetanol is killing a record number of Americans, we know
Speaker 11: that there's sex trafficking, children, women being exploited, when we
Speaker 11: know that we've caught terrorists at the border that are
Speaker 11: on the FBI watch list, this is insane that we
Speaker 11: would have this type of open border policy to post.
Speaker 12: Nine to eleven world.
Speaker 11: So I think the House is working independently and this
Speaker 11: is their priority, regardless of any the national figures. I mean,
Speaker 11: we see this as a real issue, both economic issue,
Speaker 11: a public safety national security issue, and it just needs
Speaker 11: to be addressed. And if Joe Biden will not do
Speaker 11: something like we send the executive boarders that created this
Speaker 11: is executive orders that created this mess.
Speaker 12: Now we need to take action.
Speaker 11: We got to use every tool and leverage that we
Speaker 11: have so to get the set as hacked.
Speaker 2: Well, Congressman, when you say the House is going to
Speaker 2: make these decisions independently of any actor, so is that
Speaker 2: essentially you saying, even if you do have the former
Speaker 2: president potentially making noise about a deal that Mike Johnson
Speaker 2: and House leadership, which pretty much everyone has endorsed him
Speaker 2: at this point, would pass it anyway.
Speaker 11: Look, I think you'll have the votes if we actually
Speaker 11: if we actually get the Senate to work with us,
Speaker 11: and we can hash out an agreement that would reinstate
Speaker 11: some of the Trump era policies, address the issues of
Speaker 11: visas and asylum and work permits for people who are
Speaker 11: going to come legally and follow the proper path. Then
Speaker 11: you would see what you usually see in these types
Speaker 11: of scenarios, right like you did in the debt default
Speaker 11: you did it with avoiding the shutdown. You'll see the
Speaker 11: far right vote against it, the far left vote against it,
Speaker 11: and then everyone else in the middle voting for it.
Speaker 11: Over over three hundred probably members voting for it. That's
Speaker 11: what usually happens.
Speaker 12: At the end of the day when there is a negotiation.
Speaker 11: The extremes sit it out, they vote no and complain
Speaker 11: about it, and then the middle who actually have to govern.
Speaker 12: Right, we pass the legislation, do what we can with.
Speaker 12: People have to.
Speaker 11: Understand that Republicans, we control one third of the government, right,
Speaker 11: the Democrats have the.
Speaker 12: Said they have the White House. We need to negotiate.
Speaker 11: We're not going to get everything we want, but if
Speaker 11: we can get some really good wins that actually address
Speaker 11: the crisis and stop this mass migration flow to New
Speaker 11: York City that's hurting cities like ours and we can't
Speaker 11: afford it and we're seeing citizen services being cut as
Speaker 11: a result, well then that's a win and we should
Speaker 11: do it, regardless of who, at the end of the
Speaker 11: day will take political credit for it. We need to
Speaker 11: do the right thing.
Speaker 2: Okay, Well, you've mentioned New York a few times, so
Speaker 2: let's talk specifically about what's happening. They're obviously dealing with
Speaker 2: an influx of migrants, many of which have been bussed
Speaker 2: from Texas, and I'm sure you saw the news yesterday.
Speaker 2: New York is now suing seventeen Texas bus companies for
Speaker 2: seven hundred and eight million dollars to recoup costs incurred
Speaker 2: by providing shelter and services to these migrants.
Speaker 4: Do you agree? Do you support that move?
Speaker 11: Congressomone, Look, I support any tool that's going to stop
Speaker 11: this flow. I think a lot of the problem of
Speaker 11: these non government organizations, these NGOs that receive a lot
Speaker 11: of government funding, they are responsible for transporting the majority
Speaker 11: of the migrants. Yes, states like Texas are sending some,
Speaker 11: but that's about ten to fifteen percent of the individuals
Speaker 11: that we're seeing in New York City. So I support
Speaker 11: any measure that will stop it.
Speaker 12: But truly, which.
Speaker 11: Really going to stop it is if we secure the border.
Speaker 11: Right at the end of the day, it comes down
Speaker 11: to that, and so I really urge Mayor Adams to
Speaker 11: get Senator Schumer to act, and he he calls for
Speaker 11: more funding, he called which which would only exacerbate the problem. Right,
Speaker 11: It would just allow him to open up more shelters
Speaker 11: and more encampments in New York City, And it may
Speaker 11: it may help the city financially, but doesn't really solve
Speaker 11: the problem. What's really going to solve the problem is
Speaker 11: having border security and a reasonable process for people, which
Speaker 11: we do by the way we have laws and for
Speaker 11: generations people have been coming, including my own parents through
Speaker 11: this country. We have a process in place. It needs
Speaker 11: to be followed, it needs to be enforced, and that's
Speaker 11: what we need. We need more resources to make sure
Speaker 11: that these cases are heard.
Speaker 4: Quicker, Congressman.
Speaker 2: Finally, I only have a minute left with you, but
Speaker 2: I do want to make sure to ask this question.
Speaker 2: How confident are you that a partial shutdown on January
Speaker 2: nineteenth can be averted?
Speaker 11: You know, I think there's a lot of variables right now,
Speaker 11: so it's hard to say.
Speaker 12: Look, they've said we were going.
Speaker 4: To show, say more likely than not.
Speaker 11: I would say at a partial shutdown would be more
Speaker 11: likely than a complete shutdown.
Speaker 12: But I also.
Speaker 11: Think that you know, people have said we were going
Speaker 11: to have shutdowns twice before in this Congress, and we
Speaker 11: did it. We averted it last minute, working in a
Speaker 11: bipartisan way. But at some point we need to see
Speaker 11: policy changes. We don't want to just continue the existing
Speaker 11: funding levels. We have a thirty four trillion dollar debt.
Speaker 11: We need to be serious about spending and we've got
Speaker 11: to find savings. And so that is why negotiating is
Speaker 11: so important right now.
Speaker 2: All right, and on that note, we believe it. Congressman,
Speaker 2: thank you so much for your time safe travels back
Speaker 2: to Washington next week. That is Republican Congresswoman from New York,
Speaker 2: Nicole Maliotakis. We'll have much more coming up next on
Speaker 2: the second hour of sound On.
Speaker 4: So stick with us. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch the
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Speaker 2: We want to get more on the jobs figures now,
Speaker 2: because two hundred and sixteen thousand payrolls added in the
Speaker 2: month of December, economists thought it would be one hundred
Speaker 2: and seventy five thousand, and rather than a three point
Speaker 2: eight percent unemployment rate economists we're looking for. What we
Speaker 2: got was three point seven. Wages were a little hot
Speaker 2: as well. So what does all this mean and what
Speaker 2: does it mean specifically for the Federal Reserve. Let's get
Speaker 2: more insight now with Bloomberg's International Economics and Policy correspondent
Speaker 2: Michael McKee, who is also in New York. So Mike,
Speaker 2: I guess my first question is is it as strong
Speaker 2: under the surface as meets the eye.
Speaker 13: Not quite, and it's a little weird under the surface.
Speaker 13: There are a number of different oddities in this report,
Speaker 13: none of which you are really going to matter to
Speaker 13: the Federal Reserve. But the two hundred and sixteen thousand
Speaker 13: has to be weighed against the seventy one thousand that
Speaker 13: were subtracted from October and November, so you get a
Speaker 13: net of one hundred and forty five thousand. And we
Speaker 13: were running in the third quarter at about a two
Speaker 13: hundred and twenty five thousand average pace, So clearly there's
Speaker 13: a deceleration here. And the fact that the unemployment rate
Speaker 13: did not go up was because a lot of people
Speaker 13: left the labor force. But most of those people didn't
Speaker 13: lose their jobs, they just were not in the labor force,
Speaker 13: so they're not counted as unemployed. So we don't know
Speaker 13: exactly why they went out, other than maybe it was
Speaker 13: the holidays and they didn't feel like looking for work
Speaker 13: or something like that. And finally, and this gets into
Speaker 13: the political side of things, the unemployment rate for blacks
Speaker 13: and for Asians went down, while for whites it went up,
Speaker 13: and usually if you're going into a recession or something
Speaker 13: like that, it works the other way. So a lot
Speaker 13: of things to consider when looking at this report. But
Speaker 13: as I said, I don't think the FED is going
Speaker 13: to change its views one way or another based on this.
Speaker 2: Well, Mike, I guess it's important to recognize here that
Speaker 2: the Fed's views on cutting maybe different than the view
Speaker 2: the market has adopted on cutting, because the market thinks
Speaker 2: the Fed's going to be cutting a lot more than
Speaker 2: was suggested in the dot platter, frankly was suggested in
Speaker 2: the minutes from the fed's December meeting that were released
Speaker 2: this week. They talked about how they wouldn't essentially rule
Speaker 2: out another hike. There was no suggestion that rates aren't
Speaker 2: going to stay higher for a longer period of time.
Speaker 2: So I guess, is what changed here, or what could
Speaker 2: change more market interpretation than actual Fed interpretation, because the
Speaker 2: FED may have been thinking things all along that are
Speaker 2: supported by the data.
Speaker 13: Yeah, I know what you're trying to say here, It
Speaker 13: is a weird situation.
Speaker 4: I'm not sure I succeeded.
Speaker 13: Soas helped me on television earlier today that the FED
Speaker 13: and the bond market are kind of married, but they're
Speaker 13: not sleeping in the same bed. They're not even sleeping
Speaker 13: in the same house. They're quite far apart, and that
Speaker 13: has to change. How it changes will depend on the data.
Speaker 13: We had a very weird day to day where inflation
Speaker 13: went up in Europe. It wasn't unexpected, but it went
Speaker 13: up in Europe, and all of a sudden, the market's
Speaker 13: priced out a number of ECB rate cuts. Same thing
Speaker 13: happened in the United States with the jobs report. They
Speaker 13: price out rate cuts when the FED when the employment
Speaker 13: numbers came out, and then that ISM number came out,
Speaker 13: the ISM services, which showed a slowdown in the service industries,
Speaker 13: a big drop in prices and an even bigger drop
Speaker 13: in jobs. That wasn't confirmed by the payroll report, but
Speaker 13: it was enough that all these markets, futures markets did
Speaker 13: a u turn and now are back to pricing in
Speaker 13: March moves. So if you can explain the bond market thinking,
Speaker 13: to me, you're doing better than most people, I think
Speaker 13: basically what you end up with is people are taking
Speaker 13: advantage of cheap options on the idea of maybe kind
Speaker 13: of hedging against the possibility that the FED might actually
Speaker 13: end up if inflation goes down cutting rates in March,
Speaker 13: those options may fall off if the data don't support
Speaker 13: what we're doing, and it's not like you're actually shorting
Speaker 13: treasuries or something like that.
Speaker 2: All right, Bloomberg's Michael McKee answering a question that I'm
Speaker 2: not sure actually I even asked is a question. But
Speaker 2: well done, Mike, Thank you so much. As always, we
Speaker 2: really appreciate it. Of course, Mike the expert on all
Speaker 2: things monetary policy, but we want to talk to an
Speaker 2: expert now on fiscal policy, because, as we've talked about
Speaker 2: already on this program, it's going to be a battle
Speaker 2: over appropriations, and it's going to start in just a
Speaker 2: few days when Congress returns to Washington after a multi
Speaker 2: week holiday break. The issue on the table figuring out
Speaker 2: these twelve appropriations bills by January nineteenth or February second,
Speaker 2: depending on what department of the government you are talking about,
Speaker 2: and depending on who you ask within the government, they
Speaker 2: may be feeling more or less confident about the ability
Speaker 2: for a shutdown to be averted. Shalanda Young, who's the
Speaker 2: White House's budget director, said this morning, I'm typically optimistic.
Speaker 2: Don't mark me down as optimistic this morning. So how
Speaker 2: optimistic is our fiscal policy expert, Bill Hoagland.
Speaker 4: He is the.
Speaker 2: Senior vice president at the Bipartisan Policy Center. So Bill,
Speaker 2: how are you feeling?
Speaker 14: Thank you, Kylie. I'm feeling cautiously optimistic.
Speaker 12: How's that.
Speaker 14: There's good news coming out literally in the last few
Speaker 14: hours as it relates to an agreement being reached on
Speaker 14: what we call the top line for appropriations. It is
Speaker 14: critical for the appropriation process to work the twelve bills
Speaker 14: to get them completed, that we have an agreement on
Speaker 14: the overall level of discretionary spending, both defense and non defense.
Speaker 14: And there is very strong indications that we are very
Speaker 14: very close to getting to that agreement here in the
Speaker 14: next It may be even announced later today or early tomorrow.
Speaker 14: The importance of that is once you know the top line,
Speaker 14: which we haven't had an agreement since we thought we
Speaker 14: had the agreement way back with the Fiscal Responsibility Act
Speaker 14: back last June, but of course we went through a
Speaker 14: number of iterations since then. But now we're back to
Speaker 14: where we should have been back last year. We have
Speaker 14: an agreement that's being reached. It appears to be very
Speaker 14: close to this Fiscal Responsibility Act agreement last spring, and
Speaker 14: that will allow then the appropriators to move forward by
Speaker 14: completing their bills. Quite frankly, I do believe it's very difficult, though,
Speaker 14: let's be fair, Kayley. I think it's going to be
Speaker 14: very difficult in eight days, essentially eight days, to get
Speaker 14: the agreement as it relates to the first trunch, which
Speaker 14: is Department Energy, Agriculture, Housing, and Urban Development, and Transportation.
Speaker 2: So bill, even if we do to your point about
Speaker 2: the difficulty of achieving all of this in such a
Speaker 2: short period of time, even if you have the top
Speaker 2: line figures now potentially knowing how hard it was to
Speaker 2: come to that in the first place, how much harder
Speaker 2: is it to figure out everything underneath, how that money
Speaker 2: is actually divvied up within these programs.
Speaker 14: Well well, of course, the Senate committees have been working,
Speaker 14: staff have been working for some time. The House too,
Speaker 14: It'll take some time. I guess what I want to
Speaker 14: say is I think that for those that first round
Speaker 14: of four eight major agencies that has a deadline here
Speaker 14: of January the nineteenth, my guess is it's going to
Speaker 14: require them to extend that agreement maybe into the second tranch,
Speaker 14: which is February the second, and I think they can
Speaker 14: get that all done within that timeframe. Yes, there's a
Speaker 14: lot of decisions being made, but I think a lot
Speaker 14: has been done behind the scenes. So I am, as
Speaker 14: I say, cautiously optimistic that will not have a shutdown
Speaker 14: for those four agencies, but it will require that they're
Speaker 14: an agreement to extend that first trunch the January nineteenth
Speaker 14: day two probably to February the second, with all the
Speaker 14: other eight bills.
Speaker 2: Would that extension count though as a short term cr
Speaker 2: of some kind because Speaker Johnson said he wasn't going
Speaker 2: to do any more of those, But is that, frankly,
Speaker 2: his only way out of this pickle.
Speaker 14: I think it's either that or a government shutdown for
Speaker 14: those four agencies. So I believe that once we get
Speaker 14: to or the billy up to the bar, so to speaking,
Speaker 14: you're going to be able to work out an agreement. Yes,
Speaker 14: we all, we make a lot of announcements, and I
Speaker 14: think we'll we'll find out here. Now, I want to
Speaker 14: make very clear there's one other issue here. This is
Speaker 14: just the funding for the fiscal year that we're currently in,
Speaker 14: fiscal year twenty four. This has nothing to do with
Speaker 14: the supplemental request that's still pending one hundred and six
Speaker 14: billion dollars. This is what has to do with Ukraine Israel,
Speaker 14: the issues around the border. That's still a separate issue
Speaker 14: to be debated.
Speaker 2: Well, I'm so glad you brought that up, because I'm
Speaker 2: not really sure the border issue is separate to the
Speaker 2: appropriations process anymore. The rhetoric we're hearing from Republican members
Speaker 2: of Congress is shut down the border, shut down the government.
Speaker 2: How much more complicated does this all become if the
Speaker 2: border security deal is now what is contingent upon keeping
Speaker 2: the government funded?
Speaker 14: Well, then that's a new element here. As I say,
Speaker 14: I've heard this shut down government are shut down the border.
Speaker 14: I think that's a little bit overstating it once again,
Speaker 14: a little bit dramatic in their statements, because again we're
Speaker 14: talking about first of all, funding the basic government and
Speaker 14: then the issues associated with that emergency supplemental. I think
Speaker 14: you can negotiate the emergency supplemental and the border issues
Speaker 14: separate apart from the basic funding of the Department of Agriculture, Energy, Transportation,
Speaker 14: and Housing. I think those are really separate issues, and
Speaker 14: I believe that the appropriators and the leadership at the
Speaker 14: end of the day will separate the two out.
Speaker 2: Okay, So even if the issues are separated, though, how
Speaker 2: hard is it going to be to find bipartisan compromise
Speaker 2: on this issue? This is an issue that reforms have
Speaker 2: evaded Congress for literally decades. Bill, So what makes this
Speaker 2: time different? Is it really different?
Speaker 9: You know?
Speaker 14: No, I think you're absolutely correct, Kayley, that the issue
Speaker 14: associated with the emergency supplemental that's separate apart from the
Speaker 14: basic funding. I think that is going to still continue
Speaker 14: to be very contingious whether or not they can reach
Speaker 14: an agreement here. I think it's still very problematic on
Speaker 14: that score. I do think that there is a real
Speaker 14: desire on the part of particularly the members in the
Speaker 14: Senate to find a solution here, and it will not Listen,
Speaker 14: let's be honest, even if we could find some improvements
Speaker 14: upon the border, whether it be through the parole issues
Speaker 14: or other issues down there, I do think that we're
Speaker 14: not going to solve all the problems of the border
Speaker 14: in this one particular bill. But one thing it's important
Speaker 14: is to keep in mind that that Emergency supplemental was
Speaker 14: to provide additional funding to the border exactly for what
Speaker 14: is needed in terms of the border judges and things
Speaker 14: of that nature, and the border guards and all that
Speaker 14: which are necessary to strengthen the border and protect the
Speaker 14: border here. So again, I want to keep I want
Speaker 14: to keep trying to keep the two separate from the
Speaker 14: basic fundings of the of the federal government for fiscal
Speaker 14: year twenty four. But you're absolute correct. I think it's
Speaker 14: going to be very difficult, and we're not there yet clearly,
Speaker 14: but at least the United States Senator and a bipartisan
Speaker 14: matter is trying to work overtime to find a solution. Now,
Speaker 14: whether even if the Senate could get an agreement, whether
Speaker 14: that would be acceptable, and the House is still very
Speaker 14: much up in the air, as the new Speaker has
Speaker 14: interjected himself and says that he wants to negotiate directly
Speaker 14: with the White House. That will further delay any kind
Speaker 14: of agreement going forward on the border.
Speaker 2: So, Bill, let's talk about the new speaker. Can Mike
Speaker 2: Johnson get through all of these different fights and still
Speaker 2: have the gavel in hand on the other.
Speaker 4: End of him.
Speaker 14: I have to believe it's gonna be tough for him.
Speaker 14: He's gonna have to he's jail, I say he's learning
Speaker 14: on the job. At the same time, I do think
Speaker 14: that he will retain his speakership. I don't think the
Speaker 14: United States House wants to go through the same exercise
Speaker 14: they went through last October in terms of finding a
Speaker 14: new speaker at this point, going into a political year,
Speaker 14: an election year, and where questions are being raised about
Speaker 14: whether the leadership in the House can whether Republicans can
Speaker 14: retain the leadership in the House. I'm not a political
Speaker 14: pundit in that sense, but I do think the last
Speaker 14: thing you want is, first of all, to have a
Speaker 14: government shutdown or to have another fight over the speaker
Speaker 14: in the United States House of Representative, if Republicans want
Speaker 14: to retain the House in the next one hundred and
Speaker 14: nineteenth Congress.
Speaker 2: And finally, Bill, Just in my final moment with you,
Speaker 2: I want to return to something you said at the
Speaker 2: top of our conversation. The idea that these negotiators over
Speaker 2: the deal are indeed close. Is that something you've heard
Speaker 2: directly from the White House or from the people in
Speaker 2: the room. And how close exactly is close? Are we there?
Speaker 14: It's hard to say this. We're talking about an agreement
Speaker 14: of spending. That's about one point six trillion dollars. I
Speaker 14: am under the impression we're two billion dollars away from
Speaker 14: an agreement that's coming from within the halls of the
Speaker 14: Congress today.
Speaker 2: All right, Bill Hoagland, it's always great to have you
Speaker 2: on the program. Thank you so much for providing this insight.
Speaker 2: He is, of course, the executive vice president of the
Speaker 2: Bipartisan Policy Center and spent a lot of time walking
Speaker 2: those halls of Congress. I'm sure he still does. Really
Speaker 2: great to have him.
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