1 00:00:02,920 --> 00:00:10,600 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,640 --> 00:00:14,560 Speaker 1: Bloomberg Balance of Power podcast. Catch Just Live weekdays at 3 00:00:14,560 --> 00:00:17,239 Speaker 1: noon Eastern on Emocarplay and then Roun Auto with the 4 00:00:17,239 --> 00:00:21,280 Speaker 1: Bloomberg Business app. Listen on demand wherever you get your podcasts, 5 00:00:21,360 --> 00:00:25,360 Speaker 1: or watch us live on YouTube. 6 00:00:26,400 --> 00:00:29,120 Speaker 2: I'm joined now on Bloomberg Television and Radio for an 7 00:00:29,160 --> 00:00:33,040 Speaker 2: exclusive interview with a Democratic Senator from Georgia, Rafael Warnock. 8 00:00:33,080 --> 00:00:36,720 Speaker 2: His first time on Bloomberg TV and radio. He sits 9 00:00:36,720 --> 00:00:38,800 Speaker 2: on a key committee that is in focus this week, 10 00:00:38,840 --> 00:00:41,840 Speaker 2: the Senate Commerce, Science, and Transportation Committee, which is leading 11 00:00:41,880 --> 00:00:45,680 Speaker 2: the fight on the FAA reauthorization bill. Senator, thank you 12 00:00:45,760 --> 00:00:48,360 Speaker 2: so much for being here on Bloomberg. Of course, you 13 00:00:48,400 --> 00:00:50,640 Speaker 2: and your colleagues are up against a deadline this week, 14 00:00:50,680 --> 00:00:53,680 Speaker 2: Friday May tenth is when this reoff has to happen. 15 00:00:53,960 --> 00:00:56,360 Speaker 2: There needs to be an amendment agreement to have it 16 00:00:56,440 --> 00:01:00,960 Speaker 2: happen quickly. Where exactly do things stand, What amendments deserve 17 00:01:01,320 --> 00:01:02,160 Speaker 2: to get a vote? 18 00:01:02,840 --> 00:01:05,240 Speaker 3: Well, thank you so very much. It's wonderful to be 19 00:01:05,360 --> 00:01:09,959 Speaker 3: here with you. Kaylee. Listen, our aviation industry is so 20 00:01:10,240 --> 00:01:13,160 Speaker 3: very important to the American economy and of course, we 21 00:01:13,200 --> 00:01:18,080 Speaker 3: want to make sure that consumers that flyers are safe, 22 00:01:18,440 --> 00:01:21,840 Speaker 3: and that our airlines operate in an efficient manner. So 23 00:01:21,880 --> 00:01:25,320 Speaker 3: this comes up every five years. I'm on the Commerce Committee. 24 00:01:25,520 --> 00:01:27,880 Speaker 3: We've been working on this bill for more than a year. 25 00:01:27,959 --> 00:01:31,760 Speaker 3: I have been especially focused on the issue of boastering 26 00:01:31,920 --> 00:01:37,760 Speaker 3: our workforce pipeline. We have a shortage of pilots, aviation mechanics, 27 00:01:38,120 --> 00:01:40,399 Speaker 3: other people who work in the industry, and we are 28 00:01:40,440 --> 00:01:44,080 Speaker 3: barely pulling from all of our human talent. So I 29 00:01:44,120 --> 00:01:46,640 Speaker 3: have provisions in the bill that address that along with 30 00:01:46,720 --> 00:01:49,320 Speaker 3: other things, and I remain very hopeful that we'll get 31 00:01:49,320 --> 00:01:51,440 Speaker 3: all of this over the finish line before the deadline 32 00:01:51,440 --> 00:01:52,040 Speaker 3: come Fridate. 33 00:01:53,600 --> 00:01:55,320 Speaker 2: Okay, so, Senator, in your mind, there is not a 34 00:01:55,400 --> 00:01:58,480 Speaker 2: chance that a short term authorization may need to happen, 35 00:01:58,520 --> 00:02:00,880 Speaker 2: considering this doesn't just need to make through your chamber, 36 00:02:00,920 --> 00:02:02,960 Speaker 2: but the House as well. 37 00:02:02,960 --> 00:02:06,080 Speaker 3: Listen, we are in the midst of the sausage making 38 00:02:06,120 --> 00:02:11,680 Speaker 3: that happens in Congress. But I think there is a commitment, 39 00:02:12,160 --> 00:02:14,680 Speaker 3: a large consensus that we need to try to get 40 00:02:14,680 --> 00:02:17,639 Speaker 3: this over the finish line, and I remain hopeful that 41 00:02:18,040 --> 00:02:20,600 Speaker 3: we will. 42 00:02:20,760 --> 00:02:23,480 Speaker 2: Well, Senator, there is some disagreement even between you and 43 00:02:23,600 --> 00:02:27,519 Speaker 2: some of your other Democratic colleagues, around certain provisions, including 44 00:02:27,639 --> 00:02:30,639 Speaker 2: more flights out of DCA, the airport just down the 45 00:02:30,720 --> 00:02:33,360 Speaker 2: road from where you and I are. It's staunchly opposed 46 00:02:33,360 --> 00:02:38,600 Speaker 2: by senators and neighboring state Senator Warner, Kate van holland Cardon, 47 00:02:38,800 --> 00:02:40,800 Speaker 2: to name a few, are all opposed to this. I 48 00:02:40,840 --> 00:02:43,200 Speaker 2: know you're for it. What do you say to those though, 49 00:02:43,560 --> 00:02:47,240 Speaker 2: who suggest that adding slots at Reagan could potentially lead 50 00:02:47,280 --> 00:02:49,680 Speaker 2: to further delays or even safety risks. 51 00:02:50,280 --> 00:02:53,880 Speaker 3: Well, have great respect and really affection for my colleagues 52 00:02:53,919 --> 00:02:57,079 Speaker 3: in Maryland and Virginia, but they are wrong on this issue. 53 00:02:57,720 --> 00:03:00,840 Speaker 3: To put it bluntly, they're just wrong. This will not 54 00:03:01,240 --> 00:03:05,520 Speaker 3: compromise safety in any way. We have addressed this issue 55 00:03:06,720 --> 00:03:10,120 Speaker 3: with the FAA. Basically, we want to make sure that 56 00:03:10,280 --> 00:03:16,280 Speaker 3: flyers throughout our country have access to the nation's capital. 57 00:03:16,800 --> 00:03:20,000 Speaker 3: This is the seat of government. And basically this is 58 00:03:20,000 --> 00:03:24,560 Speaker 3: a modest proposal that will add about one percent to 59 00:03:25,160 --> 00:03:30,600 Speaker 3: DCA's daily operations. I think that my colleagues respectfully have 60 00:03:30,720 --> 00:03:33,960 Speaker 3: certain interests that they're trying to protect. Their safety issue 61 00:03:34,000 --> 00:03:37,480 Speaker 3: simply does not hold water. And I'm hopeful that at 62 00:03:37,520 --> 00:03:40,800 Speaker 3: the end of the day we'll be able to have 63 00:03:41,280 --> 00:03:44,080 Speaker 3: some more flights. Really, it's just a handful of more 64 00:03:44,120 --> 00:03:47,960 Speaker 3: flights coming in and out of the airport that serves 65 00:03:47,960 --> 00:03:51,560 Speaker 3: the nation's capital, and certainly people west of the Mississippi 66 00:03:52,320 --> 00:03:54,400 Speaker 3: should have access as well as folks on this side 67 00:03:54,600 --> 00:03:57,280 Speaker 3: who go back and forth every single day. 68 00:03:58,640 --> 00:04:01,600 Speaker 2: Well, Senator, in addition to serving on the Commerce, Science, 69 00:04:01,600 --> 00:04:03,800 Speaker 2: and Transportation Committee, you also serve on a few other 70 00:04:03,880 --> 00:04:06,320 Speaker 2: key committees, including the Senate Banking Committee, And I'd like 71 00:04:06,360 --> 00:04:08,800 Speaker 2: to lean on that expertise you have for a moment, 72 00:04:09,800 --> 00:04:11,920 Speaker 2: if you will. We got to report out yesterday an 73 00:04:11,920 --> 00:04:16,640 Speaker 2: independent third party probe into a toxic workplace culture at 74 00:04:16,640 --> 00:04:19,520 Speaker 2: the FDIC. There are some Republicans who are now calling 75 00:04:19,560 --> 00:04:22,279 Speaker 2: for the resignation of the FDIC chair Marty Gruenberg. Do 76 00:04:22,279 --> 00:04:24,000 Speaker 2: you think he should resign? 77 00:04:25,880 --> 00:04:30,400 Speaker 3: Well, let me say that I am still reviewing the report. 78 00:04:31,440 --> 00:04:33,520 Speaker 3: What I am seeing there. Some of the things that 79 00:04:33,839 --> 00:04:38,000 Speaker 3: I see there are concerning, even disturbing. But we will 80 00:04:38,040 --> 00:04:41,920 Speaker 3: hear from the chairman. In just a few days, he 81 00:04:42,000 --> 00:04:45,920 Speaker 3: will appear before my committee and we'll get a chance 82 00:04:45,960 --> 00:04:48,960 Speaker 3: to hear from him directly, and we'll see where we 83 00:04:49,000 --> 00:04:49,599 Speaker 3: go from there. 84 00:04:50,880 --> 00:04:52,760 Speaker 4: But let me just fair enough, Senator. 85 00:04:52,440 --> 00:04:55,440 Speaker 3: Clear, let me be clear that an abusive and toxic 86 00:04:55,839 --> 00:05:01,599 Speaker 3: workplace environment where people feel that they are being abused 87 00:05:01,600 --> 00:05:06,400 Speaker 3: in some way that is hostile to the work environment, 88 00:05:06,839 --> 00:05:10,640 Speaker 3: is intolerable, and one way or the other, it will 89 00:05:10,640 --> 00:05:13,160 Speaker 3: have to be addressed, and we will make sure that 90 00:05:13,279 --> 00:05:16,680 Speaker 3: that happens well. 91 00:05:16,680 --> 00:05:19,159 Speaker 2: And Senator will look forward to that testimony before the 92 00:05:19,200 --> 00:05:21,520 Speaker 2: Banking Committee in just a few days. There, of course, 93 00:05:21,600 --> 00:05:24,320 Speaker 2: is a lot still happening that is getting attention outside 94 00:05:24,360 --> 00:05:28,560 Speaker 2: of Washington, including Israel, where there have been moves into Rafa, 95 00:05:28,600 --> 00:05:32,039 Speaker 2: the Gaza city in which more than a million Palestinians 96 00:05:32,080 --> 00:05:35,200 Speaker 2: are taking yef region. We have now gotten confirmation from 97 00:05:35,200 --> 00:05:38,120 Speaker 2: the Defense Department, from the Secretary Lloyd Austin that the 98 00:05:38,200 --> 00:05:41,120 Speaker 2: US has withheld pause for now a shipment of bombs 99 00:05:41,400 --> 00:05:45,840 Speaker 2: to Israel overconcerned about how they may be used in Rafa. 100 00:05:45,880 --> 00:05:49,160 Speaker 2: Is this appropriate for the administration to be doing at 101 00:05:49,200 --> 00:05:52,120 Speaker 2: this time, Sir, I'm very. 102 00:05:52,000 --> 00:05:56,400 Speaker 3: Concerned about what's going on in Gaza, and I'm already 103 00:05:56,440 --> 00:06:01,159 Speaker 3: on the record I said many weeks ago that I'm 104 00:06:01,279 --> 00:06:06,960 Speaker 3: very concerned about any incursion in Tarrafa. I pray for 105 00:06:07,000 --> 00:06:11,640 Speaker 3: a day where Israeli mothers and fathers and Palestinian mothers 106 00:06:11,680 --> 00:06:13,680 Speaker 3: and fathers can do what all of us parents want. 107 00:06:13,720 --> 00:06:16,440 Speaker 3: I have two young children myself. Put your children to 108 00:06:16,480 --> 00:06:19,200 Speaker 3: bed at night in peace and awake into a world 109 00:06:19,240 --> 00:06:24,320 Speaker 3: that embraces all of them. And so we intend to 110 00:06:24,360 --> 00:06:26,560 Speaker 3: make sure that we keep an eye on this situation. 111 00:06:27,440 --> 00:06:32,240 Speaker 3: But we need a ceasefire. In this situation, Israel has 112 00:06:32,279 --> 00:06:37,080 Speaker 3: a right to defend itself. I am deeply offended and 113 00:06:37,160 --> 00:06:40,640 Speaker 3: hurt by what happened on October seventh, where we saw 114 00:06:40,680 --> 00:06:43,840 Speaker 3: this attack, where we saw rape and sexual assault used 115 00:06:43,839 --> 00:06:47,440 Speaker 3: as a weapon of war. But I'm also very concerned 116 00:06:47,560 --> 00:06:52,839 Speaker 3: about over thirty thousand Palestinian lives that have been lost 117 00:06:52,839 --> 00:06:56,719 Speaker 3: in this conflict, the majority of them being women and children. 118 00:06:57,600 --> 00:07:00,279 Speaker 3: So I'm hopeful that at the end of the day day, 119 00:07:01,040 --> 00:07:05,560 Speaker 3: we will recognize that the answer to death and destruction 120 00:07:06,440 --> 00:07:07,800 Speaker 3: is not more death and destruction. 121 00:07:09,840 --> 00:07:12,480 Speaker 2: Well, and Senator, of course, your Chamber, together with the House, 122 00:07:12,600 --> 00:07:16,320 Speaker 2: did ultimately advance supplemental funding not just for Israel but 123 00:07:16,360 --> 00:07:18,760 Speaker 2: other allies as well, And of course you're still doing 124 00:07:18,760 --> 00:07:22,360 Speaker 2: the work to finish the job of further efforts that 125 00:07:22,400 --> 00:07:25,640 Speaker 2: need more immediate attention, including the FAA reauthorization that we 126 00:07:25,720 --> 00:07:29,240 Speaker 2: began this conversation with just finally, Senator, there are things 127 00:07:29,280 --> 00:07:32,840 Speaker 2: that may not be attached to that FAA legislation because 128 00:07:32,880 --> 00:07:35,880 Speaker 2: not all of the amendments can get a vote. Is 129 00:07:35,920 --> 00:07:38,760 Speaker 2: there going to be any other major vehicle with which 130 00:07:38,880 --> 00:07:44,680 Speaker 2: legislation can get done for the remainder of this Congress, Look. 131 00:07:44,640 --> 00:07:47,280 Speaker 3: That remains to be seen. We remain engaged. There are 132 00:07:47,280 --> 00:07:50,520 Speaker 3: a lot of issues to address. I'm glad that it's 133 00:07:50,600 --> 00:07:53,480 Speaker 3: part of the FAA. Part of what will happen is 134 00:07:53,480 --> 00:07:57,960 Speaker 3: that we will also reauthorize the National Transportation Safety Board. 135 00:07:58,440 --> 00:08:00,880 Speaker 3: That's important when you look at issue like what happened 136 00:08:00,880 --> 00:08:08,360 Speaker 3: with Alaska Airlines, the trained derailment in Palestine, Ohio, the 137 00:08:08,400 --> 00:08:11,800 Speaker 3: bridge in Baltimore, a bridge that I know well. I 138 00:08:11,920 --> 00:08:15,560 Speaker 3: pastored in Baltimore, and we're rooting for our friends there, 139 00:08:16,480 --> 00:08:18,960 Speaker 3: and I think the Congress understands on both sides of 140 00:08:19,040 --> 00:08:22,840 Speaker 3: the isle that that's important to the national economy. So 141 00:08:22,880 --> 00:08:25,280 Speaker 3: we'll remain focused on these issues. I'm proud of Georgia. 142 00:08:25,320 --> 00:08:29,800 Speaker 3: Georgia is a great aviation state. It holds the world's busiest, 143 00:08:30,000 --> 00:08:37,040 Speaker 3: most efficient airport Hartsville, Jackson, And again, I hope that 144 00:08:37,040 --> 00:08:38,800 Speaker 3: by the end of the week we'll be able to 145 00:08:38,800 --> 00:08:42,719 Speaker 3: say to our constituents that we got this done all right. 146 00:08:42,800 --> 00:08:46,000 Speaker 2: Senator Rafael Warnock, the Democrat from Georgia, thank you so 147 00:08:46,080 --> 00:08:49,200 Speaker 2: much for joining me in this exclusive conversation on Bloomberg 148 00:08:49,240 --> 00:08:53,840 Speaker 2: Television and Radio. Now, we'd like to keep the focus 149 00:08:53,880 --> 00:08:56,040 Speaker 2: on the goings on on Capitol Hill because, of course, 150 00:08:56,080 --> 00:08:58,360 Speaker 2: while immediately they do have to deal with issues like 151 00:08:58,400 --> 00:09:01,880 Speaker 2: the FAA reauthorization, technically there also needs to be more 152 00:09:01,880 --> 00:09:04,840 Speaker 2: appropriations bills passed between now and the end of the 153 00:09:04,840 --> 00:09:08,120 Speaker 2: fiscal year on September thirtieth, although they could very well 154 00:09:08,160 --> 00:09:11,960 Speaker 2: punt until after the election to solve those issues, but 155 00:09:12,000 --> 00:09:14,679 Speaker 2: we still are think it's worth checking in on the 156 00:09:14,720 --> 00:09:17,040 Speaker 2: fiscal outlook for the United States as we look forward 157 00:09:17,040 --> 00:09:18,839 Speaker 2: to the work that is ahead. And I'm pleased to 158 00:09:18,840 --> 00:09:20,880 Speaker 2: say joining me now in studio is someone who has 159 00:09:20,880 --> 00:09:23,720 Speaker 2: an up close and personal view of that. Phillips Weigel 160 00:09:23,880 --> 00:09:27,000 Speaker 2: is with me, Director of the Congressional Budget Office. It's 161 00:09:27,040 --> 00:09:29,840 Speaker 2: great to see you here in our Washington, DC studio. 162 00:09:29,880 --> 00:09:32,320 Speaker 2: Thank you so much for joining me. I know that 163 00:09:32,360 --> 00:09:35,000 Speaker 2: you're set to give updated forecasts for the ten year 164 00:09:35,559 --> 00:09:38,080 Speaker 2: budget and economic outlook pretty soon. Can you just give 165 00:09:38,160 --> 00:09:40,880 Speaker 2: us a broad overview of how that's likely to change 166 00:09:41,600 --> 00:09:44,000 Speaker 2: now compared to the last time you issued a forecast 167 00:09:44,080 --> 00:09:44,280 Speaker 2: like this. 168 00:09:44,640 --> 00:09:47,800 Speaker 5: Yeah, thanks so much, and we'll have that updated ten 169 00:09:47,880 --> 00:09:51,199 Speaker 5: year outlook later in the spring, so sometimes before the 170 00:09:51,280 --> 00:09:54,600 Speaker 5: end of the spring, which is June twentieth. The early 171 00:09:54,679 --> 00:09:59,120 Speaker 5: indications for twenty twenty four are that outlays a rising 172 00:09:59,559 --> 00:10:02,480 Speaker 5: by more more than we expected in our February twenty 173 00:10:02,520 --> 00:10:06,040 Speaker 5: twenty four update. And we see that in a variety 174 00:10:06,080 --> 00:10:06,520 Speaker 5: of ways. 175 00:10:06,559 --> 00:10:07,320 Speaker 6: You know, one is. 176 00:10:08,920 --> 00:10:13,560 Speaker 5: Outlays for student loans and for SBA loans. Those are 177 00:10:13,800 --> 00:10:16,839 Speaker 5: credit re estimates that the administration has said that the 178 00:10:16,840 --> 00:10:19,320 Speaker 5: instance is the money coming in for student loans and 179 00:10:19,360 --> 00:10:21,880 Speaker 5: the money coming in for SBA loans is going to 180 00:10:21,880 --> 00:10:24,839 Speaker 5: be less than they had booked in the budget before, 181 00:10:25,240 --> 00:10:28,880 Speaker 5: so that will increase the deficit. There's a security supplemental 182 00:10:28,920 --> 00:10:32,240 Speaker 5: of ninety five billion dollars that's new legislation since our 183 00:10:32,280 --> 00:10:36,800 Speaker 5: February update. That will also mean an increased deficit. So 184 00:10:37,000 --> 00:10:40,560 Speaker 5: there's a variety of other things, many of those pointing 185 00:10:40,559 --> 00:10:42,600 Speaker 5: in the direction of a wider deficit. 186 00:10:42,679 --> 00:10:46,560 Speaker 2: Deficit well, of course, when we think about deficit reduction, 187 00:10:46,679 --> 00:10:48,520 Speaker 2: there's kind of two things that factor in. One you 188 00:10:48,520 --> 00:10:51,240 Speaker 2: could spend less, the other you could raise revenue. Obviously, 189 00:10:51,240 --> 00:10:55,120 Speaker 2: all of that has difficulties, especially in that spending less. 190 00:10:55,520 --> 00:10:57,800 Speaker 2: In large part, there's only so much you can do 191 00:10:57,840 --> 00:11:00,440 Speaker 2: in terms of spending cuts when you have mandatory spending 192 00:11:00,440 --> 00:11:04,720 Speaker 2: like social Security and medicare. Is it easier for lawmakers 193 00:11:04,760 --> 00:11:09,560 Speaker 2: to act now on those issues rather than waiting for 194 00:11:09,600 --> 00:11:13,000 Speaker 2: it and pretense potentially exacerbating the deficit in the interim period. 195 00:11:13,360 --> 00:11:14,160 Speaker 1: Yeah, it is. 196 00:11:14,240 --> 00:11:17,280 Speaker 5: One of the challenges of looking at the deficit is 197 00:11:17,280 --> 00:11:20,800 Speaker 5: that we know that the current situation is not sustainable, 198 00:11:21,040 --> 00:11:23,320 Speaker 5: but we don't know when that moment will come. 199 00:11:23,559 --> 00:11:24,880 Speaker 1: When in succesfull. 200 00:11:24,480 --> 00:11:27,120 Speaker 5: Market is to lose faith in the willingness of the 201 00:11:27,160 --> 00:11:30,000 Speaker 5: United States to take on the job of deficit reduction, 202 00:11:30,200 --> 00:11:33,080 Speaker 5: and so acting sooner makes it easier in a sense 203 00:11:33,120 --> 00:11:35,840 Speaker 5: that the changes, whether on the spending side or on 204 00:11:35,880 --> 00:11:40,560 Speaker 5: the revenue side, those changes are smaller the sooner that 205 00:11:40,559 --> 00:11:45,200 Speaker 5: we act. But as you said, it's difficult at any 206 00:11:45,200 --> 00:11:46,680 Speaker 5: one moment to act. 207 00:11:46,840 --> 00:11:50,160 Speaker 2: Well, something else that makes fiscal sustainability more difficult is 208 00:11:50,200 --> 00:11:52,720 Speaker 2: that the cost of borrowing. Right when we are now 209 00:11:52,760 --> 00:11:54,800 Speaker 2: here at Bloomberg talking each and every day about this 210 00:11:54,840 --> 00:11:58,240 Speaker 2: idea that interest rates may stay higher for longer, how 211 00:11:58,240 --> 00:12:01,160 Speaker 2: do you think about that in terms of the fiscal outlook? 212 00:12:01,240 --> 00:12:02,719 Speaker 2: What are the implications of that. 213 00:12:03,440 --> 00:12:08,040 Speaker 5: There's an important implication of rising debt on interest costs. Now, 214 00:12:08,160 --> 00:12:11,520 Speaker 5: net interest outlays for the US government this year are 215 00:12:11,600 --> 00:12:15,200 Speaker 5: already set to be more than defense spending, and soon 216 00:12:15,240 --> 00:12:17,480 Speaker 5: there'll be more than non defense spending. This is the 217 00:12:17,520 --> 00:12:21,400 Speaker 5: discretionary spending. So net interest outlays have risen and are 218 00:12:21,400 --> 00:12:25,480 Speaker 5: becoming important as our debt gets larger. Well, that means 219 00:12:25,520 --> 00:12:28,080 Speaker 5: that we're more vulnerable to higher interest rates. And so 220 00:12:28,120 --> 00:12:31,120 Speaker 5: as an example, if interest rates are fifty basis points 221 00:12:31,200 --> 00:12:34,560 Speaker 5: higher than we had in our budgetary projections, well, net 222 00:12:34,600 --> 00:12:38,000 Speaker 5: interest outlays will be about two trillion dollars higher over 223 00:12:38,080 --> 00:12:41,640 Speaker 5: ten years. So it's an increasing and important vulnerability. 224 00:12:41,840 --> 00:12:44,120 Speaker 2: Well, and there also is kind of this circular effect 225 00:12:44,200 --> 00:12:46,880 Speaker 2: here right where you have to consider that higher interest 226 00:12:46,960 --> 00:12:49,280 Speaker 2: rates are a product of higher inflation. But there's an 227 00:12:49,360 --> 00:12:52,480 Speaker 2: argument that the deficit can cause inflation. That you know, 228 00:12:52,480 --> 00:12:55,160 Speaker 2: fiscal spending as a whole can be inflationary. How do 229 00:12:55,200 --> 00:12:57,199 Speaker 2: you think about that kind of feedback loop. 230 00:12:57,480 --> 00:13:01,319 Speaker 5: No, it's an important feedback, and in some sense it 231 00:13:01,440 --> 00:13:04,120 Speaker 5: means that the US is yet more vulnerable. So if 232 00:13:04,520 --> 00:13:08,720 Speaker 5: higher deficits feed into higher inflation, as they clearly did 233 00:13:08,720 --> 00:13:11,280 Speaker 5: over the past several years, well, then that means higher 234 00:13:11,280 --> 00:13:15,480 Speaker 5: interest rates and more net interest outlays. Now, inflation has 235 00:13:15,520 --> 00:13:18,800 Speaker 5: come down over where it was, say, two years ago. 236 00:13:19,040 --> 00:13:21,680 Speaker 5: There's been an uptick of inflation early this year, but 237 00:13:21,800 --> 00:13:25,160 Speaker 5: we still expect inflation to moderate through the rest of 238 00:13:25,200 --> 00:13:29,160 Speaker 5: this year and then into next year. The challenge is 239 00:13:29,200 --> 00:13:31,880 Speaker 5: the pace at which that happens, the impact on interest rates, 240 00:13:32,600 --> 00:13:34,880 Speaker 5: and then how those changes interact with our debt. 241 00:13:35,040 --> 00:13:37,760 Speaker 2: Yeah, who knows what will be on interest rate levels 242 00:13:37,800 --> 00:13:41,040 Speaker 2: or inflation levels by next year twenty twenty five. Something 243 00:13:41,080 --> 00:13:42,959 Speaker 2: else I wanted to ask you about twenty twenty five is, 244 00:13:43,000 --> 00:13:44,400 Speaker 2: of course, that is when we're going to have to 245 00:13:44,400 --> 00:13:47,520 Speaker 2: be dealing with the tax cut question that was passed 246 00:13:47,559 --> 00:13:50,720 Speaker 2: during the Trump administration back in twenty seventeen. In twenty 247 00:13:50,760 --> 00:13:54,000 Speaker 2: twenty five is when they expire. How much would it 248 00:13:54,040 --> 00:13:57,280 Speaker 2: cost if Congress were to renew that at a time 249 00:13:57,280 --> 00:13:59,600 Speaker 2: when we're talking here about high deficits, and again this 250 00:13:59,640 --> 00:14:01,560 Speaker 2: would be less revenue coming in. 251 00:14:01,800 --> 00:14:05,280 Speaker 5: No, that's right, that important parts of the twenty seventeen 252 00:14:05,360 --> 00:14:08,080 Speaker 5: tax Act expire at the end of next year, at 253 00:14:08,080 --> 00:14:10,480 Speaker 5: the end of twenty twenty five. Those are not in 254 00:14:10,520 --> 00:14:14,280 Speaker 5: our physical projections in the sense of the taxes revert 255 00:14:14,360 --> 00:14:17,440 Speaker 5: to the pre December twenty seventeen law and is more revenue. 256 00:14:17,720 --> 00:14:21,000 Speaker 5: So extending the parts of the tax act that expire 257 00:14:21,400 --> 00:14:25,320 Speaker 5: would cost upwards of three trillion dollars over ten years, 258 00:14:25,440 --> 00:14:29,400 Speaker 5: and really closer to four trillion dollars including the interest service. 259 00:14:29,880 --> 00:14:32,800 Speaker 2: Okay, So when we were considering this back in twenty seventeen, 260 00:14:32,840 --> 00:14:35,400 Speaker 2: the CBO did find that the economic benefits of that 261 00:14:35,520 --> 00:14:39,640 Speaker 2: legislation wouldn't outweigh the costs of the higher deficit, so 262 00:14:39,680 --> 00:14:42,320 Speaker 2: they didn't pay for themselves. Given how much has changed 263 00:14:42,320 --> 00:14:44,960 Speaker 2: in the interim period, though that was twenty seventeen, we're 264 00:14:44,960 --> 00:14:48,960 Speaker 2: here seven and eight years later. Have you changed the 265 00:14:48,960 --> 00:14:52,600 Speaker 2: way you might think about the economic value of lower taxes? 266 00:14:54,080 --> 00:14:56,000 Speaker 5: You know, it's something that we look at all the time, 267 00:14:56,200 --> 00:14:59,240 Speaker 5: and we revisit our analysis of the twenty seventeen tax Act. 268 00:15:00,160 --> 00:15:03,480 Speaker 5: In April twenty eighteen, CBO put out analysis saying that 269 00:15:03,480 --> 00:15:06,680 Speaker 5: the twenty seventeen tax Act had a positive impact on 270 00:15:06,720 --> 00:15:11,560 Speaker 5: business investment and from there to economic growth and job creation, 271 00:15:11,720 --> 00:15:13,680 Speaker 5: and we saw that in the beginning of twenty eighteen. 272 00:15:14,400 --> 00:15:16,800 Speaker 5: The challenge is that in the middle of twenty eighteen 273 00:15:17,200 --> 00:15:19,920 Speaker 5: there is a slew of tariffs and other trade actions. 274 00:15:20,360 --> 00:15:23,080 Speaker 5: Then since it has had a negative effect on business investment. 275 00:15:23,360 --> 00:15:26,240 Speaker 5: So that's the sort of analysis we would do again 276 00:15:27,160 --> 00:15:31,120 Speaker 5: with whatever Congress is considering extending some or all the 277 00:15:31,160 --> 00:15:33,320 Speaker 5: tax cuts or none of them, we would look at 278 00:15:33,320 --> 00:15:36,080 Speaker 5: those impacts on the economy and then on the budget. 279 00:15:36,360 --> 00:15:40,360 Speaker 2: All right, Phil Swegel, the Director of the Congressional Budget Office, 280 00:15:40,400 --> 00:15:42,720 Speaker 2: thank you so much for joining me here in our Washington, 281 00:15:43,120 --> 00:15:45,840 Speaker 2: DC studio. Great to talk with you, and we'll look 282 00:15:45,880 --> 00:15:48,360 Speaker 2: forward later this spring to getting your updated ten year 283 00:15:48,400 --> 00:15:50,160 Speaker 2: budget and economic outlook. 284 00:15:52,600 --> 00:15:56,000 Speaker 1: You're listening to the Bloomberg Balance of Power podcast kens 285 00:15:56,120 --> 00:15:59,160 Speaker 1: just live weekdays at noon Eastern on Applecarplay and then 286 00:15:59,200 --> 00:16:02,760 Speaker 1: ron Oto Bloomberg Business. You can also listen live on 287 00:16:02,840 --> 00:16:06,120 Speaker 1: Amazon Alexa from our flagship New York station, jo Say 288 00:16:06,200 --> 00:16:08,480 Speaker 1: Alexa playing Bloomberg eleven thirty. 289 00:16:11,120 --> 00:16:13,880 Speaker 2: I'm pleased to say that joining me is Republican Congressman 290 00:16:13,920 --> 00:16:16,480 Speaker 2: Andy Barr of Kentucky. He is a member of the 291 00:16:16,520 --> 00:16:20,360 Speaker 2: House Foreign Affairs Committee. Congressman, welcome back to Bloomberg. Thank 292 00:16:20,400 --> 00:16:22,160 Speaker 2: you so much for being with me. I would love 293 00:16:22,200 --> 00:16:24,640 Speaker 2: to get your reaction to the news the confirmation we 294 00:16:24,680 --> 00:16:28,240 Speaker 2: have gotten from the administration today that they have in 295 00:16:28,240 --> 00:16:31,920 Speaker 2: fact paused the shipment of these large bombs to Israel 296 00:16:31,960 --> 00:16:34,920 Speaker 2: overconcern of how they may be used in Rafa. The 297 00:16:35,000 --> 00:16:39,400 Speaker 2: high civilian death toll potentially that could could result from them, 298 00:16:39,720 --> 00:16:41,360 Speaker 2: is that appropriate in your mind? 299 00:16:43,120 --> 00:16:48,080 Speaker 7: It's a direct abrogation of their responsibility under the Constitution 300 00:16:48,240 --> 00:16:51,600 Speaker 7: to take care that the laws are faithfully executed. Congress, 301 00:16:51,680 --> 00:16:55,800 Speaker 7: on a bipartisan, bi cameral basis, directed the administration to 302 00:16:55,840 --> 00:17:01,120 Speaker 7: provide this military assistance to Israel to defend itself against terrorists, 303 00:17:01,520 --> 00:17:05,320 Speaker 7: and the administration does not have the legal authority to 304 00:17:05,520 --> 00:17:08,520 Speaker 7: just ignore and disregard the will of the American people, 305 00:17:08,800 --> 00:17:11,000 Speaker 7: through their elected representatives in Congress. 306 00:17:11,400 --> 00:17:13,200 Speaker 6: We passed the assistance package. 307 00:17:13,240 --> 00:17:16,480 Speaker 7: We did not authorize the administration to pause these shipments, 308 00:17:16,800 --> 00:17:21,440 Speaker 7: and this is an affront to the relationship between our 309 00:17:21,560 --> 00:17:27,760 Speaker 7: two countries. The fact that this administration is rejecting an 310 00:17:27,800 --> 00:17:31,280 Speaker 7: Act of Congress and turning its back on our key 311 00:17:31,359 --> 00:17:36,600 Speaker 7: ally in the Middle East is obnoxious, and Congress will 312 00:17:36,720 --> 00:17:40,440 Speaker 7: certainly be asking searching questions about number one, the lack 313 00:17:40,480 --> 00:17:43,600 Speaker 7: of authority for the administration to do this, and number two, 314 00:17:44,320 --> 00:17:48,800 Speaker 7: why on earth this administration would put domestic politics ahead 315 00:17:48,840 --> 00:17:52,080 Speaker 7: of our own national security and the security of our allies. 316 00:17:53,520 --> 00:17:56,440 Speaker 2: Well, Congressman, the counter argument would perhaps be that this 317 00:17:56,480 --> 00:17:59,280 Speaker 2: isn't even so much about what's happening domestically as the 318 00:17:59,359 --> 00:18:01,760 Speaker 2: idea that in Rafa there are more than a million 319 00:18:01,840 --> 00:18:05,240 Speaker 2: Palestinian civilians who are taking refuge and they want to 320 00:18:05,280 --> 00:18:08,360 Speaker 2: make sure that the civilian death toll does not go higher. 321 00:18:08,480 --> 00:18:11,480 Speaker 2: Is there nothing Israel could do, no level at which 322 00:18:11,520 --> 00:18:13,840 Speaker 2: that death toll could rise to that would alter your 323 00:18:13,920 --> 00:18:17,280 Speaker 2: view of how the US should be approaching Israeli policy. 324 00:18:18,359 --> 00:18:23,440 Speaker 7: Well, this argument is based on the faulty presumption that 325 00:18:23,480 --> 00:18:28,760 Speaker 7: it is somehow the Israeli Defense Force's fault. Hamas terras 326 00:18:28,880 --> 00:18:34,000 Speaker 7: use innocent men, women and children Palestinian innocent Palestinians as 327 00:18:34,080 --> 00:18:34,880 Speaker 7: human shields. 328 00:18:35,200 --> 00:18:37,840 Speaker 6: The problem is not the Israeli defense forces. 329 00:18:38,000 --> 00:18:41,880 Speaker 7: The problem are is the cancer of hamas terras embedded 330 00:18:41,880 --> 00:18:42,439 Speaker 7: in Rafa. 331 00:18:42,640 --> 00:18:43,760 Speaker 6: That is the problem. 332 00:18:44,080 --> 00:18:46,719 Speaker 7: We need to give Israel the time and space to 333 00:18:46,800 --> 00:18:50,480 Speaker 7: do what needs to be done to prevent October seventh 334 00:18:50,480 --> 00:18:54,879 Speaker 7: from ever happening again and to rid Gaza of radical 335 00:18:55,040 --> 00:19:01,720 Speaker 7: Islamic terrorists. Until Israel is able to deradical and demilitarize Gaza, 336 00:19:02,280 --> 00:19:05,520 Speaker 7: we will continue to see this kind of outrageous terrorist 337 00:19:05,560 --> 00:19:08,320 Speaker 7: activity perpetrated against our key allies. 338 00:19:09,920 --> 00:19:12,000 Speaker 2: Well, Congressman, it's great to have you weigh in on 339 00:19:12,040 --> 00:19:14,359 Speaker 2: this matter. As a member of the House Foreign Affairs Committee. 340 00:19:14,400 --> 00:19:17,440 Speaker 2: You also are a member of the House Financial Services Committee. 341 00:19:17,440 --> 00:19:19,080 Speaker 2: In fact, you would like to be the next chair 342 00:19:19,520 --> 00:19:21,480 Speaker 2: of that committee, and I want to ask you on 343 00:19:21,520 --> 00:19:24,520 Speaker 2: an issue relevant to your role there. We got a 344 00:19:24,560 --> 00:19:29,040 Speaker 2: third party independent report yesterday about a toxic workplace culture 345 00:19:29,800 --> 00:19:32,840 Speaker 2: at the FDIC. We have had a lot of calls 346 00:19:32,880 --> 00:19:36,200 Speaker 2: for the chair of the FDICE, Marty Greenberg, to resign. 347 00:19:36,320 --> 00:19:40,040 Speaker 2: Would that really, though, solve these deep rooted problems in 348 00:19:40,119 --> 00:19:40,560 Speaker 2: your mind? 349 00:19:42,200 --> 00:19:46,360 Speaker 7: Well, the report found that Chairman Gruenberg would be particularly 350 00:19:46,480 --> 00:19:49,399 Speaker 7: challenged to fix these problems, and I certainly agree. That's 351 00:19:49,400 --> 00:19:53,560 Speaker 7: why I called for Chairman Gruenberg's resignation, which is overdue 352 00:19:53,600 --> 00:19:55,960 Speaker 7: here and really, the question you have to ask yourself 353 00:19:56,119 --> 00:20:01,320 Speaker 7: is if this toxic work workplace. If this culture of 354 00:20:01,640 --> 00:20:06,440 Speaker 7: harassment and misconduct, it's that existed in a regulatory, regulated 355 00:20:06,480 --> 00:20:12,600 Speaker 7: financial institution and ensured depository institution that the FDIC oversaw. 356 00:20:12,680 --> 00:20:16,000 Speaker 7: Do you think for one minute the regulators the bank 357 00:20:16,080 --> 00:20:19,800 Speaker 7: examiners would say that we should keep management in place. 358 00:20:19,840 --> 00:20:20,959 Speaker 6: The answer is, of course not. 359 00:20:22,359 --> 00:20:24,600 Speaker 7: And so we need to hold the FDIC to the 360 00:20:24,640 --> 00:20:28,480 Speaker 7: same standards that they would hold their regulated banks to. 361 00:20:29,240 --> 00:20:31,920 Speaker 7: And in this case, it's very clear that the only 362 00:20:31,960 --> 00:20:34,560 Speaker 7: way to start to clean up the mess at the 363 00:20:34,640 --> 00:20:39,280 Speaker 7: FDIC is to hold the leadership to account, and that 364 00:20:39,359 --> 00:20:42,960 Speaker 7: means that Chairman Gruenberg should go. The other point here 365 00:20:43,040 --> 00:20:46,160 Speaker 7: is that it's more than just a toxic work environment. 366 00:20:46,760 --> 00:20:50,840 Speaker 7: It is actually threatening safety and soundness of our financial system. 367 00:20:50,880 --> 00:20:54,120 Speaker 7: Because we know the fdi C, because of these problems, 368 00:20:54,440 --> 00:20:56,520 Speaker 7: has had a employee retention problem. 369 00:20:56,600 --> 00:21:00,879 Speaker 6: Bank examiners have left. There is a shortage. 370 00:21:00,440 --> 00:21:04,440 Speaker 7: Of talented and capable UH and UH and and well 371 00:21:04,480 --> 00:21:06,760 Speaker 7: trained UH bank examiners at. 372 00:21:06,640 --> 00:21:07,200 Speaker 1: The fdi C. 373 00:21:07,880 --> 00:21:11,879 Speaker 7: This is directly attributable to the toxic workplace. And you 374 00:21:11,920 --> 00:21:15,040 Speaker 7: know the you know this is this is this is 375 00:21:15,080 --> 00:21:17,960 Speaker 7: a threat to safety and soundness of the banking system. 376 00:21:18,000 --> 00:21:21,720 Speaker 7: So I think this is a this is a damning report, 377 00:21:21,800 --> 00:21:23,720 Speaker 7: and we have to see some accountability. 378 00:21:25,960 --> 00:21:29,760 Speaker 2: Another banking related matters, sir. There was talk that this 379 00:21:30,000 --> 00:21:33,840 Speaker 2: FAA reauthorization bill that technically needs to be done by 380 00:21:33,880 --> 00:21:36,439 Speaker 2: Congress this week might have some things attached to it, 381 00:21:36,480 --> 00:21:41,240 Speaker 2: including safe banking for marijuana companies, potentially even stable coin legislation. 382 00:21:41,359 --> 00:21:44,119 Speaker 2: It seems less likely now that those things will ultimately 383 00:21:44,440 --> 00:21:47,600 Speaker 2: get passed through this vehicle. Do you see another vehicle 384 00:21:48,000 --> 00:21:50,240 Speaker 2: with which they could in this Congress? 385 00:21:51,680 --> 00:21:52,040 Speaker 8: I do. 386 00:21:52,080 --> 00:21:54,920 Speaker 7: I think another must pass piece of legislation that could 387 00:21:54,960 --> 00:21:58,280 Speaker 7: be a vehicle would be the National Defense Authorization Act at. 388 00:21:58,240 --> 00:21:58,880 Speaker 6: The end of the year. 389 00:21:59,200 --> 00:22:01,800 Speaker 7: Maybe it might be politically more achievable in a lane 390 00:22:01,880 --> 00:22:05,280 Speaker 7: duck after the election to do this. But as a 391 00:22:05,320 --> 00:22:08,920 Speaker 7: supporter of both the stable coin legislation that we marked 392 00:22:09,000 --> 00:22:12,119 Speaker 7: up and the Market Structure Bill for digital assets, I 393 00:22:12,119 --> 00:22:12,560 Speaker 7: think this. 394 00:22:12,520 --> 00:22:13,119 Speaker 6: Is very important. 395 00:22:13,160 --> 00:22:15,800 Speaker 7: I think it's connected to national security. When you think 396 00:22:15,840 --> 00:22:22,240 Speaker 7: about stable coins. The United States needs to promote dollar 397 00:22:22,320 --> 00:22:25,680 Speaker 7: denominated stable coins in the global economy to protect and 398 00:22:26,359 --> 00:22:29,000 Speaker 7: advance the dollar's dominance, and the dollar is the. 399 00:22:28,920 --> 00:22:30,080 Speaker 6: World's reserve currency. 400 00:22:30,440 --> 00:22:34,320 Speaker 7: Blockchain is coming, digital assets are coming, stable coins are coming. 401 00:22:34,760 --> 00:22:37,520 Speaker 7: We need to make sure that we provide regulatory certainty 402 00:22:37,520 --> 00:22:42,480 Speaker 7: and clarity for investors in crypto and in digital assets, 403 00:22:42,520 --> 00:22:45,760 Speaker 7: to make sure that stable coins which are coming to 404 00:22:45,800 --> 00:22:49,119 Speaker 7: reduce friction, to increase the speed with which transactions occur, 405 00:22:50,640 --> 00:22:55,639 Speaker 7: to to find, you know, innovation in our financial system, 406 00:22:55,960 --> 00:22:58,360 Speaker 7: we need to make sure that those stable coins are 407 00:22:58,359 --> 00:23:01,720 Speaker 7: denominated in dollars. That's why this is so important, and 408 00:23:01,800 --> 00:23:04,480 Speaker 7: it is connected to national security. So I'm hopeful that 409 00:23:04,520 --> 00:23:06,720 Speaker 7: if we can't move it as a standalone before the 410 00:23:06,840 --> 00:23:10,200 Speaker 7: end of this Congress, that we can attach some version 411 00:23:10,240 --> 00:23:12,840 Speaker 7: of this to the National Defense Authorization Act. 412 00:23:14,160 --> 00:23:17,240 Speaker 2: Congressman, finally, I literally have thirty seconds left with you, 413 00:23:17,280 --> 00:23:19,640 Speaker 2: but I can't let you go without asking. As you understand, 414 00:23:19,640 --> 00:23:22,320 Speaker 2: it is Marjorie Taylor Green's motion to vacate the speaker 415 00:23:22,359 --> 00:23:24,200 Speaker 2: effort dead at this point. 416 00:23:25,520 --> 00:23:27,800 Speaker 6: Certainly on pause and mercifully so. 417 00:23:29,320 --> 00:23:33,760 Speaker 7: The last thing that any conservative, self described conservative should 418 00:23:33,760 --> 00:23:38,000 Speaker 7: do six months ahead of a very consequential presidential election 419 00:23:38,160 --> 00:23:41,399 Speaker 7: is to vacate the Speaker's office. That would be so 420 00:23:41,600 --> 00:23:44,920 Speaker 7: counterproductive and certainly not good for the country. 421 00:23:46,400 --> 00:23:49,720 Speaker 2: All right, Congressman Andy Barr, the Republican from Kentucky, thank 422 00:23:49,760 --> 00:23:53,200 Speaker 2: you so much for joining me live today from Capitol Hill. 423 00:23:54,280 --> 00:23:57,800 Speaker 1: You're listening to the Bloomberg Balance of Power podcast kens 424 00:23:57,880 --> 00:24:00,800 Speaker 1: just Live week days at Noone's Tern car Play and 425 00:24:00,800 --> 00:24:03,520 Speaker 1: then Proud Otto with the Bloomberg Business app. Listen on 426 00:24:03,600 --> 00:24:09,879 Speaker 1: demand wherever you get your podcasts. Watch us live on YouTube. 427 00:24:10,840 --> 00:24:14,439 Speaker 2: I am, indeed Kaylee Lines in Washington, where President Biden 428 00:24:14,640 --> 00:24:18,000 Speaker 2: is not today. He is instead in Wisconsin, a critical 429 00:24:18,040 --> 00:24:20,480 Speaker 2: swing status he campaigns for reelection, and he's there for 430 00:24:20,560 --> 00:24:23,640 Speaker 2: a very specific reason, together with Brad Smith and Microsoft, 431 00:24:24,880 --> 00:24:28,560 Speaker 2: announcing a three point three billion dollar investment the company 432 00:24:28,640 --> 00:24:33,400 Speaker 2: plans to make in Wisconsin. Coincidentally, on the exact same 433 00:24:33,480 --> 00:24:36,560 Speaker 2: site where fox Con was originally supposed to build out, 434 00:24:36,600 --> 00:24:38,680 Speaker 2: a project that was announced and heralded under the Trump 435 00:24:38,720 --> 00:24:42,760 Speaker 2: administration that ultimately never came to fruition. The President just 436 00:24:42,840 --> 00:24:47,600 Speaker 2: wrapping up remarks in Wisconsin on his Investing and America agenda. 437 00:24:47,640 --> 00:24:50,680 Speaker 2: All of this, of course, meant to highlight the manufacturing 438 00:24:50,720 --> 00:24:53,439 Speaker 2: renaissance that this president has tried to claim credit for 439 00:24:53,480 --> 00:24:56,720 Speaker 2: bringing about through his various pieces of legislation. And it's 440 00:24:56,720 --> 00:24:58,920 Speaker 2: on that note we bring in now our political panel. 441 00:24:58,960 --> 00:25:01,640 Speaker 2: Morrig Gillespie is with me from New York. She's founder 442 00:25:01,840 --> 00:25:05,439 Speaker 2: of Bluestack Strategies, alongside Brad Howard, a Democratic strategists and 443 00:25:05,520 --> 00:25:08,200 Speaker 2: Corcoran Street Group founder, is. 444 00:25:08,160 --> 00:25:08,800 Speaker 4: With me now. 445 00:25:08,960 --> 00:25:11,040 Speaker 2: So Brad, just to begin with you, as we've seen 446 00:25:11,080 --> 00:25:13,399 Speaker 2: the President making a number of trips like this to 447 00:25:13,440 --> 00:25:16,000 Speaker 2: swing states, specifically to areas in which we are seeing 448 00:25:16,040 --> 00:25:20,920 Speaker 2: companies lawed plans for investment and for job growth. All 449 00:25:20,960 --> 00:25:23,640 Speaker 2: of it, though, are about projects that are sure going 450 00:25:23,680 --> 00:25:26,639 Speaker 2: to start, but aren't necessarily going to be completed between 451 00:25:26,680 --> 00:25:29,320 Speaker 2: now and the time voters actually go cast a vote 452 00:25:29,359 --> 00:25:32,280 Speaker 2: for Biden or not in November. How big of a 453 00:25:32,320 --> 00:25:34,960 Speaker 2: struggle is this for President Biden to be talking about 454 00:25:35,000 --> 00:25:39,320 Speaker 2: things that voters can't actually see tangibly. Yet in many cases. 455 00:25:39,840 --> 00:25:41,439 Speaker 8: Well, I would disagree, because that what the voters can 456 00:25:41,480 --> 00:25:44,080 Speaker 8: see of the jobs these projects are creating, and these 457 00:25:44,080 --> 00:25:47,679 Speaker 8: are good pay union jobs that can't be exported. 458 00:25:47,760 --> 00:25:47,920 Speaker 1: Right. 459 00:25:48,000 --> 00:25:50,840 Speaker 8: So this is part of the President's commitment to being 460 00:25:50,880 --> 00:25:53,920 Speaker 8: the most pro labor president in American history. In addition, 461 00:25:54,000 --> 00:25:58,159 Speaker 8: this is a constant, a direct consequence of the President's 462 00:25:58,160 --> 00:26:01,840 Speaker 8: economic package that he past and some of the more 463 00:26:01,920 --> 00:26:06,480 Speaker 8: historic investments in infrastructure, in chips manufacturing, that he has 464 00:26:06,520 --> 00:26:10,119 Speaker 8: been promoting since. And so I'm glad to see the 465 00:26:10,119 --> 00:26:14,240 Speaker 8: White House going out and telling this story and showcasing 466 00:26:14,280 --> 00:26:17,679 Speaker 8: and taking legislation that's a very abstract thing and turning 467 00:26:17,680 --> 00:26:21,040 Speaker 8: it into real life jobs in these swing states. And 468 00:26:21,080 --> 00:26:23,640 Speaker 8: so I think he's smart to point out the kind 469 00:26:23,680 --> 00:26:28,160 Speaker 8: of fake facade of the GOP of the President Trump record, 470 00:26:28,680 --> 00:26:31,960 Speaker 8: which was a disasters for in terms of jobs, and 471 00:26:32,000 --> 00:26:34,600 Speaker 8: you're looking at the president who's focusing on not just 472 00:26:34,680 --> 00:26:37,439 Speaker 8: making the wealth like the president. The President Trump had 473 00:26:37,440 --> 00:26:39,280 Speaker 8: a tax plan that made the wealthy wealthier, and we're 474 00:26:39,320 --> 00:26:41,920 Speaker 8: seeing the wealth Actually there's a study out this past 475 00:26:41,960 --> 00:26:46,840 Speaker 8: week that the wealthier paying less taxes effectively than average 476 00:26:46,840 --> 00:26:49,159 Speaker 8: hardworking American families. That is messed up, and that's a 477 00:26:49,200 --> 00:26:51,639 Speaker 8: result of the Trump tax code of reforms that he 478 00:26:51,680 --> 00:26:53,720 Speaker 8: made when he was president. Biden has focused like a 479 00:26:53,800 --> 00:26:56,000 Speaker 8: laser in the middle class, and I'm excited to see 480 00:26:56,000 --> 00:26:58,080 Speaker 8: that he's in the rust belt, going back to some 481 00:26:58,119 --> 00:27:00,600 Speaker 8: of these states where jobs have left to come back 482 00:27:00,640 --> 00:27:03,840 Speaker 8: in and really focus on rebuilding with good labor jobs. 483 00:27:05,480 --> 00:27:07,719 Speaker 2: Well, as we talk about the contrast between Biden and 484 00:27:07,760 --> 00:27:12,800 Speaker 2: Trump here specifically more again this facility where Microsoft is 485 00:27:12,840 --> 00:27:14,680 Speaker 2: going to be building is the same site where Fox 486 00:27:14,720 --> 00:27:17,160 Speaker 2: Cone originally was going to when it was announced under 487 00:27:17,200 --> 00:27:20,440 Speaker 2: the Trump administration years ago, and ultimately that didn't really 488 00:27:20,480 --> 00:27:24,040 Speaker 2: come together. How stark is that contrast for Biden? Is 489 00:27:24,080 --> 00:27:28,439 Speaker 2: this just an opportunity to kind of flex on Donald 490 00:27:28,440 --> 00:27:29,399 Speaker 2: Trump in some sense? 491 00:27:29,920 --> 00:27:32,280 Speaker 9: It's certainly not a coincidence that they're doing it this way, 492 00:27:32,359 --> 00:27:35,240 Speaker 9: and it is a strategic move by the Biden administration 493 00:27:35,359 --> 00:27:38,560 Speaker 9: that is a good opportunity for them to tellt what 494 00:27:38,680 --> 00:27:41,920 Speaker 9: Biden has sought to do for the economy. I would 495 00:27:41,960 --> 00:27:44,880 Speaker 9: say that to your point in how you questioned things 496 00:27:44,920 --> 00:27:48,199 Speaker 9: about has Biden really delivered on those promises? And I 497 00:27:48,200 --> 00:27:50,760 Speaker 9: think that that's where the American people need to be 498 00:27:50,840 --> 00:27:54,040 Speaker 9: reminded that's what Biden's team should be doing, because they 499 00:27:54,080 --> 00:27:56,399 Speaker 9: don't feel it. They don't feel as though the economy 500 00:27:57,240 --> 00:27:59,120 Speaker 9: is in their favor and that things are going well 501 00:27:59,160 --> 00:28:01,119 Speaker 9: for them, and MP is hitting on that. He is 502 00:28:01,200 --> 00:28:05,520 Speaker 9: constantly reminding them that are telling them that the economy 503 00:28:05,600 --> 00:28:08,080 Speaker 9: is better under his presidency. So it's definitely going to 504 00:28:08,119 --> 00:28:10,119 Speaker 9: be a factor that continues to be part of the 505 00:28:10,119 --> 00:28:14,000 Speaker 9: conversation as we go towards November. But I think this 506 00:28:14,080 --> 00:28:17,840 Speaker 9: is an opportunity to hit on Trump that Biden is 507 00:28:17,880 --> 00:28:19,320 Speaker 9: certainly taking advantage of here. 508 00:28:21,280 --> 00:28:24,000 Speaker 2: On the subject of former President Donald Trump, he also 509 00:28:24,000 --> 00:28:26,400 Speaker 2: has been in the news in the last twenty four hours. 510 00:28:26,480 --> 00:28:28,960 Speaker 2: He of course, was in court in New York yesterday 511 00:28:28,960 --> 00:28:32,000 Speaker 2: and his ongoing hush money trial. Stormy Daniels took the 512 00:28:32,080 --> 00:28:36,119 Speaker 2: stand with at times salacious testimony about her sexual encounter 513 00:28:36,600 --> 00:28:38,760 Speaker 2: with Donald Trump. Court, of course in that case is 514 00:28:38,800 --> 00:28:42,280 Speaker 2: on a break today. But we also learned yesterday, perhaps 515 00:28:42,360 --> 00:28:45,400 Speaker 2: more in favor of the former president than the Stormy 516 00:28:45,480 --> 00:28:50,280 Speaker 2: Daniels testimony, that the Florida case, the Document's case in 517 00:28:50,320 --> 00:28:53,600 Speaker 2: which Judge Aileen Cannon is overseeing it, has been postponed 518 00:28:53,640 --> 00:28:55,920 Speaker 2: indefinitely the trial that is, because of a bunch of 519 00:28:56,400 --> 00:28:59,200 Speaker 2: motions and pre trial hearings that she says need to 520 00:28:59,200 --> 00:29:02,680 Speaker 2: take place between now and July. Brad, How consequential will 521 00:29:02,680 --> 00:29:05,400 Speaker 2: it be if the only time we see Donald Trump 522 00:29:05,440 --> 00:29:08,200 Speaker 2: in court between now in November is in New York, 523 00:29:08,240 --> 00:29:10,600 Speaker 2: where we've seen him now four weeks and to this 524 00:29:10,640 --> 00:29:13,200 Speaker 2: point there has been no real indication that it is 525 00:29:13,320 --> 00:29:15,760 Speaker 2: changing his standing in polls. 526 00:29:17,000 --> 00:29:20,080 Speaker 8: Yeah, and I think, like I agree with most most 527 00:29:20,120 --> 00:29:23,080 Speaker 8: folks who analyze this and say, you know, you know, 528 00:29:23,120 --> 00:29:24,960 Speaker 8: I think there was an Axios article out this week 529 00:29:25,000 --> 00:29:27,440 Speaker 8: that said, the only people that really matter in this 530 00:29:27,480 --> 00:29:30,720 Speaker 8: selection are six percent of voters in six swing states. 531 00:29:32,120 --> 00:29:34,160 Speaker 8: Most most folks have their mind made up whether they 532 00:29:34,200 --> 00:29:37,160 Speaker 8: think Trump has committed crimes or not. I don't think 533 00:29:37,280 --> 00:29:40,200 Speaker 8: the outcome of this trial is going to change that 534 00:29:40,280 --> 00:29:43,000 Speaker 8: in any dramatic way, though we have no data to suggest, 535 00:29:43,040 --> 00:29:46,560 Speaker 8: because he's the first indicted candidate we've ever had from 536 00:29:46,600 --> 00:29:49,160 Speaker 8: president of the major party nominee. So you know, we'll 537 00:29:49,160 --> 00:29:50,680 Speaker 8: see how that plays out. But what I do think 538 00:29:50,720 --> 00:29:53,080 Speaker 8: the consequences of him being forced to stay in the 539 00:29:53,120 --> 00:29:56,080 Speaker 8: courtroom are that it allows President Biden to have the 540 00:29:56,120 --> 00:29:58,400 Speaker 8: campaign trail to himself right now. You know, Biden's out 541 00:29:59,120 --> 00:30:01,640 Speaker 8: touting the economy, he's out talking about what he believes in, 542 00:30:01,680 --> 00:30:04,680 Speaker 8: and he's fundraising to pour money into these swing states 543 00:30:04,680 --> 00:30:07,360 Speaker 8: so they can build up operations. Trump the money he 544 00:30:07,440 --> 00:30:10,080 Speaker 8: raises is going to his legal defense funds, So you know, 545 00:30:10,320 --> 00:30:13,200 Speaker 8: I think there's a multitude of factors here that make 546 00:30:13,320 --> 00:30:15,640 Speaker 8: this at the end of the day, I think a 547 00:30:15,680 --> 00:30:18,640 Speaker 8: net loss for Trump. I don't think it's going to 548 00:30:18,760 --> 00:30:22,480 Speaker 8: necessarily change too many voters' minds. We'll see what happens 549 00:30:22,520 --> 00:30:25,400 Speaker 8: if he is convicted, you know, if he's if he 550 00:30:25,400 --> 00:30:28,360 Speaker 8: has proven innocent, that could be that could give him 551 00:30:28,400 --> 00:30:31,160 Speaker 8: a big boost. Who knows, because it may put some 552 00:30:31,280 --> 00:30:34,520 Speaker 8: validation to the attacks that this was just a part 553 00:30:34,560 --> 00:30:36,840 Speaker 8: of an endeavor. I'm a little frustrated because I do 554 00:30:36,880 --> 00:30:40,280 Speaker 8: think this is kind of the weakest case, uh that 555 00:30:40,280 --> 00:30:43,040 Speaker 8: that we have again, that that the prosecution has against 556 00:30:43,040 --> 00:30:45,440 Speaker 8: done in trump of all the trials. It's unfortunate this 557 00:30:45,480 --> 00:30:47,840 Speaker 8: is going first because it has paused what I think 558 00:30:47,920 --> 00:30:50,840 Speaker 8: is the real concern, which is the Florida case about 559 00:30:50,880 --> 00:30:54,000 Speaker 8: his mishandling and classified documents. So you know, we're this 560 00:30:54,880 --> 00:30:56,880 Speaker 8: this is this is like a TV soap opera play 561 00:30:57,000 --> 00:30:58,800 Speaker 8: out at the moment, no one really knows how it's 562 00:30:58,840 --> 00:31:01,200 Speaker 8: gonna ends. Probably gonna be some twist and turns like 563 00:31:01,240 --> 00:31:03,800 Speaker 8: you see the soap opera. So grab the popcorn watch 564 00:31:03,800 --> 00:31:04,920 Speaker 8: and let's see how this plays out. 565 00:31:06,080 --> 00:31:09,040 Speaker 2: Ah, the drama, there is never a shortage of it, 566 00:31:09,080 --> 00:31:11,000 Speaker 2: and Maura I would also point out there didn't seem 567 00:31:11,040 --> 00:31:14,480 Speaker 2: to be a shortage of drama in the Indiana primary yesterday. 568 00:31:14,800 --> 00:31:16,840 Speaker 2: All of us seem to have forgotten that primaries are 569 00:31:16,880 --> 00:31:19,080 Speaker 2: still ongoing because at this point we already have our 570 00:31:19,080 --> 00:31:23,560 Speaker 2: presumptive Democratic and Republican nominee. So in theory, what do 571 00:31:23,680 --> 00:31:27,600 Speaker 2: they matter, except perhaps in a situation in which Nikki Hayley, 572 00:31:28,480 --> 00:31:31,680 Speaker 2: a former Republican presidential candidate who ended her campaign two 573 00:31:31,680 --> 00:31:35,280 Speaker 2: months ago, drew twenty two percent of the vote in 574 00:31:35,320 --> 00:31:38,800 Speaker 2: the Indiana primary. More if you're the Trump campaign, how 575 00:31:38,800 --> 00:31:39,960 Speaker 2: do you look at a number like that? 576 00:31:40,480 --> 00:31:44,040 Speaker 9: They should be concerned because that is a choice that 577 00:31:44,400 --> 00:31:46,440 Speaker 9: twenty two percent of the you know, those who voted 578 00:31:46,480 --> 00:31:49,160 Speaker 9: and made to not vote for Donald Trump, knowing that 579 00:31:49,200 --> 00:31:52,120 Speaker 9: he's a presentative dominee. And to me, it is just 580 00:31:52,160 --> 00:31:54,600 Speaker 9: a reminder of what makes the fundamentals of our democracy 581 00:31:54,680 --> 00:31:56,080 Speaker 9: is that we have a choice, and if we don't 582 00:31:56,080 --> 00:31:58,400 Speaker 9: like the top two choices, we have an opportunity to 583 00:31:58,480 --> 00:32:00,280 Speaker 9: vote for somebody else, and in this case is still 584 00:32:00,280 --> 00:32:02,000 Speaker 9: in the ballot, to vote in the primary, and the 585 00:32:02,000 --> 00:32:04,040 Speaker 9: primary is an opportunity that we've seen that in other 586 00:32:04,080 --> 00:32:06,280 Speaker 9: states on the Democratic side as well, or they're doing 587 00:32:06,320 --> 00:32:08,720 Speaker 9: protest votes, and I think in this way, Republicans are 588 00:32:08,760 --> 00:32:10,800 Speaker 9: reminding Donald Trump that he does not have all of us, 589 00:32:11,160 --> 00:32:14,040 Speaker 9: and it's an important opportunity to try and reach out 590 00:32:14,040 --> 00:32:14,640 Speaker 9: to those voters. 591 00:32:16,200 --> 00:32:16,400 Speaker 6: Well. 592 00:32:16,440 --> 00:32:18,840 Speaker 2: Brad as Mora raises the protest votes we have seen 593 00:32:19,120 --> 00:32:22,200 Speaker 2: in Democratic primaries and states like Michigan elsewhere where voters 594 00:32:22,200 --> 00:32:27,719 Speaker 2: were basically choosing different variations of not voting for Biden 595 00:32:28,240 --> 00:32:31,680 Speaker 2: in the primary, whatever language the specific ballot was, using 596 00:32:31,800 --> 00:32:35,880 Speaker 2: some protest on his policy toward Israel. There was a 597 00:32:35,880 --> 00:32:38,600 Speaker 2: lot of conversation about how that may not actually translate 598 00:32:38,960 --> 00:32:42,360 Speaker 2: into the general election, that the primary vote was kind 599 00:32:42,360 --> 00:32:44,120 Speaker 2: of more of a throwaway when you knew that Biden 600 00:32:44,200 --> 00:32:46,720 Speaker 2: was going to get the nomination, no matter what. Should 601 00:32:46,720 --> 00:32:48,479 Speaker 2: we be thinking the same way about those who are 602 00:32:48,480 --> 00:32:51,560 Speaker 2: selecting to vote for Nicki Haley in the Republican primary 603 00:32:51,600 --> 00:32:53,320 Speaker 2: or these situations different. 604 00:32:53,960 --> 00:32:56,280 Speaker 8: Very different, And here's why. When you look at the 605 00:32:56,280 --> 00:33:01,000 Speaker 8: Democratic primary, these are protest votes from the left, which 606 00:33:01,080 --> 00:33:04,239 Speaker 8: means in November, when the ballot you have the two 607 00:33:04,280 --> 00:33:07,800 Speaker 8: party candidates, there is no option to go further left right, 608 00:33:07,880 --> 00:33:10,400 Speaker 8: and so President Biden is who they're going to come 609 00:33:10,400 --> 00:33:13,000 Speaker 8: home to in November. This is very typical, even in Michigan, 610 00:33:13,120 --> 00:33:14,560 Speaker 8: and you go back and look at Barack Obama in 611 00:33:14,560 --> 00:33:17,200 Speaker 8: twenty twelve, he had a protest vote of twelve percent, 612 00:33:17,320 --> 00:33:20,239 Speaker 8: Joe Biden was only fourteen percent, and Barack Obama went 613 00:33:20,240 --> 00:33:22,880 Speaker 8: to defeat at Romney. So it's kind of a proof 614 00:33:22,960 --> 00:33:25,160 Speaker 8: point of what I'm talking about here. The difference with 615 00:33:25,280 --> 00:33:28,440 Speaker 8: these vote protest votes you're seeing in the red states. 616 00:33:28,600 --> 00:33:31,360 Speaker 8: In the Indiana, for example, are people that are in 617 00:33:31,400 --> 00:33:34,160 Speaker 8: the middle. They think Donald Trump has gone too far 618 00:33:34,240 --> 00:33:36,640 Speaker 8: to the right, particularly on the issues of abortion, and 619 00:33:36,680 --> 00:33:38,840 Speaker 8: then of course all the legal trouble he's having. So 620 00:33:39,200 --> 00:33:41,400 Speaker 8: they have a place to go, and that's Joe Biden, 621 00:33:41,440 --> 00:33:44,480 Speaker 8: who's a good, decent human being who they may disagree 622 00:33:44,480 --> 00:33:46,440 Speaker 8: with on some policies, but at the end of the day, 623 00:33:46,680 --> 00:33:51,000 Speaker 8: they think he's going to protect democracy and make America proud, 624 00:33:51,360 --> 00:33:53,200 Speaker 8: and so they do have an option here, and the 625 00:33:53,200 --> 00:33:56,400 Speaker 8: Biden campaign knows that realizes that they're making an all 626 00:33:56,440 --> 00:34:00,000 Speaker 8: out effort to get some of those disenfranchised Republican voters, 627 00:34:00,360 --> 00:34:03,360 Speaker 8: the Hayley voters, to come into the Biden column, and 628 00:34:03,880 --> 00:34:08,040 Speaker 8: we oddly the Trump campaign is insulting those same voters. 629 00:34:08,040 --> 00:34:09,520 Speaker 8: So we'll see where they land at the end of 630 00:34:09,560 --> 00:34:11,960 Speaker 8: the day. I suspect most will come home to Trump, 631 00:34:12,080 --> 00:34:13,720 Speaker 8: but we only need you to go to Joe Biden. 632 00:34:15,760 --> 00:34:19,799 Speaker 2: All right. Brad Howard, Democratic strategists and founder of the 633 00:34:19,960 --> 00:34:23,040 Speaker 2: Quirkoran Street Group, alongside Mara Gillespie, the founder over at 634 00:34:23,080 --> 00:34:26,040 Speaker 2: Blue Stack Strategies, our wonderful political panel today. Thank you 635 00:34:26,120 --> 00:34:26,560 Speaker 2: so much. 636 00:34:29,480 --> 00:34:32,839 Speaker 1: You're listening to the Bloomberg Balance of Power podcast Ken 637 00:34:33,000 --> 00:34:35,759 Speaker 1: Just Live weekdays at noon Eastern on Apple car Play 638 00:34:35,800 --> 00:34:38,399 Speaker 1: and Enroud Otto with the Bloomberg Business app. You can 639 00:34:38,440 --> 00:34:41,680 Speaker 1: also listen live on Amazon Alexa from our flagship New 640 00:34:41,760 --> 00:34:45,319 Speaker 1: York station Just Say Alexa playing Bloomberg eleven thirty. 641 00:34:47,520 --> 00:34:49,200 Speaker 2: We have spent a good deal of time this hour 642 00:34:49,320 --> 00:34:52,719 Speaker 2: talking about President Biden's trip to Wisconsin today, highlighting his 643 00:34:52,760 --> 00:34:56,520 Speaker 2: efforts to revitalize manufacturing in the US, but of course 644 00:34:56,560 --> 00:34:59,600 Speaker 2: the efforts of this administration have not and did just there. 645 00:35:00,040 --> 00:35:02,000 Speaker 2: We've seen a lot of other effort underway, including a 646 00:35:02,040 --> 00:35:06,960 Speaker 2: focus on competition and an effort to strengthen enforcement of 647 00:35:07,040 --> 00:35:10,360 Speaker 2: antitrust law. And that is where our next guest comes 648 00:35:10,400 --> 00:35:12,840 Speaker 2: in Doha. Mechi is here with me in the studio 649 00:35:12,920 --> 00:35:15,680 Speaker 2: from the Department of Justice or she is the Principal 650 00:35:15,719 --> 00:35:20,680 Speaker 2: Deputy Assistant Attorney General for the Antitrust Division Doha. Welcome 651 00:35:20,800 --> 00:35:23,759 Speaker 2: to Bloomberg. Thank you so much for being here. If 652 00:35:23,800 --> 00:35:26,400 Speaker 2: we could just begin with very high level. Obviously, this 653 00:35:26,440 --> 00:35:29,520 Speaker 2: administration has focused immensely on competition. We have seen a 654 00:35:29,560 --> 00:35:32,480 Speaker 2: lot of antitrust action from the DOJ and from other 655 00:35:32,520 --> 00:35:35,880 Speaker 2: regulators as well. What effect, broadly do you think it 656 00:35:35,880 --> 00:35:39,600 Speaker 2: has had on actual deal activity? Have you discouraged it 657 00:35:39,640 --> 00:35:40,240 Speaker 2: from happening? 658 00:35:40,600 --> 00:35:40,960 Speaker 6: Sure? 659 00:35:41,120 --> 00:35:44,440 Speaker 4: Broadly speaking, anti trust is about opening up free markets, 660 00:35:44,880 --> 00:35:48,439 Speaker 4: and I think that our approach to antitrust enforcement, which 661 00:35:48,440 --> 00:35:51,840 Speaker 4: has been focused on understanding business and the facts and 662 00:35:52,200 --> 00:35:55,560 Speaker 4: the way anti trust law applies to those facts, means 663 00:35:55,600 --> 00:35:59,919 Speaker 4: that we have spotted and appropriately challenged deals that harm 664 00:36:00,120 --> 00:36:04,000 Speaker 4: consumers or harm workers. But as a general matter, they're 665 00:36:04,000 --> 00:36:07,560 Speaker 4: still deal making activity. The vast majority of deals don't 666 00:36:07,600 --> 00:36:09,560 Speaker 4: even get so much as a phone call from the 667 00:36:09,680 --> 00:36:12,080 Speaker 4: Justice Department. Some ninety eight percent of deals are still 668 00:36:12,080 --> 00:36:14,960 Speaker 4: getting through without so much as a question. For the 669 00:36:15,040 --> 00:36:21,120 Speaker 4: small percentage of M and A that raises questions about competition, 670 00:36:21,880 --> 00:36:25,640 Speaker 4: we are investigating thoroughly, and when appropriate, we are going 671 00:36:25,680 --> 00:36:29,000 Speaker 4: to court to challenge those transactions, and we're having success 672 00:36:29,680 --> 00:36:32,880 Speaker 4: and often we are seeing that when we are concerned 673 00:36:32,920 --> 00:36:37,560 Speaker 4: about competition in certain kinds of mergers and acquisitions, parties 674 00:36:37,600 --> 00:36:42,440 Speaker 4: are often abandoning transactions then face the threat of litigation 675 00:36:42,520 --> 00:36:45,000 Speaker 4: from the Justice Department. Well, certainly we've seen that, for 676 00:36:45,040 --> 00:36:47,239 Speaker 4: example in the airline space in a case I know 677 00:36:47,360 --> 00:36:50,239 Speaker 4: that you were involved in, but in that case is 678 00:36:50,280 --> 00:36:51,880 Speaker 4: with many others we have seen that have gotten a 679 00:36:51,920 --> 00:36:55,040 Speaker 4: great deal of attention. We're talking about public companies. We've 680 00:36:55,080 --> 00:36:57,760 Speaker 4: seen increasingly, though, a lot of activity in the private 681 00:36:57,760 --> 00:36:58,920 Speaker 4: sector in private equity. 682 00:36:58,960 --> 00:37:02,759 Speaker 2: How are you thinking about deals in that perhaps less 683 00:37:02,840 --> 00:37:05,759 Speaker 2: transparent space, if you will, considering we have seen so 684 00:37:05,840 --> 00:37:08,360 Speaker 2: much activity happening specifically in private markets. 685 00:37:08,560 --> 00:37:11,600 Speaker 4: To appreciate our approach, our approach to private equity, you 686 00:37:11,640 --> 00:37:15,080 Speaker 4: really have to understand where we've been. And for years 687 00:37:15,239 --> 00:37:19,080 Speaker 4: before the Biden administration, there was a sort of normative 688 00:37:19,120 --> 00:37:25,160 Speaker 4: assumption that private equity transactions tended to be competitively neutral 689 00:37:25,400 --> 00:37:29,640 Speaker 4: or beneficial. And what we've done is actually bring private 690 00:37:29,680 --> 00:37:34,000 Speaker 4: equity to the same level of analysis and scrutiny as 691 00:37:34,040 --> 00:37:37,560 Speaker 4: any other kind of transaction. And so there we're thinking 692 00:37:37,600 --> 00:37:42,560 Speaker 4: about not only whether a private equity deal changes concentration 693 00:37:42,760 --> 00:37:45,839 Speaker 4: in a market right, whether it allows a company to 694 00:37:45,920 --> 00:37:49,560 Speaker 4: have very high shares for example, But we're also thinking 695 00:37:49,640 --> 00:37:52,960 Speaker 4: about the type of transaction. Is it a serial transaction, 696 00:37:53,560 --> 00:37:56,440 Speaker 4: right where a private equity firm is buying a number 697 00:37:56,440 --> 00:38:00,000 Speaker 4: of firms in a market or perhaps even an adjacent market. 698 00:38:00,600 --> 00:38:04,560 Speaker 4: Is it a tock in transaction. Is it a transaction 699 00:38:04,680 --> 00:38:08,279 Speaker 4: that is premised on dropping quality or increasing take rate 700 00:38:08,600 --> 00:38:13,440 Speaker 4: or raising prices. And so we're thinking about private equity 701 00:38:13,560 --> 00:38:15,680 Speaker 4: just as we would any other kind of company. 702 00:38:16,000 --> 00:38:18,720 Speaker 2: Is there a specific market or industry in which private 703 00:38:18,760 --> 00:38:22,359 Speaker 2: equity involvement is getting more scrutiny from the Department of 704 00:38:22,400 --> 00:38:25,440 Speaker 2: Justice that you feel is perhaps more problematic. 705 00:38:25,840 --> 00:38:27,799 Speaker 4: You know, one of the great privileges of working at 706 00:38:27,840 --> 00:38:30,560 Speaker 4: the Justice Department is that we are tasked with policing 707 00:38:30,600 --> 00:38:33,600 Speaker 4: the entire US economy. And it turns out that private 708 00:38:33,600 --> 00:38:37,480 Speaker 4: equity also is active across the entire US economy. And 709 00:38:37,560 --> 00:38:41,280 Speaker 4: so we're taking our facts as we find them. Certainly, 710 00:38:41,360 --> 00:38:44,960 Speaker 4: there's been a lot of writing about private equity and healthcare. 711 00:38:45,880 --> 00:38:50,560 Speaker 4: There's been writing about private equity in real estate. I 712 00:38:50,640 --> 00:38:55,960 Speaker 4: was recently reading something that suggested that certain pe firms 713 00:38:56,000 --> 00:39:00,160 Speaker 4: are acquiring more than one thousand homes per day, and 714 00:39:00,280 --> 00:39:03,560 Speaker 4: if they continue at the current rate of buying housing 715 00:39:03,600 --> 00:39:09,240 Speaker 4: stock that private equity firms may own a substantial percentage 716 00:39:09,400 --> 00:39:12,040 Speaker 4: of all homes in the United States. And of course 717 00:39:12,120 --> 00:39:15,760 Speaker 4: we know that housing is a important vehicle for wealth building, 718 00:39:16,200 --> 00:39:20,279 Speaker 4: and so that should raise some questions if we are 719 00:39:20,320 --> 00:39:24,000 Speaker 4: concerned about the exercise of power and housing, for example. 720 00:39:24,360 --> 00:39:27,480 Speaker 4: And there are many other industries where we see a 721 00:39:27,480 --> 00:39:32,319 Speaker 4: lot of private equity activity, enterprise software, We're seeing it 722 00:39:32,360 --> 00:39:35,120 Speaker 4: in food and beverages, We're seeing it in hospitals, and 723 00:39:35,200 --> 00:39:38,279 Speaker 4: so there it's our job to just ask questions and 724 00:39:38,360 --> 00:39:42,000 Speaker 4: make sure that we are appropriately scrutinizing those transactions. 725 00:39:42,360 --> 00:39:44,479 Speaker 2: Well, it's interesting to hear you bring up housing because, 726 00:39:44,480 --> 00:39:46,800 Speaker 2: of course, is we're in this twenty twenty four election cycle. 727 00:39:46,840 --> 00:39:51,279 Speaker 2: Housing policy and housing costs affordability certainly is something that 728 00:39:51,320 --> 00:39:54,239 Speaker 2: continually comes up. We've obviously seen the administration outlining a 729 00:39:54,280 --> 00:39:56,040 Speaker 2: lot that they would like to see done in housing. 730 00:39:56,360 --> 00:39:58,440 Speaker 2: Unclear how much of that can be accomplished and how 731 00:39:58,480 --> 00:40:01,880 Speaker 2: much you would need another years for if President Biden 732 00:40:01,920 --> 00:40:05,359 Speaker 2: does get another four years, what should we expect from 733 00:40:05,400 --> 00:40:09,400 Speaker 2: the Anti Trust Division at the DOJ? Would would policy 734 00:40:09,480 --> 00:40:14,160 Speaker 2: largely continue as has had been during this first term. 735 00:40:14,239 --> 00:40:16,839 Speaker 4: So I'll say that we've used the full complement of 736 00:40:16,920 --> 00:40:22,040 Speaker 4: tools to address housing problems. So whether it's an amicus 737 00:40:22,080 --> 00:40:27,319 Speaker 4: brief that addresses commissions, for example, that realtors can make 738 00:40:28,239 --> 00:40:32,799 Speaker 4: in housing transactions or rental pricing software, we take this 739 00:40:32,880 --> 00:40:37,200 Speaker 4: really seriously because housing is important, and we also know 740 00:40:37,280 --> 00:40:39,880 Speaker 4: that buying a home is a really important part of 741 00:40:39,920 --> 00:40:44,080 Speaker 4: the American dream. But pivoting to the reality that it's 742 00:40:44,120 --> 00:40:47,439 Speaker 4: an election year, you know, it's business as usual for us. 743 00:40:47,880 --> 00:40:52,240 Speaker 4: We have a visionary Assistant Attorney General and Jonathan Cantor, 744 00:40:52,560 --> 00:40:57,440 Speaker 4: and a wonderful Attorney General who is himself an antitrust 745 00:40:58,000 --> 00:41:02,799 Speaker 4: lover who came in with a vision for vigorous enforcement, 746 00:41:02,880 --> 00:41:05,799 Speaker 4: and for years we've been executing on that vision, and 747 00:41:05,840 --> 00:41:07,120 Speaker 4: I expect that to continue. 748 00:41:08,360 --> 00:41:10,200 Speaker 2: I'd like to ask you about something. And I realized 749 00:41:10,239 --> 00:41:13,400 Speaker 2: that this is a hypothetical scenario at this point because 750 00:41:13,400 --> 00:41:17,640 Speaker 2: Byteedance does not seem interested in divesting TikTok here in 751 00:41:17,640 --> 00:41:20,040 Speaker 2: the US, despite legislation that has passed and been signed 752 00:41:20,040 --> 00:41:22,080 Speaker 2: into law by President Biden that would require them to 753 00:41:22,120 --> 00:41:24,520 Speaker 2: do so basically within the year or else face a 754 00:41:24,560 --> 00:41:27,040 Speaker 2: ban in the US. But even if by Dance were 755 00:41:27,040 --> 00:41:30,040 Speaker 2: to say, okay, you know what we will be selling TikTok. 756 00:41:30,600 --> 00:41:34,160 Speaker 2: How easily could that run into antitrust concerns? Is there 757 00:41:34,200 --> 00:41:36,239 Speaker 2: any tech or media company in the US that could 758 00:41:36,239 --> 00:41:39,400 Speaker 2: acquire an operation that big without it raising a competition 759 00:41:39,520 --> 00:41:40,840 Speaker 2: flag for you? 760 00:41:40,840 --> 00:41:43,360 Speaker 4: You know, as a department official, I can't really respond 761 00:41:43,360 --> 00:41:47,080 Speaker 4: to hypotheticals, but I'll say that any transaction really goes 762 00:41:47,120 --> 00:41:50,200 Speaker 4: through the same kind of inquiry you had, ask the 763 00:41:50,200 --> 00:41:55,480 Speaker 4: same questions about whether a transaction raises concentration concerns, whether 764 00:41:55,600 --> 00:42:00,520 Speaker 4: it increases the power of the acquiring firm, and so 765 00:42:00,680 --> 00:42:03,960 Speaker 4: I would expect that that kind of analysis is no different. 766 00:42:04,000 --> 00:42:07,799 Speaker 4: There's no special consideration for any one company, no matter 767 00:42:07,840 --> 00:42:09,280 Speaker 4: its size or or prominence. 768 00:42:09,680 --> 00:42:11,720 Speaker 2: All right, Dohal, great to have you here on Ballance 769 00:42:11,719 --> 00:42:14,120 Speaker 2: of Power. Thank you so much for joining me in studio. 770 00:42:14,160 --> 00:42:16,680 Speaker 2: Doha Mechi is from the Department of Justice, where she 771 00:42:16,760 --> 00:42:21,200 Speaker 2: is the Principal Deputy Assistant Attorney General for the Antitrust Division. 772 00:42:21,280 --> 00:42:23,080 Speaker 2: Great to have her here today. 773 00:42:25,440 --> 00:42:27,880 Speaker 6: Thanks for listening to the Balance of Power podcast. 774 00:42:28,480 --> 00:42:30,920 Speaker 3: Make sure to subscribe if you haven't already, at Apple, 775 00:42:31,000 --> 00:42:31,600 Speaker 3: Spotify 776 00:42:31,719 --> 00:42:34,279 Speaker 7: Or wherever you get your podcasts, and you can find 777 00:42:34,360 --> 00:42:37,600 Speaker 7: us live every weekday from Washington, DC at noontime, Eastern 778 00:42:37,880 --> 00:42:40,040 Speaker 7: at Bloomberg dot com.