Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
Speaker 1: my co host Matt Miller. Every business day, we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. Ten year treasury yield
Speaker 1: now down back below one point five percent at one
Speaker 1: point four percent. That spiking yields yesterday really spooked markets
Speaker 1: and I think got some people to kind of think
Speaker 1: about valuations here, uh, think about asset allocation here. Let's
Speaker 1: get the lay of the land with Jim Bianco. He's
Speaker 1: a president and founder Bianco Research. He's also a contributor
Speaker 1: to Bloomberg Opinion based in Chicago. Jim, thanks so much
Speaker 1: for joining us here. What do you make of the
Speaker 1: action over the past couple of days, again, having yields
Speaker 1: shoot up here and we saw a lot of commodities flash,
Speaker 1: maybe some inflations of inflation signs. What do you make
Speaker 1: about what's going on? I think what you just said
Speaker 1: is right inflation signs. I've been trying to say that
Speaker 1: there is two different words that we need to keep
Speaker 1: our mind on, and that is reflation, which you hear
Speaker 1: a lot of an inflation if people use those words interchangeably,
Speaker 1: but they shouldn't because there are two different concepts. If
Speaker 1: interest rates are rising because of reflation, that is real
Speaker 1: growth is coming back, earnings are coming back, people are
Speaker 1: getting jobs. Then Chairman Paul is right, it reflects higher
Speaker 1: rates reflect a confidence in the economy. But if we're
Speaker 1: crossing over to that, it is inflation, and that is
Speaker 1: your loss of purchasing power. Your dollar in a year
Speaker 1: will buy you less than a dollar now if you
Speaker 1: own a fixed income security by the name fixed income,
Speaker 1: you don't get any more dollars in a year. You
Speaker 1: get the same number, but it buys less. You don't
Speaker 1: want to touch those securities, and that's why rates could
Speaker 1: be going up and it would be very bad for
Speaker 1: the stock market. So I think we're canting this push
Speaker 1: pull is to yes, we know the economies could come
Speaker 1: back strong this year. That's not the issue. The issue
Speaker 1: is how much of that's going to be inflation, how
Speaker 1: much of that's going to be real wealth. And with
Speaker 1: the surgeon commodities, as you've mentioned in other measures. People
Speaker 1: are getting more and more worried that we're going to
Speaker 1: see something we haven't seen in twenty five years, and
Speaker 1: that is an actual inflation boom. Jim, I've been thinking
Speaker 1: about you all morning, and not just exchange messages earlier today,
Speaker 1: but I've been thinking about your read on what we've
Speaker 1: seen in the bond market. You know, there's a question
Speaker 1: about whether it's just thin trading, or whether it's potentially
Speaker 1: leverage positions that are getting unwound, you know, convexity hedging,
Speaker 1: you name it, technical factor, or whether this is actually
Speaker 1: a belief in inflation that perhaps isn't being reflected in
Speaker 1: a tips market, in a in a securities market that
Speaker 1: is distorted by thin liquidity and a whole host of
Speaker 1: other issues. Can you just what's going on? Yeah? So,
Speaker 1: so two things. Um, There is the treasury real rates
Speaker 1: market or TIPS securities, Treasury inflay and protective securities, and
Speaker 1: we look at the difference between those securities and nominal
Speaker 1: rates to get what's called the inflation break even rate
Speaker 1: as an indicator of the future of inflation. The biggest
Speaker 1: buyer in that market is the FED. They have bought
Speaker 1: more bonds in the last year tips bonds than have
Speaker 1: been issued, and the amount of outstanding for the public
Speaker 1: is actually declining. That's how many they bought. So my
Speaker 1: point there is they've got a giant footprint all over
Speaker 1: that market, and I've been doubting the measures that we've
Speaker 1: been getting out of that market. So that is an
Speaker 1: inflation indicator that people said, look, there's no problem there. Yeah,
Speaker 1: but it could also be because the Fed stomping all
Speaker 1: over it. But to your other point about what's going
Speaker 1: on in the bond market, if you're not a bond
Speaker 1: geek like I am, and I'm gonna put you in
Speaker 1: the bond, yeah, and you look at yields and you go, oh,
Speaker 1: they're on their way to one and a half, and
Speaker 1: some people say they might be a two by the
Speaker 1: end of the year. I'm an equity investor. I own
Speaker 1: a business. Who cares it's two percent, it's not a deal.
Speaker 1: And it goes to two and a half, it's not
Speaker 1: a big deal. You know, if your bond investor, it
Speaker 1: matters a lot because you could wind up with with
Speaker 1: total return losses that could be very, very big. If
Speaker 1: you've owned thirty year bonds this year, you're down on
Speaker 1: the year on the thirty year bond one of the
Speaker 1: worst first two months of a year in history. And
Speaker 1: if you're buying bonds on leverage, because you can do
Speaker 1: that through the repo market, you can leverage your positions
Speaker 1: all you want. You could have catastrophic losses. If we
Speaker 1: have a two percent yield coming in the next few months,
Speaker 1: and if the bond market is in a bad place,
Speaker 1: all capital markets are in a bad place as well too,
Speaker 1: So it's not a worry. I don't think at this
Speaker 1: point that you know two percent on the tenure Treasury
Speaker 1: is going to crush the economy with super high interest rates.
Speaker 1: War is two percent could create havoc in the credit markets,
Speaker 1: and that could hurt the economy. The ability to raise
Speaker 1: money ye to do two things that you're you're comfortable
Speaker 1: with doing that could come into question. We're not there now,
Speaker 1: but we've got to stop doing this, so we don't
Speaker 1: go there. All right, I'm gonna annoy Paul and ask
Speaker 1: a question that's in the weeds. But you mentioned this
Speaker 1: tips market. You mentioned this sort of inflation expectations market,
Speaker 1: and this is really key because a lot of people
Speaker 1: keep pointing to it to show that actually inflation expectations
Speaker 1: are going down over the long term even as treasure
Speaker 1: yields go up. This doesn't make sense in a lot
Speaker 1: of ways. Are you saying the inflation expectations as measured
Speaker 1: by the market are highly inaccurate based on the distortions,
Speaker 1: based on the amount of that market that's been dominated,
Speaker 1: that's been hoovered up by the Federal Reserve. Yes, And
Speaker 1: I'll even back up one step further. Inflation expectations is
Speaker 1: a predictor of where inflation is gonna go. We've had
Speaker 1: these markets for twenty years have not been very good
Speaker 1: at all. They have not been a very good indicator
Speaker 1: of what actually happens in the beginning. Now you throw
Speaker 1: in the fact that the largest single buyer is the
Speaker 1: Federal Reserve in these markets, and you've seen real interest
Speaker 1: rates falling all year long. If the economy is going
Speaker 1: to boom at five, six or seven percent, which would
Speaker 1: be if you believe Goldman's forecast, seven percent real, that
Speaker 1: would be the fastest yearly growth in forty years. If
Speaker 1: we had that happened this year, real rates should be
Speaker 1: rising in that kind of environment. But the falling, or
Speaker 1: at least the tips market has been falling. Why because
Speaker 1: the fit is relentlessly buying these every day. In fact,
Speaker 1: they publish every day how much they buy, and it's
Speaker 1: in the several billions every single day that they buy
Speaker 1: of this market. So I'll quote the British economist Charles Goodheart,
Speaker 1: he's a good friend to John Farrell's. When a measure,
Speaker 1: when a measure becomes a target, it seeks being a measure.
Speaker 1: Will look at Yes, we're looking at tips as a
Speaker 1: measure of where the market things inflation is. But if
Speaker 1: the FETE is targeting it by all of their buying,
Speaker 1: it's no longer a measure. So that's what I've been saying.
Speaker 1: I think conceptually it's right. You know, over the last
Speaker 1: few months, tips break evens have been going up. But
Speaker 1: when you want to get into the weeds and say
Speaker 1: well they picked three weeks ago and this and that,
Speaker 1: be careful now because you got that big footprint of
Speaker 1: the FEDS stomping all over that market, and it might
Speaker 1: be giving signals that aren't the measure that you think
Speaker 1: they are. Jim Bianco, thank you so much for being
Speaker 1: with us, Jim Bianco of Bianco Research. It's always wonderful
Speaker 1: having you on Honestly, I was actually really looking forward
Speaker 1: to hearing what he had to say because he always
Speaker 1: has such nuanced views pairing but the technical Paul, with
Speaker 1: the fundamental and really that tips market concept. I know
Speaker 1: it's in the weeds, but it's really important. It is.
Speaker 1: And we hear a lot of strategists and a lot
Speaker 1: of fun managers talk about that tip tips market and uh,
Speaker 1: you know it's interesting that you know, kind of bringing
Speaker 1: in also the FED buying and how that's impacting the
Speaker 1: market and rates across the rake curve. Yeah, honestly fascinating discussion.
Speaker 1: And we want to turn our attention to the medical
Speaker 1: advances that we have seen which have been turbo charged
Speaker 1: by the pandemic. And Paul, I do think that one
Speaker 1: emerging aspect of the pandemic is all the money and
Speaker 1: all the attention on the need for biopharmaceutical investment as
Speaker 1: well as research and joining us now is someone very
Speaker 1: much on the forefront of that. Dr Steve Cutler, chief
Speaker 1: executive officer of Icon PLC, based in Dublin. Just to
Speaker 1: give you a sense, Icon had a tie up with
Speaker 1: p r A Health Sciences. It was the largest healthcare
Speaker 1: transaction deal this year. Twelve billion dollars, and both companies
Speaker 1: help basically run the clinical trials for drug makers and
Speaker 1: medical device developers, and they've been on the front lines
Speaker 1: of some of these medical advancements. Dr Cutler, thank you
Speaker 1: so much for being with us. Can you give us
Speaker 1: a sense of just how much the pandemic has turbo
Speaker 1: charged what really has been in the works for a while,
Speaker 1: which is investment in biopharmaceutical development. Yeah, Good morning, Paul,
Speaker 1: Good morning Lisa. The pandemics certainly has been obviously a
Speaker 1: tragic event, you know, across our society, but there have
Speaker 1: been some silver linings since, at least for us in
Speaker 1: our business, and the way in which we've run clinical
Speaker 1: trials now has has fundamentally changed in terms of approval times,
Speaker 1: in terms of the types of technology we're able to
Speaker 1: apply to running clinical trials, and quite frankly, in terms
Speaker 1: of the awareness of society of clinical trials and the
Speaker 1: benefits of clinical trials. We think that all plays into
Speaker 1: a very positive environment for our organization going forward, and
Speaker 1: hence one of the reasons that we've we've we've made
Speaker 1: this union with pr A Okay, doctor, this is a
Speaker 1: big deal for you guys. Per A is a big
Speaker 1: company as well. Talked us about the real drivers, the
Speaker 1: strategic drivers behind putting these two companies together. Here. Yeah,
Speaker 1: there's a couple of them. Certainly, we've seen we've been
Speaker 1: competing with pra A for for a number of years now,
Speaker 1: twenty thirty years since we've been in existence, and they've
Speaker 1: been a very strong competitor there and a very a
Speaker 1: very good competitor over that time. And and they're very
Speaker 1: strong cultural fits. So so when you bring too large
Speaker 1: people related businesses together, the culture, the focus, the core
Speaker 1: values of the organizations are very important. We see a
Speaker 1: lot of similarities there. We've made an assessment really over
Speaker 1: the last few years in terms of our other competitors
Speaker 1: and the fit we had with p r A really
Speaker 1: really really brought them to the four in terms of
Speaker 1: their benefits and the advantages. There's really a couple of them.
Speaker 1: For us as a large organizer, we moved from being
Speaker 1: we were six, they were seven, or vice versa in
Speaker 1: terms of our league table in revenues in the organiz
Speaker 1: we now move as a combined organization to number two
Speaker 1: in the industry. So we are and we're number one
Speaker 1: in a number of the segments. So we are we
Speaker 1: have the scale now to really deliver innovative solutions and
Speaker 1: creative solutions for for our customers across the globe. We
Speaker 1: have the depth and the breadth of resources, and that's
Speaker 1: very important in the clinical trials game because we run
Speaker 1: trials all over the world in all sorts of different
Speaker 1: therapeutic areas. The other component is the technology side of things.
Speaker 1: As I said, through the pandemic, we've realized that applying
Speaker 1: the new technology is the ability to access patient data
Speaker 1: remotely and to monitor patient data remotely in a confidential
Speaker 1: and private manner allows us to be much more efficient.
Speaker 1: And as we as we run those sort of trials
Speaker 1: and we run what we call more decentralized clinical trials
Speaker 1: where patients don't have to go to sites we can
Speaker 1: we can monitor patients at home. We have those sort
Speaker 1: of services. Pr A bring a mobile health platform to that.
Speaker 1: We can offer a really compelling vision in that space
Speaker 1: for for our customers, so we can be much more efficient,
Speaker 1: I believe going forward. And then finally for our shareholders,
Speaker 1: there's significant value in this in this union. And you
Speaker 1: know from an accretion point of view, from a long
Speaker 1: term revenue and the sustainable growth perspective. Dr Cutler, It's
Speaker 1: been a real write in twelve months for a lot
Speaker 1: of people around the world, and I'm trying to find
Speaker 1: silver linings every day for my children, and one of
Speaker 1: them that I try to lean upon is that perhaps
Speaker 1: we'll get biopharmaceutical research that are cure the cold, or
Speaker 1: cure cancer, cure all sorts of elm ends that we
Speaker 1: have with us today. Do you see those kinds of
Speaker 1: seismic advancements that are made because of the money put
Speaker 1: behind my pharmaceutical research as a result of the pandemic?
Speaker 1: So much? Are we're going to cure cancer because of
Speaker 1: the I think I know, I think we're all very
Speaker 1: focused on that. That's a very big part of our portfolio.
Speaker 1: But what we what we have seen is a real
Speaker 1: focus on clinical trials and the ability to get clinical
Speaker 1: trials moving much faster and a much less bureaucratic fashion
Speaker 1: than we've seen in the past. Of what I'm seeing
Speaker 1: is it would be much more efficient going forward in
Speaker 1: the way we run clinical trials, whether they be decentralized
Speaker 1: or the more traditional And so what we see is
Speaker 1: our sponsors will have more opportunity to put more drugs
Speaker 1: through the pipeline, so to speak, to have more shots
Speaker 1: on goal to get pharmaceuticals and get good drugs to market,
Speaker 1: whether they be cancer drugs, whether they be pandemic or vaccines,
Speaker 1: whether they be other other drugs. That's what we see.
Speaker 1: The pandemic has really caused us to rethink the way
Speaker 1: we do things and know that we can do things
Speaker 1: in very different ways. We were involved in the large
Speaker 1: Visor biointech trial that was one of our big, big studies.
Speaker 1: We were able to get that done so much faster
Speaker 1: than we normally do with these clinical trials, and so
Speaker 1: that that really lays the groundwork, I think for a
Speaker 1: very very strong future in our business. Dr Cutler, thank
Speaker 1: you so much for joining us. We appreciate that. Dr
Speaker 1: Stephen Cutler. He's the chief executive officer of Icon PLC.
Speaker 1: They are based in Dublin. Just announced this week a
Speaker 1: big deal, the biggest healthcare transactions so far this year,
Speaker 1: Icon acquiring p r A Health Sciences. That's a company
Speaker 1: based in Raleigh, North Carolina. Total transaction value of twelve
Speaker 1: billion dollars um and you know Lisa's As Dr Cutler mentioned,
Speaker 1: it was really great to see how some of these
Speaker 1: how quickly these tests and these trials were done. I
Speaker 1: gotta say, can you tell where my mind's at? And basically,
Speaker 1: what is it done? What is it over? Can we
Speaker 1: end the pandemic? I mean, how many times gonna answer
Speaker 1: that question from my kids before I start passing it
Speaker 1: on to every guest that comes on, especially people on
Speaker 1: the front lines, to know the answer. That's where we
Speaker 1: all are. And the good news, Lisa is the metrics
Speaker 1: are really trending in the right direction. So that is
Speaker 1: certainly good news at a very difficult year. Yes, it
Speaker 1: is that time of year again where we hear from
Speaker 1: Warren Buffett and his faith will parse every single word
Speaker 1: he has to say. Cat chick Lynsky follows Warren Buffett follows,
Speaker 1: the finance industry, follows the insurance and Street is really
Speaker 1: the ace on this. She's from Bloomberg News. Cat, we
Speaker 1: haven't really heard that much from Mr Buffett over the
Speaker 1: last year with all that's been going on. What do
Speaker 1: you expect is see and hear and read When we
Speaker 1: do get his letter, well, I think it means it's
Speaker 1: going to pack more of a punch, because you know, yeah,
Speaker 1: we heard from him last May at his annual meetings.
Speaker 1: But during that meeting he sort of expressed caution about
Speaker 1: the whole situation, about the pandemic and especially about the
Speaker 1: econom outcomes from it. So I think its shareholders are
Speaker 1: really looking to this letter to sort of provide some clarity,
Speaker 1: because you know, the letter does describe how Berkshire did
Speaker 1: over the past year. But people really turned to Buffett
Speaker 1: too as kind of a business leader and you know,
Speaker 1: a successful investor, and they want to know his thoughts
Speaker 1: on lots of issues, including the presidential election, in which
Speaker 1: he was really actually quite silent about, and the race
Speaker 1: protests that swept the nation last year, and even more
Speaker 1: investing type issues like the Reddit mania. You know, depending
Speaker 1: on when he put pen to paper um and actually
Speaker 1: wrote this letter, I think people will be interested to
Speaker 1: hear if if he has thoughts on kind of where
Speaker 1: all that stock market speculations stand. Well, this ninety year
Speaker 1: old chief executive officer, the Oracle of Omaha, is one
Speaker 1: of the most famed investors ever to hit Wall Street,
Speaker 1: and yet I do wonder, especially as he takes a
Speaker 1: less of a role at the company, how much import
Speaker 1: his views have at this point given the other companies
Speaker 1: that have sort of filled the void and entered the front,
Speaker 1: the front running seat in terms of influence. I mean,
Speaker 1: has this letter waned with respect to how it's perceived
Speaker 1: on Wall Street? Well so, I I you know, I
Speaker 1: asked that question to these investors who follow him religiously,
Speaker 1: like why do you keep reading it? Because obviously, you know,
Speaker 1: you can look back at his letters at the dot
Speaker 1: com bubble and that sort of gives you a sense
Speaker 1: of what he might think about with you know, the
Speaker 1: current stock market um situation we're seeing. But I do
Speaker 1: think that investors still look to him because he does
Speaker 1: have this historical perspective and if you've ever watched him
Speaker 1: speak at these events, I mean you can tell he
Speaker 1: really has an incredible memory, an incredible recall of everything
Speaker 1: he's read and seen and done, and I think that
Speaker 1: does lend his words still some weight. You know, he
Speaker 1: can really he can take all that you know, we've
Speaker 1: had to kind of ingest over the past year in
Speaker 1: terms of the news and what's happening, and and he
Speaker 1: can sort of step back and say, you know, compared
Speaker 1: to his you know, ninety years of history of being
Speaker 1: on this planet, here's kind of you know, take on it.
Speaker 1: So alright, Cat, one of the things that people really
Speaker 1: are the last several years have really focused on is
Speaker 1: what to do with all that cash. I'm looking at
Speaker 1: the f A function on the Bloomberg terminal for Berkshire Hathway,
Speaker 1: and you know, four hundred over four undred billion dollars
Speaker 1: in cash on the balance. Yes, there's a little bit
Speaker 1: of depth, super super cash rich here. What's the expectation here?
Speaker 1: Can he put that money to work? Yeah? So we
Speaker 1: actually have closer to a hundred and forty five billion
Speaker 1: dollars of cash to work, which is actually close to
Speaker 1: a record for Berkshire, and it is hard. I mean,
Speaker 1: you know, he needs to find bigger deals, bigger stock
Speaker 1: purchases that actually move the needle and kind of generate
Speaker 1: even higher returns for the conglomerate. And when you're you know,
Speaker 1: fighting off private equity firms who are bidding for the
Speaker 1: same company you are, and now the kind of spack boom,
Speaker 1: I think it's made it a lot more challenging for
Speaker 1: Bershire to say, you know, here, here we are as
Speaker 1: a clear you know, buyer of these companies. And so
Speaker 1: I think that's why we've seen trends like he was
Speaker 1: a massive purchaser of stock, at least through the first
Speaker 1: nine months. It's one of his biggest years ever for
Speaker 1: repurchasing stock, which for most companies is so routine, but
Speaker 1: for Bucket, I think it really underscores this point. But
Speaker 1: he's he is willing to expand his horizons if he
Speaker 1: needs to to find ways to deploy that cash. But
Speaker 1: obviously he would love that elephant size deal to come around.
Speaker 1: One thing I'm curious to hear is he's been really
Speaker 1: adamant about American exceptionalism and the growth of the economy,
Speaker 1: talking about how lucky it is to be born in
Speaker 1: America and the growth of the nation uh continuing, and
Speaker 1: he sort of has had complete faith in that for
Speaker 1: a long time. He's been right to a large degree.
Speaker 1: And yet as he tries to diversify his investments, I'm
Speaker 1: curious to know whether he will change his tune at
Speaker 1: all when we see some of the dynamism coming out
Speaker 1: of other places in the world. What's your sense of
Speaker 1: that based on the rhetoric out of Warren Buffett's shop,
Speaker 1: out of his colleagues, UH, just generally at a Berkshire Hathaway,
Speaker 1: I do agree like He's always been very optimistic about America,
Speaker 1: and I think that will continue. I think we'll probably
Speaker 1: still hear from him about, you know, the positive attributes
Speaker 1: he thinks of this country and our systems and how
Speaker 1: they work. Obviously, it'll probably be tempered with, you know,
Speaker 1: how do you view that in terms of the riots
Speaker 1: we saw at the capital and some of the other
Speaker 1: stresses we've had in this democracy over the past year.
Speaker 1: But I do think he is more willing to venture abroad,
Speaker 1: and we saw that last year where he piled the
Speaker 1: billion dollars into Japanese trading house stocks. And I think
Speaker 1: this shows not only the influence of his deputies. I
Speaker 1: think they do have an influence on him kind of
Speaker 1: expanding through horizons, but I think it shows that if
Speaker 1: Berkshire is really going to be able to deploy its
Speaker 1: funds successfully and generate these higher returns, they're going to
Speaker 1: have to start looking abroad. They're going to have to
Speaker 1: figure out different economies and these different types of companies,
Speaker 1: like these trading companies in Japan, and figure out which
Speaker 1: ones are actually gonna fit because Berkshire just is fishing
Speaker 1: in too small of a pond right now. Cat. Thanks
Speaker 1: very much. We really appreciated Cat Chiglinsky, financial reporter for
Speaker 1: Bloomberg News, giving us the latest on Bertrad Hathaway, Hathaway,
Speaker 1: Warren Buffett. Again, it's that time of the year where
Speaker 1: we will hear from the Oracle of Omaha with his
Speaker 1: annual investment letters. Cat was mentioning lots to parse through there.
Speaker 1: All right, let's turn our attention to fiscal stimulus. It
Speaker 1: looks like the House is scheduled to take up the
Speaker 1: stimulus bill on the floor of the Chamber today, with
Speaker 1: passage expected late in the evening or potentially Saturday. Let's
Speaker 1: get the latest on what may or may not be
Speaker 1: included in that bill. We do that with Eric Wasson,
Speaker 1: Bloomberg Congressional reporter. Eric, thanks so much for joining us.
Speaker 1: Talk to us about what are the notable inclusions and
Speaker 1: maybe exclusions from this one point nine trillion dollar fiscal
Speaker 1: stimulus bill. Well, you know the big debate here in
Speaker 1: the last twenty four hours through about minimum wave provision.
Speaker 1: That was the sort of the lightning rod division in
Speaker 1: the Senate and a Senate official, obscure Senate official, a
Speaker 1: seen up parliamentary and rule that they cannot do it.
Speaker 1: Through this budget bill. So that's leading to a lot
Speaker 1: of conflict here. House progressives are really urging the Vice
Speaker 1: President to possibly try to overrule that something she can
Speaker 1: do with the right House is reluctant to do. The
Speaker 1: House will include that provision in the bility passed tonight
Speaker 1: probably around eight or nine o'clock. However, in the Senate
Speaker 1: there's now talk of doing a tax penalty to try
Speaker 1: to force large corporations to raise that wage. So there's
Speaker 1: a lot going on there. That's the main thing that's
Speaker 1: up for change. But as far as the main provision
Speaker 1: that people know about, the fourteen hundred dollar stimulus checks
Speaker 1: for those making lessons seventy five thousand dollars a year,
Speaker 1: that's pretty much locked in as far as I can tell.
Speaker 1: That's in the House bill and likely to remain in
Speaker 1: the Senate bill. We're also looking attention of unemployment benefits
Speaker 1: and a child tax credit expansion temporarily. So can we
Speaker 1: get a sense of how committed Democrats are as a whole,
Speaker 1: and I realize it's not a cohesive group right now,
Speaker 1: how committed they are to getting a minimum wage increase through,
Speaker 1: especially now that it would have to tie a two,
Speaker 1: a tax increase or some other provision that would be
Speaker 1: more directly tied to the deficit. Well, you know, it's
Speaker 1: just it's just not really clear if they're going to
Speaker 1: all be on board. I mean putting a tax increase.
Speaker 1: There's a very tiny international tax loophole closer in the
Speaker 1: bill now, turning two billion dollars of making it a
Speaker 1: very large descliament of five percent payroll tax on companies.
Speaker 1: That's very easy for Republicans to demondize. And the portrays
Speaker 1: at tax increase the middle of a pandemic that caused
Speaker 1: some heartburn for moderate Democrats. So this hasn't really been
Speaker 1: shopped around, put forward by Bernie Sanders and on Widen's
Speaker 1: progressives on the left, and the Shumer is now weighing it,
Speaker 1: but you know, we don't really know yet if moderates
Speaker 1: are going to go for that. Eric, give us a
Speaker 1: sense of timing here. We're getting very close to, you know,
Speaker 1: the point in March where a lot of these benefits
Speaker 1: from the original or the last round of fiscal stilling
Speaker 1: to start to expire for a lot of people. So
Speaker 1: time is of the essence here. Yeah, that's right. The
Speaker 1: expanded unemployment benefits of for gig workers long term on
Speaker 1: the board and those getting that three our plus up
Speaker 1: from the federal government to their state benefits does expire
Speaker 1: begin to expire March four, team, You know, the Senate
Speaker 1: has this two more weeks to act. That's probably enough
Speaker 1: time to get it done. Although the wrinkle was a
Speaker 1: minimum wage is going to cause a lot of negotiating
Speaker 1: and conversations over the weekend early on. If they can
Speaker 1: resolve that, the Senate could easily pass it on the
Speaker 1: floor within two weeks. Is a special budget procedures, so
Speaker 1: the Republicans can't really drag it out. Do we have
Speaker 1: a sense of how much momentum there would be after
Speaker 1: this bill gets passed, and the expectation is it will
Speaker 1: get passed by mid March, how much momentum there is
Speaker 1: to get working on that infrastructure bill to possibly get
Speaker 1: something passed again later in the year. Yeah, that's a
Speaker 1: story that Chris Confident and I I probably did on
Speaker 1: the terminal last week. Their infrastructure has a lot of momentum.
Speaker 1: You know, that could be a Biparson villa, and in
Speaker 1: fact they can't risk necessarily use this budget procedure for
Speaker 1: infrastructure for several reasons, including the fact that's the long
Speaker 1: term spending of proposal. It goes beyond ten years and
Speaker 1: violate the Bird rule in the Senate. But there's a
Speaker 1: lot of talk among Progressive of adding a draft back
Speaker 1: of other things, some expansion of Obama tire to elder tire, childcare,
Speaker 1: and so forth, and that's going to make it more
Speaker 1: controversial and make it potentially more difficulty. All right, So
Speaker 1: one thing, I just want to get a sense for
Speaker 1: our listeners in the metro New York area and some
Speaker 1: other high tax areas state and local tax. Uh, that
Speaker 1: issue that's not in this bility hit home for you. Yeah,
Speaker 1: as I start to do my taxes, it's just just
Speaker 1: goes crazy that that was left out, that that was proposed,
Speaker 1: proposed by you know, was proposed by some members, especially
Speaker 1: the Northeast delegations, but that did not make it into
Speaker 1: this field. And you know, it's obviously could be a
Speaker 1: candidate for the second round. There's there's a lot of
Speaker 1: talk of doing major tax legislation in the second round,
Speaker 1: including an increasing capital gains tax for those making more
Speaker 1: than one million dollars a year to equalize the rates
Speaker 1: with ordinary and comic etcetera. So we send ull Be
Speaker 1: a large tax package there you might never of a
Speaker 1: shot of getting that salt deduction again. Eric Wasson, thank
Speaker 1: you so much for joining us. Eric quass and Bloomberg
Speaker 1: Congressional reporter joining us on congressional matters. Plus the salt text,
Speaker 1: which is near and dear. Yeah, we need the salt text.
Speaker 1: Gotta take care of that, and we need the gateway
Speaker 1: and the gateway. Since you have left the shows, certain
Speaker 1: things never changed that. I was about to say, have
Speaker 1: you been to the Mall of America yet? How do
Speaker 1: you feel about that? I know how you feel about that.
Speaker 1: Coming up, we've got more talking about municipal finance to
Speaker 1: get some of these local areas backed up and running.
Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can
Speaker 1: subscribe and listen to interviews of Apple Podcasts or whatever
Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter
Speaker 1: at Matt Miller three. Put on false Sweeney I'm on
Speaker 1: Twitter at pt Sweeney Before the podcast. You can always
Speaker 1: catch us worldwide at Bloomberg Radio