1
00:00:02,520 --> 00:00:10,119
Speaker 1: Bloomberg Audio Studios, podcasts, radio News. You're listening to the

2
00:00:10,119 --> 00:00:14,160
Speaker 1: Bloomberg Balance of Power podcast kettys live weekdays at noon

3
00:00:14,240 --> 00:00:17,440
Speaker 1: and five pm Eastern on Apple, Cocklay and Android Auto

4
00:00:17,520 --> 00:00:20,680
Speaker 1: with the Bloomberg Business App. Listen on demand wherever you

5
00:00:20,720 --> 00:00:24,160
Speaker 1: get your podcasts, or watch us live on YouTube.

6
00:00:25,360 --> 00:00:28,080
Speaker 2: It is a Saint Patrick's Day celebratory day, with a

7
00:00:28,160 --> 00:00:29,960
Speaker 2: number of events held at the White House, including a

8
00:00:30,000 --> 00:00:33,560
Speaker 2: bilateral meeting between President Donald Trump and the Irish Tea Shock,

9
00:00:33,960 --> 00:00:36,280
Speaker 2: And of course that meeting in the Oval Office earlier

10
00:00:36,400 --> 00:00:39,800
Speaker 2: was open to the press, in which President and the

11
00:00:39,880 --> 00:00:42,680
Speaker 2: d Shock for that matterfield and a number of questions

12
00:00:42,720 --> 00:00:46,040
Speaker 2: from reporters and in the presence of a European leader.

13
00:00:46,120 --> 00:00:49,640
Speaker 2: President Trump had many critical words for Europe itself, specifically

14
00:00:49,640 --> 00:00:52,839
Speaker 2: our NATO allies who have so far not answered his

15
00:00:52,920 --> 00:00:55,640
Speaker 2: call to help reopen the Strait of hor moves. Here's

16
00:00:55,640 --> 00:00:57,840
Speaker 2: a taste of the rhetoric from President Trump.

17
00:00:58,560 --> 00:01:03,320
Speaker 3: So I think NATO's making a very foolish mistake.

18
00:01:03,360 --> 00:01:05,319
Speaker 4: And I've long said that, you know.

19
00:01:05,280 --> 00:01:08,240
Speaker 5: I wonder whether or not NATO would ever be there

20
00:01:08,280 --> 00:01:11,160
Speaker 5: for us. So this is this was a great test,

21
00:01:11,480 --> 00:01:13,520
Speaker 5: because we don't need him, but they should have been there.

22
00:01:13,720 --> 00:01:17,679
Speaker 5: The other thing is, and I think, you know, very important,

23
00:01:19,200 --> 00:01:21,399
Speaker 5: we didn't have to be there for.

24
00:01:21,480 --> 00:01:26,440
Speaker 6: Ukraine, saying we didn't have to be there for Ukraine,

25
00:01:26,520 --> 00:01:30,240
Speaker 6: and essentially I guess connecting the dots between this conflict

26
00:01:30,880 --> 00:01:31,479
Speaker 6: and that one.

27
00:01:31,600 --> 00:01:33,320
Speaker 7: Let's see what Tyler is hearing.

28
00:01:33,360 --> 00:01:35,960
Speaker 6: We go to the White House now, Bloomberg's Washington correspondent,

29
00:01:36,040 --> 00:01:38,560
Speaker 6: Tyler Kendall is on the north lawn where, yes, the

30
00:01:38,640 --> 00:01:42,039
Speaker 6: fountain is died fluorescent green. Tyler, it's not quite in

31
00:01:42,080 --> 00:01:44,720
Speaker 6: your shot there. It matches the lawn. Tell us what

32
00:01:44,760 --> 00:01:46,920
Speaker 6: the President is talking about here and whether there'll be

33
00:01:46,959 --> 00:01:49,160
Speaker 6: some sort of punitive action that follows this for our

34
00:01:49,360 --> 00:01:50,040
Speaker 6: NATO allies.

35
00:01:50,840 --> 00:01:53,040
Speaker 8: Well, President Trump Joe at the moment says that he

36
00:01:53,080 --> 00:01:55,920
Speaker 8: doesn't have any punitive action in mind. But I will

37
00:01:55,920 --> 00:01:58,760
Speaker 8: say that our own analysts at Bloomberg Economics have pointed

38
00:01:58,800 --> 00:02:01,720
Speaker 8: out that our European allies in particular are in this

39
00:02:01,880 --> 00:02:04,920
Speaker 8: tough spot because they are constrained not just by politics

40
00:02:04,960 --> 00:02:07,920
Speaker 8: but also by capabilities. But there is this growing fear

41
00:02:07,960 --> 00:02:11,240
Speaker 8: among allies that the White House could disengage from the

42
00:02:11,280 --> 00:02:13,679
Speaker 8: war in Ukraine if they don't engage when it comes

43
00:02:13,720 --> 00:02:16,000
Speaker 8: to the conflict in Iran and President Trump, they are

44
00:02:16,040 --> 00:02:19,919
Speaker 8: bringing up Ukraine almost unprompted when he is talking about

45
00:02:19,919 --> 00:02:22,880
Speaker 8: what has been at this point a long strained relationship

46
00:02:22,960 --> 00:02:29,000
Speaker 8: between the US and traditional allies, particularly around spending in

47
00:02:29,120 --> 00:02:31,840
Speaker 8: the regions. And now it appears that President Trump is

48
00:02:31,840 --> 00:02:36,000
Speaker 8: actually abandoning his call for our allies to surge resources

49
00:02:36,240 --> 00:02:38,640
Speaker 8: to help secure the straight over moves, which is really

50
00:02:38,880 --> 00:02:41,320
Speaker 8: what this comes down to, with him telling reporters just

51
00:02:41,440 --> 00:02:44,080
Speaker 8: moments ago, quote, we don't need too much help, we

52
00:02:44,120 --> 00:02:48,040
Speaker 8: don't need any help at all. Actually, now, President Trump,

53
00:02:48,280 --> 00:02:51,600
Speaker 8: of course, was addressing what has appeared to be weariness

54
00:02:51,639 --> 00:02:53,720
Speaker 8: from our allies at best when it comes to his

55
00:02:53,760 --> 00:02:57,720
Speaker 8: demand for them to send naval escorts to help secure

56
00:02:57,760 --> 00:03:00,440
Speaker 8: the critical waterway. Take today, for example, we heard from

57
00:03:00,440 --> 00:03:03,359
Speaker 8: the French President mat Cron confirming that his country will

58
00:03:03,400 --> 00:03:05,960
Speaker 8: not send military assets to secure the Strait, but that

59
00:03:06,000 --> 00:03:09,160
Speaker 8: they stand ready at this point to help once the

60
00:03:09,240 --> 00:03:12,120
Speaker 8: situation gets a little bit calmer. Because Joe and Keiley,

61
00:03:12,160 --> 00:03:14,720
Speaker 8: we have now repeatedly heard from our allies that at

62
00:03:14,720 --> 00:03:17,800
Speaker 8: this point they're not a party to this conflict, and

63
00:03:17,800 --> 00:03:21,160
Speaker 8: that NATO is this defensive alliance. It is raising questions though,

64
00:03:21,160 --> 00:03:23,840
Speaker 8: after President Trump yesterday signaled that Secretary of State Mark

65
00:03:23,960 --> 00:03:28,160
Speaker 8: Arrubio could announce a coalition task with securing the straight

66
00:03:28,200 --> 00:03:30,880
Speaker 8: When asked directly which countries the US is currently talking

67
00:03:30,919 --> 00:03:32,840
Speaker 8: about with this, he sort of sides up the question,

68
00:03:32,919 --> 00:03:35,840
Speaker 8: but did highlight bilateral ties between the US and many,

69
00:03:36,160 --> 00:03:39,880
Speaker 8: many Middle Eastern countries currently embroiled in the conflict.

70
00:03:41,280 --> 00:03:44,160
Speaker 2: All right, Bloomberg's Tyler Kenthal live on the north lawn

71
00:03:44,320 --> 00:03:46,240
Speaker 2: of the White House. Thank you so much, and we

72
00:03:46,280 --> 00:03:48,200
Speaker 2: go to the other end of Pennsylvania. Now is joining

73
00:03:48,240 --> 00:03:51,560
Speaker 2: us live from Capitol Hill is Congressman Michael McCall of Texas, who,

74
00:03:51,560 --> 00:03:54,040
Speaker 2: of course is the chair emeritus of the House Foreign

75
00:03:54,040 --> 00:03:57,080
Speaker 2: Affairs Committee. Congressman, welcome back to Bloomberg TV and Radio.

76
00:03:57,120 --> 00:03:59,680
Speaker 2: It's good to have you, sir. I would love to

77
00:03:59,680 --> 00:04:02,200
Speaker 2: begin with your assessment as to whether or not you

78
00:04:02,280 --> 00:04:05,480
Speaker 2: believe that we need Allied help in the Middle East

79
00:04:05,680 --> 00:04:08,240
Speaker 2: with the Strait of Hormus right now, as the President contends,

80
00:04:08,240 --> 00:04:10,560
Speaker 2: we don't need anyone's help. If that is the case,

81
00:04:10,920 --> 00:04:12,800
Speaker 2: why is the strait not open for transit?

82
00:04:14,360 --> 00:04:16,960
Speaker 4: Well, we can do it alone. Kayleie. I was in

83
00:04:17,000 --> 00:04:18,040
Speaker 4: the White House yesterday.

84
00:04:18,080 --> 00:04:21,960
Speaker 9: But the President's point is we're always there for NATO,

85
00:04:22,040 --> 00:04:25,919
Speaker 9: We're always there for our European allies, and they should

86
00:04:25,960 --> 00:04:28,719
Speaker 9: be there in our time of need. But if I

87
00:04:28,720 --> 00:04:32,120
Speaker 9: could take that further with your business audience, Yeah, the

88
00:04:32,240 --> 00:04:36,960
Speaker 9: United States is a net gain producer of energy. It's

89
00:04:37,080 --> 00:04:40,839
Speaker 9: Europe that needs us probably more than we do. Certainly

90
00:04:40,920 --> 00:04:43,760
Speaker 9: China needs it a lot. I mean, their majority of

91
00:04:43,800 --> 00:04:48,520
Speaker 9: their oil comes from carg Island and from Iran. But

92
00:04:48,640 --> 00:04:54,240
Speaker 9: the Hormos Straits are being cleared currently by our military.

93
00:04:54,760 --> 00:04:57,960
Speaker 9: The sea mines, the drones are really the biggest problem

94
00:04:58,040 --> 00:05:02,360
Speaker 9: in the asymmetric warfare. I think in terms of cost sharing,

95
00:05:02,880 --> 00:05:07,160
Speaker 9: burden sharing in this conflict. It seems to me our

96
00:05:07,200 --> 00:05:09,960
Speaker 9: friends and allies, I'll be a part of this operation.

97
00:05:11,279 --> 00:05:11,440
Speaker 4: You know.

98
00:05:11,480 --> 00:05:15,120
Speaker 6: It's interesting, mister chairman, welcome back. It's good to see you.

99
00:05:14,880 --> 00:05:19,800
Speaker 6: You've been walking through modeling and possible scenarios like this,

100
00:05:19,920 --> 00:05:22,400
Speaker 6: I know, for a lot of years, and there are

101
00:05:22,440 --> 00:05:24,520
Speaker 6: a lot of questions about what the President should be

102
00:05:24,520 --> 00:05:27,679
Speaker 6: focused on. As he just said, we're resetting the meeting

103
00:05:27,680 --> 00:05:30,360
Speaker 6: with China. The word he used was reset. Looks like

104
00:05:30,440 --> 00:05:33,479
Speaker 6: it'll take place in about five weeks. Do you worry that,

105
00:05:33,520 --> 00:05:36,960
Speaker 6: whether it's South America, the Caribbean, Greenland, now Iran, that

106
00:05:37,000 --> 00:05:41,000
Speaker 6: the President isn't focused on the biggest threat to the

107
00:05:41,120 --> 00:05:44,040
Speaker 6: United States, which is China.

108
00:05:44,200 --> 00:05:46,960
Speaker 9: I think, and there's a valid point there when it

109
00:05:46,960 --> 00:05:51,960
Speaker 9: comes to our military resources, we are moving, like for instance,

110
00:05:52,000 --> 00:05:56,240
Speaker 9: to our dad defense system out of South Korea, moving

111
00:05:56,279 --> 00:05:59,280
Speaker 9: that to the Middle East. So I do have some

112
00:05:59,720 --> 00:06:03,560
Speaker 9: concerns along those lines. On the other hand, I think

113
00:06:03,640 --> 00:06:07,279
Speaker 9: if you look up from a geopolitical standpoint, the pressure

114
00:06:07,920 --> 00:06:11,000
Speaker 9: that's being put on on the countries that are so

115
00:06:11,160 --> 00:06:15,320
Speaker 9: dependent on Iranian oil, White China when they see a

116
00:06:15,440 --> 00:06:20,360
Speaker 9: free Venezuela an American companies controlling that, when they see

117
00:06:20,440 --> 00:06:25,680
Speaker 9: Cuba on the horizon, when they see their adversary alliances

118
00:06:26,040 --> 00:06:30,520
Speaker 9: you know, China, Russia, run North Korea, Venezuela, Cuba, all

119
00:06:30,520 --> 00:06:34,600
Speaker 9: in this together that is now being impacted by energy

120
00:06:35,120 --> 00:06:37,760
Speaker 9: and so I think going into these talks to answer

121
00:06:37,760 --> 00:06:42,279
Speaker 9: your question, Joe, is that you know Cali Sarrice once

122
00:06:42,320 --> 00:06:44,120
Speaker 9: told me, you want everybody Toalaika.

123
00:06:44,640 --> 00:06:45,800
Speaker 4: They're not always going to do that.

124
00:06:45,839 --> 00:06:49,040
Speaker 9: You wanted to respect you, and if they don't respect you,

125
00:06:49,040 --> 00:06:51,920
Speaker 9: you want them to fear you. That is something that

126
00:06:52,000 --> 00:06:56,560
Speaker 9: President Trump carries very greatly into these these talks. There's

127
00:06:56,600 --> 00:06:59,880
Speaker 9: no question that the dictators in the world today were

128
00:06:59,880 --> 00:07:05,000
Speaker 9: the Putin or Chairman She or the Iatola the new one.

129
00:07:05,080 --> 00:07:11,640
Speaker 9: Now have great fear about President Trump because he is unpredictable.

130
00:07:12,200 --> 00:07:16,080
Speaker 9: He will negotiate, but if you don't negotiate in good faith,

131
00:07:16,440 --> 00:07:17,800
Speaker 9: there will be consequences.

132
00:07:19,360 --> 00:07:21,679
Speaker 2: Well, let's talk about one of those dictators you just mentioned.

133
00:07:21,680 --> 00:07:24,800
Speaker 2: For Vladimir Putin and for Russia, has President Trump actually

134
00:07:24,840 --> 00:07:28,000
Speaker 2: handed you an incredible gift with the relief of sanctions

135
00:07:28,000 --> 00:07:29,200
Speaker 2: and higher oil prices.

136
00:07:32,080 --> 00:07:36,920
Speaker 9: I disagree with that action personally. I have a sanctions

137
00:07:36,960 --> 00:07:41,440
Speaker 9: bill ready to go with Lindsay Graham. Once we get

138
00:07:41,560 --> 00:07:44,120
Speaker 9: the nod, you know that it's time to do it.

139
00:07:44,880 --> 00:07:49,760
Speaker 9: This is a setback for that legislation because we've lifted

140
00:07:50,320 --> 00:07:51,360
Speaker 9: sanctions on Russia.

141
00:07:51,440 --> 00:07:54,239
Speaker 4: Why am I against that? For this point?

142
00:07:54,600 --> 00:08:00,280
Speaker 9: Primarily Putin and Russia are providing the Iranian regime with

143
00:08:00,440 --> 00:08:05,240
Speaker 9: military intelligence to take out American targets and kill Americans.

144
00:08:05,960 --> 00:08:08,560
Speaker 9: Why in the world will we be rewarding that kind

145
00:08:08,560 --> 00:08:14,480
Speaker 9: of behavior by lifting sanctions for temporary decrease in gas prices.

146
00:08:14,520 --> 00:08:17,040
Speaker 9: We can do that by other means, I think we

147
00:08:17,120 --> 00:08:20,960
Speaker 9: need to put more pressure on Russia, not less. And

148
00:08:21,000 --> 00:08:25,560
Speaker 9: these sha Had drones, by the way that Iran had

149
00:08:25,560 --> 00:08:29,960
Speaker 9: been threatening our American truths with we're basically given to Russia,

150
00:08:30,600 --> 00:08:34,120
Speaker 9: have been co produced in Russia now with the Iranians,

151
00:08:34,559 --> 00:08:39,000
Speaker 9: and now are being used to kill Americans. So it

152
00:08:39,280 --> 00:08:43,520
Speaker 9: just who's your friend and who's your enemy. Russia is

153
00:08:43,559 --> 00:08:47,040
Speaker 9: not our friend. They are an adversary. They always have been,

154
00:08:47,720 --> 00:08:49,520
Speaker 9: and I don't think we have to be letting up

155
00:08:49,520 --> 00:08:50,959
Speaker 9: pressure on them right now.

156
00:08:51,840 --> 00:08:54,120
Speaker 6: To that ending, you worry that the President might condition

157
00:08:54,200 --> 00:08:57,480
Speaker 6: our support for Ukraine based on the way NATO behaves

158
00:08:57,480 --> 00:08:58,320
Speaker 6: with Iran.

159
00:09:00,559 --> 00:09:05,160
Speaker 9: To some extent, and let's not forget Ukraine volunteered its

160
00:09:05,200 --> 00:09:09,360
Speaker 9: expertise to deal with this asymmetric warfare with the drones.

161
00:09:10,040 --> 00:09:13,440
Speaker 9: They have the best capability in some respects better than

162
00:09:13,480 --> 00:09:13,720
Speaker 9: we do.

163
00:09:14,200 --> 00:09:16,160
Speaker 4: Think about this, we pay millions.

164
00:09:15,840 --> 00:09:19,080
Speaker 9: Of dollars for an interceptor to take out a two

165
00:09:19,120 --> 00:09:24,120
Speaker 9: thousand dollars drone. Ukraine for four years now have developed

166
00:09:24,240 --> 00:09:29,120
Speaker 9: very innovative technology to counter the Shahad drones in a

167
00:09:29,240 --> 00:09:34,400
Speaker 9: very effective but also very cost effective way. I applaud

168
00:09:34,400 --> 00:09:36,920
Speaker 9: in Ukraine for helping the United States out, and I

169
00:09:36,920 --> 00:09:41,320
Speaker 9: think the United States should reward that behavior, not to

170
00:09:41,480 --> 00:09:42,560
Speaker 9: punish that behavior.

171
00:09:45,000 --> 00:09:47,559
Speaker 2: Mister Sherman, I'm sure you've seen the news today that

172
00:09:47,640 --> 00:09:50,400
Speaker 2: Joe Ken has resigned as the head of counter terrorism

173
00:09:50,400 --> 00:09:53,880
Speaker 2: at the DNI under Tulci Gabbard, and in his resignation

174
00:09:54,040 --> 00:09:56,840
Speaker 2: he in part suggested that there was no eminent threat

175
00:09:56,880 --> 00:09:59,480
Speaker 2: posed to the United States by Iran. I wonder if

176
00:09:59,520 --> 00:10:02,600
Speaker 2: the brief is that you have received would dispute that

177
00:10:02,679 --> 00:10:05,040
Speaker 2: and what you make specifically of him pointing the finger

178
00:10:05,080 --> 00:10:09,800
Speaker 2: at Israel, suggesting it was Israel that made President Trump.

179
00:10:09,520 --> 00:10:10,199
Speaker 3: Take this action.

180
00:10:11,559 --> 00:10:13,840
Speaker 9: Well, I think this was a bad appointment the National

181
00:10:13,960 --> 00:10:17,160
Speaker 9: counter Terrorism Center. I mean, if anyone should understand the

182
00:10:17,160 --> 00:10:20,680
Speaker 9: threat level now, the fact that they've tried to assassinate

183
00:10:20,679 --> 00:10:25,120
Speaker 9: the president, Mike Pompeo's an indictment. I'm aner indictment in

184
00:10:25,160 --> 00:10:30,120
Speaker 9: Iran because of Solomony. There are sleeper cells here. I

185
00:10:30,160 --> 00:10:33,840
Speaker 9: think he was part of this wing in my party

186
00:10:34,280 --> 00:10:40,880
Speaker 9: that's isolationist, that's becoming increasingly sort of anti Israel, if

187
00:10:40,880 --> 00:10:45,400
Speaker 9: you will, and I disagree with it, and I'm frankly

188
00:10:45,679 --> 00:10:50,679
Speaker 9: it's time for a new leader. INTC n CTC and

189
00:10:50,720 --> 00:10:53,320
Speaker 9: I look forward to that. So you know, I disagree

190
00:10:53,360 --> 00:10:56,360
Speaker 9: with his assertions. I think the threat level, given the

191
00:10:56,400 --> 00:11:00,240
Speaker 9: conflict in Iran right now, is on high alerts. You've

192
00:11:00,240 --> 00:11:03,360
Speaker 9: seen demonstrate with the last four attacks, one in my

193
00:11:03,440 --> 00:11:07,960
Speaker 9: hometown of Austin, one with a Boston bombing type style

194
00:11:08,640 --> 00:11:12,920
Speaker 9: attempt in New York of Virginia in a classroom, and

195
00:11:12,960 --> 00:11:15,120
Speaker 9: then in a synagogue, and I.

196
00:11:15,040 --> 00:11:16,640
Speaker 4: Think you're going to see more of these.

197
00:11:17,400 --> 00:11:19,920
Speaker 9: So for the guy who's supposed to be connecting all

198
00:11:19,960 --> 00:11:23,480
Speaker 9: the dots to say that there was no imminent threat,

199
00:11:24,320 --> 00:11:27,440
Speaker 9: I would respond to him, There's been an imminent threat

200
00:11:27,440 --> 00:11:31,600
Speaker 9: since nineteen seventy nine, when the iotol took over Iran

201
00:11:32,320 --> 00:11:35,840
Speaker 9: in a dark veil of terror, descended on the Middle East,

202
00:11:36,600 --> 00:11:40,839
Speaker 9: spreading terror through its proxies for almost fifty years. I

203
00:11:40,920 --> 00:11:44,320
Speaker 9: think it's high time that I applaud the President for

204
00:11:44,400 --> 00:11:47,960
Speaker 9: this very difficult decision, because no other president's done it

205
00:11:48,640 --> 00:11:49,680
Speaker 9: since President Trump.

206
00:11:51,080 --> 00:11:53,080
Speaker 6: Jerem McCall, we've got to ask you about q But

207
00:11:53,120 --> 00:11:57,400
Speaker 6: while we have you in our remaining question, there's a

208
00:11:57,520 --> 00:12:01,319
Speaker 6: nationwide blackout and it looks like a that's about to fall.

209
00:12:01,400 --> 00:12:04,400
Speaker 6: The President says, I do believe I will be having

210
00:12:04,480 --> 00:12:07,040
Speaker 6: the honor of taking Cuba. That's a direct quote. I

211
00:12:07,120 --> 00:12:09,760
Speaker 6: think I can do anything I want with it. As

212
00:12:09,800 --> 00:12:12,480
Speaker 6: remarkable as that rhetoric is, what should he do with it?

213
00:12:14,480 --> 00:12:16,800
Speaker 9: Well, you know, the president only speaks a very bold,

214
00:12:17,440 --> 00:12:19,920
Speaker 9: you know turns, But I think what he's saying is

215
00:12:20,880 --> 00:12:24,520
Speaker 9: there are winds of change in the air. There are

216
00:12:24,520 --> 00:12:28,840
Speaker 9: winds of freedom. After Venezuela fell, the people in Iran

217
00:12:29,160 --> 00:12:32,160
Speaker 9: rose up to the Iola, and the people in Cuba

218
00:12:32,400 --> 00:12:38,559
Speaker 9: have attacked the Communist Party's headquarters in Cuba. We have

219
00:12:38,640 --> 00:12:42,520
Speaker 9: another opportunity, I think with Cuba for freedom, you know,

220
00:12:42,600 --> 00:12:46,080
Speaker 9: and democracy that we haven't seen in a long time.

221
00:12:46,120 --> 00:12:48,680
Speaker 9: You know, John Kennedy had the Bay of Pigs operation

222
00:12:49,400 --> 00:12:54,079
Speaker 9: that failed miserably. I don't see a military style invasion,

223
00:12:54,120 --> 00:12:57,960
Speaker 9: but rather, as we talked about the global markets of energy,

224
00:12:58,360 --> 00:13:01,560
Speaker 9: Cuba now is being cut off of their energy supply

225
00:13:01,679 --> 00:13:07,280
Speaker 9: from Venezuela and Mexico and now importantly Aron, So their

226
00:13:07,360 --> 00:13:12,600
Speaker 9: economy now, I believe, is going to be decimated, and

227
00:13:12,640 --> 00:13:15,680
Speaker 9: we'll provide the ingredients are going to be right for

228
00:13:16,120 --> 00:13:20,920
Speaker 9: a revolution and an overthrow of that communist dictatorship. That

229
00:13:20,920 --> 00:13:26,680
Speaker 9: could be another yet hugely profound and historic geopolitical moment.

230
00:13:27,920 --> 00:13:31,440
Speaker 6: Wow, really important conversation with Michael McCall, congressman of course

231
00:13:31,440 --> 00:13:35,080
Speaker 6: Republican from Texas, but also Chair Emeritus of the House

232
00:13:35,080 --> 00:13:39,080
Speaker 6: Foreign Affairs Committee. Mister Chair, thank you so much. Really interesting, Kaylee,

233
00:13:39,160 --> 00:13:40,480
Speaker 6: what we learned there. We want to play this to

234
00:13:40,480 --> 00:13:43,520
Speaker 6: the panel now. Bloomberg Politics contributors Genie Schanzano and Rick

235
00:13:43,600 --> 00:13:46,400
Speaker 6: Davis are back with us. Rick as our Republican strategist

236
00:13:46,480 --> 00:13:49,800
Speaker 6: partner at Stone Core Capital, Genius Democracy visiting fellow at

237
00:13:49,800 --> 00:13:55,880
Speaker 6: Harvard Kennedy School's Ash Center, and again a Bloomberg Politics contributor, Rick,

238
00:13:55,920 --> 00:13:58,360
Speaker 6: what did you think about that? I want to talk

239
00:13:58,400 --> 00:14:01,120
Speaker 6: about Iran, but I have to ask about what the

240
00:14:01,240 --> 00:14:04,360
Speaker 6: chair just said about Cuba. Can we do better than

241
00:14:04,400 --> 00:14:05,560
Speaker 6: the Bay of Pigs this time?

242
00:14:05,679 --> 00:14:05,839
Speaker 7: Rick?

243
00:14:07,040 --> 00:14:09,720
Speaker 10: Yeah, Well, it's nice to see someone on Capitol Hill

244
00:14:09,880 --> 00:14:12,320
Speaker 10: giving us a little straight talk about these issues that

245
00:14:12,400 --> 00:14:13,719
Speaker 10: you just fired off at him.

246
00:14:13,760 --> 00:14:15,480
Speaker 7: I thought it was a terrific interview.

247
00:14:16,160 --> 00:14:20,680
Speaker 10: Look, I mean, Cuba's economy has been decimated for decades,

248
00:14:21,160 --> 00:14:24,320
Speaker 10: and what we have done by cutting off the supply

249
00:14:24,360 --> 00:14:30,640
Speaker 10: of oil from these competitors in the region is just

250
00:14:30,720 --> 00:14:33,200
Speaker 10: to you know, put it over the brink. The reality

251
00:14:33,320 --> 00:14:39,000
Speaker 10: is it was an unsustainable political system for a long

252
00:14:39,080 --> 00:14:41,920
Speaker 10: long time, and it's now collapsing on its own weight.

253
00:14:42,280 --> 00:14:46,600
Speaker 10: My hope is that exactly what Congressman McCall said. The

254
00:14:46,960 --> 00:14:51,040
Speaker 10: people of Cuba say, we've had enough. They've been protests

255
00:14:51,040 --> 00:14:53,600
Speaker 10: in the past and have been put down by military

256
00:14:53,640 --> 00:14:57,240
Speaker 10: strong arming, and it's about time that all that becomes

257
00:14:57,280 --> 00:15:00,680
Speaker 10: of reckoning. I actually applaud Donald trump efforts to try

258
00:15:00,720 --> 00:15:04,040
Speaker 10: and get the current government to step down. A bloodless coup,

259
00:15:04,080 --> 00:15:06,320
Speaker 10: in essence, would be probably the best thing that could

260
00:15:06,360 --> 00:15:07,800
Speaker 10: happen for the Cuban people.

261
00:15:09,480 --> 00:15:11,720
Speaker 2: All right, Rick Davis and Jeanie Shanzeno are going to

262
00:15:11,760 --> 00:15:13,360
Speaker 2: be sticking with us. We'll hear from Genie in just

263
00:15:13,400 --> 00:15:15,600
Speaker 2: a moment as we continue on here on balance of power,

264
00:15:15,640 --> 00:15:17,880
Speaker 2: focusing not just on Cuba, but of course the ongoing

265
00:15:17,920 --> 00:15:18,800
Speaker 2: conflict with Iran.

266
00:15:18,880 --> 00:15:19,680
Speaker 3: Now on Day.

267
00:15:19,960 --> 00:15:23,280
Speaker 2: Eighteen, we'll have more on that up ahead when Alan Goldenberg,

268
00:15:23,360 --> 00:15:26,360
Speaker 2: the senior Vice president and chief policy officer at J Street,

269
00:15:26,440 --> 00:15:29,360
Speaker 2: joins us as to where this conflict goes next. Keeping

270
00:15:29,360 --> 00:15:31,240
Speaker 2: in mind, President Trump did say at the White House

271
00:15:31,240 --> 00:15:32,840
Speaker 2: that we're not ready to get out yet, but he

272
00:15:32,920 --> 00:15:34,680
Speaker 2: suggested getting out could be soon.

273
00:15:34,960 --> 00:15:37,120
Speaker 6: Stay with us on Balance of Power. We'll have much

274
00:15:37,160 --> 00:15:38,320
Speaker 6: more coming up after this.

275
00:15:42,600 --> 00:15:46,240
Speaker 1: You're listening to the Bloomberg Balance of Power podcast catches

276
00:15:46,280 --> 00:15:49,600
Speaker 1: live weekdays at noon and five pm Eastern on Apple

277
00:15:49,640 --> 00:15:52,680
Speaker 1: Cocklay and Android Otto with the Bloomberg Business App. You

278
00:15:52,720 --> 00:15:56,160
Speaker 1: can also listen live on Amazon Alexa from our flagship

279
00:15:56,240 --> 00:16:00,000
Speaker 1: New York station, Just Say Alexa played Bloomberg eleven.

280
00:16:01,440 --> 00:16:03,160
Speaker 2: Checking on the markets for US, and of course checking

281
00:16:03,200 --> 00:16:05,480
Speaker 2: on oil. As we see Brent crude above triple digits,

282
00:16:05,480 --> 00:16:09,040
Speaker 2: above one hundred dollars, a barrel again could close at

283
00:16:09,040 --> 00:16:10,760
Speaker 2: that level for the fourth day in a row. We

284
00:16:10,760 --> 00:16:12,640
Speaker 2: haven't seen a streak like that in some time. As

285
00:16:12,680 --> 00:16:14,440
Speaker 2: we consider that the straight of hour Mews is still

286
00:16:14,440 --> 00:16:17,400
Speaker 2: effectively shut to transit, including for energy flows. Despite the

287
00:16:17,400 --> 00:16:19,920
Speaker 2: efforts of President Trump to try to get allies and

288
00:16:19,960 --> 00:16:23,480
Speaker 2: even some adversaries alike on side to build a coalition

289
00:16:23,560 --> 00:16:25,920
Speaker 2: to reopen the Strait of hor Mews, he obviously expressed

290
00:16:25,920 --> 00:16:30,000
Speaker 2: great displeasure both yesterday and today with NATO allies specifically

291
00:16:30,000 --> 00:16:32,080
Speaker 2: who have not agreed to do so. And as we

292
00:16:32,080 --> 00:16:34,760
Speaker 2: consider the situation in the Strait in this war with

293
00:16:34,800 --> 00:16:37,480
Speaker 2: Iran more broadly as we are now on Day eighteen,

294
00:16:37,560 --> 00:16:41,120
Speaker 2: we turn to Elon Goldenberg, who is Senior vice president

295
00:16:41,160 --> 00:16:43,840
Speaker 2: and Chief Policy Officer at J Street. He also served

296
00:16:44,040 --> 00:16:46,640
Speaker 2: as an advisor as special advisor to Vice President Kamala

297
00:16:46,640 --> 00:16:49,480
Speaker 2: Harris on the Middle East in the early months of

298
00:16:49,520 --> 00:16:52,000
Speaker 2: the war between Israel and Gaza and the aftermath of

299
00:16:52,040 --> 00:16:55,600
Speaker 2: October seventh. Welcome Elon to Bloomberg TV and Radio. It's

300
00:16:55,600 --> 00:16:58,280
Speaker 2: great to have you, and I was struck yesterday, specifically

301
00:16:58,360 --> 00:17:02,000
Speaker 2: by a post on X that you made basically with

302
00:17:02,040 --> 00:17:05,080
Speaker 2: your observations of this war now nearly three weeks in,

303
00:17:05,160 --> 00:17:08,880
Speaker 2: including your suggestion that the options for ending it are

304
00:17:08,960 --> 00:17:12,159
Speaker 2: now all bad. But I was especially struck with the

305
00:17:12,160 --> 00:17:15,080
Speaker 2: fact that you years ago said, convened a group of

306
00:17:15,080 --> 00:17:17,359
Speaker 2: and this is I'm using your words here, security, energy,

307
00:17:17,400 --> 00:17:19,960
Speaker 2: and economic experts to walk through the scenarios for US

308
00:17:20,040 --> 00:17:23,359
Speaker 2: Oaron war and the implications for global oil prices. You

309
00:17:23,400 --> 00:17:25,399
Speaker 2: said what we're seeing now was considered one of the

310
00:17:25,520 --> 00:17:29,760
Speaker 2: least likely but worst outcomes. Do you think this administration

311
00:17:29,920 --> 00:17:30,680
Speaker 2: was prepared for it?

312
00:17:30,720 --> 00:17:31,680
Speaker 3: And what do they do now?

313
00:17:33,040 --> 00:17:33,280
Speaker 4: Yeah?

314
00:17:33,320 --> 00:17:35,240
Speaker 11: I don't think they were. And thanks for having me

315
00:17:36,240 --> 00:17:38,679
Speaker 11: with the scenario that we ran looked at kind of

316
00:17:38,800 --> 00:17:42,600
Speaker 11: small level war, mid level war, or something really significant,

317
00:17:42,640 --> 00:17:46,879
Speaker 11: and the conclusion was, only when you really threaten the

318
00:17:46,880 --> 00:17:50,600
Speaker 11: Iranian regime with regime change and really make it existential

319
00:17:50,640 --> 00:17:52,879
Speaker 11: for them, are they going to start doing things like

320
00:17:52,920 --> 00:17:54,760
Speaker 11: shutting down the Strait of Horror moves. They want to

321
00:17:54,760 --> 00:17:56,840
Speaker 11: wait out of it. They didn't really want a direct

322
00:17:56,880 --> 00:17:59,960
Speaker 11: fight with the United States because we are much bigger,

323
00:18:00,040 --> 00:18:01,920
Speaker 11: we are much stronger. At the end of the day,

324
00:18:02,200 --> 00:18:03,840
Speaker 11: things will be worse off for them than they are

325
00:18:03,920 --> 00:18:06,920
Speaker 11: for us. But if you push them into a corner

326
00:18:06,960 --> 00:18:08,840
Speaker 11: and give them no options, this is where they go.

327
00:18:09,240 --> 00:18:11,520
Speaker 11: And the challenge we have specifically with the Strait of

328
00:18:11,560 --> 00:18:16,440
Speaker 11: Hormuz is it's a very small area right next to Iran,

329
00:18:16,880 --> 00:18:19,920
Speaker 11: so it's very easy for them to disrupt it. All

330
00:18:20,000 --> 00:18:23,159
Speaker 11: they have to do to successfully disrupt shipping is have

331
00:18:23,600 --> 00:18:25,720
Speaker 11: a small boat going there every once in a while,

332
00:18:25,840 --> 00:18:29,720
Speaker 11: drop a mine, have fly a UAV in and hit

333
00:18:29,760 --> 00:18:32,000
Speaker 11: a ship. All you need is a couple of ships

334
00:18:32,000 --> 00:18:35,800
Speaker 11: to explode, and suddenly nobody is pushing anything through the strait,

335
00:18:35,840 --> 00:18:37,800
Speaker 11: and you're talking about millions of arrows of oil who

336
00:18:37,800 --> 00:18:40,240
Speaker 11: aren't getting through. I actually think the one thing about

337
00:18:40,240 --> 00:18:44,080
Speaker 11: this scenario that nobody really expected is one of the

338
00:18:44,080 --> 00:18:46,480
Speaker 11: other reasons people thought it was unlikely Iron would close

339
00:18:46,480 --> 00:18:48,920
Speaker 11: the strait is that's how Roan gets all of its

340
00:18:48,960 --> 00:18:51,680
Speaker 11: oil out. But it's been kind of crazy about this scenario,

341
00:18:51,760 --> 00:18:54,639
Speaker 11: and people didn't anticipate is they're still pushing their oil out.

342
00:18:54,680 --> 00:18:56,400
Speaker 11: They're just not letting anybody else push.

343
00:18:56,160 --> 00:18:59,159
Speaker 7: Their oil through. That's right. We see that they have

344
00:18:59,240 --> 00:18:59,840
Speaker 7: in fact to do.

345
00:19:00,000 --> 00:19:01,960
Speaker 6: I've been doing a little traffic control in the straight

346
00:19:02,240 --> 00:19:07,600
Speaker 6: elon the head of the International Maritime Organization Our Sineo Domingez,

347
00:19:07,680 --> 00:19:12,240
Speaker 6: was speaking to the Financial Times and said military assistance

348
00:19:12,359 --> 00:19:15,680
Speaker 6: is not a long term or sustainable solution to open

349
00:19:15,800 --> 00:19:18,719
Speaker 6: up the strait. Do you believe that diplomacy is the

350
00:19:18,720 --> 00:19:20,600
Speaker 6: only way to keep it open or should our NATO

351
00:19:20,640 --> 00:19:22,360
Speaker 6: allies be showing up to help us out.

352
00:19:24,359 --> 00:19:26,159
Speaker 11: I think at the end of the day, you're going

353
00:19:26,240 --> 00:19:30,399
Speaker 11: to need a deal. You can have short term military

354
00:19:30,520 --> 00:19:33,760
Speaker 11: escorts going through the strait and get more ships in,

355
00:19:34,800 --> 00:19:38,879
Speaker 11: but the problem is that takes a huge amount of

356
00:19:39,000 --> 00:19:43,639
Speaker 11: ships to actually be able to do something like that

357
00:19:43,680 --> 00:19:46,320
Speaker 11: for a sustained period of time. You know, our NATO

358
00:19:46,359 --> 00:19:48,399
Speaker 11: allies don't have that many ships that are capable of

359
00:19:48,400 --> 00:19:50,679
Speaker 11: doing that. We don't have that many ships that are

360
00:19:50,680 --> 00:19:53,080
Speaker 11: capable of doing that because ships go out for a

361
00:19:53,080 --> 00:19:55,000
Speaker 11: couple months at a time. On top of that, then

362
00:19:55,040 --> 00:19:58,679
Speaker 11: they have to try transport back home. Then you have

363
00:19:58,720 --> 00:20:01,920
Speaker 11: to spend time at home. Already seeing this, if you've

364
00:20:01,960 --> 00:20:05,199
Speaker 11: seen stories about the Ford, which is an aircraft carrier

365
00:20:05,240 --> 00:20:07,000
Speaker 11: that's going to be at sea for almost a year

366
00:20:07,080 --> 00:20:09,880
Speaker 11: now and things are starting to break down, shifts need

367
00:20:09,920 --> 00:20:14,440
Speaker 11: time at home, and so I think that becomes very expensive,

368
00:20:14,560 --> 00:20:17,240
Speaker 11: very fast when you're also looking at things like a

369
00:20:17,320 --> 00:20:21,240
Speaker 11: scenario of China and Taiwan and trying to secure the

370
00:20:21,240 --> 00:20:22,520
Speaker 11: Indo Pacific.

371
00:20:22,480 --> 00:20:22,679
Speaker 8: You know.

372
00:20:24,680 --> 00:20:26,520
Speaker 3: So, yeah, it's.

373
00:20:27,680 --> 00:20:30,080
Speaker 2: No, it's incredible to see the military presence that we

374
00:20:30,240 --> 00:20:33,639
Speaker 2: have built up, despite of course President Trump suggesting that

375
00:20:33,680 --> 00:20:35,920
Speaker 2: he didn't want to start any new conflicts in the

376
00:20:35,960 --> 00:20:38,680
Speaker 2: Middle East specifically, and it was for that reason perhaps

377
00:20:39,000 --> 00:20:40,600
Speaker 2: or at least in part, that the director of the

378
00:20:40,680 --> 00:20:44,240
Speaker 2: National counter Terrorism Center, Joe Kent, handed in his resignation

379
00:20:44,359 --> 00:20:46,679
Speaker 2: today saying he cannot support this war in Iran. But

380
00:20:46,720 --> 00:20:49,639
Speaker 2: his reasoning here, and I'll quote him directly from his

381
00:20:49,760 --> 00:20:52,280
Speaker 2: post on x Iran post no imminent threat to our nation,

382
00:20:52,560 --> 00:20:54,680
Speaker 2: and it is clear that we started this war due

383
00:20:54,720 --> 00:20:59,200
Speaker 2: to pressure from Israel and it's powerful American lobby. Now

384
00:20:59,600 --> 00:21:02,200
Speaker 2: Elon obviously we've seen even the Secretary of State Mark

385
00:21:02,240 --> 00:21:05,200
Speaker 2: or Rubio suggests that it was clear to the US

386
00:21:05,200 --> 00:21:07,080
Speaker 2: that Israel was going to make a move on Iran

387
00:21:07,920 --> 00:21:10,040
Speaker 2: and that the US was going to have to participate.

388
00:21:10,080 --> 00:21:12,600
Speaker 2: I wonder your assessment here to what extent Israel did

389
00:21:12,640 --> 00:21:15,040
Speaker 2: force the hint of the United States when President Trump

390
00:21:15,040 --> 00:21:18,359
Speaker 2: has suggested it was he that forced Israel's Now.

391
00:21:18,240 --> 00:21:20,399
Speaker 11: The bug stops with the President of the United States.

392
00:21:20,440 --> 00:21:23,800
Speaker 11: When the President of the United States puts American troops

393
00:21:23,800 --> 00:21:27,240
Speaker 11: in harm's way, he is the one who's responsible for that.

394
00:21:27,480 --> 00:21:27,679
Speaker 7: You know.

395
00:21:27,960 --> 00:21:31,040
Speaker 11: You know, Nitaille wanted to conduct strikes on Iran during

396
00:21:31,080 --> 00:21:36,320
Speaker 11: Biden's presidency, during Obama's presidency, even like the previous Israeli

397
00:21:36,320 --> 00:21:39,040
Speaker 11: Prime minister pushed for it in Bush's presidency, and US

398
00:21:39,119 --> 00:21:42,760
Speaker 11: presidents said no and Donald Trump said yes. So I

399
00:21:42,760 --> 00:21:46,520
Speaker 11: think really the responsibility has to be ultimately on Donald

400
00:21:46,560 --> 00:21:48,480
Speaker 11: Trump in the United States. And the other thing about

401
00:21:48,480 --> 00:21:54,080
Speaker 11: this is I actually think specifically Kent, Joe Kent's statement

402
00:21:54,160 --> 00:21:57,359
Speaker 11: in his letter actually started to border on kind of

403
00:21:57,400 --> 00:22:00,359
Speaker 11: anti Semitic tropes when he's talking about, you know, the

404
00:22:01,320 --> 00:22:05,680
Speaker 11: media influence and you know, Israel tricked Donald Trump into

405
00:22:05,720 --> 00:22:09,320
Speaker 11: this war and Israel caused the Iraq War. That's some

406
00:22:09,359 --> 00:22:13,320
Speaker 11: conspiracy level theory level stuff. And look, I work for

407
00:22:13,359 --> 00:22:20,280
Speaker 11: an organization that pushes for a complex nuance conversation about Israel.

408
00:22:20,600 --> 00:22:24,040
Speaker 11: We don't need to just be supporting Israel no matter

409
00:22:24,080 --> 00:22:26,680
Speaker 11: what blindly. We can have disagreements, we can have real

410
00:22:26,680 --> 00:22:29,680
Speaker 11: discussions about policy. But for me, Kent went too far,

411
00:22:30,280 --> 00:22:32,240
Speaker 11: way too far, even if I agree with him on

412
00:22:32,280 --> 00:22:34,199
Speaker 11: the fact that the war was a bad idea and

413
00:22:34,440 --> 00:22:38,879
Speaker 11: in blaming this on israelis when really ultimately it's up

414
00:22:38,880 --> 00:22:40,920
Speaker 11: to the president of the United States.

415
00:22:40,960 --> 00:22:41,440
Speaker 7: Interesting.

416
00:22:41,600 --> 00:22:44,760
Speaker 6: Just lastly, with all of that said, Elon, we're looking

417
00:22:44,760 --> 00:22:48,080
Speaker 6: at a massive investment twenty one million dollars that APAK

418
00:22:48,160 --> 00:22:52,159
Speaker 6: has spent in four open Illinois congressional races.

419
00:22:52,200 --> 00:22:53,440
Speaker 7: This is primary day.

420
00:22:54,080 --> 00:22:57,040
Speaker 6: It looks like APAK could see only one of the

421
00:22:57,119 --> 00:23:00,680
Speaker 6: four turning to its favor as it tries to install

422
00:23:01,160 --> 00:23:06,040
Speaker 6: a group of pro Israel Democrats in blue seats in

423
00:23:06,080 --> 00:23:07,360
Speaker 6: this case in Illinois.

424
00:23:07,440 --> 00:23:08,480
Speaker 7: How important is that.

425
00:23:08,400 --> 00:23:10,480
Speaker 6: Investment and how concerned will you be if they don't

426
00:23:10,480 --> 00:23:10,920
Speaker 6: pay off.

427
00:23:12,560 --> 00:23:15,359
Speaker 11: Look, I'm the organization I work for at j Street

428
00:23:15,440 --> 00:23:18,359
Speaker 11: is pretty much opposed to what APAK is doing completely.

429
00:23:18,400 --> 00:23:20,280
Speaker 3: We are, you know, very much.

430
00:23:20,600 --> 00:23:22,800
Speaker 11: You know, we are one of the candidates that APAC

431
00:23:22,880 --> 00:23:27,280
Speaker 11: went after, the grandson of Holocaust survivors in you know,

432
00:23:27,359 --> 00:23:30,679
Speaker 11: running in Illinois, who deeply loves Israel as I do,

433
00:23:31,040 --> 00:23:33,560
Speaker 11: and is also critical of the Nittanyau government. This is

434
00:23:33,600 --> 00:23:36,680
Speaker 11: the problem. What APAC has done is they have defined

435
00:23:36,800 --> 00:23:40,400
Speaker 11: pro Israel as pro Nintaiau. And it's been very clear

436
00:23:40,400 --> 00:23:43,040
Speaker 11: from the way Nintanialu has conducted this war in Gaza,

437
00:23:43,840 --> 00:23:46,080
Speaker 11: the way he has behaved in terms of intervening in

438
00:23:46,119 --> 00:23:49,320
Speaker 11: American politics, that there's no love for ninittanial who's incredibly

439
00:23:49,440 --> 00:23:53,600
Speaker 11: unpopular among American Jews and among you know, American voters.

440
00:23:54,080 --> 00:23:57,560
Speaker 11: And so if definition of supporting Israel is supporting Natanyau,

441
00:23:58,200 --> 00:24:00,600
Speaker 11: that's a that's a doubt, that's a that's a terrible

442
00:24:00,680 --> 00:24:03,959
Speaker 11: narrow definition. That's not where seventy percent of American Jews are.

443
00:24:03,960 --> 00:24:06,719
Speaker 11: And that's why Jay Street exists to make the alternative

444
00:24:06,760 --> 00:24:11,080
Speaker 11: case you can be pro Israel and critical of Israeli policies,

445
00:24:11,520 --> 00:24:14,199
Speaker 11: just like you can be pro America and critical of

446
00:24:14,240 --> 00:24:16,200
Speaker 11: Donald Trump's policies. Those aren't the same thing.

447
00:24:16,280 --> 00:24:20,520
Speaker 6: Yeah, Elon, thank you. We appreciate the conversation. Elon Goldenberg,

448
00:24:20,640 --> 00:24:23,160
Speaker 6: j Street, he is chief policy officer. Thanks for joining

449
00:24:23,240 --> 00:24:25,600
Speaker 6: us on Bloomberg as we play it to the panel. Now,

450
00:24:25,600 --> 00:24:29,120
Speaker 6: Bloomberg Politics contributors Genie Shanzo and Rick Davis are back

451
00:24:29,160 --> 00:24:32,680
Speaker 6: with us. Genie, I'm not sure your thoughts on this,

452
00:24:32,760 --> 00:24:34,919
Speaker 6: because we could take this in a lot of different

453
00:24:34,920 --> 00:24:37,240
Speaker 6: directions here, But now that it is primary day and

454
00:24:37,280 --> 00:24:39,879
Speaker 6: you have a spend on this level from Apak, what

455
00:24:39,880 --> 00:24:43,800
Speaker 6: do you make of Elon's response there?

456
00:24:43,840 --> 00:24:46,760
Speaker 7: From Jay Street, I.

457
00:24:46,680 --> 00:24:48,960
Speaker 12: Think he's underscoring what a lot of people have been

458
00:24:49,000 --> 00:24:52,080
Speaker 12: talking about. There was this fascinating piece and punch bowl

459
00:24:52,119 --> 00:24:56,000
Speaker 12: this morning about twenty one million dollars spent by a

460
00:24:56,280 --> 00:25:00,560
Speaker 12: pac and to your point, just one candidate likely to win.

461
00:25:00,680 --> 00:25:03,639
Speaker 12: Those are not good odds, but it goes along with

462
00:25:03,720 --> 00:25:06,840
Speaker 12: what we have been seeing, and I think Elon beautifully

463
00:25:06,920 --> 00:25:10,760
Speaker 12: underscored this, which is the idea that Americans and many

464
00:25:10,920 --> 00:25:15,520
Speaker 12: Jewish Americans and many people in Israel differentiate between the

465
00:25:15,560 --> 00:25:20,560
Speaker 12: regime Nettan Yahoo's government and support for Israel itself and

466
00:25:20,600 --> 00:25:25,080
Speaker 12: the Israeli people. And you have in the United States

467
00:25:25,200 --> 00:25:29,960
Speaker 12: this real concern about the lobby, the ability of APEC

468
00:25:30,119 --> 00:25:34,000
Speaker 12: for many, many decades, going back to fund candidates and

469
00:25:34,119 --> 00:25:37,680
Speaker 12: campaigns who were do their bidding in government. That has

470
00:25:37,760 --> 00:25:41,760
Speaker 12: made the United States almost inseparable from a policy perspective

471
00:25:41,800 --> 00:25:45,520
Speaker 12: as it pertains to foreign policy. And I'm not saying

472
00:25:45,560 --> 00:25:47,960
Speaker 12: that is true. I'm saying there are concerns out there,

473
00:25:48,000 --> 00:25:51,200
Speaker 12: which is why I think his argument is so important.

474
00:25:51,600 --> 00:25:54,560
Speaker 12: The buck stops with the president of the United States,

475
00:25:54,560 --> 00:25:57,719
Speaker 12: and I want to underscore what he said. Israel Net

476
00:25:57,840 --> 00:26:01,000
Speaker 12: and Yaho rightly tried to get Joe Baia twice to

477
00:26:01,080 --> 00:26:04,960
Speaker 12: go into Iran, and Joe Biden said no, same thing

478
00:26:05,000 --> 00:26:06,360
Speaker 12: with Obama, and you can go back.

479
00:26:06,480 --> 00:26:06,960
Speaker 3: Presidents.

480
00:26:07,240 --> 00:26:10,080
Speaker 12: That's absolutely nat and Yahoo's right to do that. He

481
00:26:10,240 --> 00:26:12,480
Speaker 12: should be doing that in the interest of his own country.

482
00:26:12,800 --> 00:26:15,880
Speaker 12: But our president should be doing our bidding and what's

483
00:26:15,920 --> 00:26:18,119
Speaker 12: in our national interest. And the problem we have with

484
00:26:18,200 --> 00:26:22,280
Speaker 12: this war is the president has yet to articulate clearly

485
00:26:22,600 --> 00:26:25,440
Speaker 12: how any of this isn't our best interest. As gas

486
00:26:25,480 --> 00:26:29,360
Speaker 12: prices soar and we are all scratching our heads wondering

487
00:26:29,520 --> 00:26:30,400
Speaker 12: why we are there.

488
00:26:31,840 --> 00:26:33,680
Speaker 2: All right, Rick Davis, we've got a minute left. Would

489
00:26:33,720 --> 00:26:34,720
Speaker 2: love your response as well.

490
00:26:36,080 --> 00:26:39,680
Speaker 10: Yeah, look, I mean the reality is Israel has been

491
00:26:39,720 --> 00:26:42,800
Speaker 10: our greatest ally in that region for decades. It's the

492
00:26:42,800 --> 00:26:47,600
Speaker 10: only democracy there, and they haven't been enormously helpful to

493
00:26:47,680 --> 00:26:50,600
Speaker 10: our national security. And it is in our security interest

494
00:26:50,920 --> 00:26:54,760
Speaker 10: for the preservation of the Israeli state, which Iran has

495
00:26:54,800 --> 00:26:59,480
Speaker 10: been avowed to destroy since the Iatola Colemani took over

496
00:26:59,600 --> 00:27:01,879
Speaker 10: forty siven years ago. So I don't think there's a

497
00:27:02,080 --> 00:27:05,960
Speaker 10: much of a debate as to why we are in

498
00:27:06,000 --> 00:27:08,399
Speaker 10: this war or why we think it's in our national

499
00:27:08,440 --> 00:27:11,520
Speaker 10: interests to defeat the largest terrors for agime in the world.

500
00:27:11,920 --> 00:27:15,120
Speaker 10: I think the issue is in this case, I would say,

501
00:27:15,160 --> 00:27:18,320
Speaker 10: domestic politics. How you frame that, It's going to be

502
00:27:18,400 --> 00:27:19,080
Speaker 10: totally different.

503
00:27:20,600 --> 00:27:23,960
Speaker 2: All right, Rick Davis and Jeanie Shanzano, Bloomberg Politics contributors

504
00:27:24,000 --> 00:27:25,919
Speaker 2: to both of them. Thank you for joining us on

505
00:27:26,000 --> 00:27:28,000
Speaker 2: Balance of Power today, and we still have more ahead.

506
00:27:28,000 --> 00:27:29,879
Speaker 2: As we turn next to Miam Againnis the President for

507
00:27:29,920 --> 00:27:32,160
Speaker 2: a Committee for Responsible Federal Budgets.

508
00:27:32,200 --> 00:27:34,320
Speaker 6: Stay with us on Balance of Power. We'll have much

509
00:27:34,320 --> 00:27:35,560
Speaker 6: more coming up after.

510
00:27:35,359 --> 00:27:43,920
Speaker 1: This, you're listening to the Bloomberg Balance of Power podcast.

511
00:27:44,160 --> 00:27:47,320
Speaker 1: Catch us live weekdays at noon and five pm Eastern

512
00:27:47,440 --> 00:27:50,879
Speaker 1: on Apple Cockley and Android Auto with the Bloomberg Business App.

513
00:27:51,040 --> 00:27:54,320
Speaker 1: Listen on demand wherever you get your podcasts, or watch

514
00:27:54,359 --> 00:27:56,760
Speaker 1: us live on YouTube.

515
00:27:57,000 --> 00:27:59,639
Speaker 6: As we talk politics here in Washington, and there is

516
00:28:00,160 --> 00:28:03,960
Speaker 6: a direct connection today certainly has been the last eighteen days, Klee,

517
00:28:04,040 --> 00:28:07,040
Speaker 6: with our eyes of course on energy prices. And there's

518
00:28:07,080 --> 00:28:09,439
Speaker 6: a big question about the cost of this war, beyond

519
00:28:09,440 --> 00:28:12,560
Speaker 6: our investments and beyond the loss of life, never mind

520
00:28:12,640 --> 00:28:15,960
Speaker 6: the more than one hundred and forty wounded Americans that

521
00:28:16,000 --> 00:28:19,040
Speaker 6: we've learned about the war, we know cost one, make

522
00:28:19,119 --> 00:28:22,119
Speaker 6: that eleven point three billion dollars in the first six days.

523
00:28:22,160 --> 00:28:24,920
Speaker 6: That was the report from the Pentagon to Congress following

524
00:28:24,920 --> 00:28:27,760
Speaker 6: some briefings on Capitol Hill. Based on reports that we

525
00:28:27,800 --> 00:28:30,840
Speaker 6: have seen since then, we're approaching sixteen billion dollars.

526
00:28:30,840 --> 00:28:31,880
Speaker 7: This is day eighteen.

527
00:28:32,440 --> 00:28:35,119
Speaker 6: And of course there's no sense of how expensive this

528
00:28:35,160 --> 00:28:36,360
Speaker 6: conflict could be in the end.

529
00:28:36,680 --> 00:28:40,280
Speaker 2: No, And of course it's also about our stockpiles. Right

530
00:28:40,320 --> 00:28:43,480
Speaker 2: we are expending a massive amount of munitions, not only

531
00:28:43,520 --> 00:28:45,760
Speaker 2: to strike thousands of targets in Iran, but also to

532
00:28:45,760 --> 00:28:48,680
Speaker 2: act defensively as Iran is sending out drones and missiles

533
00:28:48,680 --> 00:28:50,760
Speaker 2: of its own, even though that activity has indeed slowed

534
00:28:50,800 --> 00:28:54,040
Speaker 2: down with the success of some US strikes against those capabilities.

535
00:28:54,040 --> 00:28:55,960
Speaker 2: But to your point, Joe, it all comes at a cost.

536
00:28:56,040 --> 00:29:00,680
Speaker 2: And while the Pentagon has a massive, massive budget, there

537
00:29:00,800 --> 00:29:04,200
Speaker 2: is percolating here in Washington an idea that the White

538
00:29:04,240 --> 00:29:06,080
Speaker 2: House is getting ready to come to Congress with a

539
00:29:06,160 --> 00:29:09,400
Speaker 2: supplemental funding request in regard to this that we've been

540
00:29:09,400 --> 00:29:11,400
Speaker 2: told could be to the tune of fifty though even

541
00:29:11,440 --> 00:29:12,560
Speaker 2: one hundred billion dollars.

542
00:29:12,640 --> 00:29:14,600
Speaker 7: Yeah, that's right. We haven't heard the number yet.

543
00:29:14,600 --> 00:29:16,440
Speaker 6: A lot of lawmakers are already pledging to vote for

544
00:29:16,480 --> 00:29:19,920
Speaker 6: it without hearing that number, because it's an effort to

545
00:29:19,960 --> 00:29:22,280
Speaker 6: support the troops. But Kaylee, we're looking at the first

546
00:29:22,280 --> 00:29:25,040
Speaker 6: trillion dollar defense budget in history, and the President is

547
00:29:25,080 --> 00:29:27,760
Speaker 6: projecting a fifty percent increase for next.

548
00:29:27,640 --> 00:29:30,120
Speaker 2: Year one and a half trillion dollars. It's a massive

549
00:29:30,320 --> 00:29:33,760
Speaker 2: price tag. And of course, as we consider massive federal spending,

550
00:29:33,760 --> 00:29:35,840
Speaker 2: we turn to a voice we talked to about that

551
00:29:35,880 --> 00:29:38,720
Speaker 2: particular subject quite often, please to say, Maya McGinnis is

552
00:29:38,760 --> 00:29:40,840
Speaker 2: back with us here on Bloomberg TV and Radio. She's

553
00:29:40,880 --> 00:29:43,440
Speaker 2: president of the Committee for a Responsible Federal Budget in Maya.

554
00:29:43,480 --> 00:29:44,080
Speaker 3: It's been a while.

555
00:29:44,120 --> 00:29:46,080
Speaker 2: It's great to have you back on balance of power

556
00:29:46,320 --> 00:29:50,000
Speaker 2: when we consider this supplemental idea in particular, it also

557
00:29:50,200 --> 00:29:52,760
Speaker 2: is worth pointing out, but even when this request does come,

558
00:29:53,120 --> 00:29:55,440
Speaker 2: it might have a very difficult time getting to sixty

559
00:29:55,520 --> 00:29:57,520
Speaker 2: votes in the United States Senate, where you would need

560
00:29:57,760 --> 00:30:00,719
Speaker 2: a significant number of Democrats to so, and they are

561
00:30:00,760 --> 00:30:04,040
Speaker 2: all largely against this war with a run, which then

562
00:30:04,120 --> 00:30:07,840
Speaker 2: points us to another potential budget reconciliation package.

563
00:30:08,000 --> 00:30:11,720
Speaker 3: How nervous does that make you? All of this makes

564
00:30:11,760 --> 00:30:12,280
Speaker 3: me nervous.

565
00:30:12,520 --> 00:30:15,200
Speaker 13: The national security situation makes me nervous, and the fiscal

566
00:30:15,240 --> 00:30:19,200
Speaker 13: situation makes me nervous. And certainly what's going on right

567
00:30:19,280 --> 00:30:22,959
Speaker 13: now is revealing huge new costs that we're undertaking and

568
00:30:23,160 --> 00:30:25,600
Speaker 13: also probably future costs that we're going to have to

569
00:30:25,600 --> 00:30:30,400
Speaker 13: deal with, both some vulnerabilities that have been revealed and

570
00:30:30,600 --> 00:30:32,840
Speaker 13: bringing down of some of our weapon systems we're going

571
00:30:32,880 --> 00:30:35,160
Speaker 13: to have to build back up. So, yes, this has

572
00:30:35,200 --> 00:30:38,400
Speaker 13: become a huge political hot potato. Democrats who are feeling

573
00:30:38,520 --> 00:30:41,600
Speaker 13: left out of the process are likely not to support

574
00:30:41,640 --> 00:30:44,480
Speaker 13: a supplemental, and so it may have to go through reconciliation.

575
00:30:45,120 --> 00:30:46,840
Speaker 3: But you're hearing a great.

576
00:30:46,560 --> 00:30:50,640
Speaker 13: Deal of concern from even within Republicans that reconciliation may

577
00:30:50,680 --> 00:30:54,640
Speaker 13: not be the way to go. There's another little piece

578
00:30:54,680 --> 00:30:57,920
Speaker 13: of this, which is in oba the big tax build.

579
00:30:58,280 --> 00:31:01,680
Speaker 13: A lot of defense spending was also included in that bill,

580
00:31:01,720 --> 00:31:05,200
Speaker 13: about one hundred and fifty billion dollars on top of

581
00:31:05,240 --> 00:31:08,080
Speaker 13: the normal appropriations. So we know that there's more set

582
00:31:08,120 --> 00:31:11,080
Speaker 13: aside for defense already. What we don't know is how

583
00:31:11,120 --> 00:31:13,160
Speaker 13: it would be spent, how it's going to be spent,

584
00:31:13,280 --> 00:31:16,200
Speaker 13: if there's money there that could be used before there's

585
00:31:16,200 --> 00:31:19,480
Speaker 13: a supplemental or reconciliation. So I think the big question

586
00:31:19,640 --> 00:31:21,959
Speaker 13: is not only is what is the strategy of this

587
00:31:22,040 --> 00:31:24,760
Speaker 13: war that we're in, but where are the needs and

588
00:31:24,800 --> 00:31:27,120
Speaker 13: where are the plans for spending the money we already

589
00:31:27,160 --> 00:31:30,560
Speaker 13: have before we put in place new dollars. And I

590
00:31:30,560 --> 00:31:33,400
Speaker 13: think everybody would agree national security is sort of the

591
00:31:33,400 --> 00:31:36,080
Speaker 13: first most important claim on budgetary dollars.

592
00:31:37,000 --> 00:31:40,040
Speaker 3: But the defense budget is big and complicated, and the

593
00:31:40,080 --> 00:31:41,800
Speaker 3: money may already be there.

594
00:31:43,440 --> 00:31:46,240
Speaker 6: Maya It's great to see you. You issued a statement

595
00:31:46,280 --> 00:31:48,920
Speaker 6: following the President's State of the Union that said, the

596
00:31:48,960 --> 00:31:52,600
Speaker 6: state of our union is more indebted than ever. Ultimately,

597
00:31:52,640 --> 00:31:55,440
Speaker 6: you wrote, the President's agenda thus far has added significantly

598
00:31:55,520 --> 00:31:57,840
Speaker 6: to the national debt, and we will be spending even

599
00:31:57,840 --> 00:32:01,280
Speaker 6: more because of our past refusal to pay for our priorities.

600
00:32:01,320 --> 00:32:03,480
Speaker 6: You point out interest payments on the debt well total

601
00:32:03,560 --> 00:32:08,120
Speaker 6: nearly seventeen trillion between now and twenty thirty six. That's

602
00:32:08,160 --> 00:32:11,160
Speaker 6: before a protracted war in the Middle East. How much

603
00:32:11,200 --> 00:32:12,600
Speaker 6: worse could this get?

604
00:32:13,720 --> 00:32:17,240
Speaker 13: There is no ceiling on how much worse this could get. First,

605
00:32:17,560 --> 00:32:20,040
Speaker 13: this is one of those moments that reminds us how

606
00:32:20,160 --> 00:32:23,160
Speaker 13: dangerous it is that we're already spending more on interest

607
00:32:23,240 --> 00:32:26,440
Speaker 13: payments than we are in national defense. This is why

608
00:32:26,520 --> 00:32:30,080
Speaker 13: we don't want to be in that situation. Second, situation

609
00:32:30,200 --> 00:32:32,600
Speaker 13: like the one we're in could have huge costs in

610
00:32:32,720 --> 00:32:34,960
Speaker 13: terms of if it costs a billion dollars a day

611
00:32:35,000 --> 00:32:36,360
Speaker 13: or anything close to that.

612
00:32:36,480 --> 00:32:39,280
Speaker 3: Those costs could skyrocket so quickly.

613
00:32:39,760 --> 00:32:43,760
Speaker 13: Also, it could have profound pronounced economic effects what.

614
00:32:43,640 --> 00:32:45,880
Speaker 3: We're seeing all the time and talking about all the time.

615
00:32:45,760 --> 00:32:48,880
Speaker 13: Right now, which could have a hard hitting effect on

616
00:32:48,920 --> 00:32:49,960
Speaker 13: the US economy.

617
00:32:50,240 --> 00:32:52,520
Speaker 3: And this could get worse before it gets better.

618
00:32:52,880 --> 00:32:55,680
Speaker 13: One of the main reasons you want a strong fiscal

619
00:32:55,720 --> 00:32:58,920
Speaker 13: foundation is to be ready for moments like this, And

620
00:32:59,000 --> 00:33:01,120
Speaker 13: the big concern is that the US has borrowed so

621
00:33:01,240 --> 00:33:03,760
Speaker 13: much just for consumption, just for things we didn't want

622
00:33:03,800 --> 00:33:07,240
Speaker 13: to pay for, that when real emergencies come along, we

623
00:33:07,280 --> 00:33:09,240
Speaker 13: are not in good shape to respond to them or

624
00:33:09,320 --> 00:33:12,720
Speaker 13: have the fiscal flexibility to do so that we should

625
00:33:12,720 --> 00:33:16,840
Speaker 13: be able to if we had been in better fiscal shape.

626
00:33:17,200 --> 00:33:20,240
Speaker 2: Well, so when we consider emergencies, the Committee for Responsible

627
00:33:20,240 --> 00:33:23,960
Speaker 2: Federal Budget put out a new break glass plan, essentially

628
00:33:24,600 --> 00:33:27,640
Speaker 2: how you withstand an economic shock without having to contribute

629
00:33:27,640 --> 00:33:30,520
Speaker 2: more to the deficit like we've seen with shocks in

630
00:33:30,520 --> 00:33:34,120
Speaker 2: the past like COVID for example, and stimulus checks. I

631
00:33:34,160 --> 00:33:36,320
Speaker 2: wonder if you see us as getting closer to that

632
00:33:36,440 --> 00:33:38,800
Speaker 2: kind of break glass moment, especially with a war in

633
00:33:38,800 --> 00:33:42,760
Speaker 2: the Middle East that could potentially have dire economic consequences

634
00:33:42,800 --> 00:33:46,920
Speaker 2: with a supply shock and potential reinflationary effects. Are we

635
00:33:47,000 --> 00:33:48,640
Speaker 2: on that trajectory right now?

636
00:33:49,400 --> 00:33:50,080
Speaker 3: Yeah, exactly.

637
00:33:50,440 --> 00:33:53,240
Speaker 13: When we released this a week or so ago, maybe

638
00:33:53,240 --> 00:33:55,080
Speaker 13: a couple of weeks ago, we certainly didn't think that

639
00:33:55,120 --> 00:33:56,240
Speaker 13: an emergency would.

640
00:33:56,000 --> 00:33:57,960
Speaker 3: Be hitting us quite so immediately.

641
00:33:58,680 --> 00:34:01,880
Speaker 13: And the concern is that if we have to borrow

642
00:34:01,880 --> 00:34:04,440
Speaker 13: for an emergency, if it's a supplemental for the war

643
00:34:04,440 --> 00:34:06,800
Speaker 13: that we're going through right now, if there's a recession,

644
00:34:06,840 --> 00:34:10,480
Speaker 13: if there's another kind of emergency that's unanticipated or a pandemic,

645
00:34:11,080 --> 00:34:13,960
Speaker 13: we don't have the same fiscal space to borrow that

646
00:34:14,040 --> 00:34:16,480
Speaker 13: we have had in the past because our debt is

647
00:34:16,520 --> 00:34:17,640
Speaker 13: at near record levels.

648
00:34:17,840 --> 00:34:20,280
Speaker 3: And so what we're recommending is that if we do borrow,

649
00:34:20,360 --> 00:34:21,440
Speaker 3: if we do borrow.

650
00:34:21,239 --> 00:34:24,600
Speaker 13: Fifty billion for what's going on right now or even more,

651
00:34:24,960 --> 00:34:28,160
Speaker 13: we need to offset those costs, not immediately, not in

652
00:34:28,160 --> 00:34:30,239
Speaker 13: the same moment if you're in a recession, but you

653
00:34:30,320 --> 00:34:32,200
Speaker 13: need to have a plan not only to borrow the

654
00:34:32,200 --> 00:34:33,640
Speaker 13: money for the emergency, but.

655
00:34:33,719 --> 00:34:34,680
Speaker 3: How to offset it.

656
00:34:35,040 --> 00:34:36,840
Speaker 13: And more than that, we think you should offset it

657
00:34:36,840 --> 00:34:38,879
Speaker 13: by two dollars to one, so that we would start

658
00:34:38,920 --> 00:34:43,600
Speaker 13: putting down payments towards deficit reduction, put in place automatic

659
00:34:43,640 --> 00:34:46,360
Speaker 13: changes to the budget, put us on a trajectory so

660
00:34:46,360 --> 00:34:48,520
Speaker 13: we would bring our deficits down to the goal that

661
00:34:48,600 --> 00:34:51,160
Speaker 13: so many people are starting to think makes the most sense,

662
00:34:51,200 --> 00:34:53,960
Speaker 13: which is three percent of GDP compared to the six

663
00:34:54,000 --> 00:34:57,160
Speaker 13: percent where we currently are but don't use an emergency,

664
00:34:57,280 --> 00:35:01,080
Speaker 13: or don't let an emergency create an even more indebted

665
00:35:01,120 --> 00:35:03,560
Speaker 13: situation than we currently have. We need to agree that

666
00:35:03,600 --> 00:35:06,440
Speaker 13: whenever we borrow for an emergency, we're also going to

667
00:35:06,440 --> 00:35:08,800
Speaker 13: have a plan to offset or pay for those costs

668
00:35:09,040 --> 00:35:10,960
Speaker 13: and use it as a moment to get our fiscal

669
00:35:11,160 --> 00:35:13,400
Speaker 13: house in better shape than it currently is.

670
00:35:14,040 --> 00:35:16,640
Speaker 3: I hope we'll see your testimony put this in place.

671
00:35:16,760 --> 00:35:20,359
Speaker 6: I'm sorry, no, we saw your testimony to this end

672
00:35:20,400 --> 00:35:24,320
Speaker 6: before the Senate Finance Subcommittee on physcal Responsibility and Economic Growth.

673
00:35:24,480 --> 00:35:27,960
Speaker 6: Maya the idea of a one and a half trillion

674
00:35:28,040 --> 00:35:31,200
Speaker 6: dollar Pentagon budget. Of course, that would I guess presumably

675
00:35:31,200 --> 00:35:35,279
Speaker 6: go through regular order to get a number of that size.

676
00:35:36,120 --> 00:35:39,920
Speaker 6: That a fifty percent increase would mean what for our

677
00:35:40,000 --> 00:35:40,840
Speaker 6: national debt?

678
00:35:41,480 --> 00:35:43,600
Speaker 3: We are talking trillions more.

679
00:35:43,640 --> 00:35:46,880
Speaker 13: We are talking multiple trillions more just from that increase.

680
00:35:47,280 --> 00:35:49,200
Speaker 13: And it's not to say that we do or don't

681
00:35:49,280 --> 00:35:51,040
Speaker 13: need that. One of the things about our group we

682
00:35:51,480 --> 00:35:53,319
Speaker 13: don't really weigh in on the policies.

683
00:35:53,880 --> 00:35:55,879
Speaker 3: What we want is to be able.

684
00:35:55,640 --> 00:35:59,280
Speaker 13: To have a national security budget that reflects the risks

685
00:35:59,320 --> 00:36:01,920
Speaker 13: of the world that we're in. We don't want to

686
00:36:01,960 --> 00:36:05,279
Speaker 13: be deciding national security based on our budget, and we

687
00:36:05,400 --> 00:36:07,600
Speaker 13: have switched to that's where that's the situation.

688
00:36:08,040 --> 00:36:09,000
Speaker 3: Now. That sounds like a.

689
00:36:09,000 --> 00:36:12,400
Speaker 13: Huge increase given that we can't even audit the Defense department.

690
00:36:12,640 --> 00:36:14,920
Speaker 13: We need to understand the money that's there already, and

691
00:36:14,960 --> 00:36:18,120
Speaker 13: there are certainly savings to be had in the procurement

692
00:36:18,200 --> 00:36:21,840
Speaker 13: process in paying for outdated weapons systems. Right now, we

693
00:36:22,040 --> 00:36:25,520
Speaker 13: have basically a defense posture that's set up for last

694
00:36:25,520 --> 00:36:27,240
Speaker 13: centuries threats instead of this centuries.

695
00:36:27,280 --> 00:36:28,680
Speaker 3: We really need to rethink all that.

696
00:36:28,920 --> 00:36:31,800
Speaker 13: There will be new costs, and there are probably trillions

697
00:36:31,800 --> 00:36:33,960
Speaker 13: of dollars of savings will be able to get over time.

698
00:36:34,400 --> 00:36:37,359
Speaker 13: But if there are needs for defense increases, we have

699
00:36:37,440 --> 00:36:39,239
Speaker 13: to budget for them. We have to be willing to

700
00:36:39,280 --> 00:36:41,400
Speaker 13: figure out where we're either going to pay more in

701
00:36:41,440 --> 00:36:44,160
Speaker 13: taxes or reduce spending in other parts of the budget.

702
00:36:44,400 --> 00:36:46,759
Speaker 13: But right now this offhanded sort of approach. If we

703
00:36:46,800 --> 00:36:49,760
Speaker 13: can just increase the defense budget by fifty percent, there's

704
00:36:50,000 --> 00:36:52,480
Speaker 13: no room in the budget for that. And this is

705
00:36:52,480 --> 00:36:55,080
Speaker 13: the moment that people have been warning about that the

706
00:36:55,120 --> 00:36:57,480
Speaker 13: world is very risky and we have a budget that

707
00:36:57,560 --> 00:36:59,160
Speaker 13: now makes us very vulnerable.

708
00:37:00,280 --> 00:37:03,000
Speaker 2: Well in Maya on this idea of finding other offsets

709
00:37:03,040 --> 00:37:05,160
Speaker 2: elsewhere in the budget. We've all seen the pie chart

710
00:37:05,440 --> 00:37:08,120
Speaker 2: when you look at US federal spending. We spend a

711
00:37:08,120 --> 00:37:11,000
Speaker 2: lot on the military. Non defense discretionary spending is a

712
00:37:11,080 --> 00:37:14,120
Speaker 2: pretty small slice of the pie. Is the money even

713
00:37:14,200 --> 00:37:16,440
Speaker 2: there to offset if we're going to increase this by

714
00:37:16,480 --> 00:37:17,440
Speaker 2: fifty percent.

715
00:37:17,840 --> 00:37:20,160
Speaker 13: Well, the money is there, but it's not in places

716
00:37:20,160 --> 00:37:22,080
Speaker 13: where people are willing to talk about it. One of

717
00:37:22,160 --> 00:37:24,080
Speaker 13: the things we talked a lot about in this hearing

718
00:37:24,320 --> 00:37:27,160
Speaker 13: was the fact that we spend six dollars per senior

719
00:37:27,600 --> 00:37:30,719
Speaker 13: on every one dollar we spend on children. Is that

720
00:37:30,800 --> 00:37:33,719
Speaker 13: a budget that makes sense is sending checks to people

721
00:37:33,760 --> 00:37:37,160
Speaker 13: who might not need them the top priority when we should.

722
00:37:36,960 --> 00:37:39,000
Speaker 3: Be making sure that programs like Social.

723
00:37:38,840 --> 00:37:42,080
Speaker 13: Security don't become insolvent in six years, which is going

724
00:37:42,120 --> 00:37:44,760
Speaker 13: to happen. But we need to look at all areas

725
00:37:44,800 --> 00:37:46,960
Speaker 13: of the budget. We need to put everything on the table.

726
00:37:47,000 --> 00:37:50,080
Speaker 13: Look at our healthcare, look at our retirement, look at

727
00:37:50,120 --> 00:37:53,600
Speaker 13: other areas of defense, non non defense discretionary.

728
00:37:53,960 --> 00:37:55,640
Speaker 3: We're not going to be able to find the savings

729
00:37:55,680 --> 00:37:57,440
Speaker 3: if we don't look at all parts of the budget.

730
00:37:57,760 --> 00:38:00,920
Speaker 13: Those, for instance, I think, focused on very tiny slivers

731
00:38:01,280 --> 00:38:04,000
Speaker 13: and miss some of the areas like healthcare, for instance,

732
00:38:04,200 --> 00:38:06,759
Speaker 13: where some of the most savings can be found. We're

733
00:38:06,760 --> 00:38:09,799
Speaker 13: going to have to get serious the situation that we're

734
00:38:09,840 --> 00:38:11,440
Speaker 13: seeing right now in the Middle East. That's kind of

735
00:38:11,480 --> 00:38:14,400
Speaker 13: the wake up call. But this was true even before this.

736
00:38:14,480 --> 00:38:15,920
Speaker 13: We have got to get serious. We're going to have

737
00:38:15,960 --> 00:38:18,200
Speaker 13: to look at every single one of the slices of

738
00:38:18,200 --> 00:38:18,879
Speaker 13: that pie chart.

739
00:38:20,200 --> 00:38:21,920
Speaker 7: Do you worry, Maya?

740
00:38:22,080 --> 00:38:24,560
Speaker 6: And I don't know what you're hearing from lawmakers on this,

741
00:38:24,680 --> 00:38:28,480
Speaker 6: but the idea of a supplemental becoming a reconciliation bill. Essentially,

742
00:38:28,560 --> 00:38:32,759
Speaker 6: the president asks for more money to prosecute the war

743
00:38:32,800 --> 00:38:35,520
Speaker 6: against Iran, and lawmakers say, fine, but I need to

744
00:38:35,600 --> 00:38:38,479
Speaker 6: have mine too, And this turns into a very well

745
00:38:38,520 --> 00:38:40,040
Speaker 6: decorated Christmas tree by the.

746
00:38:40,000 --> 00:38:41,680
Speaker 7: Time it reaches the floor.

747
00:38:41,760 --> 00:38:45,080
Speaker 6: Lawmakers see an opportunity a vehicle to attach stuff to it.

748
00:38:45,120 --> 00:38:48,440
Speaker 6: They may not need a reconciliation bill. Is this going

749
00:38:48,520 --> 00:38:50,840
Speaker 6: to be the next train like that that leaves the station?

750
00:38:51,760 --> 00:38:54,600
Speaker 13: I so worry that everything can become a Christmas tree

751
00:38:54,680 --> 00:38:58,239
Speaker 13: right now? There is no there's no norm anymore that

752
00:38:58,400 --> 00:39:01,840
Speaker 13: we basically budget. We barely put out budgets right regularly.

753
00:39:01,880 --> 00:39:04,560
Speaker 13: The budget committees don't put forth budgets and they're almost

754
00:39:04,600 --> 00:39:07,799
Speaker 13: never adopted. We don't deal with the trade offs, and

755
00:39:07,880 --> 00:39:10,359
Speaker 13: basically a lot of lawmakers have figured out that the

756
00:39:10,400 --> 00:39:13,719
Speaker 13: best way to kind of pander to the public is

757
00:39:13,800 --> 00:39:16,000
Speaker 13: give more things without having to pay for them, and

758
00:39:16,080 --> 00:39:18,839
Speaker 13: so then it becomes a race for who can borrow more.

759
00:39:19,080 --> 00:39:21,120
Speaker 13: We're seeing this in the talk about how to make

760
00:39:21,160 --> 00:39:22,200
Speaker 13: things more affordable, for.

761
00:39:22,160 --> 00:39:25,640
Speaker 3: Instance, So yes, any supplemental.

762
00:39:25,320 --> 00:39:29,000
Speaker 13: Is almost surely going to have other unrelated items piled on.

763
00:39:29,080 --> 00:39:32,760
Speaker 13: The supplemental will probably be too large, and other items

764
00:39:32,760 --> 00:39:35,719
Speaker 13: that are unrelated will probably be thrown in sort of

765
00:39:35,719 --> 00:39:37,360
Speaker 13: that horse trading of trying.

766
00:39:37,160 --> 00:39:38,280
Speaker 3: To get other people's votes.

767
00:39:38,719 --> 00:39:41,759
Speaker 13: We need to bring back some real structure to the

768
00:39:41,800 --> 00:39:42,800
Speaker 13: budgeting process.

769
00:39:43,280 --> 00:39:44,840
Speaker 3: We know emergencies will happen.

770
00:39:44,880 --> 00:39:48,359
Speaker 13: For instance, we should set aside resources in advance each

771
00:39:48,400 --> 00:39:51,759
Speaker 13: year in the budget, so that there's already an emergency

772
00:39:52,400 --> 00:39:55,680
Speaker 13: savings pool set aside, rather than having to borrow more.

773
00:39:56,040 --> 00:39:58,920
Speaker 13: But you bet I worry about this right now before

774
00:39:59,040 --> 00:39:59,800
Speaker 13: midterm election.

775
00:40:00,239 --> 00:40:03,280
Speaker 3: Things are getting political, as if they ever aren't.

776
00:40:03,960 --> 00:40:06,480
Speaker 13: We will surely see people bidding up the cost of

777
00:40:06,560 --> 00:40:09,960
Speaker 13: any any emergency bill that they start to discuss, whatever

778
00:40:10,040 --> 00:40:11,080
Speaker 13: format takes.

779
00:40:12,560 --> 00:40:12,840
Speaker 12: Maya.

780
00:40:12,880 --> 00:40:15,000
Speaker 2: We just have about thirty seconds left here. But obviously

781
00:40:15,000 --> 00:40:16,640
Speaker 2: all of this is on the spending side. On the

782
00:40:16,680 --> 00:40:19,440
Speaker 2: revenue side, if the administration were to decide to pursue

783
00:40:19,480 --> 00:40:22,600
Speaker 2: a say, gas tax holiday because of the higher energy

784
00:40:22,600 --> 00:40:25,520
Speaker 2: prices emanating from this conflict, what revenue impact would that have.

785
00:40:26,600 --> 00:40:28,920
Speaker 13: Yeah, So the gas tax, depending on how many months

786
00:40:28,960 --> 00:40:32,400
Speaker 13: one puts out, it's quite costly. You're talking about tens

787
00:40:32,400 --> 00:40:35,640
Speaker 13: of billions of dollars adding up very quickly, and importantly,

788
00:40:35,880 --> 00:40:38,800
Speaker 13: it doesn't actually end up making the costs cheaper.

789
00:40:39,120 --> 00:40:42,279
Speaker 3: Those things lead into more demand for the product, which

790
00:40:42,280 --> 00:40:44,200
Speaker 3: actually pushes up the cost of gas.

791
00:40:44,239 --> 00:40:46,560
Speaker 13: So I know it's not what people want to hear,

792
00:40:46,800 --> 00:40:50,520
Speaker 13: but gas tax holidays aren't effective and they are expensive.

793
00:40:51,880 --> 00:40:53,480
Speaker 6: Sounds like we're going to need a bigger piece of

794
00:40:53,560 --> 00:40:58,080
Speaker 6: glass to break Maya. She is the voice of reality

795
00:40:58,080 --> 00:41:00,600
Speaker 6: here in the nation's capital, Miamiguinnis. It's really great to

796
00:41:00,600 --> 00:41:03,560
Speaker 6: see you, Maya, President for the Committee for a Responsible

797
00:41:03,600 --> 00:41:07,040
Speaker 6: Federal Budget with some sobering truths there that most lawmakers

798
00:41:07,120 --> 00:41:12,520
Speaker 6: don't want to deal with right now. Thanks for listening

799
00:41:12,600 --> 00:41:15,880
Speaker 6: to the Balance of Power podcast. Make sure to subscribe

800
00:41:15,960 --> 00:41:18,640
Speaker 6: if you haven't already at Apple, Spotify, or wherever you

801
00:41:18,680 --> 00:41:21,439
Speaker 6: get your podcasts, and you can find us live every

802
00:41:21,440 --> 00:41:25,279
Speaker 6: weekday from Washington, DC at noontime Eastern at Bloomberg dot

803
00:41:25,320 --> 00:41:25,800
Speaker 6: com