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 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,119 Speaker 1: noon and five pm Eastern on Apple, Cocklay and Android 4 00:00:17,160 --> 00:00:20,560 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:25,080 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,640 --> 00:00:27,960 Speaker 2: It isn't a quiet Friday here in Washington. It seems 7 00:00:28,000 --> 00:00:30,040 Speaker 2: we never get to have one of those these days, 8 00:00:30,080 --> 00:00:32,240 Speaker 2: even ahead of a holiday weekend, at least, while President 9 00:00:32,280 --> 00:00:36,239 Speaker 2: Trump is active on True Social with new threats of 10 00:00:36,360 --> 00:00:39,600 Speaker 2: tariffs twenty five percent potentially on Apple if they don't 11 00:00:39,600 --> 00:00:42,760 Speaker 2: make their iPhones in the United States, and fifty percent 12 00:00:42,840 --> 00:00:45,000 Speaker 2: be threatened to be implemented on all goods coming out 13 00:00:45,040 --> 00:00:48,000 Speaker 2: of the European Union. Next Sunday, as the President on 14 00:00:48,040 --> 00:00:50,720 Speaker 2: True Social, Joe describes the European Union as having been 15 00:00:50,880 --> 00:00:54,000 Speaker 2: very difficult to work with on a trade deal, and 16 00:00:54,040 --> 00:00:56,800 Speaker 2: he says discussions with them are going nowhere. 17 00:00:56,920 --> 00:00:57,160 Speaker 3: Yeah. 18 00:00:57,200 --> 00:01:00,880 Speaker 4: Scott Bessen has made similar remarks here into The European 19 00:01:00,960 --> 00:01:03,120 Speaker 4: Union's trade chief will have a call today with Jamison 20 00:01:03,160 --> 00:01:07,720 Speaker 4: Greer that's set for later this afternoon, according to a 21 00:01:07,760 --> 00:01:11,319 Speaker 4: European Commission spokesperson. So you wonder if this is bluster 22 00:01:11,600 --> 00:01:13,680 Speaker 4: ahead of a meeting, or if we're really trying to 23 00:01:13,680 --> 00:01:15,959 Speaker 4: get the gears turning on something here that could land 24 00:01:16,000 --> 00:01:19,840 Speaker 4: at fifty percent. We may be buying more wine this 25 00:01:19,920 --> 00:01:21,600 Speaker 4: weekend ahead of that taking effects. 26 00:01:22,200 --> 00:01:24,480 Speaker 2: Yeah, well, remember when he was threatening a much higher 27 00:01:24,480 --> 00:01:26,520 Speaker 2: than fifty percent. I think it was too tariff on 28 00:01:26,520 --> 00:01:27,319 Speaker 2: wine and champagne. 29 00:01:27,319 --> 00:01:29,440 Speaker 4: Thank you, were negotiating with ourselves at this point. Let's 30 00:01:29,440 --> 00:01:32,000 Speaker 4: go to the White House to get details on this. 31 00:01:32,040 --> 00:01:35,080 Speaker 4: Bloomberg's Tyler Kendall is on the north lawn with more Tyler. 32 00:01:35,959 --> 00:01:38,080 Speaker 5: Yeah, hey, Joe, Well, this really is setting the tone 33 00:01:38,120 --> 00:01:40,440 Speaker 5: ahead of this call that we're still expecting to happen 34 00:01:40,520 --> 00:01:43,959 Speaker 5: between the EU's trade chief and the USTR Gmis and Greer. 35 00:01:44,160 --> 00:01:46,759 Speaker 5: Keep in mind that earlier this week, Bloomberg News had 36 00:01:46,800 --> 00:01:49,440 Speaker 5: reported that the EU floated a new proposal to the 37 00:01:49,520 --> 00:01:51,960 Speaker 5: US when it came to trade, including that both countries 38 00:01:51,960 --> 00:01:54,960 Speaker 5: could gradually lower their tariffs down to zero when it 39 00:01:55,000 --> 00:01:58,800 Speaker 5: comes to certain agricultural products and industrial goods. Appear as 40 00:01:58,840 --> 00:02:01,560 Speaker 5: though that that really wasn't enough to move the needle here. 41 00:02:01,600 --> 00:02:03,800 Speaker 5: As President Trump outlined this morning, he thinks that no 42 00:02:03,920 --> 00:02:06,360 Speaker 5: progress has been made in terms of trade talks with 43 00:02:06,440 --> 00:02:09,280 Speaker 5: the European Union, and there's a few different complicating factors. 44 00:02:09,280 --> 00:02:12,040 Speaker 5: In fact, the Treasury Secretary Scott best And outlined one 45 00:02:12,080 --> 00:02:14,519 Speaker 5: of them earlier today on Bloomberg Television, saying, one of 46 00:02:14,560 --> 00:02:17,160 Speaker 5: the biggest issues is that the EU has to negotiate 47 00:02:17,240 --> 00:02:17,799 Speaker 5: as a block. 48 00:02:18,880 --> 00:02:21,840 Speaker 6: I think the President was getting frustrated with the EU. 49 00:02:22,360 --> 00:02:25,280 Speaker 6: You know the problem with EU. I've said several times 50 00:02:25,520 --> 00:02:28,480 Speaker 6: they have a collective action problem. They're twenty seven countries, 51 00:02:28,760 --> 00:02:32,320 Speaker 6: they all have different needs. The Germans they are interested 52 00:02:32,360 --> 00:02:36,080 Speaker 6: in cars of French and agriculture, so and then you 53 00:02:36,160 --> 00:02:40,560 Speaker 6: have Brussels negotiating with them. 54 00:02:40,760 --> 00:02:43,120 Speaker 5: That can also make it difficult to address some of 55 00:02:43,120 --> 00:02:45,560 Speaker 5: this White House's demands when it comes to what they 56 00:02:45,680 --> 00:02:49,080 Speaker 5: like to call those non monetary trade barriers. President Trump 57 00:02:49,120 --> 00:02:51,960 Speaker 5: highlighted them and his post on truth Social earlier today, 58 00:02:51,960 --> 00:02:55,560 Speaker 5: including the that value added taxes, which the European Union 59 00:02:55,600 --> 00:02:58,160 Speaker 5: really has said is fair and that isn't going to 60 00:02:58,200 --> 00:03:01,160 Speaker 5: really be up for negotiations when it comes to trade talk. 61 00:03:01,240 --> 00:03:02,800 Speaker 5: So we're going to have to see how this develops. 62 00:03:02,840 --> 00:03:05,640 Speaker 5: Of course, Joe and Kelly, if this escalation did go 63 00:03:05,720 --> 00:03:08,600 Speaker 5: into effect, it would be a pretty big one. Bloomberg 64 00:03:08,600 --> 00:03:11,639 Speaker 5: Economics estimates that if that fifty percent tariff went into play, 65 00:03:11,880 --> 00:03:15,239 Speaker 5: it would ultimately cut EU exports to the US by 66 00:03:15,360 --> 00:03:16,240 Speaker 5: more than half. 67 00:03:17,880 --> 00:03:20,399 Speaker 2: All right, Bloomberg's Tyler Kendall live on the White House 68 00:03:20,440 --> 00:03:22,600 Speaker 2: North Lawn here on Bloomberg TV and Radio. Thank you 69 00:03:23,160 --> 00:03:27,200 Speaker 2: so much. As we are tracking this from here in Washington, 70 00:03:27,200 --> 00:03:30,079 Speaker 2: we also have our eyes on New York today really 71 00:03:30,120 --> 00:03:33,079 Speaker 2: all week. As Joe mentioned earlier, it's Fleet Week in 72 00:03:33,080 --> 00:03:35,200 Speaker 2: New York and up there for the festivities and joining 73 00:03:35,280 --> 00:03:37,200 Speaker 2: us now for an interview here on Balance of Powers. 74 00:03:37,200 --> 00:03:41,360 Speaker 2: Admiral Darryl Caddle, Commander of the US Fleet Forces Command. 75 00:03:41,400 --> 00:03:44,880 Speaker 2: He's with us from our headquarters up in New York City. Admiral, 76 00:03:44,920 --> 00:03:48,080 Speaker 2: thank you so much for your time. Obviously, Fleetweek is 77 00:03:48,120 --> 00:03:51,440 Speaker 2: about showing off and honoring the service members who serve 78 00:03:52,080 --> 00:03:54,400 Speaker 2: on these vessels. But I do want to ask you 79 00:03:54,440 --> 00:03:56,680 Speaker 2: about the size of the fleet as we begin our 80 00:03:56,720 --> 00:04:01,640 Speaker 2: conversation here, as we look at specifically the Harrison with China. 81 00:04:01,680 --> 00:04:03,760 Speaker 2: The US Navy as of now has two hundred and 82 00:04:03,840 --> 00:04:06,280 Speaker 2: ninety six ships in its fleet. China's is on pace 83 00:04:06,360 --> 00:04:09,880 Speaker 2: to surpass four hundred this year. Is there any way 84 00:04:09,920 --> 00:04:11,320 Speaker 2: for us to possibly catch up. 85 00:04:12,720 --> 00:04:14,960 Speaker 7: Well, first of all, thank you for having me. I 86 00:04:15,000 --> 00:04:17,640 Speaker 7: really do appreciate it being on balance of power. I 87 00:04:17,720 --> 00:04:19,920 Speaker 7: just love the title of the show and being a 88 00:04:20,040 --> 00:04:23,240 Speaker 7: Navy commander and having a chance to talk with you today. Kaylee, 89 00:04:23,760 --> 00:04:25,520 Speaker 7: You know, I get this question a lot about the 90 00:04:25,880 --> 00:04:29,400 Speaker 7: difference in size of the Chinese fleet versus the US fleet, 91 00:04:29,800 --> 00:04:34,040 Speaker 7: shipbuilding capacity differences, and I just want to assure you 92 00:04:34,080 --> 00:04:38,640 Speaker 7: and others that will be listening that I don't worry 93 00:04:38,640 --> 00:04:43,159 Speaker 7: about it too much. You know, we do consider China 94 00:04:43,200 --> 00:04:46,360 Speaker 7: to be our pacing threat. We are concerned with our 95 00:04:46,360 --> 00:04:49,840 Speaker 7: shipbuilding capacity, but you know, there is nothing that beats 96 00:04:49,880 --> 00:04:52,960 Speaker 7: the quality of the US Navy warship. There's nothing that 97 00:04:53,000 --> 00:04:55,680 Speaker 7: beats our capability, our technology, and most of all our 98 00:04:55,760 --> 00:04:58,960 Speaker 7: sailors that are on board and crew those ships. That 99 00:04:59,120 --> 00:05:03,039 Speaker 7: just really is our true advantage. So while you know 100 00:05:03,120 --> 00:05:06,280 Speaker 7: we are playing a bit of catch up on shipbuilding capacity, 101 00:05:06,560 --> 00:05:08,640 Speaker 7: I don't think a strategy for the US should be 102 00:05:08,720 --> 00:05:12,680 Speaker 7: trying to match that. It's really, you know, our ability 103 00:05:12,680 --> 00:05:16,479 Speaker 7: to have quality over quantity is really a better strategy 104 00:05:16,520 --> 00:05:17,280 Speaker 7: for how we fight. 105 00:05:18,920 --> 00:05:20,920 Speaker 4: Well, it's interesting, Admiral, and we do welcome you to 106 00:05:20,960 --> 00:05:23,880 Speaker 4: the program. It's great to see here as we look 107 00:05:23,880 --> 00:05:27,080 Speaker 4: at the parative ships kicking off Fleet Week in the Hudson. 108 00:05:27,120 --> 00:05:29,880 Speaker 4: It does bring that technology right in front of a 109 00:05:29,920 --> 00:05:31,839 Speaker 4: lot of people who might not be as familiar with 110 00:05:31,880 --> 00:05:33,960 Speaker 4: it as those who are. 111 00:05:33,880 --> 00:05:35,279 Speaker 3: In the defense space. 112 00:05:35,720 --> 00:05:38,400 Speaker 4: The shipbuilding capacity, though of the US, is something that 113 00:05:38,400 --> 00:05:41,640 Speaker 4: the Trump administration has addressed with an executive order calling 114 00:05:41,680 --> 00:05:43,480 Speaker 4: for the revitalization of shipbuilding. 115 00:05:43,560 --> 00:05:44,520 Speaker 3: What is it that we need? 116 00:05:45,320 --> 00:05:47,880 Speaker 7: Well, I'm thrilled that the Trump administration has done it. 117 00:05:48,000 --> 00:05:50,640 Speaker 7: The President is really emphasizing it. You know, this is 118 00:05:50,640 --> 00:05:54,840 Speaker 7: commercial shipping, this is navy shipping, this is all types 119 00:05:54,920 --> 00:05:58,400 Speaker 7: where the US has really divested in that capability, not 120 00:05:58,480 --> 00:06:00,799 Speaker 7: so much well our war shows, but incommercial shipping. 121 00:06:01,200 --> 00:06:02,640 Speaker 8: So, first of all, you know. 122 00:06:02,600 --> 00:06:04,720 Speaker 7: That capacity does need to increase, and we need to 123 00:06:04,760 --> 00:06:09,080 Speaker 7: become more self sufficient and our own you know, maritime 124 00:06:09,279 --> 00:06:13,120 Speaker 7: services and not be so reliant on international building. But 125 00:06:13,279 --> 00:06:15,520 Speaker 7: you know, from our warships in particular, we have a 126 00:06:15,520 --> 00:06:18,200 Speaker 7: lot of ships on contract and we are working hard 127 00:06:18,240 --> 00:06:21,200 Speaker 7: to emphasize with those defense industrial partners that build those 128 00:06:21,240 --> 00:06:23,159 Speaker 7: for US to actually deliver. 129 00:06:22,920 --> 00:06:24,800 Speaker 8: Those on time and get back on track. 130 00:06:25,160 --> 00:06:27,520 Speaker 7: As well as the maintenance contracts that we have those 131 00:06:27,560 --> 00:06:30,000 Speaker 7: need to improve in their performance as well. 132 00:06:30,440 --> 00:06:32,920 Speaker 8: So this emphasis on this and putting some heat and. 133 00:06:32,960 --> 00:06:36,520 Speaker 7: Light on the shipbuilding industry and our industrial partners that 134 00:06:37,080 --> 00:06:40,400 Speaker 7: work with US is extremely important for the US to 135 00:06:40,520 --> 00:06:43,000 Speaker 7: exercise our power projection globally. 136 00:06:43,040 --> 00:06:43,680 Speaker 8: I think. 137 00:06:45,320 --> 00:06:45,880 Speaker 9: Well, Admiral. 138 00:06:45,960 --> 00:06:48,599 Speaker 2: Here in Washington, we were tracking yesterday the passage of 139 00:06:48,640 --> 00:06:50,840 Speaker 2: the so called One Big Beautiful Bill in the House 140 00:06:50,839 --> 00:06:53,719 Speaker 2: of Representatives that has a lot of President Trump's priorities 141 00:06:54,160 --> 00:06:56,400 Speaker 2: in it, but also included an additional one hundred and 142 00:06:56,440 --> 00:06:59,840 Speaker 2: fifty billion dollars in defense spending. Knowing that this has 143 00:06:59,839 --> 00:07:03,279 Speaker 2: been ministration has outlined other objectives, including the building out 144 00:07:03,279 --> 00:07:05,919 Speaker 2: of this so called Golden Dome. Are you expecting the 145 00:07:05,960 --> 00:07:09,400 Speaker 2: fleet to directly benefit from that additional funding? Is that 146 00:07:09,520 --> 00:07:11,880 Speaker 2: funding frankly adequate or is more needed? 147 00:07:12,600 --> 00:07:14,160 Speaker 8: Well? I do think it's adequate. 148 00:07:14,240 --> 00:07:18,040 Speaker 7: I really am very appreciative of the administration emphasizing defense 149 00:07:18,560 --> 00:07:22,280 Speaker 7: spending and getting the budgets right. You know, my job 150 00:07:22,560 --> 00:07:26,600 Speaker 7: at US Fleet Forces, our Atlantic Fleet really emphasizes readiness 151 00:07:26,640 --> 00:07:30,960 Speaker 7: and readiness costs and to have a military that's expeditionary 152 00:07:31,120 --> 00:07:33,440 Speaker 7: like the Navy, you know, on call, ready to go 153 00:07:33,600 --> 00:07:38,640 Speaker 7: worldwide globally requires a high level of readiness, and that's 154 00:07:38,680 --> 00:07:43,200 Speaker 7: across our ordnance capacities, our parts supplies, and of course 155 00:07:43,240 --> 00:07:46,840 Speaker 7: the training of our sailors. So I think the budget's 156 00:07:46,840 --> 00:07:49,560 Speaker 7: appropriate and the Navy's going to get a part of that, 157 00:07:49,960 --> 00:07:52,280 Speaker 7: and that's going to help us sustain that. I do 158 00:07:52,360 --> 00:07:55,280 Speaker 7: think the Golden Dome and particular what you mentioned that 159 00:07:55,600 --> 00:07:57,880 Speaker 7: the Navy will also be a major player in that 160 00:07:57,960 --> 00:08:00,920 Speaker 7: as well. Now, the Navy is what protect our homeland 161 00:08:01,280 --> 00:08:04,400 Speaker 7: from its two approaches, the Atlantic and the Pacific, and 162 00:08:04,640 --> 00:08:07,880 Speaker 7: so the threats don't just come from intercontinental ballistic missiles. 163 00:08:08,200 --> 00:08:11,320 Speaker 7: They can also come from submarine launch cruise missiles, and 164 00:08:11,360 --> 00:08:13,560 Speaker 7: that's where the Navy plays a prominent role in making 165 00:08:13,600 --> 00:08:17,040 Speaker 7: sure that our homeland is protected against those threats. 166 00:08:18,040 --> 00:08:20,760 Speaker 4: Well, as we consider readiness, Admiral, we have to talk 167 00:08:20,760 --> 00:08:23,440 Speaker 4: about recruitment. It's something that we have heard this White 168 00:08:23,440 --> 00:08:25,640 Speaker 4: House and the Defense Secretary talk about quite a bit. 169 00:08:25,760 --> 00:08:28,440 Speaker 4: You're aiming to recruit a little over forty thousand new 170 00:08:28,480 --> 00:08:31,760 Speaker 4: sailors this year. In twenty twenty five, the Naval Institute says, 171 00:08:31,960 --> 00:08:34,840 Speaker 4: you're seeing the highest recruitment numbers in two decades. 172 00:08:34,880 --> 00:08:36,000 Speaker 3: Will you exceed that goal. 173 00:08:37,000 --> 00:08:39,600 Speaker 8: So we are already exceeding that. 174 00:08:39,800 --> 00:08:42,160 Speaker 7: We had a banner year last year, and you know, 175 00:08:42,559 --> 00:08:44,520 Speaker 7: a little over forty thousand last year. 176 00:08:44,760 --> 00:08:47,760 Speaker 8: We got that goal this year. Right now we're on pace. 177 00:08:48,000 --> 00:08:48,880 Speaker 8: We are four. 178 00:08:48,760 --> 00:08:52,160 Speaker 7: Thousand sailors over where we were last year, and so 179 00:08:52,280 --> 00:08:56,040 Speaker 7: we are enjoying record recruitment and the recruiters across the 180 00:08:56,080 --> 00:08:58,360 Speaker 7: country just doing an incredible job to do that. 181 00:08:58,720 --> 00:08:59,880 Speaker 8: It's very hard work. 182 00:09:00,280 --> 00:09:02,600 Speaker 7: You know, we are all in the same demand for 183 00:09:02,679 --> 00:09:05,680 Speaker 7: this talent in our country, and when only less than 184 00:09:05,760 --> 00:09:08,240 Speaker 7: one percent of everyone in our country serves, you can 185 00:09:08,280 --> 00:09:10,800 Speaker 7: imagine a population of those that can do what we 186 00:09:10,840 --> 00:09:13,160 Speaker 7: do for a living is quite small. And across the 187 00:09:13,320 --> 00:09:15,959 Speaker 7: armed forces, we're all in demand for those. So I'm 188 00:09:16,040 --> 00:09:18,920 Speaker 7: very proud of our Navy recruiters to achieve that. I 189 00:09:18,920 --> 00:09:21,080 Speaker 7: would also mention to you that our retention is at 190 00:09:21,120 --> 00:09:23,920 Speaker 7: a record high. So when we get folks in, they 191 00:09:24,000 --> 00:09:26,400 Speaker 7: really enjoy what they're doing in the Navy, and I 192 00:09:26,400 --> 00:09:29,559 Speaker 7: think that's tied to our incredible mission and the Navy 193 00:09:29,640 --> 00:09:32,280 Speaker 7: is out there, they're way team, and so I think 194 00:09:32,280 --> 00:09:34,880 Speaker 7: we're enjoying record retention as well. When you combine those 195 00:09:35,120 --> 00:09:36,720 Speaker 7: we're going to put a real dentt in some of 196 00:09:36,720 --> 00:09:39,079 Speaker 7: the gaps at sea that we have had over the 197 00:09:39,160 --> 00:09:41,800 Speaker 7: last few years and really chip away at that to 198 00:09:41,840 --> 00:09:44,880 Speaker 7: get our wholeness back with respect to manning our ships. 199 00:09:46,400 --> 00:09:48,880 Speaker 2: I feel like I should disclose a admiral that I 200 00:09:48,920 --> 00:09:51,200 Speaker 2: am the daughter of a naval eighty eator and I 201 00:09:51,240 --> 00:09:54,480 Speaker 2: know that he loved nothing more than flying at fourteens. 202 00:09:54,480 --> 00:09:56,400 Speaker 2: He spent a lot of time on these very vessels 203 00:09:56,400 --> 00:09:59,280 Speaker 2: we're talking about themselves, but I want to talk about 204 00:09:59,280 --> 00:10:01,920 Speaker 2: active service members who are finding that they have had 205 00:10:01,960 --> 00:10:07,760 Speaker 2: their deployments on carriers and other supportive vessels extended, specifically 206 00:10:07,800 --> 00:10:09,840 Speaker 2: in the Red Sea, as the US has been engaged 207 00:10:09,880 --> 00:10:13,200 Speaker 2: up until recently with Hoothy's and Iranian proxy, that of 208 00:10:13,240 --> 00:10:17,520 Speaker 2: course was quite disruptive in the Red Sea in particular 209 00:10:17,920 --> 00:10:20,560 Speaker 2: in recent years. The Truman is now heading home. But 210 00:10:20,640 --> 00:10:23,839 Speaker 2: as we considered the multiple F eighteens that actually fell 211 00:10:23,880 --> 00:10:28,760 Speaker 2: off that carrier, tens of millions of dollars in aircraft lost, 212 00:10:29,000 --> 00:10:32,520 Speaker 2: was there an over deployment problem with the Truman or 213 00:10:32,520 --> 00:10:34,920 Speaker 2: with anyone else stationed in the Red Seas? That why 214 00:10:34,960 --> 00:10:37,439 Speaker 2: a truce had to be reached with the Houthis. 215 00:10:38,240 --> 00:10:39,520 Speaker 8: You know all great questions. 216 00:10:39,600 --> 00:10:43,800 Speaker 7: You know, our carrier strike groups project power and dominating 217 00:10:43,800 --> 00:10:47,079 Speaker 7: control sea lanes like no other thing there is. I mean, 218 00:10:47,080 --> 00:10:49,320 Speaker 7: that's why the president, you know, in the crisis happens, 219 00:10:49,320 --> 00:10:52,319 Speaker 7: where's the nearest aircraft carrier in the nearest strike group, 220 00:10:52,880 --> 00:10:57,280 Speaker 7: and so high demand for aircraft carriers because of that 221 00:10:57,400 --> 00:11:00,680 Speaker 7: and our force structure currently, you know, we have a 222 00:11:00,760 --> 00:11:03,920 Speaker 7: you know, essentially about a three point zero presence worldwide 223 00:11:04,000 --> 00:11:07,360 Speaker 7: globally all the time, and so we shoot for about 224 00:11:07,360 --> 00:11:10,480 Speaker 7: a seven month deployment, So every thirty six month, we'd 225 00:11:10,480 --> 00:11:13,200 Speaker 7: like to see our carriers and the strike group cruisers 226 00:11:13,200 --> 00:11:16,960 Speaker 7: and destroyers deploy for about seven months every thirty six months. 227 00:11:17,200 --> 00:11:19,360 Speaker 7: When those get delayed, that does take a toll on 228 00:11:19,400 --> 00:11:23,520 Speaker 7: our readiness. It makes the return maintenance availabilities as we 229 00:11:23,559 --> 00:11:27,360 Speaker 7: call the maintenance periods longer. It's harder on the ships. 230 00:11:27,400 --> 00:11:30,680 Speaker 7: It's hard to recoup from that extended deployment. From the 231 00:11:30,720 --> 00:11:33,760 Speaker 7: impact it has on that readiness level, you know, it 232 00:11:33,800 --> 00:11:36,640 Speaker 7: impacts people's lives as well. People think they're coming back 233 00:11:36,640 --> 00:11:38,520 Speaker 7: at seven month point and they get back at the 234 00:11:38,559 --> 00:11:41,160 Speaker 7: eight to nine month point. They had weddings plan and 235 00:11:41,200 --> 00:11:43,559 Speaker 7: trips plan, and that kind of thing. So there's quality 236 00:11:43,559 --> 00:11:46,720 Speaker 7: of life impacts as well. But make no mistake about it, 237 00:11:46,800 --> 00:11:49,240 Speaker 7: there is no bigger compliment on Earth. 238 00:11:49,320 --> 00:11:51,040 Speaker 8: Than to act to be extended. 239 00:11:51,040 --> 00:11:54,160 Speaker 7: To know you are the force across the joint force 240 00:11:54,559 --> 00:11:57,680 Speaker 7: that the President and the Secretary of Defense needs to 241 00:11:57,720 --> 00:12:00,920 Speaker 7: be there to ensure we are deterring a girl making 242 00:12:00,960 --> 00:12:04,520 Speaker 7: sure the ceilings and communication remain open. And these sailors 243 00:12:04,880 --> 00:12:09,240 Speaker 7: wilfully and understand that we communicate that to them, and 244 00:12:09,480 --> 00:12:11,880 Speaker 7: they put their life on hold to do those extensions. 245 00:12:12,440 --> 00:12:15,160 Speaker 8: With regarding the loss of aircraft. 246 00:12:14,679 --> 00:12:18,040 Speaker 7: On board the extension of the Truman that those are 247 00:12:18,080 --> 00:12:22,439 Speaker 7: not related in any way. When you fly thousands of 248 00:12:22,840 --> 00:12:26,719 Speaker 7: combat sorties on occasion, there are going to be material failures. 249 00:12:26,960 --> 00:12:28,560 Speaker 7: There are going to be things that happen in real 250 00:12:28,600 --> 00:12:31,360 Speaker 7: combat that's happening in the Red Sea. It's going to 251 00:12:31,400 --> 00:12:33,920 Speaker 7: result in some combat losses of those aircraft. 252 00:12:34,520 --> 00:12:36,079 Speaker 8: And when those happen. 253 00:12:35,960 --> 00:12:39,240 Speaker 7: And if there's human mistakes, they get thoroughly investigated. We 254 00:12:39,280 --> 00:12:42,640 Speaker 7: look hard into that, we hold people accountable if that's necessary, 255 00:12:42,840 --> 00:12:46,160 Speaker 7: But most importantly, we learn and we grow as a force, 256 00:12:46,320 --> 00:12:49,280 Speaker 7: and we put those lessons learned back into the system. 257 00:12:49,640 --> 00:12:52,360 Speaker 7: On each training cycle, to make sure we're understanding what 258 00:12:52,400 --> 00:12:55,040 Speaker 7: we're wrong, to make sure we never make those mistakes again. 259 00:12:55,360 --> 00:12:56,480 Speaker 8: And I don't want you to think. 260 00:12:56,360 --> 00:12:58,600 Speaker 7: That being extended had anything to do with the loss 261 00:12:58,600 --> 00:12:59,520 Speaker 7: of the F eighteens. 262 00:13:00,520 --> 00:13:03,160 Speaker 4: Well, we appreciate your answering that question, Admiral. They've been 263 00:13:03,200 --> 00:13:05,600 Speaker 4: busy out there, certainly according to the Pentagon, and what 264 00:13:05,640 --> 00:13:09,960 Speaker 4: you're telling us now, a massive drawdown in missiles, specifically 265 00:13:10,160 --> 00:13:12,600 Speaker 4: in rockets. What do we need how much have we 266 00:13:12,679 --> 00:13:16,599 Speaker 4: expended in what do we need to replenish the munitions 267 00:13:16,679 --> 00:13:17,600 Speaker 4: used against Yemen? 268 00:13:18,559 --> 00:13:21,880 Speaker 7: Well, you know, high end munitions like standard missile series 269 00:13:22,000 --> 00:13:26,320 Speaker 7: Standard missile two s M two, SM six, SM three, 270 00:13:26,920 --> 00:13:29,640 Speaker 7: The missiles we shoot from our destroyers and cruisers are 271 00:13:29,760 --> 00:13:34,679 Speaker 7: our critical offensive and defensive weapons, and they're expensive and 272 00:13:34,760 --> 00:13:36,679 Speaker 7: we like to make sure when we expend one of 273 00:13:36,720 --> 00:13:40,480 Speaker 7: those that it's against the target that really it required 274 00:13:40,480 --> 00:13:44,240 Speaker 7: that level of capability to take out. So because of that, 275 00:13:44,440 --> 00:13:46,559 Speaker 7: when you know low calls drolls are being shot at 276 00:13:46,559 --> 00:13:49,400 Speaker 7: our ships one way UAVs if you will, you know, 277 00:13:49,440 --> 00:13:51,320 Speaker 7: we don't. We want to make sure we have matched 278 00:13:51,360 --> 00:13:57,360 Speaker 7: the right response capability weapon system against that threat. So 279 00:13:57,880 --> 00:14:00,640 Speaker 7: the Ford Strike Group, which is about the replace to Truman. 280 00:14:01,120 --> 00:14:04,960 Speaker 7: It's still finishing up its final deployment preparations. We'll be 281 00:14:05,000 --> 00:14:08,240 Speaker 7: deploying with a couple new missile systems. You can think 282 00:14:08,240 --> 00:14:10,960 Speaker 7: about missiles about the size of a hell fire missile. 283 00:14:11,840 --> 00:14:14,200 Speaker 7: There are two program of records that call the Coyote 284 00:14:14,640 --> 00:14:16,800 Speaker 7: and the road Runner missile systems that they'll be on 285 00:14:16,840 --> 00:14:21,800 Speaker 7: our destroyers. That missile is significantly cheaper, has great standoff capability, 286 00:14:21,960 --> 00:14:24,640 Speaker 7: and be the first time we've employed them, and that 287 00:14:25,080 --> 00:14:27,720 Speaker 7: strike group will be certified to actually use. 288 00:14:27,600 --> 00:14:31,320 Speaker 8: That weapon system. Now, what that does is saves. 289 00:14:31,000 --> 00:14:34,880 Speaker 7: Our main weapons battery and so with the offensive weapons 290 00:14:35,120 --> 00:14:38,000 Speaker 7: that we're having to use typically to defend ourselves, that 291 00:14:38,040 --> 00:14:40,760 Speaker 7: won't be as needed. So we're really happy about that. 292 00:14:40,920 --> 00:14:44,440 Speaker 7: It's more cost effective, it's more appropriate, and the ship's 293 00:14:44,480 --> 00:14:46,960 Speaker 7: captains have a lot of confidence they can defend them 294 00:14:47,000 --> 00:14:50,240 Speaker 7: ships properly with a lower cost weapon system. 295 00:14:50,800 --> 00:14:54,280 Speaker 4: The really interesting Admiral Darryl Caudle with US live from 296 00:14:54,280 --> 00:14:58,040 Speaker 4: World Headquarters in New York in Manhattan for Fleetweek. He's 297 00:14:58,040 --> 00:15:00,040 Speaker 4: the commander of the US Fleet Forces comand admir a 298 00:15:00,120 --> 00:15:01,520 Speaker 4: really great pleasure to talk with you. 299 00:15:01,800 --> 00:15:03,080 Speaker 3: We'd love to do it again. 300 00:15:02,920 --> 00:15:05,680 Speaker 4: At some point here on Bloomberg, and congratulations to the 301 00:15:05,680 --> 00:15:09,280 Speaker 4: more than one thousand midshipmen graduating the Naval Academy today, 302 00:15:09,360 --> 00:15:12,360 Speaker 4: just up the road from where we are in Annapolis, 303 00:15:12,840 --> 00:15:13,400 Speaker 4: Go Navy. 304 00:15:13,520 --> 00:15:16,120 Speaker 3: Go well with the daughter of a naval aviator. I'm 305 00:15:16,200 --> 00:15:17,720 Speaker 3: Joe Matthew. Did we learn a lot there that was 306 00:15:17,720 --> 00:15:18,200 Speaker 3: pretty good? 307 00:15:18,280 --> 00:15:20,080 Speaker 2: Yeah, it was a great conversation and we still have 308 00:15:20,160 --> 00:15:22,120 Speaker 2: more of them ahead here on Balance of Power. On 309 00:15:22,120 --> 00:15:23,800 Speaker 2: Bloomberg TV and radio. 310 00:15:26,000 --> 00:15:29,480 Speaker 1: You're listening to the Bloomberg Balance of Power Podcast. Catch 311 00:15:29,520 --> 00:15:32,600 Speaker 1: us live weekdays at noon and five pm Eastern on 312 00:15:32,720 --> 00:15:35,960 Speaker 1: Apple Cocklay and Android Auto with the Bloomberg Business App. 313 00:15:36,000 --> 00:15:39,000 Speaker 1: You can also listen live on Amazon Alexa from our 314 00:15:39,040 --> 00:15:44,200 Speaker 1: flagship New York station, Just Say Alexa played Bloomberg eleven thirty. 315 00:15:45,000 --> 00:15:47,880 Speaker 2: The Treasury Secretary Scott best Of telling Bloomberg earlier today 316 00:15:47,880 --> 00:15:50,000 Speaker 2: that we could see a number of trade deals in 317 00:15:50,040 --> 00:15:52,920 Speaker 2: the coming weeks, but perhaps President Trump isn't convinced one 318 00:15:52,920 --> 00:15:55,880 Speaker 2: of those will be the European Union? Is He today 319 00:15:56,040 --> 00:15:59,840 Speaker 2: threatens a fifty percent tariff on the EU effective June first, 320 00:16:00,120 --> 00:16:02,760 Speaker 2: and says discussions with them are going nowhere. 321 00:16:02,880 --> 00:16:05,920 Speaker 4: This was quite the deep dive with the Treasury Secretary 322 00:16:05,960 --> 00:16:07,760 Speaker 4: and they spoke for about a half an hour. Talked 323 00:16:07,760 --> 00:16:10,880 Speaker 4: about a lot of what's happening in Washington right now, 324 00:16:10,880 --> 00:16:12,560 Speaker 4: but we do want to bring you into the conversation 325 00:16:12,680 --> 00:16:15,720 Speaker 4: specific to terrorists because it was today that President Trump 326 00:16:15,760 --> 00:16:19,240 Speaker 4: threatened this fifty percent levee against the EU. 327 00:16:19,520 --> 00:16:22,160 Speaker 3: Reaction from the Treasury Secretary. Let's watch and listen. 328 00:16:23,080 --> 00:16:28,280 Speaker 6: We have substantial revenue coming in now, and there is 329 00:16:28,440 --> 00:16:32,160 Speaker 6: at some point there's an equilibrium rate let's call it 330 00:16:32,200 --> 00:16:37,480 Speaker 6: a laughter curve for tariffs. So and I think we 331 00:16:37,560 --> 00:16:41,640 Speaker 6: will reach that rate. The other thing that's happening is 332 00:16:41,800 --> 00:16:45,520 Speaker 6: a lot of their tariff barriers or non tariff trade barriers. 333 00:16:45,560 --> 00:16:48,400 Speaker 6: A lot of these non tariff trade barriers are coming down, 334 00:16:48,800 --> 00:16:53,720 Speaker 6: so friction's decreasing there. And again, because we don't know 335 00:16:54,120 --> 00:16:57,400 Speaker 6: where these tariff negotiations are going to end up, they 336 00:16:57,480 --> 00:17:01,000 Speaker 6: won't end up being scored. But it's several hundred million 337 00:17:01,040 --> 00:17:04,199 Speaker 6: dollars a year, several hundred billion dollars a year of 338 00:17:04,359 --> 00:17:09,200 Speaker 6: revenue that will be used. For every one hundred billion, 339 00:17:09,240 --> 00:17:12,040 Speaker 6: that's one hundred billion less the bonds that Treasury has 340 00:17:12,080 --> 00:17:12,640 Speaker 6: to issue. 341 00:17:12,760 --> 00:17:15,200 Speaker 10: When you talk about uncertainty and getting more certainty because 342 00:17:15,200 --> 00:17:17,280 Speaker 10: the tax bill. Some of the uncertainty, A lot of 343 00:17:17,320 --> 00:17:19,040 Speaker 10: it is because of tariffs right now, because we're not 344 00:17:19,119 --> 00:17:21,320 Speaker 10: exactly sure we're going to end up. Do you have 345 00:17:21,359 --> 00:17:25,240 Speaker 10: a sense when the economic community, the business community will 346 00:17:25,240 --> 00:17:27,080 Speaker 10: get better certainty on tariffs. 347 00:17:27,240 --> 00:17:30,399 Speaker 6: Well, we've done the ninety day pause. As I mentioned 348 00:17:30,440 --> 00:17:34,800 Speaker 6: several times, we have eighteen important trading partners, So what 349 00:17:34,840 --> 00:17:37,760 Speaker 6: everyone should really focus on are those. We've done a 350 00:17:37,800 --> 00:17:41,600 Speaker 6: deal with the UK. My sense is over the next 351 00:17:41,640 --> 00:17:46,480 Speaker 6: couple of weeks we're going to have several large deals announced. 352 00:17:47,200 --> 00:17:50,600 Speaker 6: We have put a pause and a ninety day pause 353 00:17:51,240 --> 00:17:54,760 Speaker 6: with China. I expect that we will be negotiating in 354 00:17:54,840 --> 00:18:01,680 Speaker 6: person with them again. And then the President today when 355 00:18:01,760 --> 00:18:06,320 Speaker 6: we initiated the pause, the pause and the ten percent 356 00:18:07,280 --> 00:18:11,560 Speaker 6: are moving down from the April second rate to the 357 00:18:11,640 --> 00:18:16,920 Speaker 6: ten percent level was contingent on countries or trading blocks 358 00:18:17,000 --> 00:18:20,199 Speaker 6: coming and negotiating in good faith, and I think the 359 00:18:20,240 --> 00:18:23,600 Speaker 6: President was getting frustrated with the EU. You know the 360 00:18:23,680 --> 00:18:26,760 Speaker 6: problem with EU. I've said several times they have a 361 00:18:26,760 --> 00:18:30,199 Speaker 6: collective action problem. They're twenty seven countries, they all have 362 00:18:30,400 --> 00:18:33,840 Speaker 6: different needs. The Germans, they are interested in cars of 363 00:18:33,920 --> 00:18:38,680 Speaker 6: French and agriculture, so and then you have Brussels negotiating 364 00:18:38,800 --> 00:18:39,920 Speaker 6: with them. 365 00:18:41,680 --> 00:18:45,080 Speaker 2: The Treasury Secretary Scott Bessett in conversation with Bloomberg Wall 366 00:18:45,119 --> 00:18:47,320 Speaker 2: Street Week host David Weston. You can of course find 367 00:18:47,320 --> 00:18:49,520 Speaker 2: that on Wall Street Week later tonight, but also on 368 00:18:49,520 --> 00:18:53,200 Speaker 2: the Bloomberg terminal and online. Interesting to hear the Treasury 369 00:18:53,200 --> 00:18:55,760 Speaker 2: Secretary specifically calling out the fact that this is a 370 00:18:55,840 --> 00:18:58,080 Speaker 2: multi nation block we're talking about when it comes to 371 00:18:58,119 --> 00:19:00,720 Speaker 2: the European Union, in particular twenty seven and countries have 372 00:19:00,800 --> 00:19:04,520 Speaker 2: to agree, maybe making these negotiations harder. Of course, President 373 00:19:04,520 --> 00:19:07,520 Speaker 2: Trump in his true Social post contending today that that 374 00:19:07,680 --> 00:19:11,000 Speaker 2: block was formed for the primary purpose of taking advantage 375 00:19:11,000 --> 00:19:13,600 Speaker 2: of the United States on trade. He has repeatedly made 376 00:19:13,640 --> 00:19:17,200 Speaker 2: this claim, Joe, even though it's not necessarily actually accurate. 377 00:19:17,280 --> 00:19:19,679 Speaker 4: You wonder how all this plays into the meeting today 378 00:19:19,720 --> 00:19:23,000 Speaker 4: that our US trade representative will have with Trade minister 379 00:19:23,800 --> 00:19:27,400 Speaker 4: for the European Union that'll take place apparently this afternoon. 380 00:19:27,440 --> 00:19:29,199 Speaker 4: A lot of this is said to be bluster or 381 00:19:29,200 --> 00:19:31,800 Speaker 4: a negotiating tactic. Now we're at fifty percent. We'll see 382 00:19:31,800 --> 00:19:34,560 Speaker 4: where we are tomorrow. The markets seem to be taking 383 00:19:34,560 --> 00:19:35,840 Speaker 4: this so far instride. 384 00:19:36,040 --> 00:19:38,159 Speaker 2: Yeah, so let's play it to our political panel now. 385 00:19:38,240 --> 00:19:41,560 Speaker 2: Rick Davis and Jeanie Shanzano Bloomberg Politics contributors are both 386 00:19:41,600 --> 00:19:44,359 Speaker 2: with US Rick is stone Court Capital partner and Republican strategists. 387 00:19:44,359 --> 00:19:47,080 Speaker 2: Genie are democratic analyst and senior Democracy fellow at the 388 00:19:47,080 --> 00:19:50,760 Speaker 2: Center for the Study of the Presidency and Congress. Rick, 389 00:19:50,880 --> 00:19:52,840 Speaker 2: when we look at the market reaction, which is Joe 390 00:19:52,880 --> 00:19:55,359 Speaker 2: rightly points out largely a shrug today, are we getting 391 00:19:55,400 --> 00:19:58,000 Speaker 2: to the point where no one is actually taking these 392 00:19:58,040 --> 00:20:01,000 Speaker 2: tariff threats from the president as seri as they were, 393 00:20:01,040 --> 00:20:04,240 Speaker 2: knowing how frequently they are walked back to have been 394 00:20:04,280 --> 00:20:06,760 Speaker 2: proven essentially, is just negotiating tactics. 395 00:20:07,840 --> 00:20:08,040 Speaker 8: Yeah. 396 00:20:08,080 --> 00:20:11,240 Speaker 11: I think to a large degree, the shock appeal to 397 00:20:11,320 --> 00:20:15,560 Speaker 11: the market is over. There is a sensibility that what 398 00:20:15,760 --> 00:20:18,479 Speaker 11: Donald Trump says on day one is not necessarily what 399 00:20:18,560 --> 00:20:23,240 Speaker 11: goes into effect day ninety and so I think there's 400 00:20:23,320 --> 00:20:27,359 Speaker 11: some reasoning there's some rational actors now starting to look 401 00:20:27,400 --> 00:20:30,280 Speaker 11: at this and saying, Okay, we now have a pattern. 402 00:20:30,720 --> 00:20:32,960 Speaker 8: We're going to follow the pattern rather than the rhetoric. 403 00:20:33,440 --> 00:20:35,200 Speaker 8: And by the way, that was. 404 00:20:35,240 --> 00:20:38,560 Speaker 11: Smart money in his first term. It wasn't what he said. 405 00:20:38,880 --> 00:20:40,960 Speaker 11: You had to wait and see what he actually did. 406 00:20:41,640 --> 00:20:44,600 Speaker 11: And so I think we're just sort of now relearned 407 00:20:45,119 --> 00:20:50,000 Speaker 11: the Trump's cycle and people are starting to adjust to that. 408 00:20:50,240 --> 00:20:54,320 Speaker 11: I would say, what's interesting about the latest conversation with 409 00:20:54,440 --> 00:20:57,920 Speaker 11: the secretary is this notion that they're now applying sort 410 00:20:57,960 --> 00:21:02,600 Speaker 11: of the Laugher curve to tariffs. Arthur Laffer, popularized in 411 00:21:02,600 --> 00:21:07,159 Speaker 11: the Reagan administration for his work around tax cuts, is 412 00:21:07,800 --> 00:21:11,600 Speaker 11: basically got the theory that there's a certain level of 413 00:21:11,640 --> 00:21:14,119 Speaker 11: tariff that gets you the most revenue. And so the 414 00:21:14,200 --> 00:21:17,320 Speaker 11: question is what do we think those levels are and 415 00:21:17,440 --> 00:21:20,240 Speaker 11: is that what Donald Trump is trying to achieve. So 416 00:21:20,359 --> 00:21:22,840 Speaker 11: I guess it's just wait and see what happens. But 417 00:21:22,920 --> 00:21:25,600 Speaker 11: this next G seven meeting is going to say a 418 00:21:25,600 --> 00:21:27,520 Speaker 11: lot about where we are with European tariffs. 419 00:21:27,520 --> 00:21:30,440 Speaker 4: I'm sure, what do you think about this genie? It's 420 00:21:30,440 --> 00:21:33,520 Speaker 4: not a very useful negotiating tact if if it's not 421 00:21:33,920 --> 00:21:38,400 Speaker 4: taken seriously. Wall Street is giving its answer here does 422 00:21:38,440 --> 00:21:40,480 Speaker 4: the President become the boy who cried tariff? 423 00:21:42,640 --> 00:21:45,520 Speaker 9: You know, I think he'd be very frustrated to hear 424 00:21:45,560 --> 00:21:48,480 Speaker 9: this conversation. And that's how it's being taken on Wall Street, 425 00:21:50,640 --> 00:21:53,000 Speaker 9: you know. And I think one of the dangers with 426 00:21:53,080 --> 00:21:55,879 Speaker 9: Donald Trump is he will frequently do what you don't 427 00:21:55,880 --> 00:21:58,160 Speaker 9: expect him to do, so he very well could pull 428 00:21:58,200 --> 00:22:00,600 Speaker 9: the trigger on some of this. I think it's very 429 00:22:00,640 --> 00:22:04,040 Speaker 9: curious though, and interesting that when Georgia Maloney was over 430 00:22:04,080 --> 00:22:07,359 Speaker 9: here not just a few weeks ago, as the representative 431 00:22:07,400 --> 00:22:12,680 Speaker 9: of the EU Block, we really believed that those conversations 432 00:22:12,680 --> 00:22:15,119 Speaker 9: were going well. But we can hear both from the 433 00:22:15,119 --> 00:22:19,159 Speaker 9: President and also Scott Besson that they are frustrated. And 434 00:22:19,200 --> 00:22:21,800 Speaker 9: of course, as we all know, when you are negotiating 435 00:22:22,200 --> 00:22:27,440 Speaker 9: with a federation states with wildly different interests, it is very, 436 00:22:27,600 --> 00:22:30,760 Speaker 9: very complicated. But it's hard for me to believe that 437 00:22:30,840 --> 00:22:34,359 Speaker 9: either Scott Besson or the President could be surprised that 438 00:22:34,480 --> 00:22:37,240 Speaker 9: Germany and France and Italy and all the other EU 439 00:22:37,320 --> 00:22:41,120 Speaker 9: countries have very different interests. That's what makes this complicated, 440 00:22:41,520 --> 00:22:44,159 Speaker 9: and which is why most people don't pull the trigger 441 00:22:44,240 --> 00:22:47,200 Speaker 9: on this kind of thing and then negotiate. They do 442 00:22:47,240 --> 00:22:49,880 Speaker 9: this in a more methodical manner than the President has 443 00:22:49,960 --> 00:22:51,680 Speaker 9: been keen on doing so far. 444 00:22:53,960 --> 00:22:54,120 Speaker 5: Well. 445 00:22:54,160 --> 00:22:58,000 Speaker 2: Of course, it's not just countries that are play here, 446 00:22:58,040 --> 00:23:00,960 Speaker 2: it's specific companies as well. Genie is it's not just 447 00:23:01,000 --> 00:23:03,639 Speaker 2: a fifty percent here if he's threatened on the European Union, 448 00:23:03,680 --> 00:23:05,760 Speaker 2: but also twenty five percent on Apple if they don't 449 00:23:05,760 --> 00:23:08,960 Speaker 2: make their iPhones in the United States. Knowing, Tim Cook 450 00:23:09,160 --> 00:23:14,320 Speaker 2: personally donated to his inaugural committee. He attended the inauguration. 451 00:23:14,440 --> 00:23:16,880 Speaker 2: He's met with Trump at the White House. President Trump 452 00:23:16,880 --> 00:23:20,640 Speaker 2: has told us repeatedly he's been in conversations with Tim 453 00:23:20,720 --> 00:23:23,320 Speaker 2: Cook as all of that. For nothing. Is no tech 454 00:23:23,320 --> 00:23:26,960 Speaker 2: company able to ingratiate itself enough for the President to 455 00:23:27,000 --> 00:23:30,439 Speaker 2: feel that they can still make their products anywhere but 456 00:23:30,560 --> 00:23:31,800 Speaker 2: the United States of America. 457 00:23:33,040 --> 00:23:35,119 Speaker 9: Yeah, poor Tim Cook. And he was actually at the 458 00:23:35,119 --> 00:23:38,000 Speaker 9: White House on Tuesday. I actually shouldn't say poor Tim Cook. 459 00:23:38,760 --> 00:23:43,560 Speaker 9: I don't think he's not poor. But you know, he's 460 00:23:43,640 --> 00:23:46,760 Speaker 9: been trying to ingratiate himself, even as I mentioned on Tuesday, 461 00:23:46,800 --> 00:23:49,200 Speaker 9: he was there. But as we recall, when the President 462 00:23:49,280 --> 00:23:51,840 Speaker 9: was in the Middle East, he vocally said he still 463 00:23:51,880 --> 00:23:54,280 Speaker 9: has a little problem with Tim Cook. And that was 464 00:23:54,320 --> 00:23:56,760 Speaker 9: his building all over India, and he said, I don't 465 00:23:56,760 --> 00:24:00,320 Speaker 9: want him building there, I want him building here. Of course, 466 00:24:00,359 --> 00:24:04,720 Speaker 9: that is far easier said than done, and so you know, 467 00:24:04,880 --> 00:24:07,480 Speaker 9: I think the question now is does Tim Cook do 468 00:24:07,680 --> 00:24:11,360 Speaker 9: Apple try to wait out this president? Because the idea 469 00:24:11,720 --> 00:24:14,760 Speaker 9: that they could move manufacturing over here and kick it 470 00:24:14,880 --> 00:24:17,480 Speaker 9: up in the way the President and you know, people 471 00:24:17,520 --> 00:24:20,640 Speaker 9: at the Commerce Secretary would like to see is very, 472 00:24:20,720 --> 00:24:22,800 Speaker 9: very difficult to believe. In fact, some of the reports 473 00:24:22,800 --> 00:24:26,199 Speaker 9: say that if that happened, we'd all be paying thirty 474 00:24:26,200 --> 00:24:29,800 Speaker 9: five hundred dollars or more for an iPhone. I can't 475 00:24:29,800 --> 00:24:31,879 Speaker 9: do it, Kaylee, I just can't do it, So please 476 00:24:32,000 --> 00:24:32,919 Speaker 9: don't do that to us. 477 00:24:33,240 --> 00:24:33,320 Speaker 12: Ye. 478 00:24:34,119 --> 00:24:36,639 Speaker 3: You know, we talked to Bloomberg's Mark Erman about this. 479 00:24:36,760 --> 00:24:40,520 Speaker 4: Our Apple reporter, who's dropping more scoops than anybody on 480 00:24:40,600 --> 00:24:43,160 Speaker 4: this company, wouldn't even try to put a number on it. 481 00:24:43,560 --> 00:24:46,080 Speaker 4: Ricky said it was unquantifiable. He also called it a 482 00:24:46,119 --> 00:24:49,119 Speaker 4: pipe dream and never going to happen. The idea of 483 00:24:49,160 --> 00:24:53,400 Speaker 4: Apple moving its manufacturing base here. You mentioned earlier though, 484 00:24:53,440 --> 00:24:55,320 Speaker 4: that if we did do that, it's not going to 485 00:24:55,359 --> 00:24:59,240 Speaker 4: be the army of millions of people turning screws into phones, 486 00:24:59,240 --> 00:25:02,000 Speaker 4: as Howard Lutton said at one point. It's going to 487 00:25:02,000 --> 00:25:07,639 Speaker 4: be likely AI driven robotic manufacturing that makes that even 488 00:25:07,680 --> 00:25:10,080 Speaker 4: feasible to take place. Here in the US, but it's 489 00:25:10,119 --> 00:25:12,600 Speaker 4: coming at the same time that the president is trying 490 00:25:12,600 --> 00:25:15,000 Speaker 4: to ban international students from going to Harvard. 491 00:25:15,040 --> 00:25:15,920 Speaker 3: How do you get both? 492 00:25:17,240 --> 00:25:20,440 Speaker 11: Yeah, that's the thing. I think they're mutually exclusive. You've 493 00:25:20,440 --> 00:25:24,080 Speaker 11: got to have people who have that technical skill if 494 00:25:24,119 --> 00:25:27,240 Speaker 11: you want to have manufacturing of these kind of technical lives. 495 00:25:27,280 --> 00:25:29,440 Speaker 11: And by the way, we need that for everything else 496 00:25:29,440 --> 00:25:33,520 Speaker 11: we're doing. We're not even talking about quantum computing or AI. 497 00:25:33,800 --> 00:25:37,560 Speaker 11: We're just talking about manufacturing. But when you go to Detroit, 498 00:25:37,640 --> 00:25:41,040 Speaker 11: when you go to around the country where people are manufacturing, 499 00:25:41,160 --> 00:25:45,040 Speaker 11: it's robotics that matter, it's AI that matters. It's not 500 00:25:45,320 --> 00:25:48,480 Speaker 11: you know, sort of the typical labor that we're used to. 501 00:25:48,560 --> 00:25:52,200 Speaker 11: I've been to a fox Con manufacturing facility. I mean, 502 00:25:52,280 --> 00:25:55,800 Speaker 11: it's very few people and a lot of mechanical activity 503 00:25:55,880 --> 00:25:59,120 Speaker 11: going on, all of which coordinated through you know, very 504 00:25:59,240 --> 00:26:04,280 Speaker 11: very sophisticated computer programming. So unless we have that capacity, 505 00:26:05,119 --> 00:26:07,240 Speaker 11: we are never going to be able to achieve the 506 00:26:07,320 --> 00:26:11,399 Speaker 11: kind of quote second Industrial Revolution that Donald Trump wants. 507 00:26:11,960 --> 00:26:15,879 Speaker 11: But it still doesn't satisfy the fundamental supply chain needs 508 00:26:15,920 --> 00:26:18,040 Speaker 11: and where we're going to find all the component parts 509 00:26:18,080 --> 00:26:21,080 Speaker 11: to this. So we are a long way away from 510 00:26:21,119 --> 00:26:27,480 Speaker 11: putting up a sophisticated and well equipped and supplied Apple 511 00:26:27,520 --> 00:26:31,160 Speaker 11: manufacturing facility here. But look what Tim Cook has learned 512 00:26:31,280 --> 00:26:35,520 Speaker 11: is you can rent Donald Trump, but you can't buy him. 513 00:26:35,520 --> 00:26:38,199 Speaker 4: Well, you wonder how quiet the White House is going 514 00:26:38,240 --> 00:26:39,959 Speaker 4: to be if the likes of Tim Cook and Jensen 515 00:26:40,000 --> 00:26:43,480 Speaker 4: Wong can't get a favorable treatment after coming to kiss 516 00:26:43,480 --> 00:26:46,800 Speaker 4: the ring. Rick Davis and Genie Shanzano thank you as always. 517 00:26:49,800 --> 00:26:53,280 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 518 00:26:53,320 --> 00:26:56,760 Speaker 1: us live weekdays at noon and five pm Eastern on Apple, 519 00:26:56,840 --> 00:27:00,200 Speaker 1: Cocklay and Android Auto with the Bloomberg Business apps and 520 00:27:00,320 --> 00:27:03,360 Speaker 1: on demand wherever you get your podcasts, or watch us 521 00:27:03,400 --> 00:27:05,680 Speaker 1: live on YouTube. 522 00:27:06,040 --> 00:27:08,239 Speaker 4: Welcome to the Friday edition of Balance and Power. It's 523 00:27:08,280 --> 00:27:10,000 Speaker 4: great to have you here at the threshold of what 524 00:27:10,040 --> 00:27:12,240 Speaker 4: I hope is a long weekend for you, Memorial Day 525 00:27:12,240 --> 00:27:13,240 Speaker 4: weekend straight ahead. 526 00:27:13,240 --> 00:27:15,400 Speaker 3: And if you're a lawmaker, you're just getting home. 527 00:27:16,000 --> 00:27:21,359 Speaker 4: Reconnecting with the family, marching in parades, maybe holding a 528 00:27:21,359 --> 00:27:22,600 Speaker 4: couple of town hall meetings. 529 00:27:22,680 --> 00:27:23,080 Speaker 3: I don't know. 530 00:27:23,119 --> 00:27:25,440 Speaker 4: We'll find out because there'll be plenty of tape next 531 00:27:25,440 --> 00:27:28,760 Speaker 4: week if they do. As the Reconciliation bill, or the 532 00:27:29,440 --> 00:27:31,920 Speaker 4: beautiful bill goes from the House to the Senate. We've 533 00:27:31,960 --> 00:27:33,600 Speaker 4: been talking about this for a couple of days. It 534 00:27:33,640 --> 00:27:36,240 Speaker 4: was this time yesterday we had just the recent passage 535 00:27:36,240 --> 00:27:37,680 Speaker 4: of the bill in the House, and now a lot 536 00:27:37,680 --> 00:27:39,879 Speaker 4: of questions about what the Senate will do after this 537 00:27:40,040 --> 00:27:43,600 Speaker 4: very careful balancing act. Mike Johnson threads the needle again, 538 00:27:44,080 --> 00:27:46,760 Speaker 4: only to have the whole thing torn up in the Senate, 539 00:27:46,880 --> 00:27:49,080 Speaker 4: or so they say, we're going to find out together. 540 00:27:49,119 --> 00:27:51,080 Speaker 4: There are Republicans in the Senate who don't want the 541 00:27:51,119 --> 00:27:55,520 Speaker 4: cuts to Medicaid spending will pose the repeal of IRA 542 00:27:55,880 --> 00:27:59,760 Speaker 4: clean energy tax credits. Some of them want deeper spending cuts. 543 00:28:00,440 --> 00:28:03,360 Speaker 4: Ask Mike Crapo, he wants the tax cuts to be permanent. 544 00:28:03,440 --> 00:28:06,840 Speaker 4: That's going to cost more. Nobody likes the salt cap. 545 00:28:07,000 --> 00:28:10,000 Speaker 4: We keep hearing, and so what it will be like 546 00:28:10,080 --> 00:28:13,840 Speaker 4: this weekend to be a lawmaker back home, as we said, 547 00:28:14,600 --> 00:28:17,679 Speaker 4: maybe going to the local barbecue, hearing from voters on this, 548 00:28:17,880 --> 00:28:21,240 Speaker 4: knowing that a lot of things just agreed upon could 549 00:28:21,280 --> 00:28:24,639 Speaker 4: soon change. Really delighted to let you know that the 550 00:28:24,720 --> 00:28:26,679 Speaker 4: Chairman is with us here on the Friday edition to 551 00:28:26,720 --> 00:28:28,639 Speaker 4: talk this out. A man who knows a lot more 552 00:28:28,680 --> 00:28:31,400 Speaker 4: about holding the gavel than most people walking the earth. 553 00:28:31,440 --> 00:28:33,120 Speaker 3: Patrick McHenry, the former chair. 554 00:28:32,920 --> 00:28:35,760 Speaker 4: Of the House Financial Services Committee, former Speaker pro tem 555 00:28:35,800 --> 00:28:39,960 Speaker 4: Bloomberg contributor. I'm proud to say now, Congressman, welcome to 556 00:28:39,960 --> 00:28:41,560 Speaker 4: the family. I haven't had a chance to say that. 557 00:28:41,560 --> 00:28:42,800 Speaker 4: That's really exciting for us. 558 00:28:43,080 --> 00:28:45,160 Speaker 3: Are you a gas or charcoal guy? 559 00:28:48,320 --> 00:28:52,280 Speaker 12: Gas out of convenience, But if I had more time, charcoal. 560 00:28:52,880 --> 00:28:54,960 Speaker 3: The right answer. What is it going to be like 561 00:28:55,000 --> 00:28:56,440 Speaker 3: for Republican lawmakers going home? 562 00:28:56,440 --> 00:28:58,560 Speaker 4: Will they be celebrated in their home districts for getting 563 00:28:58,560 --> 00:29:00,320 Speaker 4: this done? 564 00:29:00,400 --> 00:29:05,280 Speaker 12: Yes? The fact that this was such a grueling process 565 00:29:05,320 --> 00:29:08,920 Speaker 12: made the outcome even more joyous for Republicans and the 566 00:29:08,920 --> 00:29:13,200 Speaker 12: Republican base. This is a set of aggressive spending cuts 567 00:29:13,240 --> 00:29:16,600 Speaker 12: over the over the tenure window that this bill is 568 00:29:16,600 --> 00:29:20,320 Speaker 12: written for. It extends the tax cuts and Jobs Acts. 569 00:29:20,800 --> 00:29:25,680 Speaker 12: President Trump's first term key domestic initiative. You know that 570 00:29:26,040 --> 00:29:30,160 Speaker 12: really gave him the the the economic narrative that led 571 00:29:30,240 --> 00:29:32,440 Speaker 12: him back to the presidency in the second term. So, 572 00:29:32,720 --> 00:29:35,840 Speaker 12: you know, key to the Trump narrative and a massive 573 00:29:35,880 --> 00:29:40,400 Speaker 12: success for the President's leadership team in the House Representatives. 574 00:29:40,400 --> 00:29:44,960 Speaker 12: Speaker Johnson and Scalise and Emmer and the work that 575 00:29:45,000 --> 00:29:47,560 Speaker 12: they put in with Chairman Jason Smith in the House. 576 00:29:47,560 --> 00:29:50,600 Speaker 12: So I mean real kudos to them on pulling off 577 00:29:50,640 --> 00:29:55,840 Speaker 12: what was an arduous, difficult, narrow outcome, but a decisive one. 578 00:29:55,880 --> 00:29:58,760 Speaker 3: Yeah, a rabit out of a hat. I keep hearing. 579 00:29:59,120 --> 00:30:01,120 Speaker 4: You know what it's like, though, Congressman to sit in 580 00:30:01,120 --> 00:30:03,480 Speaker 4: the House and look next door to the Senate and wonder, well, God, 581 00:30:03,480 --> 00:30:05,040 Speaker 4: what are they going to do? And do they care 582 00:30:05,120 --> 00:30:07,760 Speaker 4: about the balancing act that the feet that we just 583 00:30:07,880 --> 00:30:10,440 Speaker 4: pulled off? You heard the list I just ran through, 584 00:30:10,480 --> 00:30:14,360 Speaker 4: from medicaid to the IRA to salts. What kind of 585 00:30:14,440 --> 00:30:16,360 Speaker 4: changes do you really expect? 586 00:30:17,560 --> 00:30:21,000 Speaker 12: Well, so, the salt cap is purely a House initiative 587 00:30:21,080 --> 00:30:24,880 Speaker 12: because there are no Republican centers that represent states where 588 00:30:24,880 --> 00:30:28,720 Speaker 12: the salt deduction is a driving political force. The balance 589 00:30:28,760 --> 00:30:34,920 Speaker 12: of power in the House for Republicans are Republicans from 590 00:30:34,960 --> 00:30:38,760 Speaker 12: blue states like New Jersey and New York that were 591 00:30:38,880 --> 00:30:42,720 Speaker 12: instrumental in crafting the salt compromise or raise the ten 592 00:30:42,720 --> 00:30:45,520 Speaker 12: thousand dollars cap to forty thousand dollars. There's a science 593 00:30:45,520 --> 00:30:47,840 Speaker 12: behind it, there's art in the art of the possible 594 00:30:47,880 --> 00:30:48,600 Speaker 12: and legislation. 595 00:30:49,520 --> 00:30:50,320 Speaker 11: You're also going. 596 00:30:50,240 --> 00:30:54,440 Speaker 12: To see a series play with the Biden era clean 597 00:30:54,520 --> 00:30:57,920 Speaker 12: energy tax credits. You saw this with nuclear. Nuclear has 598 00:30:57,960 --> 00:31:01,760 Speaker 12: a very long runway for that sunset it. It's a 599 00:31:01,840 --> 00:31:05,880 Speaker 12: very popular tax credit to get more nuclear, more nuclear 600 00:31:06,080 --> 00:31:10,680 Speaker 12: options in our electricity grid. But the other initiatives have 601 00:31:10,800 --> 00:31:15,040 Speaker 12: different phase outs. Because of the political potency in Republican 602 00:31:15,080 --> 00:31:18,320 Speaker 12: members districts that voted for this bill, we're going to 603 00:31:18,320 --> 00:31:20,280 Speaker 12: see the Senate with a different set of equities on 604 00:31:20,320 --> 00:31:23,160 Speaker 12: those tax credits. There's gonna be a lot of play there. 605 00:31:23,160 --> 00:31:24,960 Speaker 12: There's going to be a significant amount of play for 606 00:31:25,720 --> 00:31:31,160 Speaker 12: other provisions related to salt, like how pass throughs use 607 00:31:31,240 --> 00:31:34,360 Speaker 12: the salt deduction or able to use the salt deduction. 608 00:31:34,760 --> 00:31:37,880 Speaker 12: You're going to see significant movement in sort of a 609 00:31:37,920 --> 00:31:42,120 Speaker 12: secondary set of tax issues for corporations. So there's a 610 00:31:42,120 --> 00:31:44,920 Speaker 12: lot of play here. But I think about eighty percent 611 00:31:44,960 --> 00:31:48,000 Speaker 12: of the bill it will be the same before this 612 00:31:48,040 --> 00:31:51,200 Speaker 12: goes to the President's desk. 613 00:31:52,920 --> 00:31:54,080 Speaker 3: Well, all right, that's great. 614 00:31:54,160 --> 00:31:57,120 Speaker 4: Patrick McHenry says, eighty percent of the bill, does Chip 615 00:31:57,280 --> 00:31:58,040 Speaker 4: Roy vote for that? 616 00:31:59,400 --> 00:32:02,080 Speaker 12: Well, what I'm saying is eighty percent will be the same. 617 00:32:02,360 --> 00:32:10,880 Speaker 12: The Senate will accept that so okay, So. 618 00:32:09,160 --> 00:32:11,000 Speaker 3: Torture will it be I guess when it comes back 619 00:32:11,040 --> 00:32:11,480 Speaker 3: to the House. 620 00:32:12,160 --> 00:32:15,719 Speaker 12: Oh, quite torture. No, it's just so what happens is 621 00:32:16,160 --> 00:32:18,600 Speaker 12: after you make a compromise like this out of the House, 622 00:32:19,200 --> 00:32:24,880 Speaker 12: just grolling every every provision that you made changes to 623 00:32:24,960 --> 00:32:28,000 Speaker 12: to get somebody's vote is highly important to that member 624 00:32:28,200 --> 00:32:31,719 Speaker 12: and to your one vote majority to get it out 625 00:32:31,760 --> 00:32:34,000 Speaker 12: of the House. One vote margin to get out of 626 00:32:34,040 --> 00:32:38,840 Speaker 12: the House. So any change here does have huge political 627 00:32:39,000 --> 00:32:44,000 Speaker 12: risk for passage. The way that the presidency, though which 628 00:32:44,040 --> 00:32:46,840 Speaker 12: we saw bring was brought to bear on the House 629 00:32:46,840 --> 00:32:50,800 Speaker 12: of Representatives, meant that maybe people did have serious disagreements, 630 00:32:50,880 --> 00:32:55,520 Speaker 12: maybe there are really fractious, nasty meetings for months. But 631 00:32:55,600 --> 00:33:00,040 Speaker 12: the President closed the deal and his helpmate in this 632 00:33:00,160 --> 00:33:03,360 Speaker 12: is Speaker Johnson, and they closed the deal and got 633 00:33:03,360 --> 00:33:05,680 Speaker 12: a bill out of the House. So what what will 634 00:33:05,720 --> 00:33:10,040 Speaker 12: be What will happen now is that the US Senate 635 00:33:10,080 --> 00:33:12,800 Speaker 12: will have to act before the fourth of July recess 636 00:33:12,840 --> 00:33:16,600 Speaker 12: in order to meet a timeline that is dictated by 637 00:33:17,040 --> 00:33:22,120 Speaker 12: the dead ceiling deadline UH, which which means the Congress 638 00:33:22,160 --> 00:33:25,680 Speaker 12: needs to have this bill, this tax bill, which is 639 00:33:25,800 --> 00:33:28,280 Speaker 12: largely extension of the current code frankly with a number 640 00:33:28,320 --> 00:33:30,960 Speaker 12: of spending cuts attached to it and some small small 641 00:33:31,040 --> 00:33:34,400 Speaker 12: changes to the code. They have to they have to 642 00:33:34,400 --> 00:33:36,360 Speaker 12: get the bill through the Senate before the fourth of 643 00:33:36,400 --> 00:33:38,560 Speaker 12: July in order to have that bill to the present's 644 00:33:38,600 --> 00:33:41,360 Speaker 12: desk by the end of July. This is a very 645 00:33:41,400 --> 00:33:45,000 Speaker 12: tough task in a in a in a Congress with 646 00:33:45,080 --> 00:33:47,960 Speaker 12: wide majorities for for the party in power, and these 647 00:33:48,000 --> 00:33:50,720 Speaker 12: are not wide majorities for House and Senate Republicans. 648 00:33:51,800 --> 00:33:55,520 Speaker 4: So what will be k Street's posture over the course 649 00:33:55,720 --> 00:33:57,680 Speaker 4: of June, and what will it be like to be 650 00:33:57,720 --> 00:33:59,760 Speaker 4: a lawmaker sitting by the phone. 651 00:34:00,880 --> 00:34:04,040 Speaker 12: This is where you make your bones. This is where 652 00:34:05,440 --> 00:34:09,880 Speaker 12: legislators earn their keep. This is this is your paycheck 653 00:34:10,080 --> 00:34:13,320 Speaker 12: for the whole Congress. You got to get the president's 654 00:34:13,400 --> 00:34:17,560 Speaker 12: signature legislative item through the Congress with with the main 655 00:34:17,640 --> 00:34:22,719 Speaker 12: points of his domestic agenda. The defense plus up is 656 00:34:22,800 --> 00:34:27,359 Speaker 12: a big part of this conversation. In this bill, and 657 00:34:27,400 --> 00:34:30,560 Speaker 12: the spending cuts and all the tax provisions that the 658 00:34:30,600 --> 00:34:34,080 Speaker 12: President pledged in the campaign are in this bill. It 659 00:34:34,120 --> 00:34:36,960 Speaker 12: is go time. And if you're a lobbyist on K Street, 660 00:34:37,600 --> 00:34:41,560 Speaker 12: you're not making summer plans because your summer just got 661 00:34:41,640 --> 00:34:44,880 Speaker 12: sucked away by the House and the Senate grinding this 662 00:34:44,920 --> 00:34:47,840 Speaker 12: thing out, and it will be a hell of a 663 00:34:47,880 --> 00:34:49,120 Speaker 12: nasty grind. 664 00:34:49,800 --> 00:34:52,560 Speaker 4: Wow, what's the money maker on K Street? Is it 665 00:34:52,600 --> 00:34:54,719 Speaker 4: the clean energy tax credits? The incentives? 666 00:34:56,160 --> 00:34:58,200 Speaker 12: I think yes, I think that's a It's a huge 667 00:34:58,280 --> 00:35:02,440 Speaker 12: driver of the conversation, serious driver of the conversation. There's 668 00:35:02,840 --> 00:35:07,719 Speaker 12: so much that that the Bidy administration put into the code, 669 00:35:08,239 --> 00:35:12,240 Speaker 12: and there's so much economic interest aligned with those provisions. 670 00:35:12,239 --> 00:35:12,919 Speaker 11: Some of them are. 671 00:35:12,880 --> 00:35:17,239 Speaker 12: Being significantly used, others are not used as much. But 672 00:35:17,320 --> 00:35:22,520 Speaker 12: the political potency across red states and which will matter 673 00:35:22,560 --> 00:35:28,240 Speaker 12: for the US Senate Republicans and red districts across the country, 674 00:35:29,320 --> 00:35:34,200 Speaker 12: these things do matter, and frankly, they're largely popular with 675 00:35:34,360 --> 00:35:38,279 Speaker 12: the voting populace and the business community. So it makes 676 00:35:38,320 --> 00:35:44,399 Speaker 12: it really a challenging thing to bring fiscal discipline at 677 00:35:44,400 --> 00:35:46,759 Speaker 12: the same time that you have very popular provisions you 678 00:35:46,800 --> 00:35:49,680 Speaker 12: have to take away in order to get some fiscal 679 00:35:49,719 --> 00:35:52,319 Speaker 12: discipline back into into this bill. 680 00:35:53,600 --> 00:35:56,200 Speaker 4: As a man who's actually held the gavel stood of 681 00:35:56,239 --> 00:35:59,520 Speaker 4: the speaker's rostrum, you know as well as we do 682 00:35:59,640 --> 00:36:02,600 Speaker 4: that this didn't need to just be a one vote 683 00:36:02,760 --> 00:36:06,000 Speaker 4: margin could have had a couple more Republicans. What do 684 00:36:06,080 --> 00:36:08,839 Speaker 4: you do when you're holding the gavel and Andrew Garbarino 685 00:36:08,920 --> 00:36:10,759 Speaker 4: falls asleep in the back of the room. Are you 686 00:36:10,800 --> 00:36:12,440 Speaker 4: telling me nobody could wake him up? 687 00:36:15,800 --> 00:36:19,960 Speaker 12: There are a couple of folks that slept across the 688 00:36:20,320 --> 00:36:24,760 Speaker 12: last two weeks in Congress, some Democratic members, some Republican members. 689 00:36:25,040 --> 00:36:29,799 Speaker 12: I don't begrudge them for this, but you know, sure 690 00:36:29,960 --> 00:36:31,080 Speaker 12: is embarrassing. 691 00:36:32,280 --> 00:36:33,160 Speaker 8: Sure is embarrassing. 692 00:36:34,280 --> 00:36:38,319 Speaker 12: Having said that, Eah, I mean I didn't have a 693 00:36:38,320 --> 00:36:41,360 Speaker 12: problem with falling asleep in my early going in Congress. 694 00:36:41,360 --> 00:36:44,480 Speaker 12: Had a problem with my mouth, and I would say 695 00:36:44,480 --> 00:36:47,960 Speaker 12: things would get me in trouble. So far, better to 696 00:36:48,000 --> 00:36:52,280 Speaker 12: fall asleep than to sleep laboratory things. 697 00:36:53,640 --> 00:36:55,520 Speaker 4: Fair enough, if you're with us on YouTube, you saw 698 00:36:55,560 --> 00:36:59,280 Speaker 4: a great reaction. I'm not sure anyone on the radio. Congressman, 699 00:36:59,320 --> 00:37:02,160 Speaker 4: do they get this before we hit the debt limit? 700 00:37:02,160 --> 00:37:04,319 Speaker 4: In other words, this will remain part of the package. 701 00:37:05,080 --> 00:37:08,360 Speaker 12: Yes, And the way to think of this bill is 702 00:37:08,400 --> 00:37:11,400 Speaker 12: that it's I mentioned this. It's an extension of the 703 00:37:11,440 --> 00:37:15,440 Speaker 12: current code. They're taking as base text, the Tax Cuts 704 00:37:15,440 --> 00:37:19,799 Speaker 12: and Jobs Act of twenty seventeen. In twenty seventeen, we 705 00:37:19,880 --> 00:37:24,120 Speaker 12: created a whole new tax regime. We didn't use any 706 00:37:24,120 --> 00:37:27,160 Speaker 12: of the previous tax code. So what you're talking about 707 00:37:27,200 --> 00:37:33,840 Speaker 12: here is a set of changes that are modest in scope. 708 00:37:33,840 --> 00:37:36,600 Speaker 12: You can look at them online and you can see 709 00:37:36,680 --> 00:37:39,320 Speaker 12: what the provisions, and you can actually see for yourself 710 00:37:39,320 --> 00:37:43,200 Speaker 12: the provisions that they're altering and changing or adding, and 711 00:37:43,239 --> 00:37:47,560 Speaker 12: they're adding, for instance, no tax on tips, a few 712 00:37:47,560 --> 00:37:50,719 Speaker 12: other items at the president's pledged in the campaign. But 713 00:37:50,880 --> 00:37:53,560 Speaker 12: it's not a dramatic set of new things added to 714 00:37:53,600 --> 00:37:58,799 Speaker 12: the code. It's revisions down, not really a great deal 715 00:37:58,840 --> 00:38:01,279 Speaker 12: of additions too. So I think they can get it done. 716 00:38:01,360 --> 00:38:02,680 Speaker 12: I think they can get it done by the end 717 00:38:02,680 --> 00:38:06,120 Speaker 12: of July. But it is going to be a long, hot, nasty, 718 00:38:06,719 --> 00:38:08,960 Speaker 12: cool summer for a House Republicans. 719 00:38:09,000 --> 00:38:10,480 Speaker 4: We're so glad that you're going to be along for 720 00:38:10,520 --> 00:38:15,200 Speaker 4: the ride, though. This is fantastic. Bloomberg contributor Patrick McHenry 721 00:38:15,239 --> 00:38:18,560 Speaker 4: I said it out loud only on Bloomberg. Thanks for 722 00:38:18,600 --> 00:38:21,680 Speaker 4: listening to the Balance of Power podcast. Make sure to 723 00:38:21,719 --> 00:38:24,880 Speaker 4: subscribe if you haven't already, at Apple, Spotify, or wherever 724 00:38:24,920 --> 00:38:27,520 Speaker 4: you get your podcasts, and you can find us live 725 00:38:27,600 --> 00:38:31,360 Speaker 4: every weekday from Washington, DC at noontime Eastern at bloomberg 726 00:38:31,440 --> 00:38:32,080 Speaker 4: dot com.