WEBVTT - Pimco's Libby Cantrill Talks Midterm Blue Wave

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio, news. Libby Cantrell is with PIMCO.

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<v Speaker 1>She brings a prodigious narrowness and a look at the

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<v Speaker 1>step-by-step move of our legislation in Washington. So we have

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<v Speaker 1>a lame duck legislative deadline, December 11th. Within the media,

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<v Speaker 1>to me, it's cursory. It's like, yeah, there's a phrase,

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<v Speaker 1>lame duck, da-da-da-da. Give us the inside baseball feel of

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<v Speaker 1>Republicans in a lame duck session having to pay soldiers

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<v Speaker 1>and sailors just as one idea.

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<v Speaker 2>Yeah, I mean, this is going to be, I mean,

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<v Speaker 2>a very busy lame duck. At least that's one scenario.

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<v Speaker 2>The other scenario is that nobody shows up because they've

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<v Speaker 2>lost their seats and it's really difficult to come back

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<v Speaker 2>to Washington.

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<v Speaker 1>They literally lose their offices, right?

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<v Speaker 2>Yeah, yes. Yeah, and oftentimes they're working out of there.

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<v Speaker 2>It's in January where there's a holdover.

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<v Speaker 1>Oh, so they lose the office in January.

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<v Speaker 2>Yeah.

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<v Speaker 1>What do they do with their apartments or their families?

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<v Speaker 2>Well, then, I mean, there's going to be a lot

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<v Speaker 2>of kind of recoupling, if you will. A lot of

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<v Speaker 2>members of Congress live together as roommates. This is sort

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<v Speaker 2>of like a dirty little secret in Washington because they

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<v Speaker 2>have to afford two homes, right?

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<v Speaker 1>Like back in the 19th century. Right.

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<v Speaker 2>Basically, Tom. They also, I mean, no apologies for members

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<v Speaker 2>of Congress here, but they haven't gotten a pay raise

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<v Speaker 2>since the early aughts. So this is, you know, they're

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<v Speaker 2>not necessarily making a lot of money on a real basis.

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<v Speaker 2>So I think it could be a very busy lame

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<v Speaker 2>duck session where you, of course, have the blocking, tackling

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<v Speaker 2>the NDAA, government funding, as you alluded to. But I

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<v Speaker 2>also think you could see something like permitting reform actually

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<v Speaker 2>get some traction. What is that? advocating for basically allows

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<v Speaker 2>for more sort of traditional energy assets to be built,

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<v Speaker 2>reduces red tape, but then also reduces red tape for

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<v Speaker 2>renewables and for electricity. Oh, come on.

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<v Speaker 1>To cut to the chase, Republicans going out the door

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<v Speaker 1>want to drill in Alaska, and they're going to get

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<v Speaker 1>it done before the Democrats show up.

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<v Speaker 2>Yeah, but by the way, they still need to have

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<v Speaker 2>a bipartisan vote in the Senate, so I think you

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<v Speaker 2>could get Democrats on board, too, because I think Democrats

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<v Speaker 2>are going to want to clear the decks here. I mean,

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<v Speaker 2>this is such a rebuke. This is not— 2006, which

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<v Speaker 2>is what we were saying to our clients in the

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<v Speaker 2>last couple of weeks, that this could look like a

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<v Speaker 2>wave that you saw in 2006 where Democrats took back

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<v Speaker 2>both the House and the Senate. This is 1974. Yeah.

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<v Speaker 2>This is a total referendum against the executive branch. And

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<v Speaker 2>so you're going to have, I mean, the fact that

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<v Speaker 2>you were talking about potentially 40 to 50 seats flipping

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<v Speaker 2>for Democrats, I mean, Democrats are winning in places that

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<v Speaker 2>they did not even know that they were competitive. They

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<v Speaker 2>look like they're going to win in Nevada, Congressional District 2.

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<v Speaker 2>There's never been a Democrat there, right? That was a

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<v Speaker 2>district created in, like, 45 years ago. There's never been

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<v Speaker 2>a Democrat represented. So, again, they are winning in places

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<v Speaker 2>that they didn't even know that they were competitive. So

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<v Speaker 2>they are going to want to, I think, clear the

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<v Speaker 2>decks to the extent that they can to try to

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<v Speaker 2>then really— focus on the things that they were actually

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<v Speaker 2>elected to do, which is to try to do something

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<v Speaker 2>on affordability and then also to try to provide some

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<v Speaker 2>oversight to the executive branch. OK, so let's go to the,

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<v Speaker 2>you know, given this mandate that the Democratic Party has

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<v Speaker 2>received here, what can they realistically do? Yeah, so there

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<v Speaker 2>are obviously still constraints. President Trump is still in the

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<v Speaker 2>White House. They're going to have big majorities, but nothing

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<v Speaker 2>close to a veto-proof majority, so of course they can't

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<v Speaker 2>overturn a veto. So there is going to be some

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<v Speaker 2>sort of constraint. However, with 55 potentially in the Senate,

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<v Speaker 2>I mean, you're going to have a Democratic Party that

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<v Speaker 2>is going to have to have— they' re going to have to show—

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<v Speaker 2>the voters that they can also govern. So this can't

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<v Speaker 2>just be an opposition party. They can't just be doing

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<v Speaker 2>oversight and impeachment of Pete Hegseth or what have you.

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<v Speaker 2>They're going to have to show that they can govern.

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<v Speaker 2>And I think that means that there is some window

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<v Speaker 2>for a deal. The one thing I think that's really

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<v Speaker 2>important to point out here for the markets is this

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<v Speaker 2>is going to be a more moderate group of Democrats

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<v Speaker 2>than we have seen for a long time. There are

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<v Speaker 2>going to be more blue dogs. This is like, be still,

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<v Speaker 2>my deficit hawk heart. Because they're winning in places that are, again,

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<v Speaker 2>sort of more traditionally Republican.

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<v Speaker 1>So I've got to rip up the script. How did

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<v Speaker 1>Jeffries and Schumer bring this more moderate Democrat party into

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<v Speaker 1>the stereotype of the liberal left Democrats? What a thread

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<v Speaker 1>and needle exercise. Yeah.

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<v Speaker 2>Well, again, I think this is what the voters really did. And,

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<v Speaker 2>you know, I think to Schumer's great credit in particular.

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<v Speaker 2>you know, love Schumer, hate Schumer, however you feel about

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<v Speaker 2>him or dislike him or what have you as the

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<v Speaker 2>future majority leader again. I mean, he really focused on

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<v Speaker 2>candidate quality and he focused on candidate quality that didn't

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<v Speaker 2>pass the purity test at the national level, but actually

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<v Speaker 2>were bespoke to their local dynamics.

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<v Speaker 1>And I'm going to do a shout out. Brett Baer

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<v Speaker 1>last night on Fox as they were picking up the

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<v Speaker 1>disastrous pieces. He was brilliant on this and Brett really

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<v Speaker 1>focused on candidate quality.

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<v Speaker 2>I mean, look at what's happening in Mississippi, right? You know,

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<v Speaker 2>Tallarico in Texas, Annie Andrews in South Carolina. These are

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<v Speaker 2>not folks who are necessarily running on the national Democratic platform.

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<v Speaker 2>They're running on a very localized platform.

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<v Speaker 1>I'm so intimidated by Libby Cantrell. I have to take notes.

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<v Speaker 2>Yeah, I know.

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<v Speaker 1>That bill's on my lap. Okay. I didn't know this.

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<v Speaker 1>A veto proof is both houses. Yes. $ 290 million. House members,

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<v Speaker 1>which is way away from 258 or whatever. Yeah. And

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<v Speaker 1>in the Senate, 67 senators. Yeah. So the president's got

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<v Speaker 1>a rock solid veto ban.

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<v Speaker 2>Yes, except I will say on maybe a couple of issues.

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<v Speaker 2>One is on tariffs on Canada. That has a huge

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<v Speaker 2>I mean, look what happened right in the upper Midwest,

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<v Speaker 2>like massive rebuke on the tariff agenda or what have you.

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<v Speaker 2>I could see that actually getting to that veto-proof majority. Also,

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<v Speaker 2>Russia sanctions. That is something that really upset Republicans on

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<v Speaker 2>the Hill, also Democrats. I could see that actually getting

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<v Speaker 2>to a veto-proof majority. But outside of that, I mean,

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<v Speaker 2>it's going to have to require both compromise with the president,

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<v Speaker 2>but also compromise with the Republicans. Because remember, Tom, you

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<v Speaker 2>also need a filibuster-proof majority for most legislation. The filibuster's

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<v Speaker 2>not going anywhere. That means Democrats need to actually compromise

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<v Speaker 2>with Republicans on some things. So there's definitely going to

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<v Speaker 2>be a constraint. But I would be very surprised if

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<v Speaker 2>Democrats don't pivot to compromising with the president, at least

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<v Speaker 2>on some things.

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<v Speaker 1>Did you see Taylor Swift at the game when the Broncos?

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<v Speaker 2>Can we talk about that game? God, that game was ugly.

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<v Speaker 2>You know what? I really do appreciate that you bring up.

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<v Speaker 2>The fact that the Broncos record belies how ugly these

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<v Speaker 2>games have been. But you know what? We will take it.

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<v Speaker 2>A W is a W in the words of my 15-year-old.

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<v Speaker 1>We're migrating from Broncos type to Kansas City Chiefs. Joining

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<v Speaker 1>us now in Portland, Libby Cantrell. Thank you so much.

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<v Speaker 2>Thanks so much.

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<v Speaker 1>Brilliant with Simcoe.