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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at

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Speaker 1: noon and five pm Eastern on Apple, Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: I bobviously got about one hundred very tired senators who

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Speaker 2: just finished a lengthy vote rama more than twenty four hours,

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Speaker 2: ultimately passing at least in the Senate. The President's one

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Speaker 2: Big Beautiful Bill, the tax package, of course, passed through

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Speaker 2: the budget reconciliation process. It was difficult, though it required

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Speaker 2: some deal making to get specifically Republican Senator Lisa Murkowski

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Speaker 2: of Alaska on board. As the majority leader, John Thune

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Speaker 2: lost three Republican votes. Ran Paul of Kentucky, Tom Tillis

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Speaker 2: of North Carolina, and Susan Collins of Maine all voted

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Speaker 2: no for this package, leaving the Vice President JD. Vance

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Speaker 2: to cast the tie breaking vote.

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Speaker 3: On this vote, the Ya's are fifty, the na's are fifty,

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Speaker 3: the Senate being evenly divided, the Vice President votes, and

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Speaker 3: the affirmative the bill as amended is passed.

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Speaker 4: There you have it, having spent a few hours in

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Speaker 4: the Capitol before, you have the occasion jd Vance on Twitter.

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Speaker 4: Massive tax cuts, especially no tax on tips and overtime,

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Speaker 4: he writes, and most importantly, big money for border security.

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Speaker 4: He calls it a big win for the American people.

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Speaker 4: Of course, this saga is not done yet. The bill

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Speaker 4: now goes back to the House, where there is some

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Speaker 4: consternation about changes that were made on the Senate side,

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Speaker 4: and we want to bring in Tyler Kendall Bloomberg Washington

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Speaker 4: correspondent who's live now on Capitol Hill, to explore some

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Speaker 4: of these changes. Tyler, what comes next?

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Speaker 5: Yeah, hey Joe, Well, we are expecting the House Rules

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Speaker 5: Committee to take this up. It will likely advance out

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Speaker 5: of that, but then it advances to a full vote

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Speaker 5: on the House floor, and that's where we could run

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Speaker 5: into a little bit of difficulty. Now, keep in mind,

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Speaker 5: this bill was designed not to be tweaked. It's not

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Speaker 5: supposed to pingpong between the different chambers. But some of

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Speaker 5: these more fiscal hawks, these members of the House Freedom Caucus,

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Speaker 5: could potentially threaten to sink it, which would essentially mean

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Speaker 5: it goes back to conference and the Senate has to

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Speaker 5: get involved all over again, and it was actually interesting

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Speaker 5: to hear from Senator Lisa Murkowski you ended up voting

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Speaker 5: in favor of this package, saying that she would welcome

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Speaker 5: that if the House kicked it back over to the

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Speaker 5: Senate with changes, because at the end of the day,

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Speaker 5: there is pretty broad support about those key pillars of

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Speaker 5: the package that you mentioned when it comes to immigration priorities,

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Speaker 5: defense priorities, of course, extending the twenty seventeen tax cuts.

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Speaker 5: But where these Republicans really were divided, particularly on the

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Speaker 5: Senate side, was those changes to the spending cuts, and

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Speaker 5: we even saw that in the three members that ended

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Speaker 5: up dissenting and voting no on this bill. You had

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Speaker 5: members like Senator Tom Tillis, who basically staked not running

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Speaker 5: for reelection on his no vote for this package, as

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Speaker 5: well as Senator Susan Collins, who both had raised concerns

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Speaker 5: about what the changes to Medica could mean for their constituents.

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Speaker 5: But square that with Senator Ran Paul of Kentucky, you

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Speaker 5: voted no on this package because he wanted to see

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Speaker 5: deeper spending cuts and wasn't going to vote for any

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Speaker 5: sort of legislation that lifts the debt ceiling as much

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Speaker 5: as this plan ultimately does. And I bring this up

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Speaker 5: because it was interesting to see what sort of compromises

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Speaker 5: ended up having to be made by Senate Majority Leader

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Speaker 5: John Thune in order to get this bill over the

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Speaker 5: finish line. That includes doubling the rural hospital fund to

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Speaker 5: fifty million dollars, something that you would have thought got

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Speaker 5: would have gotten Susan Collins on board, but didn't appear

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Speaker 5: to be enough of a compromise. It also cuts a

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Speaker 5: controversial tax on solar and win energy projects and revises

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Speaker 5: a food aid carve out for Alaska, in particular with

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Speaker 5: Joe and Kelly. As you well know, helped to get

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Speaker 5: Senator Lisa Murkowski on board, even as she says she

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Speaker 5: would welcome some changes from the House, ultimately her vote

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Speaker 5: helped to put this over the finish line.

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Speaker 2: Well, would we consider the political calculations that housemaker or

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Speaker 2: House lawmakers will now be considering as they decide whether

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Speaker 2: or not to vote for this package? Tyler, How would

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Speaker 2: a threat from Elon Musk to fund primary challenges to

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Speaker 2: any incumbent who vote to impact the deficit this much

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Speaker 2: factor in? Is he a voice at all? That anyone

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Speaker 2: is listening to, let alone President Trump himself.

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Speaker 5: Well, considering that he was the largest US political donor

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Speaker 5: in the twenty twenty four campaign cycle, not just to

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Speaker 5: the White House, but also to those down ballot races,

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Speaker 5: to a tune of more than two hundred and ninety

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Speaker 5: million dollars, recording to FEC filings. I think it probably

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Speaker 5: does hold a little bit of weight around here on

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Speaker 5: Capitol Hill. But as you're describing, it really does put

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Speaker 5: some Republicans in a tough spot if they are between

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Speaker 5: President Trump and Elon Musk, because Elon Musk has threatened

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Speaker 5: to primary anyone that does support the legislation, in particular

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Speaker 5: when it comes to rolling back those electric vehicle tax credits.

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Speaker 5: And I'll give both of you a prime example that

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Speaker 5: I know you're closely watching, which is Thomas Massey in

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Speaker 5: the House, a Republican from Kentucky. We're not expecting him

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Speaker 5: to change his vote when it comes to the House package.

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Speaker 5: He's going to vote no. President Trump has already put

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Speaker 5: but some muscle already puts some money behind funding a

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Speaker 5: primary challenger against him with a super PAC. But then

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Speaker 5: we had Elon Musk, Joe and Keyley yesterday in a

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Speaker 5: post on X confirming that he intends to donate to

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Speaker 5: Thomas Massey's campaign in order to give him a little

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Speaker 5: bit of a funding boost against President Trump's operation.

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Speaker 3: Yep.

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Speaker 2: And of course President Trump now potentially suggesting having Doge

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Speaker 2: take a look at Elon Musk's companies and maybe even

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Speaker 2: looking at deporting Elon Musk though he's a US citizen.

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Speaker 2: We'll have more on that later in the show. Bloomberg's

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Speaker 2: Tyler Kendall live from Capitol Hill for us, Thank you

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Speaker 2: so much, and we want to add another voice to

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Speaker 2: the conversation now, someone who has had deep experience on

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Speaker 2: the Hill as a former seven term congressman from Pennsylvania.

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Speaker 2: A former Republican Congressman, Charlie Dent is with us. He

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Speaker 2: is now executive director of the Aspen Institute Congressional Program.

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Speaker 2: Welcome back to Bloomberg TV and Radio, sir. Obviously, with

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Speaker 2: this particular House of Representatives, which is where this bill

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Speaker 2: goes next, we have seen two things be true, one

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Speaker 2: being that the Speaker, Mike Johnson is not afraid to

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Speaker 2: allow things to fail on the floor, but the other

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Speaker 2: being that President Trump can twist some arms and usually

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Speaker 2: people who seem like their holdouts ultimately roll.

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Speaker 6: How do you expect this.

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Speaker 7: To go down?

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Speaker 8: No doubt there will be a heavy whip operation. I'm

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Speaker 8: sure the President will try to bully and threaten some

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Speaker 8: members to voting for the Senate pass package. But those

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Speaker 8: threats tend to work better with Republican members in very

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Speaker 8: safe seats. I expect those folks in the safe seats

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Speaker 8: we're making some noise right now will melt under the

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Speaker 8: pressure from the President. The bigger question is the Medicaid

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Speaker 8: changes that are of concern to many of the more

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Speaker 8: swing district or more moderate members. Their problem is not

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Speaker 8: going to be a Republican primary. Their problem is going

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Speaker 8: to be losing, potentially losing to Democrats in the fall.

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Speaker 8: And so those are the folks I think they ought

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Speaker 8: to pay close attention to these Medicaid changes. That the

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Speaker 8: Senate went further than the House did on the Medicaid changes.

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Speaker 8: In many Republican House Republicans, we were a pretty clear

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Speaker 8: line in the sand on that issue. So I'm anxious

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Speaker 8: to see how they navigate Medicaid. I could see this

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Speaker 8: bill being changed once again and going back to the Senate.

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Speaker 8: You certainly have fiscal hawks on the right who are

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Speaker 8: screaming about this, but again they're more likely to be

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Speaker 8: pressured by the president successfully. But it's more modern members

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Speaker 8: Don Bacon, you know, he could be a no vote.

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Speaker 8: He's not running again. Tom Massey is an immovable object.

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Speaker 9: He won't move.

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Speaker 8: And I don't think the Republicans can lose more than

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Speaker 8: I think they could lose. Maybe two one more vote

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Speaker 8: and that's it. And so I'm anxious to see how

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Speaker 8: they do this lip operation.

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Speaker 4: Well, it's really interesting to hear you speak about this, Congressman,

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Speaker 4: and welcome back. You seized immediately on the issue of Medicaid.

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Speaker 4: Donald Trump knows what an issue this is. He talked

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Speaker 4: about it on his way to the Alligator Alcatraz Detention

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Speaker 4: Center in Florida earlier today. Listen to how Donald Trump

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Speaker 4: put it.

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Speaker 10: I think so, I think it's going to be the

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Speaker 10: greatest bill ever passed. No, no, we're not going to

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Speaker 10: be playing with Medican all the way million Americans. Yeah,

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Speaker 10: the Democrats haven't wrong. Yeah, waste, fraud and abuse. In fact,

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Speaker 10: if you look at what's gone on, we've gone way back.

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Speaker 10: We take care of Medicaid, we take care of Medicare.

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Speaker 10: They will blow Medicare and Medicaid because they have no

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Speaker 10: idea what they're doing, just like they don't have any

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Speaker 10: idea what they did on the border.

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Speaker 4: They have no idea.

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Speaker 10: Medicaid is in big trouble with the Democrats.

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Speaker 4: Charlie Dn You hear the Republican talking points on this,

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Speaker 4: beginning with the president waste fraud abuse. No one's losing

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Speaker 4: their coverage is what we've been hearing, unless they deserve to,

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Speaker 4: unless they're able bodied adults who should be at work,

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Speaker 4: or the American people buying that argument.

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Speaker 8: Well, the problem for the President is that the Congressional

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Speaker 8: Budget Office came out with a report saying that somewhere

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Speaker 8: between eight to I think eight to fourteen million people

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Speaker 8: or twelve million people excuse me, could be losing coverage

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Speaker 8: as a result to changes in Medicaid. And so that's

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Speaker 8: a major problem. You know, you can just say, hey,

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Speaker 8: it's all about ways fraud abuse, but we're talking about

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Speaker 8: people who are going to be uncovered because of the

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Speaker 8: work requirements and also because I think the Senate I'm

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Speaker 8: not sure exactly where the Senate fell down on the

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Speaker 8: so called provider taxes that states used to draw down

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Speaker 8: federal Medicaid dollars. But that's another issue. I mean, so

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Speaker 8: the President doesn't ever get into the policy details. I

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Speaker 8: had a big fight with him back in twenty seventeen

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Speaker 8: over this in the in the White House over at

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Speaker 8: that time proposed changes to Medicaid. Then we were talking

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Speaker 8: block rants. I told him it wasn't going to work,

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Speaker 8: and he got pretty upset with me because I didn't

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Speaker 8: vote for the bill. But that was going to cut

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Speaker 8: you over twenty million people from their health benefits at

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Speaker 8: that time from Medicaid. So that's the challenge that the

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Speaker 8: president has. He can talk all he wants, but as

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Speaker 8: long as the reports out there saying over eight million

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Speaker 8: people are going to lose health benefits, they need a

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Speaker 8: better argument.

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Speaker 2: Well yeah, which gets us to the pulling around this bill,

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Speaker 2: which just that widely, no matter what pull you look at,

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Speaker 2: it is more unpopular than it is popular. If the

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Speaker 2: House ultimately is going to pass this and do so

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Speaker 2: by July fourth, have the President sign it into law,

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Speaker 2: knowing there will be roughly what sixteen months until the

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Speaker 2: midterms in twenty twenty six, how would the party need

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Speaker 2: to course correct to change that?

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Speaker 8: Well, the party has done something here that I think,

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Speaker 8: I think this has been a miscalculation to put this

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Speaker 8: all in one big, beautiful bill. I mean, I think

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Speaker 8: that was always a mistake. The Senate always wanted to

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Speaker 8: break this in two. You may recall in twenty seventeen,

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Speaker 8: after the Obamacare repeal replace initiative failed, with John McCain

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Speaker 8: going like that, turning his thumb down. You know, then

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Speaker 8: Republicans moved on to tax reform or you know, the

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Speaker 8: tax changes, and they weren't dealing with spending cuts, just

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Speaker 8: tax policy. Now, that bill, you know, was enacted into law.

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Speaker 8: I supported it, but it really didn't help Republicans much

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Speaker 8: in the midterm election. This bill is different because you

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Speaker 8: are bing both what I could say are probably unpopular

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Speaker 8: cuts to Medicaid and to food stamps or snap benefits

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Speaker 8: and some other areas, and you're also extending those tax changes.

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Speaker 8: It largely benefit people on the hire income scale. And

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Speaker 8: so that's the toxic political mix that Republicans are confronting

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Speaker 8: right now. So I suspect between now in the midterm,

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Speaker 8: Republicans will be playing a lot of defense. You may

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Speaker 8: remember in the twenty eighteen midterms, Democrats used the healthcare

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Speaker 8: issue as a blunt, blund instrument against Republicans in those races.

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Speaker 8: I suspect Democrats will try to use healthcare and Medicaid

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Speaker 8: in particular as an instrument against Republicans and marginal swing

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Speaker 8: districts going forward.

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Speaker 4: Well, so where are you on the next twenty four

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Speaker 4: hours here, Congressman? You seem to think that the House

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Speaker 4: needs to make changes. It goes back to the Senate.

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Speaker 4: That means we miss the fourth of July deadline. Does

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Speaker 4: Tom Emmer not have the votes as he sends out

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Speaker 4: the notice for lawmakers to report.

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Speaker 8: Well, I bet today he does not have the votes.

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Speaker 8: That does not mean he will not have the votes

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Speaker 8: by July fourth. But there are I mean, look, I

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Speaker 8: think they're over a dozen members House members who've expressed

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Speaker 8: some pretty strong opposition to this bill. As I said previously,

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Speaker 8: I suspect those on the far right who are concerned

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Speaker 8: about deficits, they will melt under pressure from the President.

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Speaker 8: We've heard this before. They'll yell, they'll scream, there, they'll

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Speaker 8: bang the shoe on the table. But when the President

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Speaker 8: says support this or I'm I'm going to fund the

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Speaker 8: primary opponent against you, they tend to fall in line.

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Speaker 8: The problem will be for these members in these swing districts,

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Speaker 8: these members who are at great risk of losing their

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Speaker 8: seats to the Democrats. You know, look, they can either

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Speaker 8: displease the MAGA base, they can or displease their.

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Speaker 4: Constituents written large.

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Speaker 8: You know, if Trump is mad at them in funds

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Speaker 8: of primary, and Trump successful will get some more very

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Speaker 8: conservative person to replace that individual, that seat will probably

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Speaker 8: be gone in November anyway. So what's the calculation here?

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Speaker 8: I would be if I were the president running my

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Speaker 8: whip operation, I try to figure out a way to

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Speaker 8: communicate to those few people and listen to them. Because,

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Speaker 8: by the way, if the House flips, Donald Trump is

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Speaker 8: going to have a really rough time in his next

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Speaker 8: two years in office. I mean you're going to see

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Speaker 8: all kinds of oversight and hearings and people being subpoened.

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Speaker 8: So Donald Trump better be very careful how he handles

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Speaker 8: those members. Threats and intimidation tactics are not the way

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Speaker 8: to handle them at this moment.

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Speaker 2: Well, in congressman, if you were sitting in one of

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Speaker 2: those swing states right now, knowing Elon Musk is threatening

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Speaker 2: to fund himself primary challenges to those who vote yes

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Speaker 2: for this bill, which he does not like. Would that

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Speaker 2: make you second guess your ultimate vote?

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Speaker 8: Well, maybe some on the hard right will. But at

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Speaker 8: the end of the day, I think Donald Trump has

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Speaker 8: a lot more influence with Republican primary voters than does

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Speaker 8: Elon Musk. Now, Elon Musk obviously has a checkbook. But

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Speaker 8: at the end, but Donald Trump is able to rally

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Speaker 8: much of the base to support his chosen candidates. So

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Speaker 8: the Mosk threat is real. I suspect Musk could help

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Speaker 8: with Tom Massey, who will likely vote no. And there

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Speaker 8: might be some other Republicans who vote now, who are

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Speaker 8: now on the hard right, who could probably give Elan

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Speaker 8: a call and say, I'm going to need your help,

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Speaker 8: my friend. But right now, I'd say that Trump has

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Speaker 8: more more sway than Musk. But if I'm going to

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Speaker 8: vote no, I'm in a very conservative district. I think

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Speaker 8: that Elon Musk might be running to their rescue and

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Speaker 8: might be able to maybe save them.

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Speaker 4: Fascinating. Charlie Dent. Great to have you back, so appreciate

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Speaker 4: the insights he's been there. As Kaylee mentioned, former Republican

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Speaker 4: congressman from Pennsylvania, member the House Appropriations Committee now executive

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Speaker 4: director of the Aspen Institute Congressional Program. We've got some

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Speaker 4: wood to chop here still, Kayley. As the bill heads

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Speaker 4: for the House, you wonder, though, if just the hope

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Speaker 4: to be home for the fourth of July is enough

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Speaker 4: to actually get the over the finish line.

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Speaker 2: Well, we know Washington loves the smell of jet femes.

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Speaker 2: It can be a driving force. Also on this bill,

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Speaker 2: we should note it's no longer actually officially called the

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Speaker 2: One Big Beautiful Bill Act?

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Speaker 4: Is that true?

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Speaker 2: The Senate was able to call it, Chuck Schumer specifically

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Speaker 2: to procedurally strip it out. You just call it by

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Speaker 2: a number.

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Speaker 4: Really right now?

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Speaker 2: I wonder how that's sitting with pres.

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Speaker 4: So no more build back better, no more Big Beautiful Bill.

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Speaker 2: Getting rid of the bees at least for now, We'll

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Speaker 2: have more heat here. On Balance of Power on Bloomberg

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Speaker 2: TV and Radio.

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Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catch

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Speaker 1: us live weekdays at noon and five pm. E's durn

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Speaker 1: on Apple Cocklay and Android Auto with the Bloomberg Business app.

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Speaker 1: You can also listen live on Amazon Alexa from our

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Speaker 1: flagship New York station. Just say Alexa Play Bloomberg eleven thirty.

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Speaker 4: From the majority with in the House. Yeah, Tom Emmer

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Speaker 4: says there will be a vote tomorrow in the House

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Speaker 4: following passage today in the Senate. If you're just as

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Speaker 4: they got it done in the upper chamber, I'm guessing

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Speaker 4: no one has slept yet. Remember the voter rama started

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Speaker 4: nine o'clock yesterday morning. It didn't really. They ended up

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Speaker 4: tooling around with procedural votes all day into the evening

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Speaker 4: when the voterama actually began, and just after twelve noon

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Speaker 4: on this vote, we got a tally.

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Speaker 6: On this fot fifty.

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Speaker 3: The nays are fifty, the Senate being evenly divided, the

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Speaker 3: Vice President votes, and the affirmative the bill as amended

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Speaker 3: is passed.

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Speaker 4: That's the Vice President JD. Vance was required to make

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Speaker 4: it happen with a fifty to fifty vote here and

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Speaker 4: the tie breaker. If you're with us on YouTube, you

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Speaker 4: see some very sleepy people milling around. And so there

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Speaker 4: we have it. The big beautiful bill, or at least

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Speaker 4: the version it took over the course of last evening,

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Speaker 4: has now passed the Senate, and it goes back to

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Speaker 4: the House in a slightly different form, and there are

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Speaker 4: a lot of concerns about exactly how this is going

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Speaker 4: to work. If you ask members of the House Freedom Caucus,

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Speaker 4: they're deeply worried about this. It cuts one and a

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Speaker 4: half trillion dollars in exchange for four and a half

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Speaker 4: trillion dollars in tax cuts, which is five hundred billion

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Speaker 4: dollars short of the savings that some of the fiscal

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Speaker 4: hawks said they needed to see to get to a yes.

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Speaker 4: But now again Tom Emer says we're going for it tomorrow.

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Speaker 4: The next twenty four hours are going to be critical

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Speaker 4: if they want to meet the president's July fourth deadline.

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Speaker 4: And I think that Rick and Genie will both tell

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Speaker 4: you that doesn't need to happen. But the optics here

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Speaker 4: are important for this president, and so we should assemble

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Speaker 4: our political panel with us the day after Bloomberg Politics

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Speaker 4: contributors Genie Shanzano and Rick Davis. Genie is senior Democracy

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Speaker 4: Fellow with the Center for the Study of the Presidency

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Speaker 4: in Congress. Rick is partner at Stone Court Capital are

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Speaker 4: Republican strategist, And so I'll start with you, Rick John

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Speaker 4: Thune got it done. What does it say about the

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Speaker 4: leader and the way this all played out in the

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Speaker 4: last twenty four hours.

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Speaker 11: Yeah, there were a lot of doubters last night at

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Speaker 11: about two o'clock in the morning as you were watching

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Speaker 11: it sounds like from your living room as to whether

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Speaker 11: or not they could get that one extra vote. I mean,

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Speaker 11: there was really a battle of deals that Thune was

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Speaker 11: trying to articulate between Susan Collins and Lisa Murkowski. Turns

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Speaker 11: out Lisa got a better deal. Susan didn't. She voted

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Speaker 11: against it because she feels like she's going to lose

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Speaker 11: four hospitals, five hospitals in her state. And Murkowski got

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Speaker 11: the snap provisions she wanted and wind up in. But

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Speaker 11: it was a horse trade, and then nobody really knew

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Speaker 11: for sure until this morning whether or not that deal

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Speaker 11: with Mkowski was going to stick. So no profiles encouraged

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Speaker 11: by these Republicans who thought that the trillion dollars in

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Speaker 11: Medicaid cuts were going to be a problem. So we'll

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Speaker 11: see now they move on to the House. House will

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Speaker 11: passed this, and they're going to have to campaign on

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Speaker 11: this in a year from now in midterms. It'll be

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Speaker 11: interesting to see how the public reacts.

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Speaker 4: That's right. A lot of folks referred to Tom Tillis

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Speaker 4: actually as a profile and courage. Of course, he did

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Speaker 4: vote no, and it will mean the end of his

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Speaker 4: Senate career. Ginny, we just heard from Maya mcguinnis at

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Speaker 4: the Committee for a Responsible Federal Budget. She's going to

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Speaker 4: be with us on the late edition of Balance of Power.

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Speaker 4: Her note with the headline Senate jumps off a budget

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Speaker 4: cliff on reconciliation. Is that how you see it?

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Speaker 9: It absolutely is. You know, as as Rick just described

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Speaker 9: waiting all night to see if Lisa Murkowski could get

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Speaker 9: bought off by a carve out for Aleasco, which she got,

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Speaker 9: and the other forty eight states because Hawaii goes with

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Speaker 9: Alaska as non contiguous, will have to pay for these

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Speaker 9: Medicaid cuts. So you've got, you know, seventeen eighteen million

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Speaker 9: people losing healthcare. You've got as Maya's talking about, an

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Speaker 9: enormous addition to debt and death as and this is

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Speaker 9: all to pay for tax cuts that skew to the

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Speaker 9: very wealthy. And so this is absolutely a perilous moment

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Speaker 9: for the health of the nation. It's a perilous moment

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Speaker 9: for the financial well being of the nation. And GOP

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Speaker 9: members know that they are absolutely aware of this. But

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Speaker 9: the poll of MAGA, the pull of trump Ism has

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Speaker 9: one out in the Senate, and it's likely to win

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Speaker 9: out again in the House because as much as the

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Speaker 9: House Freedom Caucus likes to cry fowl, they seem to

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Speaker 9: go along. And so you've got to give it to

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Speaker 9: Donald Trump. He's been able to pull out at least

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Speaker 9: in the Senate now and enormous victory. And so that

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Speaker 9: is a huge deal for him. And we have to

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Speaker 9: wait and see where it goes in the House. But

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Speaker 9: all that's our this thing gets through either you know,

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Speaker 9: before July fourth or in the next few hours afterwards.

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Speaker 4: We all remember the corn Husker kickback, right, Ben Nelson,

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Speaker 4: back in the old I'm a caried debate. Rick, you

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Speaker 4: were working in the Senate back then, how would you

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Speaker 4: catalog this effort when it comes to backroom deals. Did

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Speaker 4: Americans wake up and say, well, what happened and who

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Speaker 4: voted on it?

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Speaker 11: Yeah, we're a long way from those fiscal days of

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Speaker 11: you know, trying to put pressure on people not to

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Speaker 11: do these carve outs. You know, pork barrow is back,

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Speaker 11: and that's exactly Look, you always had to cut deals

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Speaker 11: in the Senate in the House to get votes, right.

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Speaker 11: That's as long as there's been those chambers, there have

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Speaker 11: been those deals. I would say that this is the

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Speaker 11: first time I can recall so many people having a

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Speaker 11: different version of the facts to work from. This idea

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Speaker 11: that you can call expiring tax cuts somehow policy and

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Speaker 11: not have it graded against you as you factor for

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Speaker 11: the deficits is nuts, because the deficits are the deficits.

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Speaker 11: And so we've just added a trillion dollars a year

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Speaker 11: in interest on the national debt. And I think all

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Speaker 11: of these guys there's no deal that can be cut

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Speaker 11: that's going to put that thing in the rear view mirror.

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Speaker 11: So I'm not surprised by the deals. It's obviously had

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Speaker 11: to get him because the underli like bill wasn't what

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Speaker 11: they wanted. But at the end of the day, what

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Speaker 11: I think everyone's going to remember from this is that

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Speaker 11: at a time when everyone agrees that we are spending

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Speaker 11: too much money in Washington, d C. We just spent

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Speaker 11: significantly amount more.

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Speaker 4: Rick Davis says, pork Beryl is back, Jeanie. That's something

438
00:22:44,680 --> 00:22:47,000
Speaker 4: to say in the middle of this conversation. When this

439
00:22:47,119 --> 00:22:50,800
Speaker 4: was supposed to be an effort to cut government spending.

440
00:22:50,800 --> 00:22:53,320
Speaker 4: You know what Elon Musk says, if it's the last

441
00:22:53,320 --> 00:22:55,600
Speaker 4: thing he ever does on this earth, he says, he'll

442
00:22:55,600 --> 00:23:00,760
Speaker 4: be helping to pay for the primary challenges against Republicans

443
00:23:00,840 --> 00:23:05,040
Speaker 4: who voted for this bill. Before we get that farther,

444
00:23:05,119 --> 00:23:06,560
Speaker 4: we've got to go to the House. And there's no

445
00:23:06,640 --> 00:23:08,680
Speaker 4: guarantee this is going to pass tomorrow, is there.

446
00:23:10,520 --> 00:23:14,800
Speaker 9: There's no guarantee it is likely that they are able

447
00:23:14,960 --> 00:23:18,240
Speaker 9: to keep this bill on track and pass it. We

448
00:23:18,280 --> 00:23:22,000
Speaker 9: don't know when you know, you just look at recent history.

449
00:23:22,160 --> 00:23:25,840
Speaker 9: Every time somebody like Chip Roy has gone out very

450
00:23:25,920 --> 00:23:29,480
Speaker 9: passionately and spoken out against the bill, he has caved.

451
00:23:29,520 --> 00:23:32,119
Speaker 9: And you know what's astonishing to me is I was

452
00:23:32,200 --> 00:23:35,560
Speaker 9: rereading Josh Hawley's off ed in the New York Times.

453
00:23:35,560 --> 00:23:36,040
Speaker 6: What was it?

454
00:23:36,080 --> 00:23:38,960
Speaker 9: We talked about it a couple months ago, saying these

455
00:23:39,000 --> 00:23:43,240
Speaker 9: medicaid provisions would destroy the party, and yet somehow he

456
00:23:43,520 --> 00:23:46,920
Speaker 9: found his way to vote yes. And that's what seems

457
00:23:46,960 --> 00:23:50,159
Speaker 9: to have happened in all of these cases. And another

458
00:23:50,240 --> 00:23:53,760
Speaker 9: really astonishing part of where we are today. You know,

459
00:23:53,800 --> 00:23:57,040
Speaker 9: you go back to George Washington telling Thomas Jefferson the

460
00:23:57,119 --> 00:24:01,600
Speaker 9: Senate cools the House. We've talked about that repeatedly. That

461
00:24:01,680 --> 00:24:05,479
Speaker 9: didn't happen here. The Senate heated things up, making it

462
00:24:05,560 --> 00:24:08,160
Speaker 9: harder for Mike Johnson as he takes this bill back.

463
00:24:08,280 --> 00:24:08,440
Speaker 5: Right.

464
00:24:08,560 --> 00:24:11,720
Speaker 9: I don't know what happened to George Washington's cooler Senate,

465
00:24:11,760 --> 00:24:14,399
Speaker 9: but it's no longer cooler, Joe. It is hotter, and

466
00:24:14,440 --> 00:24:17,440
Speaker 9: it's sending over a hotter bill. And yet in all

467
00:24:17,600 --> 00:24:21,720
Speaker 9: likelihood this thing goes through because Donald Trump is going

468
00:24:21,800 --> 00:24:24,960
Speaker 9: to be working these phones and his social media feed

469
00:24:25,320 --> 00:24:28,840
Speaker 9: and twisting these arms to keep people besides Tom Massey

470
00:24:28,880 --> 00:24:30,560
Speaker 9: and check Well.

471
00:24:30,600 --> 00:24:33,800
Speaker 4: It's really interesting the way you put that, Genie, Ricky.

472
00:24:34,080 --> 00:24:37,359
Speaker 4: Maybe not so much the saucer that cools the tea

473
00:24:37,760 --> 00:24:39,640
Speaker 4: in this case. What's going to happen in the House.

474
00:24:39,680 --> 00:24:42,320
Speaker 4: Does Tom Emmer think he has the votes because there

475
00:24:42,320 --> 00:24:44,320
Speaker 4: has been a pattern of bringing bills to the floor

476
00:24:44,640 --> 00:24:45,160
Speaker 4: that fail.

477
00:24:46,920 --> 00:24:47,640
Speaker 7: Yeah, I think.

478
00:24:47,480 --> 00:24:50,560
Speaker 11: They'll they'll they'll get the votes. It's it's interesting how

479
00:24:50,600 --> 00:24:53,760
Speaker 11: they'll get him, though, because as Genie said, Tom Massey's

480
00:24:53,800 --> 00:24:57,840
Speaker 11: pretty pretty significantly opposed to this and obviously been paying

481
00:24:57,840 --> 00:24:59,960
Speaker 11: a big political price in a fight with the President

482
00:25:00,000 --> 00:25:03,679
Speaker 11: and over it. Nick Lolota, I mean Jeanie's neighbor in

483
00:25:03,720 --> 00:25:07,640
Speaker 11: New York is saying to everybody who listened to him that,

484
00:25:07,800 --> 00:25:09,960
Speaker 11: you know, this ALT provisions weren't good enough for him,

485
00:25:10,000 --> 00:25:11,520
Speaker 11: and he's going to vote against it. But of course

486
00:25:11,560 --> 00:25:16,680
Speaker 11: we heard that from all the SALT members until they

487
00:25:16,960 --> 00:25:19,679
Speaker 11: decided to change their mind without really getting much. So

488
00:25:20,640 --> 00:25:23,280
Speaker 11: I think that leadership will get what they want. And again,

489
00:25:23,520 --> 00:25:27,160
Speaker 11: I mean, Speaker Johnson deserves credit. He is the most

490
00:25:27,280 --> 00:25:31,520
Speaker 11: underrated speaker in history, I think, and yet he's getting

491
00:25:31,560 --> 00:25:35,560
Speaker 11: an enormous amount of Donald Trump's what I would call

492
00:25:36,200 --> 00:25:40,720
Speaker 11: questionable popularity policies through the House of Representatives and made

493
00:25:40,760 --> 00:25:43,040
Speaker 11: it the law. So kudos to him. I don't want

494
00:25:43,040 --> 00:25:45,440
Speaker 11: to jinx it for him, but I see this as

495
00:25:46,359 --> 00:25:48,880
Speaker 11: a signing ceremony in the Oval Office on the fourth

496
00:25:48,920 --> 00:25:51,959
Speaker 11: of July, Boom goes via fireworks.

497
00:25:52,560 --> 00:25:55,800
Speaker 4: That's right. You know they're going to coincide that whole thing, Genie.

498
00:25:55,800 --> 00:25:59,280
Speaker 4: When I was on the daybreak feature on Bloomberg this morning,

499
00:25:59,359 --> 00:26:02,760
Speaker 4: on the terminal, the chart of the day showed the

500
00:26:02,880 --> 00:26:10,240
Speaker 4: cost of this bill on the lowest income Americans versus

501
00:26:10,280 --> 00:26:14,480
Speaker 4: the wealthiest. The Senate version of this bill that has

502
00:26:14,520 --> 00:26:18,359
Speaker 4: just passed of course, costs the bottom twenty percent of

503
00:26:18,440 --> 00:26:22,080
Speaker 4: taxpayers an average of five hundred and sixty dollars a year.

504
00:26:23,000 --> 00:26:25,560
Speaker 4: It will give an average boost of more than six

505
00:26:25,640 --> 00:26:28,119
Speaker 4: thousand dollars a year to those on the top end

506
00:26:29,320 --> 00:26:31,760
Speaker 4: if those numbers are correct. This analysis, coming from the

507
00:26:31,800 --> 00:26:35,679
Speaker 4: Budget Lab at Yale University, by the way, would suggest

508
00:26:35,680 --> 00:26:38,080
Speaker 4: Democrats have a pretty good story to tell for the midterms.

509
00:26:38,600 --> 00:26:40,800
Speaker 4: How do you frame this so people understand it?

510
00:26:42,560 --> 00:26:45,280
Speaker 9: Yeah, the work that they have done at the lab,

511
00:26:45,320 --> 00:26:47,600
Speaker 9: and I know you and Kayley interviewed the head of

512
00:26:47,600 --> 00:26:51,520
Speaker 9: the lab yesterday, it's really worth looking at what they

513
00:26:51,560 --> 00:26:55,560
Speaker 9: have come with and it is objectively construed. It is

514
00:26:55,680 --> 00:26:58,000
Speaker 9: data that you can look at and all over yourself,

515
00:26:58,320 --> 00:27:00,720
Speaker 9: and it is very telling as to who the GOP

516
00:27:01,400 --> 00:27:05,080
Speaker 9: Trump Party is and what they are interested in. And

517
00:27:05,160 --> 00:27:07,560
Speaker 9: so for the Democrats it is going to be an

518
00:27:07,600 --> 00:27:10,960
Speaker 9: issue of can they tell this story? Can they tell

519
00:27:11,000 --> 00:27:13,399
Speaker 9: a story? And I think one area they need to

520
00:27:13,480 --> 00:27:16,880
Speaker 9: work on is to stop talking about this just as

521
00:27:16,960 --> 00:27:21,400
Speaker 9: cuts to Medicaid. Twenty five percent of Americans are on Medicaid.

522
00:27:21,440 --> 00:27:25,320
Speaker 9: That's a big number, but this bill impacts even people

523
00:27:25,359 --> 00:27:29,000
Speaker 9: who are ensured, as costs will rise. So you have

524
00:27:29,240 --> 00:27:33,080
Speaker 9: that story to tell. This is Donald Trump's Obamacare, This

525
00:27:33,240 --> 00:27:36,360
Speaker 9: is his healthcare bill, and it is going to increase

526
00:27:36,480 --> 00:27:40,359
Speaker 9: costs and remove about seventeen eighteen million people in a

527
00:27:40,440 --> 00:27:44,280
Speaker 9: decade from the healthcare roles. That's number one. Number two

528
00:27:44,400 --> 00:27:46,840
Speaker 9: is the impact on green energy. We've got all these

529
00:27:46,880 --> 00:27:50,960
Speaker 9: companies talking about building new AI platforms, et cetera. Our

530
00:27:51,160 --> 00:27:54,640
Speaker 9: energy bills will go up because we don't have the

531
00:27:54,800 --> 00:27:57,959
Speaker 9: energy we need going forward. And then you look at

532
00:27:58,000 --> 00:28:00,720
Speaker 9: the debt and deficit we're giving to our chill. It

533
00:28:00,840 --> 00:28:03,880
Speaker 9: is enormous. And the funny math they're using to say

534
00:28:03,920 --> 00:28:08,240
Speaker 9: this AD zero is laughable. And I heard Peters Gary

535
00:28:08,280 --> 00:28:10,800
Speaker 9: Peter Is saying this on the floor this morning when

536
00:28:10,800 --> 00:28:12,840
Speaker 9: he was talking about the fact. You just look at

537
00:28:12,840 --> 00:28:16,760
Speaker 9: the bill itself. If there is no added cost, why

538
00:28:16,800 --> 00:28:18,919
Speaker 9: are you raising the debt ceiling? And that tells you

539
00:28:19,000 --> 00:28:19,959
Speaker 9: everything you need to know.

540
00:28:20,359 --> 00:28:23,479
Speaker 4: Jeanie Shanzo and Rick Davis taking a hard look at

541
00:28:23,480 --> 00:28:25,960
Speaker 4: the fine print as the bill clears the Senate and

542
00:28:26,040 --> 00:28:27,080
Speaker 4: heads back to the House.

543
00:28:30,480 --> 00:28:33,960
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

544
00:28:34,040 --> 00:28:37,480
Speaker 1: us live weekdays at noon and five pm Eastern on Apple,

545
00:28:37,520 --> 00:28:40,880
Speaker 1: Cocklay and Android Auto with the Bloomberg Business App, listen

546
00:28:40,960 --> 00:28:44,080
Speaker 1: on demand wherever you get your podcasts, or watch us

547
00:28:44,120 --> 00:28:45,840
Speaker 1: live on YouTube.

548
00:28:46,560 --> 00:28:49,000
Speaker 4: The bill still needs to pass the House again, but

549
00:28:49,080 --> 00:28:51,200
Speaker 4: we can tell you if you're just joining us. The

550
00:28:51,240 --> 00:28:54,480
Speaker 4: President Trump's big, beautiful bill that extends the Trump tax

551
00:28:54,520 --> 00:28:57,440
Speaker 4: cuts and does a lot more has passed the Senate.

552
00:28:57,480 --> 00:29:00,440
Speaker 4: It was a fifty to fifty tie, broken by Vice

553
00:29:00,480 --> 00:29:04,360
Speaker 4: President jd Vance and Kaylee. I was struck this morning

554
00:29:04,360 --> 00:29:07,480
Speaker 4: by the chart of the day in Bloomberg Daybreak on

555
00:29:07,520 --> 00:29:10,680
Speaker 4: the terminal. The Senate versions of the bill that just

556
00:29:10,760 --> 00:29:14,400
Speaker 4: passed cost the bottom twenty percent of taxpayers an average

557
00:29:14,400 --> 00:29:17,360
Speaker 4: of five hundred and sixty dollars a year, well giving

558
00:29:17,400 --> 00:29:20,200
Speaker 4: an average boost of more than six thousand dollars to

559
00:29:20,280 --> 00:29:23,760
Speaker 4: those at the top end. That's courtesy economists at the

560
00:29:23,760 --> 00:29:27,719
Speaker 4: Budget Lab at Yale University, and it crystallizes the message

561
00:29:27,760 --> 00:29:29,640
Speaker 4: Democrats are going to take on the road from here.

562
00:29:29,840 --> 00:29:32,640
Speaker 2: Yeah, in fact, they already have. And as we consider

563
00:29:33,000 --> 00:29:35,239
Speaker 2: that messaging in the math behind it, we turn to

564
00:29:35,360 --> 00:29:37,760
Speaker 2: someone from the Yale Budget Lab. Ernie Tdesky is with us.

565
00:29:37,760 --> 00:29:40,800
Speaker 2: He's director of economics. They are also former chief economist

566
00:29:40,840 --> 00:29:44,120
Speaker 2: at the White House Council of Economic Advisors. Welcome back

567
00:29:44,120 --> 00:29:47,440
Speaker 2: to Bloomberg TV and Radio, Ernie, as we consider how

568
00:29:47,560 --> 00:29:50,200
Speaker 2: Republicans are pitching this. Jd Vance, who cast the tie

569
00:29:50,200 --> 00:29:53,240
Speaker 2: breaking vote, the Vice President is Joe just mentioned, says

570
00:29:53,280 --> 00:29:56,080
Speaker 2: massive tax cuts, describing this on X Today as a

571
00:29:56,120 --> 00:29:59,760
Speaker 2: big win for the American people. How rich do you

572
00:29:59,800 --> 00:30:01,720
Speaker 2: have to be? How much do you have to earn

573
00:30:02,000 --> 00:30:03,840
Speaker 2: for this to actually be a win for you?

574
00:30:04,000 --> 00:30:08,280
Speaker 7: Ernie, Well, you know, this is a four trillion dollar

575
00:30:08,480 --> 00:30:11,520
Speaker 7: bill over ten years, five trillion dollars if they make

576
00:30:11,920 --> 00:30:15,440
Speaker 7: the tax cuts permanent, and it's a massive transfer from

577
00:30:15,480 --> 00:30:18,440
Speaker 7: the bottom to the top. Because remember you are extending

578
00:30:18,480 --> 00:30:21,760
Speaker 7: the twenty seventeen tax cuts, which helped everyone, but we're

579
00:30:21,800 --> 00:30:25,200
Speaker 7: still skewed toward the top. There are add ons above

580
00:30:25,200 --> 00:30:29,040
Speaker 7: and beyond the twenty seventeen tax law that primarily helped

581
00:30:29,040 --> 00:30:31,640
Speaker 7: the top as well. And then to the extent that

582
00:30:31,680 --> 00:30:33,520
Speaker 7: they are trying to pay for this, and again they're

583
00:30:33,560 --> 00:30:37,320
Speaker 7: not fully paying for this by any means. But the

584
00:30:37,400 --> 00:30:42,480
Speaker 7: cuts to Medicaid and snap food stamps primarily hurt the poor.

585
00:30:43,640 --> 00:30:46,400
Speaker 7: So net net, like you were saying, this is, you know,

586
00:30:47,960 --> 00:30:51,160
Speaker 7: nearly seven hundred dollars if you look at the bottom

587
00:30:51,800 --> 00:30:55,479
Speaker 7: twenty percent of families, and then a thirty thousand dollars

588
00:30:55,480 --> 00:30:58,480
Speaker 7: benefit net net when you look at the top one percent,

589
00:30:58,800 --> 00:31:02,480
Speaker 7: And that's not even account for tariff revenue, you know,

590
00:31:02,520 --> 00:31:04,680
Speaker 7: which is not part of the bill formally, but which

591
00:31:04,720 --> 00:31:07,440
Speaker 7: the administration is framing as a payer. And those are

592
00:31:07,480 --> 00:31:09,840
Speaker 7: also quite regressive taxes.

593
00:31:11,480 --> 00:31:13,160
Speaker 4: So I'm guessing you would not have voted for the

594
00:31:13,160 --> 00:31:18,160
Speaker 4: bill here, Ernie. The thing is, every time we spend

595
00:31:18,160 --> 00:31:21,800
Speaker 4: time talking with Republican lawmakers, the conversation immediately goes to

596
00:31:21,880 --> 00:31:27,160
Speaker 4: the CBO and how this non partisan operation that's been

597
00:31:27,240 --> 00:31:31,600
Speaker 4: part of the process here for generations has been politicized

598
00:31:31,640 --> 00:31:35,040
Speaker 4: and is looking at the wrong numbers, doing the math wrong.

599
00:31:35,720 --> 00:31:38,680
Speaker 4: How do you respond to these constant attacks on the

600
00:31:38,720 --> 00:31:42,440
Speaker 4: CBO and the suggestion that, you know what, Ernie, you're

601
00:31:42,480 --> 00:31:45,800
Speaker 4: also wrong because we're going to grow out of this debt,

602
00:31:47,360 --> 00:31:47,520
Speaker 4: you know.

603
00:31:47,520 --> 00:31:50,800
Speaker 7: I would say, first of all, CBO, to anybody that's

604
00:31:50,840 --> 00:31:56,880
Speaker 7: worked with them, knows that they hold analytical rigor and nonpartisanship,

605
00:31:58,080 --> 00:32:01,320
Speaker 7: as you know, two of the highest schemes for the organization.

606
00:32:02,120 --> 00:32:04,960
Speaker 7: What's great about CBO is that they do things consistently

607
00:32:05,600 --> 00:32:08,960
Speaker 7: and for the most part transparently over time, so you

608
00:32:09,080 --> 00:32:12,800
Speaker 7: know that they are going to analyze a bill against

609
00:32:12,920 --> 00:32:16,360
Speaker 7: current law, against the law as it is currently stated.

610
00:32:17,040 --> 00:32:20,880
Speaker 7: That was not a That was not a surprise. As

611
00:32:20,920 --> 00:32:23,680
Speaker 7: a matter of fact, this you know, this Congress, particularly

612
00:32:23,760 --> 00:32:26,400
Speaker 7: the Senate right tried to come up with a different

613
00:32:26,400 --> 00:32:30,200
Speaker 7: way of looking at it because they knew exactly how

614
00:32:30,240 --> 00:32:32,800
Speaker 7: the CBO was going to look at it. You know,

615
00:32:32,840 --> 00:32:35,760
Speaker 7: it is perfectly fair to say that when you cut

616
00:32:35,800 --> 00:32:39,360
Speaker 7: taxes there is a little bit of a growth dynamic

617
00:32:39,360 --> 00:32:44,720
Speaker 7: effect that you know, somewhat mitigates the cost. But tax

618
00:32:44,800 --> 00:32:48,720
Speaker 7: cuts don't pay for themselves by far. Back when the

619
00:32:48,760 --> 00:32:52,200
Speaker 7: twenty seventeen tax cut was passed, you know, CBO found

620
00:32:52,240 --> 00:32:54,920
Speaker 7: that the dynamic effects of that tax cut offset about

621
00:32:54,920 --> 00:32:57,640
Speaker 7: twenty percent of the cost of that bill. And that

622
00:32:57,720 --> 00:33:01,040
Speaker 7: was when we had corporate tax cut as well. Those

623
00:33:01,040 --> 00:33:03,719
Speaker 7: corporate tax cuts were permanent, so they're not being extended

624
00:33:03,840 --> 00:33:05,920
Speaker 7: in this version of the bill. It's just the individual

625
00:33:05,960 --> 00:33:08,560
Speaker 7: tax cuts, which have much less bang for the buck,

626
00:33:08,600 --> 00:33:11,360
Speaker 7: and so the dynamic effects, the growth effects should be

627
00:33:11,440 --> 00:33:14,440
Speaker 7: even lower than they were back in twenty seventeen.

628
00:33:16,160 --> 00:33:19,160
Speaker 2: Well, Ernie, that's an important point as we consider that

629
00:33:19,240 --> 00:33:22,400
Speaker 2: This is not a package mostly of tax cuts. It's

630
00:33:22,600 --> 00:33:25,480
Speaker 2: a tax extension of the rates that were set from

631
00:33:25,600 --> 00:33:28,800
Speaker 2: tax cuts eight years ago. So when we consider the

632
00:33:28,840 --> 00:33:32,240
Speaker 2: actual stimulative effect that this is likely to have, does

633
00:33:32,240 --> 00:33:35,040
Speaker 2: that basically negate it or should we be viewing this

634
00:33:35,080 --> 00:33:38,320
Speaker 2: more from the lens which is also a Republican argument here,

635
00:33:38,480 --> 00:33:41,440
Speaker 2: that it's avoiding those tax rates going higher, which could

636
00:33:41,440 --> 00:33:43,920
Speaker 2: have had a detrimental growth and consumption impact.

637
00:33:44,920 --> 00:33:47,480
Speaker 7: I mean, the thing to remember is that this bill

638
00:33:47,720 --> 00:33:51,760
Speaker 7: goes above and beyond those twenty mere extension of those

639
00:33:51,760 --> 00:33:55,000
Speaker 7: twenty seventeen tax cuts. So even if you had thought

640
00:33:55,040 --> 00:33:58,960
Speaker 7: that those twenty seventeen tax cuts, the individual ones that

641
00:33:59,000 --> 00:34:03,760
Speaker 7: were expiring ought ought to be extended, this bill as

642
00:34:03,840 --> 00:34:07,640
Speaker 7: written is still about one hundred billion dollars more expensive

643
00:34:08,400 --> 00:34:12,319
Speaker 7: than just doing that. And if the expiring provisions in

644
00:34:12,400 --> 00:34:15,240
Speaker 7: this bill were made permanent, and if there's one lesson

645
00:34:15,280 --> 00:34:17,680
Speaker 7: we've learned over the last couple of decades, it's that

646
00:34:18,120 --> 00:34:21,680
Speaker 7: expiring tax cuts have a funny way of becoming permanent,

647
00:34:22,400 --> 00:34:24,480
Speaker 7: then this is a one trillion dollar bill. You know,

648
00:34:24,520 --> 00:34:28,279
Speaker 7: above and beyond just extending the TCJA, there will be

649
00:34:28,320 --> 00:34:30,720
Speaker 7: a little bit of fiscal impulse I think in twenty

650
00:34:30,760 --> 00:34:33,600
Speaker 7: twenty six, and I think that especially if you are

651
00:34:33,640 --> 00:34:37,279
Speaker 7: the FED or if you are a macro economist thinking

652
00:34:37,280 --> 00:34:40,759
Speaker 7: about your forecast, you know, that's an important factor that

653
00:34:40,800 --> 00:34:45,200
Speaker 7: will be somewhat offset by the effects of terrorists taking effect, right,

654
00:34:45,239 --> 00:34:47,640
Speaker 7: which is going to have a detrimental effect on the economy,

655
00:34:48,480 --> 00:34:50,759
Speaker 7: and so net you just you have to think about

656
00:34:50,760 --> 00:34:53,680
Speaker 7: all these things in tandem.

657
00:34:54,080 --> 00:34:56,879
Speaker 4: So if you don't like this bill Ernie and you're

658
00:34:56,920 --> 00:35:00,800
Speaker 4: worried about debt and deficits, was extending the current baseline

659
00:35:00,840 --> 00:35:01,640
Speaker 4: the original sin?

660
00:35:03,520 --> 00:35:07,440
Speaker 7: I mean, I look, I think that everybody, including markets,

661
00:35:07,560 --> 00:35:10,680
Speaker 7: assumed that the twenty seventeen tax cuts were going to

662
00:35:10,719 --> 00:35:15,120
Speaker 7: be extended, and in the short run, that was probably

663
00:35:15,200 --> 00:35:17,879
Speaker 7: not the wrong decision to make. You know, I do

664
00:35:17,960 --> 00:35:19,920
Speaker 7: have sympathy for the argument that if we had let

665
00:35:19,960 --> 00:35:23,400
Speaker 7: them expire, that would have been a massive tax increase

666
00:35:23,440 --> 00:35:26,760
Speaker 7: next year, and that would have created macroeconomic slowdown.

667
00:35:26,760 --> 00:35:29,600
Speaker 4: That the thing is that they voted to use says

668
00:35:29,640 --> 00:35:33,520
Speaker 4: it costs nothing because we're extending it exactly, And I'm

669
00:35:33,520 --> 00:35:36,880
Speaker 4: still trying to get my head around how that works exactly.

670
00:35:36,960 --> 00:35:42,080
Speaker 7: You know, the look the baseline tricks are funny. I

671
00:35:42,239 --> 00:35:45,480
Speaker 7: like to ignore baselines and just say, look, what does

672
00:35:45,520 --> 00:35:48,280
Speaker 7: the debt trajectory look like over the next ten years

673
00:35:48,320 --> 00:35:52,440
Speaker 7: with or without this bill? And with this bill, you know,

674
00:35:52,640 --> 00:35:55,040
Speaker 7: debt is growing faster than the economy. Still, it was

675
00:35:55,080 --> 00:35:58,960
Speaker 7: already you know, forecasts to grow faster than the economy

676
00:35:59,040 --> 00:36:01,879
Speaker 7: even if the tax had expired and we had raised

677
00:36:01,880 --> 00:36:04,919
Speaker 7: more revenue as a result. Now it's even worse as

678
00:36:04,920 --> 00:36:08,279
Speaker 7: a result of this. And so look, you know, we

679
00:36:08,320 --> 00:36:11,920
Speaker 7: can have arguments about whether it was correct at this

680
00:36:11,960 --> 00:36:16,239
Speaker 7: point in the business cycle to let the twenty seventeen

681
00:36:16,320 --> 00:36:19,960
Speaker 7: tax cuts expire completely, but the fact remains that our

682
00:36:19,960 --> 00:36:23,799
Speaker 7: debt trajectory is unsustainable and there needed to be a

683
00:36:24,080 --> 00:36:27,440
Speaker 7: better way, right of you know, making a you know

684
00:36:27,520 --> 00:36:30,640
Speaker 7: both better making a better tax code and for paying

685
00:36:30,680 --> 00:36:33,279
Speaker 7: for that in a way that would actually reduce the

686
00:36:33,320 --> 00:36:34,080
Speaker 7: debt trajectory.

687
00:36:35,360 --> 00:36:38,200
Speaker 2: Well, so when we consider that debt trajectory and the

688
00:36:38,239 --> 00:36:41,479
Speaker 2: debt level, and then consider the level of interest rates

689
00:36:41,520 --> 00:36:44,080
Speaker 2: as we factor in the payments we have to make

690
00:36:44,520 --> 00:36:46,840
Speaker 2: on said debt, that's where you get to the argument

691
00:36:46,880 --> 00:36:49,600
Speaker 2: that President Trump is now making that this would all

692
00:36:49,920 --> 00:36:51,879
Speaker 2: work out for the better if the Federal Reserve were

693
00:36:51,920 --> 00:36:54,359
Speaker 2: just to lower interest rates and help bring down the

694
00:36:54,400 --> 00:36:57,279
Speaker 2: cost of that debt burden. If we were to see

695
00:36:57,320 --> 00:37:00,239
Speaker 2: a twenty five basis point cut by the Fed this

696
00:37:00,280 --> 00:37:02,319
Speaker 2: month or in the fall, if we if we see

697
00:37:02,440 --> 00:37:05,440
Speaker 2: multiple ernie, how quickly would that actually make a difference

698
00:37:05,480 --> 00:37:08,080
Speaker 2: as we consider the US's financial situation.

699
00:37:09,000 --> 00:37:11,279
Speaker 7: I think a small cut by the Federal Reserve would

700
00:37:11,280 --> 00:37:13,960
Speaker 7: not make a huge difference. Remember, the Summary of Economic

701
00:37:14,000 --> 00:37:17,799
Speaker 7: Projections already has cuts baked in for this year. It's

702
00:37:17,840 --> 00:37:20,160
Speaker 7: just a question of when during the year we're going

703
00:37:20,160 --> 00:37:22,040
Speaker 7: to see of those cuts, and so I think that

704
00:37:22,040 --> 00:37:26,640
Speaker 7: that's probably priced into the long end of the curve already.

705
00:37:27,040 --> 00:37:30,640
Speaker 7: You would need a massive shot above and beyond what

706
00:37:30,920 --> 00:37:33,720
Speaker 7: is expected from the Fed, you know, to see movement

707
00:37:33,760 --> 00:37:36,560
Speaker 7: on the long end of the curve. And even then,

708
00:37:36,080 --> 00:37:41,440
Speaker 7: if investors perceive that the FED is politically captured, or

709
00:37:41,480 --> 00:37:44,760
Speaker 7: that the Fed is you know, taking is taking fiscal

710
00:37:44,800 --> 00:37:47,920
Speaker 7: policy into it, going beyond their dual mandate and taking

711
00:37:47,960 --> 00:37:51,600
Speaker 7: fiscal policy into account, right, then then further cuts by

712
00:37:51,600 --> 00:37:54,640
Speaker 7: the Federal Reserve may be less effective than they've been

713
00:37:54,640 --> 00:37:59,640
Speaker 7: in the past because investors, you know, may incorporate lower

714
00:37:59,680 --> 00:38:02,640
Speaker 7: polyL see rates into their long term yield forecast, but

715
00:38:02,680 --> 00:38:06,200
Speaker 7: then they may ch up their inflation expectations and their

716
00:38:06,280 --> 00:38:09,560
Speaker 7: term premium as a result. So this, you know, even

717
00:38:09,560 --> 00:38:12,239
Speaker 7: a FED that cuts rates may be much less helpful

718
00:38:12,600 --> 00:38:15,720
Speaker 7: to the argument the President is making than he thinks

719
00:38:15,800 --> 00:38:16,240
Speaker 7: right now.

720
00:38:17,320 --> 00:38:20,239
Speaker 4: So is President Trump the real reason why the FED

721
00:38:20,280 --> 00:38:21,080
Speaker 4: can't cut rates?

722
00:38:22,640 --> 00:38:25,600
Speaker 7: I mean, I think that the Fed's dual mandate is

723
00:38:25,719 --> 00:38:26,200
Speaker 7: very clear.

724
00:38:26,280 --> 00:38:26,480
Speaker 5: Right.

725
00:38:27,719 --> 00:38:30,480
Speaker 7: They are concerned about inflation, and they're concerned about employment,

726
00:38:30,520 --> 00:38:35,040
Speaker 7: and they are stuck in a potential stagflationary shock right

727
00:38:35,080 --> 00:38:38,719
Speaker 7: now or a worry of one. Right, So on the

728
00:38:38,719 --> 00:38:41,560
Speaker 7: one hand, they are waiting to see the effect that

729
00:38:41,960 --> 00:38:47,040
Speaker 7: not just tariffs but immigration action and fiscal impulse next

730
00:38:47,160 --> 00:38:50,560
Speaker 7: year will have on inflation, while at the same time

731
00:38:50,760 --> 00:38:54,239
Speaker 7: keeping a keen eye on how those shocks will also

732
00:38:54,360 --> 00:38:56,480
Speaker 7: weigh on the labor market. And and you know, the

733
00:38:56,520 --> 00:38:59,960
Speaker 7: effect is the opposite, right, So if there's inflationary pressure,

734
00:39:00,120 --> 00:39:02,240
Speaker 7: you want to raise rates or or not cut rates,

735
00:39:02,640 --> 00:39:06,719
Speaker 7: Whereas if the unemployment rate starts rising, you know, much

736
00:39:06,760 --> 00:39:09,200
Speaker 7: more than it has, then you want to start considering

737
00:39:09,280 --> 00:39:12,160
Speaker 7: rate cuts. And that's a very tough position for the

738
00:39:12,160 --> 00:39:14,439
Speaker 7: FED to be in. It is you know, I don't

739
00:39:14,440 --> 00:39:16,960
Speaker 7: think it is a simple matter of you know, the

740
00:39:17,000 --> 00:39:20,680
Speaker 7: FED needs to cut rates because other countries are already lower,

741
00:39:20,800 --> 00:39:22,280
Speaker 7: or because of something else.

742
00:39:24,239 --> 00:39:26,600
Speaker 2: Well, Ernie, as we consider the kind of labor market

743
00:39:26,640 --> 00:39:29,920
Speaker 2: element of the Fed's dual mandate and the picture of

744
00:39:29,960 --> 00:39:34,080
Speaker 2: the US labor market overall. Getting back to this Reconciliation bill,

745
00:39:34,160 --> 00:39:37,360
Speaker 2: knowing it removes subsidies in a number of industries, including

746
00:39:37,400 --> 00:39:40,560
Speaker 2: those intended through the Inflation Reduction Act to invest in

747
00:39:40,600 --> 00:39:42,960
Speaker 2: clean energy, would you expect that to have a labor

748
00:39:42,960 --> 00:39:45,880
Speaker 2: market impact or at the very least mean that the

749
00:39:46,000 --> 00:39:48,880
Speaker 2: US cannot grow as many jobs as a result of

750
00:39:48,920 --> 00:39:49,680
Speaker 2: this legislation.

751
00:39:50,840 --> 00:39:52,880
Speaker 7: I mean, I think so. I think that the energy

752
00:39:52,920 --> 00:39:56,680
Speaker 7: side of the legislation could potentially raise energy costs, right,

753
00:39:56,719 --> 00:39:59,360
Speaker 7: which is a supply side issue that the FED is

754
00:40:00,600 --> 00:40:03,680
Speaker 7: you know, famously concerned with. I mean, we we have had,

755
00:40:04,120 --> 00:40:08,280
Speaker 7: we have had, you know, inflationary shocks that have stemmed

756
00:40:08,320 --> 00:40:11,560
Speaker 7: from higher energy prices in the past. I would also

757
00:40:11,600 --> 00:40:16,320
Speaker 7: be concerned about the vulnerability of the of lower income

758
00:40:16,360 --> 00:40:19,000
Speaker 7: families as a result of both this bill and tariffs,

759
00:40:19,200 --> 00:40:22,800
Speaker 7: and how that flows through the labor market. I've always

760
00:40:22,800 --> 00:40:26,080
Speaker 7: been skeptical of the claims that you know, policy this

761
00:40:26,160 --> 00:40:28,640
Speaker 7: year would lead to a recession even when tariffs were

762
00:40:28,719 --> 00:40:30,920
Speaker 7: higher than they were than they are now, you know,

763
00:40:30,920 --> 00:40:34,080
Speaker 7: a couple of months ago. I'm not odds on on

764
00:40:34,160 --> 00:40:37,160
Speaker 7: a recession, but i do think that policy creates a

765
00:40:37,200 --> 00:40:42,279
Speaker 7: macroeconomic headwind for for the US, and uh, you know,

766
00:40:42,320 --> 00:40:44,960
Speaker 7: that's uh, that's something that's going to be a major

767
00:40:45,040 --> 00:40:47,400
Speaker 7: challenge for the Fed to navigate, you know, between that

768
00:40:47,560 --> 00:40:49,200
Speaker 7: and between the upward price pressure.

769
00:40:50,880 --> 00:40:53,480
Speaker 4: Ernie, it's great to have you back. Ernie Tdsky with

770
00:40:53,560 --> 00:40:58,120
Speaker 4: his great analysis from the Economics Department. Yell budget Laub,

771
00:40:58,160 --> 00:41:00,800
Speaker 4: former Chief Economist, White House counsel of the Economic Advisor's

772
00:41:00,840 --> 00:41:02,840
Speaker 4: great to have you as part of our conversation.

773
00:41:05,239 --> 00:41:08,719
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

774
00:41:08,760 --> 00:41:12,240
Speaker 1: us live weekdays at noon and five pm Eastern on Apple,

775
00:41:12,280 --> 00:41:15,319
Speaker 1: Cocklay and Android Auto with the Bloomberg Business App. You

776
00:41:15,360 --> 00:41:18,840
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777
00:41:18,880 --> 00:41:23,080
Speaker 1: New York station, Just Say Alexa played Bloomberg eleven thirty.

778
00:41:24,360 --> 00:41:27,839
Speaker 4: Live from Washington. Thanks for joining us on the Tuesday edition.

779
00:41:27,920 --> 00:41:30,120
Speaker 4: If you're just coming along, we have big news. The

780
00:41:30,160 --> 00:41:33,200
Speaker 4: Senate passed the bill. It happened right after high noon

781
00:41:33,760 --> 00:41:37,840
Speaker 4: twelve oh three pm Washington Time, fifty to fifty, the

782
00:41:38,000 --> 00:41:40,960
Speaker 4: tiebreaker courtesy jd Vance, who made his way to the

783
00:41:41,040 --> 00:41:44,959
Speaker 4: Hill earlier today. So a little bit of change took

784
00:41:44,960 --> 00:41:48,640
Speaker 4: place in the vodama over the course of the night.

785
00:41:48,760 --> 00:41:51,280
Speaker 4: They did pull an all night or a twenty six

786
00:41:51,400 --> 00:41:54,560
Speaker 4: hour long affair. They got in there at nine o'clock

787
00:41:54,560 --> 00:41:56,759
Speaker 4: in the morning yesterday when we did our late edition

788
00:41:56,800 --> 00:41:59,840
Speaker 4: of Balance of Power last evening live from the US Senate,

789
00:42:00,760 --> 00:42:03,880
Speaker 4: that even started the voter rama. Yet two in the morning,

790
00:42:03,880 --> 00:42:07,040
Speaker 4: three in the morning, we saw updates over the course

791
00:42:07,560 --> 00:42:09,640
Speaker 4: of the evening that brought us here now with Lisa

792
00:42:09,680 --> 00:42:13,720
Speaker 4: Murkowski the last to turn in favor of the bill.

793
00:42:14,200 --> 00:42:16,560
Speaker 4: Now it goes to the House, of course, as we

794
00:42:16,600 --> 00:42:22,040
Speaker 4: continue the schoolhouse rock. Elon Musk not liking this whole show.

795
00:42:22,560 --> 00:42:24,719
Speaker 4: If you listen to this program, you know he's not

796
00:42:24,760 --> 00:42:26,400
Speaker 4: a fan of the bill, and that was the genesis

797
00:42:26,640 --> 00:42:29,879
Speaker 4: of his big breakup and then feud with President Trump,

798
00:42:29,920 --> 00:42:31,960
Speaker 4: which we kind of thought had died out. Seemed like

799
00:42:32,719 --> 00:42:38,200
Speaker 4: people were getting along until yesterday. This also happened last night.

800
00:42:38,239 --> 00:42:41,880
Speaker 4: Elon Musk vowing to make sure every member of Congress

801
00:42:41,880 --> 00:42:48,600
Speaker 4: who campaigned on a platform of reducing government spending be

802
00:42:48,760 --> 00:42:52,280
Speaker 4: voted out of office primary with his financial help quote,

803
00:42:52,360 --> 00:42:54,520
Speaker 4: they will lose their primary next year if it is

804
00:42:54,560 --> 00:42:58,680
Speaker 4: the last thing I do on this earth. Donald Trump,

805
00:42:58,800 --> 00:43:03,000
Speaker 4: of course, listening gets on truth social with a big warning,

806
00:43:03,600 --> 00:43:06,880
Speaker 4: he writes, Elon musk knew before he so strongly endorsed

807
00:43:06,880 --> 00:43:10,480
Speaker 4: me for president that I was strongly against the ev mandate.

808
00:43:10,560 --> 00:43:14,799
Speaker 4: There's the truth. If you're on YouTube, it's ridiculous, he says,

809
00:43:14,920 --> 00:43:16,759
Speaker 4: was always a major part of my campaign. Now it

810
00:43:16,800 --> 00:43:20,919
Speaker 4: gets tough as you scroll down here. Elon may get

811
00:43:20,920 --> 00:43:23,359
Speaker 4: more subsidy than any human being in history by far.

812
00:43:23,760 --> 00:43:26,920
Speaker 4: And without subsidies, he writes, Elon would probably have to

813
00:43:26,920 --> 00:43:31,000
Speaker 4: close up shop and head back to South Africa. No

814
00:43:31,080 --> 00:43:34,800
Speaker 4: more rocket launches, satellites are electric car production in our country,

815
00:43:34,800 --> 00:43:39,640
Speaker 4: he says, would save a fortune. Perhaps the Doge should

816
00:43:39,640 --> 00:43:41,520
Speaker 4: take a good hard look at this, he says, big

817
00:43:41,560 --> 00:43:44,960
Speaker 4: money to be saved, echoing these remarks as he made

818
00:43:45,000 --> 00:43:48,320
Speaker 4: his way out of town to Alligator Alcatraz in Florida.

819
00:43:48,320 --> 00:43:50,440
Speaker 4: Listen to Donald Trump, we.

820
00:43:50,480 --> 00:43:53,680
Speaker 10: Might have to put doze on Elon. You know, you know,

821
00:43:53,840 --> 00:43:57,920
Speaker 10: doj Doji is the monster that that might have to

822
00:43:57,960 --> 00:44:00,959
Speaker 10: go back and eat Elon there. I think what's gonna

823
00:44:01,000 --> 00:44:03,279
Speaker 10: happen is those He's gonna look at Musk, and if

824
00:44:03,320 --> 00:44:05,719
Speaker 10: those looks at Musk, we're gonna save a fortune.

825
00:44:05,880 --> 00:44:07,239
Speaker 4: Thank you very much, everybody.

826
00:44:07,520 --> 00:44:09,360
Speaker 10: I don't think you should be playing that game with me.

827
00:44:11,040 --> 00:44:13,680
Speaker 4: Thank you for your attention to this matter. Glad to

828
00:44:13,680 --> 00:44:16,960
Speaker 4: say Ed Ludlow is joining us. It's always a good

829
00:44:17,040 --> 00:44:19,880
Speaker 4: day when our friend Ed comes in from San Francisco,

830
00:44:20,000 --> 00:44:22,200
Speaker 4: and for good reason today the co host of Bloomberg

831
00:44:22,280 --> 00:44:25,480
Speaker 4: Tech and a friend of Balance of Power, Ed, are

832
00:44:25,520 --> 00:44:30,240
Speaker 4: we serious here? The monster is gonna come eat Elon?

833
00:44:30,320 --> 00:44:31,959
Speaker 4: What does he have to worry about? Is this real?

834
00:44:32,680 --> 00:44:32,719
Speaker 5: So?

835
00:44:33,000 --> 00:44:35,319
Speaker 12: I think what the president's referring to, and it's a

836
00:44:35,360 --> 00:44:37,880
Speaker 12: statement that he kind of said originally outside of the

837
00:44:37,880 --> 00:44:41,799
Speaker 12: White House and then reiterated in Florida is alluding to

838
00:44:42,520 --> 00:44:47,400
Speaker 12: across Elon Inc. Tesla SpaceX, and other parts of Elon's empire.

839
00:44:48,000 --> 00:44:53,560
Speaker 12: He has historically benefited from grants subsidies, but also directs

840
00:44:53,560 --> 00:44:55,040
Speaker 12: contracts with the federal government.

841
00:44:55,680 --> 00:44:57,720
Speaker 6: You'll remember when you and I last discussed this issue.

842
00:44:57,760 --> 00:44:58,839
Speaker 6: You can quantify it.

843
00:44:58,840 --> 00:45:01,800
Speaker 12: It's about twenty five billion dollars to forty billion dollars,

844
00:45:02,000 --> 00:45:04,080
Speaker 12: but it is across subsidies.

845
00:45:03,560 --> 00:45:05,160
Speaker 6: Grants, and contracts.

846
00:45:05,560 --> 00:45:07,520
Speaker 12: And I think what the president's kind of alluding to

847
00:45:07,640 --> 00:45:10,160
Speaker 12: here is saying, well, if DOGE, which review that. Remember

848
00:45:10,200 --> 00:45:13,120
Speaker 12: Elon Musk kind of was the founding one of the

849
00:45:13,160 --> 00:45:16,840
Speaker 12: founders of DOGE and has since departed after his term ended,

850
00:45:17,600 --> 00:45:19,720
Speaker 12: that's what would be reviewed. But I find the politics

851
00:45:19,760 --> 00:45:22,240
Speaker 12: that are interesting because it actually it all centers around

852
00:45:22,239 --> 00:45:26,280
Speaker 12: the bill, and actually what the President is saying direct

853
00:45:26,280 --> 00:45:29,520
Speaker 12: and indirector Musk on the issue of EV subsidy is

854
00:45:29,560 --> 00:45:31,680
Speaker 12: not what Elon Musk is saying back to him.

855
00:45:31,880 --> 00:45:34,400
Speaker 6: Elon Musk is very worried about national debt.

856
00:45:36,320 --> 00:45:38,680
Speaker 4: So you've got a nice rocket company. There be a

857
00:45:38,680 --> 00:45:42,120
Speaker 4: shamed of something happened to it is kind of the message.

858
00:45:43,480 --> 00:45:46,279
Speaker 4: What would this actually mean for Elon Musk? If the

859
00:45:46,320 --> 00:45:49,680
Speaker 4: DOGE did plug it into the hard drive, you're find

860
00:45:49,760 --> 00:45:52,680
Speaker 4: I guess, examples of waste, fraud and abuse. Are we

861
00:45:53,000 --> 00:45:57,040
Speaker 4: seriously talking about cutting contracts knowing how much the government

862
00:45:57,120 --> 00:45:57,920
Speaker 4: needs Elon.

863
00:45:57,760 --> 00:45:59,360
Speaker 6: Musk, don't.

864
00:45:59,760 --> 00:46:01,600
Speaker 12: I think it's important to be honest the audience don't

865
00:46:01,600 --> 00:46:03,440
Speaker 12: actually know the answer to that. What I would reflect

866
00:46:03,520 --> 00:46:05,799
Speaker 12: on is that and what we've reported is that lots

867
00:46:05,840 --> 00:46:10,000
Speaker 12: of the individuals inside of Doge are Elon Musk allies

868
00:46:10,040 --> 00:46:12,919
Speaker 12: and confidence they are people that he convinced to get

869
00:46:12,960 --> 00:46:16,759
Speaker 12: on board with the project. The other point is just

870
00:46:16,840 --> 00:46:21,280
Speaker 12: the reality operationally of what of what our domestic space

871
00:46:21,280 --> 00:46:27,840
Speaker 12: industry looks like. SpaceX dominates globally the vast majority about

872
00:46:28,160 --> 00:46:31,040
Speaker 12: eighty five to ninety percent of payload to orbit human

873
00:46:31,200 --> 00:46:35,200
Speaker 12: or otherwise. NASA is highly reliant on SpaceX to get

874
00:46:35,239 --> 00:46:38,920
Speaker 12: human beings to and from ISS. The Department of Defense

875
00:46:38,960 --> 00:46:41,839
Speaker 12: and the Pentagon are very reliant on SpaceX to put

876
00:46:42,640 --> 00:46:46,480
Speaker 12: defense apparatus in the form of satellites into orbit. And

877
00:46:46,560 --> 00:46:49,880
Speaker 12: so that's the reality. But I think that that's the

878
00:46:49,960 --> 00:46:53,120
Speaker 12: right interpretation that the presidents alluding to here, that Doge

879
00:46:53,120 --> 00:46:55,239
Speaker 12: would say, well, look at the value of these contracts.

880
00:46:55,520 --> 00:46:59,400
Speaker 12: Could we save money somewhere? Is there a corporate alternative

881
00:46:59,440 --> 00:47:02,000
Speaker 12: to SpaceX is probably the bigger next question.

882
00:47:03,120 --> 00:47:07,800
Speaker 4: Wow, Tesla meantime stocks down fourteen bucks almost five percent.

883
00:47:09,080 --> 00:47:11,439
Speaker 4: Is Elon Musk really going to start his own political party?

884
00:47:11,440 --> 00:47:14,040
Speaker 4: I mean, how serious are we about the next chapter

885
00:47:14,120 --> 00:47:16,200
Speaker 4: for him? He's going to start giving money to Tom

886
00:47:16,239 --> 00:47:20,040
Speaker 4: Massey primary ing everybody Republican who votes for this bill?

887
00:47:20,440 --> 00:47:23,279
Speaker 4: Start the what is it the America Party? What does

888
00:47:23,320 --> 00:47:25,160
Speaker 4: he have planned? Well?

889
00:47:25,400 --> 00:47:27,960
Speaker 12: In my career and experience of covering Elon Musk, which

890
00:47:27,960 --> 00:47:31,040
Speaker 12: includes the period prior to the November election and until

891
00:47:31,400 --> 00:47:35,160
Speaker 12: present day, that Elon Musk, you know, particularly in the

892
00:47:35,160 --> 00:47:37,359
Speaker 12: political domain, he has put his money where his mouth

893
00:47:37,480 --> 00:47:40,839
Speaker 12: is right. And this is why I brought up what

894
00:47:40,920 --> 00:47:44,680
Speaker 12: the two men are saying to each other. Mosqu's grievance

895
00:47:44,680 --> 00:47:47,359
Speaker 12: has been quite consistent. He's very worried about national debt

896
00:47:47,400 --> 00:47:50,560
Speaker 12: and he doesn't like the makeup of the bill. The

897
00:47:50,640 --> 00:47:54,319
Speaker 12: President has been saying that Musk's issue is EV subsidies,

898
00:47:54,600 --> 00:47:57,200
Speaker 12: but to his credit, Elon Musk has also been consistent

899
00:47:57,239 --> 00:48:00,000
Speaker 12: on this issue. He has argued and maintained for quite

900
00:48:00,160 --> 00:48:02,960
Speaker 12: some time that if America were do to do away

901
00:48:03,000 --> 00:48:07,000
Speaker 12: with direct consumer EV subsidies, in particular those that were

902
00:48:07,040 --> 00:48:09,920
Speaker 12: provided for in the Inflation Reduction Act, it would be

903
00:48:10,000 --> 00:48:13,800
Speaker 12: to Tesla's benefit because compared to other American automakers and companies,

904
00:48:14,400 --> 00:48:17,080
Speaker 12: Tesla's cost of doing business is much lower, it has

905
00:48:17,160 --> 00:48:19,879
Speaker 12: much more pricing power, and so if you got rid

906
00:48:19,880 --> 00:48:22,239
Speaker 12: of subsidies, it would still be ultra competitive. He has

907
00:48:22,280 --> 00:48:25,879
Speaker 12: been consistent on that, but on the political domain. Part

908
00:48:25,880 --> 00:48:28,000
Speaker 12: of his argument was in the run up to November,

909
00:48:28,560 --> 00:48:30,759
Speaker 12: he campaigned for the president on the idea that the

910
00:48:31,280 --> 00:48:34,200
Speaker 12: deficit and the national debt is something that this administration

911
00:48:34,239 --> 00:48:37,560
Speaker 12: would look at. And indeed, in several posts over recent months,

912
00:48:37,600 --> 00:48:40,279
Speaker 12: that idea has come back up, and that seems to

913
00:48:40,320 --> 00:48:41,759
Speaker 12: be what Marsk is upset about.

914
00:48:43,080 --> 00:48:44,920
Speaker 4: Great to see you, Ed, and I appreciate your coming in,

915
00:48:45,320 --> 00:48:46,960
Speaker 4: Ed Ludlow. I know we're going to talk about this

916
00:48:47,000 --> 00:48:50,160
Speaker 4: against Let's stay close watch from on Bloomberg Tech or

917
00:48:50,160 --> 00:48:53,360
Speaker 4: Frankly all day at night on Bloomberg TV and Radio.

918
00:48:53,719 --> 00:48:57,000
Speaker 4: Tom Massey, Yeah, Matt reminds us Tom Massey drives a

919
00:48:57,120 --> 00:49:01,160
Speaker 4: Tesla and actually tweeted his off grid home runs on

920
00:49:01,200 --> 00:49:05,000
Speaker 4: a wrecked model S Tesla car battery that he repurposed.

921
00:49:06,280 --> 00:49:08,360
Speaker 4: I don't know, maybe this is just a big reunion

922
00:49:08,400 --> 00:49:11,239
Speaker 4: waiting for all these guys. Breaking news coming out of

923
00:49:11,239 --> 00:49:12,840
Speaker 4: New York today. I want to mention this before we

924
00:49:12,840 --> 00:49:15,120
Speaker 4: get to our panel this hour, because we have a

925
00:49:15,120 --> 00:49:19,080
Speaker 4: lot to dissect with Rick Davis and Genie Shanzano. The

926
00:49:19,120 --> 00:49:25,400
Speaker 4: final vote is in on the New York Democratic mayoral primary.

927
00:49:25,480 --> 00:49:29,160
Speaker 4: I know you're saying, Joe, we already did this. President

928
00:49:29,239 --> 00:49:32,759
Speaker 4: was just calling him a communist. This morning, let's bring

929
00:49:32,760 --> 00:49:35,720
Speaker 4: in Laura Namius Bloomberg, New York City and State reporter

930
00:49:35,760 --> 00:49:38,840
Speaker 4: who was all over this ranked choice election when we

931
00:49:38,880 --> 00:49:41,479
Speaker 4: talked about it, was this last week or the week earlier. Laura,

932
00:49:41,520 --> 00:49:42,440
Speaker 4: I'm starting to forget.

933
00:49:42,760 --> 00:49:45,640
Speaker 13: It was last week when the first round of votes

934
00:49:45,640 --> 00:49:48,680
Speaker 13: in New York's ring choice primary came in, and today

935
00:49:48,719 --> 00:49:50,000
Speaker 13: we got to see with the rest.

936
00:49:49,840 --> 00:49:51,880
Speaker 4: Of the batter one week, right, we thought this was

937
00:49:51,920 --> 00:49:53,920
Speaker 4: going to be what it was two weeks last time around.

938
00:49:54,200 --> 00:49:57,120
Speaker 4: So break it for us. The redhead on the terminal, Laura,

939
00:49:57,800 --> 00:50:00,520
Speaker 4: the same guy you already thought one is the winn.

940
00:50:00,760 --> 00:50:00,960
Speaker 5: Right.

941
00:50:01,080 --> 00:50:04,200
Speaker 13: So what we saw today is that zoron mom Donnie

942
00:50:04,440 --> 00:50:09,160
Speaker 13: significantly widened his lead over Andrew Cuomo in the final results,

943
00:50:09,480 --> 00:50:11,560
Speaker 13: which will be certified in a couple of weeks. But

944
00:50:11,640 --> 00:50:14,600
Speaker 13: he is now leading Andrew Cuomo by twelve points in

945
00:50:14,600 --> 00:50:18,359
Speaker 13: this primary. That is an absolutely decisive victory. We knew

946
00:50:18,360 --> 00:50:20,520
Speaker 13: that he was likely going to be the winner after

947
00:50:20,600 --> 00:50:23,280
Speaker 13: last week, when he was leading Cuomo by seven points,

948
00:50:23,320 --> 00:50:26,400
Speaker 13: a result that nobody expected. Everyone thought it might be close.

949
00:50:26,440 --> 00:50:29,439
Speaker 13: But there had only been one official poll showing Mom

950
00:50:29,480 --> 00:50:33,200
Speaker 13: Donnie winning. Turns out that this electorate was not captured

951
00:50:33,200 --> 00:50:37,680
Speaker 13: by polls, and Mom Donnie is the breakaway winner. For contrast,

952
00:50:38,440 --> 00:50:40,919
Speaker 13: in twenty twenty one, the first year that the city

953
00:50:41,000 --> 00:50:43,880
Speaker 13: used this kind of rank choice voting mechanism, Eric Adams

954
00:50:43,880 --> 00:50:47,399
Speaker 13: emerged victorious after eight rounds of voting by less than

955
00:50:47,440 --> 00:50:50,880
Speaker 13: one percentage point over Catherine Garcio came in second place.

956
00:50:51,120 --> 00:50:54,280
Speaker 13: Andrew Cuomo is losing by twelve points to zoron Mom Donnie.

957
00:50:55,040 --> 00:50:59,160
Speaker 4: Amazing context, Cuomo is going to be on the ballot

958
00:50:59,160 --> 00:51:01,600
Speaker 4: still either way, right, So is he actually going to

959
00:51:01,920 --> 00:51:04,160
Speaker 4: run a campaign as an independent or something else.

960
00:51:04,520 --> 00:51:07,239
Speaker 13: So we're talking to people within the Cuomo universe right

961
00:51:07,239 --> 00:51:09,480
Speaker 13: now trying to figure out what his plans are. He

962
00:51:09,600 --> 00:51:12,080
Speaker 13: has not decided whether or not to drop out of

963
00:51:12,120 --> 00:51:14,959
Speaker 13: the race. His campaign said last week that he would

964
00:51:14,960 --> 00:51:17,080
Speaker 13: be looking at the numbers to try to decide whether

965
00:51:17,160 --> 00:51:20,600
Speaker 13: or not he had a pathway forward. It's unclear what

966
00:51:20,640 --> 00:51:22,680
Speaker 13: these numbers are going to mean, but people close to

967
00:51:22,760 --> 00:51:25,040
Speaker 13: him are already pointing out that despite the fact that

968
00:51:25,120 --> 00:51:29,120
Speaker 13: he lost this race, he got more overall votes than

969
00:51:29,320 --> 00:51:32,400
Speaker 13: Eric Adams did. In twenty twenty one, so that might

970
00:51:32,440 --> 00:51:34,640
Speaker 13: give you a hint as to what they're thinking for

971
00:51:34,680 --> 00:51:36,120
Speaker 13: the general election in November.

972
00:51:36,440 --> 00:51:41,759
Speaker 4: So, could we still have a four way man Donnie Cuomo, Adams.

973
00:51:41,440 --> 00:51:45,600
Speaker 13: Sliwa, Yes, and another candidate, Jim Walden who's running as

974
00:51:45,640 --> 00:51:49,360
Speaker 13: an independent, are possibly looking at a five way general election?

975
00:51:50,600 --> 00:51:52,520
Speaker 13: Very competitive for the first time we cut.

976
00:51:52,440 --> 00:51:54,880
Speaker 4: Out for you. Yeah, boy, I should say so, Laura,

977
00:51:54,920 --> 00:51:57,200
Speaker 4: Thank you so much for letting us know it's actually done.

978
00:51:57,360 --> 00:52:00,719
Speaker 4: It's a signed, sealed, delivered Here is New York City

979
00:52:00,719 --> 00:52:07,000
Speaker 4: State reporter of Flora Namias. Yes, Mamdani wins the Democratic primary.

980
00:52:09,080 --> 00:52:12,279
Speaker 4: Thanks for listening to the Balance of Power podcast. Make

981
00:52:12,320 --> 00:52:15,279
Speaker 4: sure to subscribe if you haven't already, at Apple, Spotify,

982
00:52:15,360 --> 00:52:17,919
Speaker 4: or wherever you get your podcasts, and you can find

983
00:52:18,000 --> 00:52:21,240
Speaker 4: us live every weekday from Washington, DC at noontime Eastern

984
00:52:21,520 --> 00:52:22,960
Speaker 4: at Bloomberg dot com.