1 00:00:02,520 --> 00:00:10,080 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,119 Speaker 1: noon and five pm Eastern on Apple, Cockley and Android 4 00:00:17,160 --> 00:00:20,520 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:25,120 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:26,160 --> 00:00:30,360 Speaker 2: President Trump on True Social describing that Ukrainian president Vladimir's 7 00:00:30,400 --> 00:00:35,400 Speaker 2: Lensky as a quote modestly successful comedian, then going on 8 00:00:35,479 --> 00:00:39,680 Speaker 2: to describe him as quote a dictator without elections. Zelensky 9 00:00:39,720 --> 00:00:42,080 Speaker 2: better move fast or he is not going to have 10 00:00:42,800 --> 00:00:46,919 Speaker 2: a country left. Can't imagine how this is received by 11 00:00:46,920 --> 00:00:48,080 Speaker 2: President Zelensky himself. 12 00:00:48,200 --> 00:00:52,160 Speaker 3: Joe That's true, who earlier had suggested that Donald Trump 13 00:00:52,200 --> 00:00:55,640 Speaker 3: is peddling in Russian disinformation. Donald Trump goes on to 14 00:00:55,680 --> 00:00:58,800 Speaker 3: write in that same post, Biden never tried Europe has 15 00:00:58,800 --> 00:01:01,840 Speaker 3: failed to bring peace in Zelensky probably wants to keep 16 00:01:01,880 --> 00:01:06,800 Speaker 3: the gravy train going, knowing that hundreds of thousands of Ukrainians, 17 00:01:06,800 --> 00:01:12,000 Speaker 3: including thousands of civilians, have died since Russia's invasion. And 18 00:01:12,040 --> 00:01:15,039 Speaker 3: that's where we start our conversation with Seth Moulton, the 19 00:01:15,080 --> 00:01:18,120 Speaker 3: Democratic Congressman from Massachusetts, is with US, not only a 20 00:01:18,160 --> 00:01:21,560 Speaker 3: combat Marine Corps veteran who served four tours in Iraq, 21 00:01:21,600 --> 00:01:23,800 Speaker 3: but now a member of the Armed Services Committee in 22 00:01:23,840 --> 00:01:26,240 Speaker 3: the House. Congressman, it's good to have you back here 23 00:01:26,280 --> 00:01:30,600 Speaker 3: on Bloomberg TV and radio. Your reaction to the rhetoric 24 00:01:30,959 --> 00:01:34,400 Speaker 3: following the opening of talks yesterday in Saudi Arabia. Did 25 00:01:34,440 --> 00:01:37,759 Speaker 3: this entire matter just take a turn to favor Russia 26 00:01:37,880 --> 00:01:38,440 Speaker 3: at the table? 27 00:01:39,880 --> 00:01:44,000 Speaker 4: Absolutely? And Trump is siding with a murderous dictator. And 28 00:01:44,080 --> 00:01:46,240 Speaker 4: I love you, Joe, but thousands of civilians didn't just 29 00:01:46,280 --> 00:01:47,000 Speaker 4: die in Ukraine. 30 00:01:47,000 --> 00:01:47,680 Speaker 3: They were killed. 31 00:01:48,440 --> 00:01:52,680 Speaker 4: They were killed in a brutal, illegal war the Vladimir 32 00:01:52,760 --> 00:01:56,240 Speaker 4: Putin started. And now the President of the United States 33 00:01:56,960 --> 00:02:01,360 Speaker 4: is saying that Ukraine started the war, that we should 34 00:02:01,360 --> 00:02:04,200 Speaker 4: side with Russia. I mean, I mean, this is akin 35 00:02:04,640 --> 00:02:07,520 Speaker 4: to FDR suddenly coming out and siding with Hitler in 36 00:02:07,560 --> 00:02:12,000 Speaker 4: World War Two. Ronald Reagan must be rolling over in 37 00:02:12,080 --> 00:02:17,400 Speaker 4: his grave. And it's unbelievable. It's just unbelievable that Republicans 38 00:02:18,280 --> 00:02:22,680 Speaker 4: do not have the basic decency and simple courage to 39 00:02:22,800 --> 00:02:25,160 Speaker 4: stand up and condemn the President for what he's saying. 40 00:02:26,240 --> 00:02:28,560 Speaker 4: I hate to say it, but I served with a 41 00:02:28,560 --> 00:02:31,440 Speaker 4: lot of Republicans who we are just absolute cowards. 42 00:02:33,240 --> 00:02:36,600 Speaker 2: Well, sir, as we consider the role of various Republicans here, 43 00:02:36,639 --> 00:02:38,760 Speaker 2: including someone who used to be part of the Republican 44 00:02:39,200 --> 00:02:42,400 Speaker 2: minority in the Senate. Marco Rubio, the now Secretary of State, 45 00:02:42,440 --> 00:02:45,280 Speaker 2: did say yesterday that both Ukraine and Europe would be 46 00:02:45,320 --> 00:02:48,480 Speaker 2: brought to the table at some point in these negotiations, 47 00:02:48,480 --> 00:02:50,840 Speaker 2: even if they weren't initially. Do you believe that to 48 00:02:50,960 --> 00:02:51,440 Speaker 2: be true? 49 00:02:52,440 --> 00:02:58,160 Speaker 4: No, because Marco Rubio doesn't speak for himself. He speaks 50 00:02:58,160 --> 00:03:00,840 Speaker 4: for Donald Trump. And when Donald Trump's is that they 51 00:03:00,880 --> 00:03:03,160 Speaker 4: won't come to the table, then that's what Margot Rubio 52 00:03:03,240 --> 00:03:06,920 Speaker 4: will do. So no, I think that they'll come to 53 00:03:06,919 --> 00:03:08,519 Speaker 4: the table at the end of the very day, the 54 00:03:08,639 --> 00:03:12,440 Speaker 4: very end of the day, and be forced, or at 55 00:03:12,520 --> 00:03:16,120 Speaker 4: least the Trump administration will try to force the Europeans 56 00:03:16,120 --> 00:03:19,840 Speaker 4: and the Ukrainians to accept a deal that favors Russia. 57 00:03:19,880 --> 00:03:23,079 Speaker 4: That's just everything on Putin's wish list. I mean, this 58 00:03:23,120 --> 00:03:25,040 Speaker 4: is truly unbelievable. I know, there are a lot of 59 00:03:25,280 --> 00:03:28,959 Speaker 4: shocking things that have come out of this administration. A 60 00:03:29,040 --> 00:03:31,240 Speaker 4: lot of the shocking things are things that Trump promised 61 00:03:31,280 --> 00:03:34,240 Speaker 4: to do. So it's hard to say. You know, a 62 00:03:34,240 --> 00:03:36,560 Speaker 4: lot of Americans say, well, you know, that's what the 63 00:03:36,600 --> 00:03:40,160 Speaker 4: president promised. I don't think he ever promised in his 64 00:03:40,200 --> 00:03:44,760 Speaker 4: campaign to side with a murderous dictator. It's just it's 65 00:03:44,840 --> 00:03:47,400 Speaker 4: unfathomable in American history. 66 00:03:47,960 --> 00:03:51,720 Speaker 3: We talked before, Congressman about the prospect of another Yalta. 67 00:03:52,880 --> 00:03:55,200 Speaker 3: You clearly do not like what's going on right now. 68 00:03:55,240 --> 00:03:56,920 Speaker 3: How should these talks proceed? 69 00:03:58,880 --> 00:04:02,680 Speaker 4: These talks should by bringing Ukraine and Russia together to 70 00:04:02,760 --> 00:04:07,160 Speaker 4: negotiate a deal that restores the sovereign voters of Ukraine 71 00:04:07,840 --> 00:04:11,880 Speaker 4: because they were illegally taken by Russia, that provide some 72 00:04:12,200 --> 00:04:16,839 Speaker 4: form of restitution for the billions and billions of dollars 73 00:04:16,839 --> 00:04:22,680 Speaker 4: in damage done to Ukraine and its economy, and some 74 00:04:22,720 --> 00:04:26,800 Speaker 4: some sort of restitution for the hundreds of thousands of 75 00:04:26,880 --> 00:04:30,360 Speaker 4: innocents killed in this war, although we know very well 76 00:04:30,400 --> 00:04:34,360 Speaker 4: they can never come back. But the idea that an 77 00:04:34,400 --> 00:04:38,000 Speaker 4: American commander in chief would throw out all of that 78 00:04:38,920 --> 00:04:44,200 Speaker 4: to side with Vladimir Putin is something that our Congress 79 00:04:44,240 --> 00:04:47,760 Speaker 4: needs to come to terms with. His Republican supporters need 80 00:04:47,800 --> 00:04:51,599 Speaker 4: to come to terms with, and you know, everyday Americans 81 00:04:51,600 --> 00:04:57,440 Speaker 4: walking around Massachusetts right now shouldn't ignore because our safety, 82 00:04:57,560 --> 00:05:01,400 Speaker 4: our national security is on the line when our commander 83 00:05:01,440 --> 00:05:03,760 Speaker 4: in chief sells us out to the Russians. 84 00:05:06,080 --> 00:05:08,880 Speaker 2: Well, as we consider what all we've heard, not just 85 00:05:08,960 --> 00:05:11,359 Speaker 2: from the President himself, but from the likes of the 86 00:05:11,360 --> 00:05:14,080 Speaker 2: Defense Secretary Pete hegset this notion that the US is 87 00:05:14,120 --> 00:05:17,080 Speaker 2: not willing to have peacekeeping forces on the ground to 88 00:05:17,120 --> 00:05:19,760 Speaker 2: make sure that any kind of peace is lasting, that 89 00:05:19,760 --> 00:05:22,600 Speaker 2: that should be left up to Europe. Having been deployed yourself, 90 00:05:22,800 --> 00:05:26,760 Speaker 2: Congressman on multiple occasions, as Joe mentioned, should US troops 91 00:05:27,000 --> 00:05:28,000 Speaker 2: have to play that role. 92 00:05:29,360 --> 00:05:33,880 Speaker 4: I'd like to think that they won't. But you absolutely 93 00:05:33,920 --> 00:05:37,920 Speaker 4: don't take that off the table. I mean, at its best, 94 00:05:38,120 --> 00:05:43,400 Speaker 4: that's just unbelievably dumb negotiating on behalf of the Secretary 95 00:05:43,440 --> 00:05:46,760 Speaker 4: of Defense and the President of the United States. But 96 00:05:46,839 --> 00:05:49,680 Speaker 4: what we're clearly seeing, and I suggested a few days ago, 97 00:05:49,800 --> 00:05:53,960 Speaker 4: is this isn't just bad negotiating. This is negotiating on 98 00:05:54,000 --> 00:05:56,520 Speaker 4: behalf of the Russians. That's what Trump and Heg Seth 99 00:05:56,520 --> 00:06:00,640 Speaker 4: are doing. They're negotiating on behalf of the Russian. 100 00:06:03,920 --> 00:06:06,600 Speaker 3: As we spend time with Congressman Seth Moulton, the Democrat 101 00:06:06,600 --> 00:06:10,120 Speaker 3: from Massachusetts. What will then be the answer, Congressman, from 102 00:06:10,160 --> 00:06:12,080 Speaker 3: your Arm Services Committee. What are you hearing from your 103 00:06:12,080 --> 00:06:14,000 Speaker 3: colleagues on the committee? What does the chairman want to do? 104 00:06:14,880 --> 00:06:19,479 Speaker 4: I mean, look, my colleagues are in disbelief, but the 105 00:06:19,520 --> 00:06:20,680 Speaker 4: problem is that they're silent. 106 00:06:21,400 --> 00:06:22,279 Speaker 3: That's the problem. 107 00:06:23,080 --> 00:06:30,160 Speaker 4: Republicans in Washington don't agree with this traitorous talk. They 108 00:06:30,160 --> 00:06:35,520 Speaker 4: want to support Ukraine, but they're scared. They're just scared 109 00:06:35,560 --> 00:06:38,320 Speaker 4: of Donald Trump. They're scared that they'll lose their precious 110 00:06:38,320 --> 00:06:41,840 Speaker 4: little seat in Congress if they say anything bad about 111 00:06:41,839 --> 00:06:45,680 Speaker 4: the president. And that's why I use the word coward 112 00:06:46,160 --> 00:06:48,599 Speaker 4: to describe so many of my Republican colleagues. 113 00:06:50,560 --> 00:06:53,800 Speaker 2: Well, the argument that I won't say that they're all 114 00:06:53,839 --> 00:06:56,760 Speaker 2: monolithic in this, but that you hear some making, Congressman, 115 00:06:56,880 --> 00:07:00,280 Speaker 2: is that Europe should have a greater responsibility for its 116 00:07:00,320 --> 00:07:03,479 Speaker 2: own defense here. That part of this is that Europeans 117 00:07:03,520 --> 00:07:07,040 Speaker 2: need to be sharing a greater portion of this burden. 118 00:07:07,160 --> 00:07:10,240 Speaker 2: Is there no accuracy to a suggestion or do you 119 00:07:10,280 --> 00:07:13,440 Speaker 2: not see that concern as valid that Europe cannot stand 120 00:07:13,520 --> 00:07:16,800 Speaker 2: up its own resources and make its own investments in 121 00:07:16,880 --> 00:07:19,960 Speaker 2: its defense and security right now? Because the administration would 122 00:07:20,080 --> 00:07:22,440 Speaker 2: argue that is part of what they're pushing for here. 123 00:07:23,200 --> 00:07:25,640 Speaker 4: Sure, that's a valid concern, that's a valid point of view. 124 00:07:25,680 --> 00:07:27,920 Speaker 4: That has nothing to do with selling out to the Russians. 125 00:07:28,440 --> 00:07:33,560 Speaker 4: And that's an absurd and absolutely absurd implication. I mean, 126 00:07:33,560 --> 00:07:37,239 Speaker 4: tell me, you're asking this question, what on earth does 127 00:07:37,280 --> 00:07:40,760 Speaker 4: that have to do with siding with Vladimir Putin over 128 00:07:40,800 --> 00:07:43,800 Speaker 4: this murderous war? What does that have to do with 129 00:07:43,920 --> 00:07:48,240 Speaker 4: giving away Ukraine's sovereign territory? What does that have to 130 00:07:48,280 --> 00:07:52,480 Speaker 4: do with lying about Zelensky and how this war began? 131 00:07:53,960 --> 00:07:55,560 Speaker 4: I mean, I'm sort of a gas at the question. 132 00:07:59,440 --> 00:08:02,240 Speaker 2: Well, and only suggesting that what you hear from the 133 00:08:02,280 --> 00:08:05,880 Speaker 2: President in part is not just his language around Zelensky 134 00:08:05,960 --> 00:08:08,600 Speaker 2: or around Putin or abound his ability to be a 135 00:08:08,640 --> 00:08:11,840 Speaker 2: deal maker, but also specifically about the US financing that 136 00:08:11,880 --> 00:08:14,960 Speaker 2: has been provided to Ukraine. It does seem the money here, Congressman, 137 00:08:15,040 --> 00:08:16,920 Speaker 2: is an issue for him and he would like to 138 00:08:16,920 --> 00:08:19,120 Speaker 2: see Europe standing up more of that. Do you not 139 00:08:19,200 --> 00:08:21,520 Speaker 2: think if Europe were to say, okay, we're all going 140 00:08:21,600 --> 00:08:24,600 Speaker 2: to pay or NATO specifically five percent of our GDP, 141 00:08:24,760 --> 00:08:27,120 Speaker 2: that is now our goal in terms of defense spending 142 00:08:27,160 --> 00:08:29,200 Speaker 2: that that could make the President come around in some 143 00:08:29,320 --> 00:08:30,480 Speaker 2: of these other ideas. 144 00:08:30,960 --> 00:08:31,480 Speaker 5: No, I don't. 145 00:08:31,840 --> 00:08:33,959 Speaker 4: I don't think so, because he's clearly shown that he's 146 00:08:33,960 --> 00:08:36,719 Speaker 4: going to slide with Russia. That's what he's shown. That's 147 00:08:36,760 --> 00:08:40,120 Speaker 4: what everything here says. And let's be clear, he's also lied, 148 00:08:41,040 --> 00:08:44,440 Speaker 4: lied blatantly about European assistants. The Europeans have given more 149 00:08:44,480 --> 00:08:49,160 Speaker 4: money to Ukraine than America has. He said that America 150 00:08:49,200 --> 00:08:51,680 Speaker 4: has given three hundred and fifty billion dollars. It's not 151 00:08:51,760 --> 00:08:54,920 Speaker 4: even close to that. So the president is lying through 152 00:08:54,960 --> 00:08:59,440 Speaker 4: his teeth as he supports Vladimir Putin. No, I'm not 153 00:08:59,559 --> 00:09:02,520 Speaker 4: naiven have to think that that will turn around. And 154 00:09:02,600 --> 00:09:05,360 Speaker 4: the idea that rush that Europe should help pay for 155 00:09:05,400 --> 00:09:07,920 Speaker 4: its own defense, that's something. First of all, it's an 156 00:09:07,960 --> 00:09:11,760 Speaker 4: idea that President Obama put forward first, saying they should 157 00:09:11,800 --> 00:09:14,320 Speaker 4: reach a two percent target. That's been the goal for 158 00:09:14,360 --> 00:09:17,680 Speaker 4: a long time. It's not been five percent. I heard 159 00:09:17,679 --> 00:09:20,959 Speaker 4: some of the European allies at Munich talk about getting 160 00:09:20,960 --> 00:09:23,599 Speaker 4: to five percent as an ambitious goal. I'd like to 161 00:09:23,640 --> 00:09:27,640 Speaker 4: see them reach that too. Ill agree Europe should contribute 162 00:09:27,679 --> 00:09:31,480 Speaker 4: more to NATO. I am not sitting here selling out. 163 00:09:31,320 --> 00:09:37,240 Speaker 3: To the Russians. Congressman, the DOGE is turning its attention 164 00:09:37,280 --> 00:09:40,880 Speaker 3: to the Pentagon, as I'm sure you've heard that a 165 00:09:40,920 --> 00:09:45,840 Speaker 3: new directive to get rid of probationary employees that we 166 00:09:45,880 --> 00:09:48,160 Speaker 3: have seen go through other agencies is in fact now 167 00:09:48,200 --> 00:09:51,800 Speaker 3: heading for the Department of Defense. As a member of 168 00:09:51,840 --> 00:09:54,199 Speaker 3: the Armed Services Committee, what are you hearing about this? 169 00:09:54,360 --> 00:09:56,800 Speaker 3: How many people could be let go and to what 170 00:09:56,920 --> 00:09:58,840 Speaker 3: extent could that impact readiness? 171 00:10:00,200 --> 00:10:03,960 Speaker 4: Look, I'm someone who's championed reform at the Pentagon for 172 00:10:04,000 --> 00:10:09,120 Speaker 4: a very long time. But reform isn't just throwing people out. 173 00:10:09,800 --> 00:10:13,320 Speaker 4: Reform is being smart about how we modernize our defense, 174 00:10:13,760 --> 00:10:17,679 Speaker 4: being smart about how we spend our money, and reducing bureaucracy. 175 00:10:18,440 --> 00:10:21,280 Speaker 4: But just willy nilly cutting a bunch of people whose 176 00:10:21,360 --> 00:10:26,800 Speaker 4: jobs are critical for our national security. That's irresponsible, it's dangerous, 177 00:10:27,840 --> 00:10:30,240 Speaker 4: and God forbid, it leads to it at some attack 178 00:10:30,320 --> 00:10:32,160 Speaker 4: on the in the United States that were not prepared 179 00:10:32,200 --> 00:10:34,640 Speaker 4: for because the people who are supposed to be on 180 00:10:34,679 --> 00:10:38,120 Speaker 4: the job watching for these signs and signals are no 181 00:10:38,200 --> 00:10:41,800 Speaker 4: longer on the job. Because Elon Musk, an immigrant, came 182 00:10:41,840 --> 00:10:44,880 Speaker 4: in and sat behind the Oval office desk, even though 183 00:10:44,880 --> 00:10:47,680 Speaker 4: he was unelected to do so, and decided to just 184 00:10:47,720 --> 00:10:50,560 Speaker 4: willy nilly cut a bunch of people out of out 185 00:10:50,559 --> 00:10:55,200 Speaker 4: of government jobs. I mean, it's irresponsible, and you know, 186 00:10:55,240 --> 00:10:57,800 Speaker 4: and yet somehow it's not surprising coming from a commander 187 00:10:57,840 --> 00:11:01,400 Speaker 4: in chief who, let's not forget dodge draft himself. He 188 00:11:01,480 --> 00:11:03,640 Speaker 4: was asked to go to Vietnam, he said, nope, someone else, 189 00:11:03,679 --> 00:11:06,560 Speaker 4: some other American can go into my place. He faked 190 00:11:06,840 --> 00:11:11,040 Speaker 4: an injury, and now he's hired the South African immigrant 191 00:11:11,040 --> 00:11:13,960 Speaker 4: to sit with him behind the Oval Office desk and 192 00:11:14,000 --> 00:11:19,640 Speaker 4: make decisions about our national security. Doesn't sound good to me. 193 00:11:19,960 --> 00:11:22,960 Speaker 4: Shouldn't make you feel Congress, your family. 194 00:11:23,720 --> 00:11:25,800 Speaker 3: I've had the opportunity to talk to you a lot 195 00:11:25,800 --> 00:11:28,560 Speaker 3: of times since you became a member of Congress, and 196 00:11:28,600 --> 00:11:30,760 Speaker 3: you don't seem like you're in a good place as 197 00:11:30,760 --> 00:11:33,960 Speaker 3: a lawmaker or as an AX. Four years for you, 198 00:11:35,160 --> 00:11:38,040 Speaker 3: Joe looks four years for you? Or are you going 199 00:11:38,120 --> 00:11:42,560 Speaker 3: to craft an answer to this as a Democratic Party? 200 00:11:43,200 --> 00:11:46,080 Speaker 4: Joe, you know me very well, and you know that 201 00:11:46,240 --> 00:11:49,880 Speaker 4: I have been out front in redirecting the Democratic Party 202 00:11:50,600 --> 00:11:53,240 Speaker 4: and saying that it's no longer good enough just to 203 00:11:53,280 --> 00:11:56,800 Speaker 4: criticize Trump, that we've got to have our own way forward, 204 00:11:57,120 --> 00:11:58,840 Speaker 4: and that we've got to make some changes as a 205 00:11:58,840 --> 00:12:01,880 Speaker 4: party to get back touch with the majority of Americans. 206 00:12:02,360 --> 00:12:04,840 Speaker 4: So you never have to question whether I'm willing to 207 00:12:04,880 --> 00:12:08,840 Speaker 4: make changes and reforms in the Democratic Party. But I'm 208 00:12:08,880 --> 00:12:12,480 Speaker 4: also going to hold Republicans accountable, and that's what needs 209 00:12:12,480 --> 00:12:15,679 Speaker 4: to happen right now when Donald Trump is selling us 210 00:12:15,679 --> 00:12:16,520 Speaker 4: out to the Russians. 211 00:12:18,760 --> 00:12:21,839 Speaker 3: This was quite a conversation with Congressman Seth Moulton, the 212 00:12:21,880 --> 00:12:25,559 Speaker 3: Democrat from Massachusetts, with us live here on Bloomberg. Congressman, 213 00:12:25,600 --> 00:12:28,480 Speaker 3: thank you very much, Kayley. You don't have to guess 214 00:12:28,840 --> 00:12:30,559 Speaker 3: how Seth Malton thinks about all of this. 215 00:12:31,240 --> 00:12:34,400 Speaker 2: No, certainly not, and he is not alone in his views. 216 00:12:34,400 --> 00:12:37,600 Speaker 2: Specifically about some of the language we are hearing around 217 00:12:37,640 --> 00:12:41,600 Speaker 2: the description of President of Ukraine, vladimir's Lynsky as a dictator. 218 00:12:41,640 --> 00:12:45,000 Speaker 2: You are seeing at least some mild pushback from Republican 219 00:12:45,080 --> 00:12:47,800 Speaker 2: senators on the Hill suggestions that that is not how 220 00:12:47,840 --> 00:12:50,880 Speaker 2: they would describe the Lame John forne example, but not 221 00:12:50,920 --> 00:12:54,800 Speaker 2: necessarily full throated pushback to the tactic that the administration 222 00:12:54,920 --> 00:12:56,960 Speaker 2: is taking here when it comes to approaching these talks. 223 00:12:56,960 --> 00:12:57,640 Speaker 2: At least an issue. 224 00:12:57,800 --> 00:13:00,360 Speaker 3: Yeah, John Thune is speaking with Bloomberg about this a 225 00:13:00,360 --> 00:13:05,000 Speaker 3: short time ago, laying blame against Vladimir Zelenski, saying Russia 226 00:13:05,040 --> 00:13:08,400 Speaker 3: is the aggressor and there is not a question about that. 227 00:13:09,440 --> 00:13:13,079 Speaker 1: You're listening to the Bloomberg Balance of Power podcast Kettas 228 00:13:13,160 --> 00:13:16,040 Speaker 1: live weekdays at noon and five pm, E's durn On 229 00:13:16,160 --> 00:13:19,400 Speaker 1: Apple Cockley and Android Auto with the Bloomberg Business App. 230 00:13:19,440 --> 00:13:22,440 Speaker 1: You can also listen live on Amazon Alexa from our 231 00:13:22,480 --> 00:13:27,640 Speaker 1: flagship New York station Just Say Alexa played Bloomberg eleven thirty. 232 00:13:29,440 --> 00:13:31,920 Speaker 2: Today, the Senate was gearing up to move forward on 233 00:13:32,000 --> 00:13:34,960 Speaker 2: a budget resolutionist so called Skinny one, that would address 234 00:13:35,040 --> 00:13:38,160 Speaker 2: part of the legislative agenda that President Trump wants to pursue, 235 00:13:38,200 --> 00:13:41,680 Speaker 2: specifically providing funding when it comes to border security and 236 00:13:41,800 --> 00:13:45,960 Speaker 2: changes to energy policy, a strategy pursued by Senator Lindsay Graham, 237 00:13:45,960 --> 00:13:47,920 Speaker 2: who leads the Budget Committee in that chamber, as well 238 00:13:47,920 --> 00:13:50,720 Speaker 2: as the Majority Leader John Thun. The House, of course, 239 00:13:50,800 --> 00:13:53,120 Speaker 2: is trying to do everything in one package. And today, 240 00:13:53,160 --> 00:13:55,520 Speaker 2: as we mentioned, that got the endorsement from the President 241 00:13:55,559 --> 00:13:58,400 Speaker 2: on True Social who said, in part quote, the House 242 00:13:58,440 --> 00:14:03,400 Speaker 2: resolution implements my full America First agenda everything in all caps, 243 00:14:03,880 --> 00:14:06,920 Speaker 2: not just parts of it. The question, of course, though, Joe, 244 00:14:07,000 --> 00:14:10,280 Speaker 2: is if it is to be everything, how much exactly 245 00:14:10,320 --> 00:14:11,360 Speaker 2: does everything cost. 246 00:14:12,679 --> 00:14:14,959 Speaker 3: That's a great question that no one in Washington, I 247 00:14:15,000 --> 00:14:16,719 Speaker 3: think can answer right now. But somebody is going to 248 00:14:16,800 --> 00:14:20,360 Speaker 3: have to come up with an answer. Philip Swagel among them. 249 00:14:20,360 --> 00:14:23,080 Speaker 3: He's director of the Congressional Budget Office, and when you 250 00:14:23,160 --> 00:14:28,200 Speaker 3: hear people talk about scoring legislation, this is the entity 251 00:14:28,360 --> 00:14:30,200 Speaker 3: that does it. He's with us at the table right 252 00:14:30,240 --> 00:14:32,000 Speaker 3: now ahead of the storm. Philip. Good to see you 253 00:14:32,040 --> 00:14:36,200 Speaker 3: and welcome. CBO bipartisan, non partisan. 254 00:14:36,320 --> 00:14:38,520 Speaker 6: CBO is non non partisan. 255 00:14:38,080 --> 00:14:42,280 Speaker 3: Forgive me, one of the most important agencies in Washington, 256 00:14:42,680 --> 00:14:45,360 Speaker 3: and therefore a very easy target when lawmakers want to 257 00:14:45,400 --> 00:14:48,720 Speaker 3: complain about the process. We'll get to that. What are 258 00:14:48,760 --> 00:14:52,040 Speaker 3: you doing right now as an organization when you're waiting 259 00:14:52,080 --> 00:14:55,920 Speaker 3: for these massive bills to drop? I mean, are you 260 00:14:56,000 --> 00:14:58,440 Speaker 3: are you? Are you doing exercises? How do you get 261 00:14:58,520 --> 00:14:59,960 Speaker 3: ready for what's about to happen? 262 00:15:00,320 --> 00:15:00,440 Speaker 7: No? 263 00:15:00,800 --> 00:15:04,760 Speaker 6: Very good. You know, we're here to support the Congress. 264 00:15:05,040 --> 00:15:08,240 Speaker 8: And I said, we're nonpartisan units for both chambers and 265 00:15:08,320 --> 00:15:11,440 Speaker 8: both sides, and we support both the Republicans, the majority 266 00:15:11,760 --> 00:15:16,360 Speaker 8: and the Democrats the minority. We've been working with the Congress, 267 00:15:16,360 --> 00:15:19,760 Speaker 8: with members with committees for months as they prepare for 268 00:15:20,640 --> 00:15:23,960 Speaker 8: this legislation, and we're working with both sides that both 269 00:15:24,000 --> 00:15:26,560 Speaker 8: it's Chairman Graham of course in the Senate, Chairman Arrington 270 00:15:26,840 --> 00:15:30,120 Speaker 8: in the House, and we're supporting them, we're supporting their staff, 271 00:15:30,480 --> 00:15:37,480 Speaker 8: and that's just routine. As the committee's jurisdiction refine their legislation, 272 00:15:38,000 --> 00:15:40,760 Speaker 8: we're going back and forth with them to provide them 273 00:15:40,760 --> 00:15:42,880 Speaker 8: with cost estimates and other information. 274 00:15:43,200 --> 00:15:46,200 Speaker 2: Well, you mentioned Chairman Arrington. Obviously, the budget resolution that 275 00:15:46,240 --> 00:15:47,680 Speaker 2: he put forward that worked its way out of the 276 00:15:47,680 --> 00:15:49,960 Speaker 2: Budget Committee called for four and a half trillion dollars 277 00:15:50,000 --> 00:15:53,160 Speaker 2: in tax cuts that will be allowed in return, you 278 00:15:53,240 --> 00:15:54,840 Speaker 2: have to have at least one and a half trillion 279 00:15:54,880 --> 00:15:57,520 Speaker 2: dollars of spending cuts. Keeping in mind that the President 280 00:15:57,560 --> 00:15:59,960 Speaker 2: said last night that he doesn't want to see Medicare, 281 00:16:00,160 --> 00:16:04,080 Speaker 2: Medicaid or Social Security touched. Is that mathematically possible? 282 00:16:05,280 --> 00:16:09,640 Speaker 8: I mean, for sure, it's mathematically possible, and it depends 283 00:16:09,640 --> 00:16:11,680 Speaker 8: on the decisions to be made by the Congress in 284 00:16:11,720 --> 00:16:14,800 Speaker 8: the future. At this point, where the Congress is now 285 00:16:14,880 --> 00:16:17,560 Speaker 8: is that they're working on a concurrent resolution. It's a resolution, 286 00:16:18,040 --> 00:16:20,640 Speaker 8: it's concurrent between the two chambers, the House and the Senate. 287 00:16:20,960 --> 00:16:24,120 Speaker 8: There's no cost estimate of that. Where the cost estament 288 00:16:24,200 --> 00:16:28,320 Speaker 8: comes in is later in the process, after each chamber comes. 289 00:16:28,160 --> 00:16:29,600 Speaker 6: Up with the specific legislation. 290 00:16:30,080 --> 00:16:34,200 Speaker 8: And so that's instances we're working with them on a 291 00:16:34,240 --> 00:16:39,480 Speaker 8: technical basis and confidentially when the eventual legislation comes forward 292 00:16:39,560 --> 00:16:41,960 Speaker 8: in whichever way it proceeds with, you know, so the 293 00:16:42,000 --> 00:16:45,480 Speaker 8: bigger or smaller, we will eventually provide a cost estimate 294 00:16:45,760 --> 00:16:47,400 Speaker 8: that makes the numbers clear. 295 00:16:47,680 --> 00:16:50,800 Speaker 3: I want to get to an important debate that's underweight 296 00:16:50,920 --> 00:16:53,320 Speaker 3: right now in Washington, because we've had people sit at 297 00:16:53,320 --> 00:16:57,640 Speaker 3: this table and argue that extending the Trump tax cuts 298 00:16:57,720 --> 00:17:01,560 Speaker 3: will prompt growth that is on quantifiable we get back 299 00:17:01,600 --> 00:17:04,840 Speaker 3: to dynamic scoring and so forth as a concept. There 300 00:17:04,880 --> 00:17:09,960 Speaker 3: others are saying that it'll explode the deficit and ravage 301 00:17:09,960 --> 00:17:12,359 Speaker 3: the economy. We get both extremes. Here a lot you 302 00:17:12,440 --> 00:17:15,840 Speaker 3: wrote at the end of last year because higher taxes 303 00:17:15,880 --> 00:17:19,280 Speaker 3: increased revenues. This is the idea of what would happen 304 00:17:19,359 --> 00:17:23,080 Speaker 3: if they were allowed to expire. Because higher taxes increase revenues, 305 00:17:23,080 --> 00:17:26,800 Speaker 3: the federal government borrows less, making more funds available for 306 00:17:26,880 --> 00:17:30,760 Speaker 3: private investment. These two effects roughly offset each other. As 307 00:17:30,800 --> 00:17:33,680 Speaker 3: a result, the expiration of the individual income tax provisions 308 00:17:33,680 --> 00:17:38,880 Speaker 3: here does not significantly affect CBO's projections of real GDP. 309 00:17:39,520 --> 00:17:41,600 Speaker 3: So does it inspire growth or not? 310 00:17:42,240 --> 00:17:44,800 Speaker 8: Okay, no, very good, And that's from a blog post 311 00:17:45,520 --> 00:17:48,320 Speaker 8: on the CBO website. And the way to think of 312 00:17:48,400 --> 00:17:51,879 Speaker 8: this is that the Tax Act in twenty seventeen has 313 00:17:51,920 --> 00:17:54,680 Speaker 8: a number of provisions. Many of them are permanent already. 314 00:17:54,800 --> 00:17:58,119 Speaker 8: So these international provisions that are largely permanent, there's corporate 315 00:17:58,200 --> 00:18:02,880 Speaker 8: provisions largely permanent. There's some business provisions that are not permanent, 316 00:18:04,280 --> 00:18:06,760 Speaker 8: expensing the research credit. 317 00:18:07,080 --> 00:18:08,520 Speaker 6: And then there's the personal side. 318 00:18:08,760 --> 00:18:11,760 Speaker 8: And so the quote you read is exactly exactly right. 319 00:18:11,840 --> 00:18:14,800 Speaker 8: It's about the personal side. And as you said, the 320 00:18:14,920 --> 00:18:18,000 Speaker 8: higher deficits that would result from extension of those leads 321 00:18:18,040 --> 00:18:22,240 Speaker 8: to crowding out such a downward effect on GDP growth. 322 00:18:22,880 --> 00:18:26,719 Speaker 8: The positive incentives of lower taxes goes in the opposite direction. 323 00:18:27,359 --> 00:18:30,600 Speaker 8: Those two cancel out on the business side. So that's 324 00:18:30,640 --> 00:18:33,639 Speaker 8: on the personal side. Then on the business side, those 325 00:18:34,359 --> 00:18:38,280 Speaker 8: have a smaller cost in dollars, but probably a larger 326 00:18:38,359 --> 00:18:41,359 Speaker 8: bang for the buck in terms of economic growth, and 327 00:18:41,400 --> 00:18:46,080 Speaker 8: so to know the growth impact of the eventual legislation, 328 00:18:46,160 --> 00:18:48,120 Speaker 8: we have to see it all and that's what we're 329 00:18:48,119 --> 00:18:48,560 Speaker 8: waiting on. 330 00:18:49,200 --> 00:18:51,280 Speaker 2: Well, and we're all waiting on it. We've been waiting, 331 00:18:51,320 --> 00:18:52,960 Speaker 2: it feels like, for some time, and I'm sure that 332 00:18:53,000 --> 00:18:55,040 Speaker 2: waiting game is going to have to last a little 333 00:18:55,080 --> 00:18:58,240 Speaker 2: bit longer knowing and we've had multiple conversations with Chairman 334 00:18:58,320 --> 00:19:00,720 Speaker 2: Jason Smith of the Ways and Means Committee about pursuing 335 00:19:00,760 --> 00:19:03,399 Speaker 2: the tax cuts that Trump would like to see implemented. 336 00:19:03,400 --> 00:19:04,920 Speaker 2: This notion that he needs more than four and a 337 00:19:04,960 --> 00:19:07,240 Speaker 2: half trillion dollars because that alone is what it will 338 00:19:07,280 --> 00:19:09,920 Speaker 2: cost to extend the twenty seventeen tax cuts. Can you 339 00:19:10,000 --> 00:19:11,919 Speaker 2: walk us through the math on why that figure for 340 00:19:12,040 --> 00:19:15,199 Speaker 2: extension is so much higher than the original score of 341 00:19:15,240 --> 00:19:17,040 Speaker 2: the legislation from eight years ago. 342 00:19:17,600 --> 00:19:19,320 Speaker 6: Okay, no, it's a great question. 343 00:19:19,840 --> 00:19:22,280 Speaker 8: And well, first of all, I should say, our colleagues 344 00:19:22,320 --> 00:19:25,399 Speaker 8: in the Joint Committee on Taxation eventually will provide the 345 00:19:25,440 --> 00:19:29,440 Speaker 8: cost estimates for the cost and so their numbers will 346 00:19:29,440 --> 00:19:32,400 Speaker 8: appear in a CBO cost estimate, but by statute, their 347 00:19:32,480 --> 00:19:37,280 Speaker 8: JCT's numbers. So broadly speaking, the twenty seventeen Act when 348 00:19:37,320 --> 00:19:40,280 Speaker 8: it was enacted in December twenty seventeen, had a variety 349 00:19:40,359 --> 00:19:44,200 Speaker 8: of lower taxes, but it also had base broadeners. Some 350 00:19:44,240 --> 00:19:46,679 Speaker 8: of those were one time it changed the indexation of 351 00:19:46,760 --> 00:19:52,080 Speaker 8: tax brackets. There's a one time repatriation of foreign income 352 00:19:52,200 --> 00:19:55,639 Speaker 8: that resulted in revenue, and another number of other provisions. 353 00:19:56,160 --> 00:19:59,160 Speaker 8: And that's why the original cost of the twenty seventeen 354 00:19:59,200 --> 00:20:04,040 Speaker 8: Act on net was lower because of these one off provisions. Now, 355 00:20:04,040 --> 00:20:06,879 Speaker 8: of course, the cost of whatever is extended or whatever 356 00:20:06,960 --> 00:20:11,600 Speaker 8: changes there are, will again depend on the specifics are 357 00:20:11,640 --> 00:20:15,160 Speaker 8: there one off provisions, are there other base broadeners, and 358 00:20:15,200 --> 00:20:16,320 Speaker 8: what exactly is done. 359 00:20:17,480 --> 00:20:21,520 Speaker 3: So when you start talking about the process, here, bring 360 00:20:21,600 --> 00:20:23,480 Speaker 3: us behind the scenes just for a moment, because I 361 00:20:23,520 --> 00:20:26,600 Speaker 3: picture stables of men and women wearing green visors going 362 00:20:26,640 --> 00:20:29,520 Speaker 3: through the raps. I mean, just the amount of time 363 00:20:29,600 --> 00:20:32,760 Speaker 3: required to read all of this is thousands of ours. 364 00:20:32,920 --> 00:20:36,480 Speaker 3: How do you devour a reconciliation bill of that size? 365 00:20:36,840 --> 00:20:39,360 Speaker 8: Now, I'm just I'm sorry, I'm smiling at the green visors. 366 00:20:40,119 --> 00:20:45,600 Speaker 8: That is our self image. It's a positive here, It's yeah, 367 00:20:45,640 --> 00:20:46,800 Speaker 8: it's definitely a positive. 368 00:20:47,600 --> 00:20:47,760 Speaker 9: You know. 369 00:20:47,800 --> 00:20:51,040 Speaker 6: It's what we do. We read the legislation line by line. 370 00:20:50,840 --> 00:20:54,160 Speaker 8: And word for word, and we work closely with Congressional staff, 371 00:20:54,560 --> 00:20:56,879 Speaker 8: and you know, the committees are very helpful as they 372 00:20:56,960 --> 00:20:57,840 Speaker 8: develop legislation. 373 00:20:58,280 --> 00:21:00,560 Speaker 6: We work back and forth. They provide a red line. 374 00:21:00,600 --> 00:21:02,480 Speaker 3: So you're seeing this as it's being written. Though you 375 00:21:02,480 --> 00:21:03,920 Speaker 3: don't get this one night and you all have to 376 00:21:03,960 --> 00:21:05,840 Speaker 3: go home and no, that's take a chapter. 377 00:21:05,920 --> 00:21:07,840 Speaker 8: Yeah, and of course, look, there's going to be changes 378 00:21:07,920 --> 00:21:10,439 Speaker 8: over time. There could be changes at the last moment, 379 00:21:11,000 --> 00:21:15,080 Speaker 8: and we support the Congress whatever processes. 380 00:21:14,720 --> 00:21:17,119 Speaker 6: That you know does it. That's how we do it. 381 00:21:17,320 --> 00:21:20,400 Speaker 8: I can give you an example from twenty twenty one. 382 00:21:20,720 --> 00:21:23,240 Speaker 8: So this is the reconciliation that happened, then we can 383 00:21:23,280 --> 00:21:26,359 Speaker 8: build back Better. At the end of the process by 384 00:21:26,440 --> 00:21:29,159 Speaker 8: which build back Better passed the House. It was never enacted, 385 00:21:29,160 --> 00:21:31,960 Speaker 8: but past the House. There are a number of members 386 00:21:32,160 --> 00:21:35,000 Speaker 8: of the House who had questions about the legislation, and 387 00:21:35,040 --> 00:21:37,359 Speaker 8: we gathered a bunch of us at CBO together in 388 00:21:37,359 --> 00:21:40,679 Speaker 8: a conference room. We were still wearing masks, and you know, 389 00:21:40,680 --> 00:21:43,800 Speaker 8: we'd all been vaccinated, and we're on a conference call 390 00:21:43,840 --> 00:21:46,560 Speaker 8: with dozens of members of Congress and they're asking us questions. 391 00:21:46,560 --> 00:21:50,040 Speaker 6: On page seventy two, line seven. You have this. 392 00:21:50,200 --> 00:21:52,600 Speaker 8: The White House says that what's the difference, and the 393 00:21:53,160 --> 00:21:55,399 Speaker 8: you know, the right analysts from CBO, one of my colleagues, 394 00:21:55,440 --> 00:21:57,320 Speaker 8: we get on the phone and you know, the conference 395 00:21:57,320 --> 00:21:59,760 Speaker 8: call and say well, here's what it is, next member. 396 00:22:00,080 --> 00:22:02,400 Speaker 8: And so that's that's to kind of in the weeds 397 00:22:02,400 --> 00:22:02,920 Speaker 8: that we do. 398 00:22:02,960 --> 00:22:04,080 Speaker 6: If that's what members want. 399 00:22:04,240 --> 00:22:06,280 Speaker 3: This is the good stuff, Kyllie. This is literally how 400 00:22:06,320 --> 00:22:07,200 Speaker 3: the sausage is made. 401 00:22:07,320 --> 00:22:09,800 Speaker 8: At some point during that meeting we took I mean, 402 00:22:09,800 --> 00:22:12,160 Speaker 8: it's going to sound sounds crazy in twenty twenty five 403 00:22:12,240 --> 00:22:14,280 Speaker 8: thinking about it, but we took our mask off and 404 00:22:14,280 --> 00:22:15,600 Speaker 8: we're all like, wow, this is weird. 405 00:22:15,600 --> 00:22:16,240 Speaker 3: That's what you look. 406 00:22:16,400 --> 00:22:18,080 Speaker 6: It was just like, you know, we just we do 407 00:22:18,160 --> 00:22:20,280 Speaker 6: what we need to do to accomplish the mission. 408 00:22:21,280 --> 00:22:24,280 Speaker 2: Well, I guess it's also a question of how your mission, 409 00:22:24,400 --> 00:22:26,800 Speaker 2: having been completed, is actually received by some of the 410 00:22:26,880 --> 00:22:29,560 Speaker 2: very same members that you're referring to. Obviously, you'll be 411 00:22:29,600 --> 00:22:31,800 Speaker 2: well aware that the CBO has come under some criticism 412 00:22:31,840 --> 00:22:34,159 Speaker 2: for the way in which it scores things. I mentioned 413 00:22:34,560 --> 00:22:36,679 Speaker 2: the share of the Ways and Means Committee Jason Smith earlier. 414 00:22:36,720 --> 00:22:39,080 Speaker 2: This was him during our last conversation about the way 415 00:22:39,119 --> 00:22:42,399 Speaker 2: tariffs should be or should not be involved in all 416 00:22:42,440 --> 00:22:42,680 Speaker 2: of this. 417 00:22:43,680 --> 00:22:46,400 Speaker 10: When you care about the fiscal health of the nation 418 00:22:46,440 --> 00:22:49,119 Speaker 10: as a whole, you have to look at the possible 419 00:22:49,160 --> 00:22:52,520 Speaker 10: influx of future revenues that could come from the President's 420 00:22:52,640 --> 00:22:59,359 Speaker 10: trade proposals and across the board ten percent tariff which 421 00:22:59,440 --> 00:23:03,720 Speaker 10: the President did campaign on, and across the board tariff 422 00:23:04,080 --> 00:23:07,119 Speaker 10: that can bring in trillions of dollars. So those are 423 00:23:07,160 --> 00:23:10,320 Speaker 10: things that you have to look at that can affect 424 00:23:10,480 --> 00:23:13,000 Speaker 10: the fiscal health of the nation as a whole. But 425 00:23:13,119 --> 00:23:16,880 Speaker 10: in the rules of reconciliation, CBO and Joint tax will 426 00:23:16,880 --> 00:23:18,720 Speaker 10: not allow those to be scored appropriately. 427 00:23:20,080 --> 00:23:22,840 Speaker 2: So he's talking about how tariffs fit into the fiscal 428 00:23:22,880 --> 00:23:25,560 Speaker 2: health of the US overall, but because of the rules 429 00:23:25,560 --> 00:23:30,160 Speaker 2: of reconciliation, the CBO and Joint Tax will not allow 430 00:23:30,200 --> 00:23:34,200 Speaker 2: it to be what he described as scored appropriately. Weigh 431 00:23:34,240 --> 00:23:36,320 Speaker 2: in on the appropriateness of the way all of this 432 00:23:36,440 --> 00:23:39,000 Speaker 2: comes together, because even the Treasury Secretary says, you can't 433 00:23:39,080 --> 00:23:41,560 Speaker 2: view these two things in isolation. Taxes and tariffs. 434 00:23:41,760 --> 00:23:43,840 Speaker 8: Okay, no, no, and I agree with that. I agree 435 00:23:43,880 --> 00:23:48,200 Speaker 8: with what Treasury Secretary DestinE said. It depends on how 436 00:23:48,280 --> 00:23:50,399 Speaker 8: the tariffs are put in place. If they're put in 437 00:23:50,400 --> 00:23:53,680 Speaker 8: plays through administrative action, through the President using his authority, 438 00:23:54,119 --> 00:23:58,159 Speaker 8: then it doesn't score in legislation. And so Chairman sim Smith, 439 00:23:58,440 --> 00:23:59,640 Speaker 8: of course is right about that. 440 00:24:00,080 --> 00:24:02,320 Speaker 6: We can still provide information to the Congress. 441 00:24:02,359 --> 00:24:04,439 Speaker 8: So we could provide a letter that says, you know, 442 00:24:04,480 --> 00:24:07,239 Speaker 8: here's what the president is done, here's our estimate of 443 00:24:07,280 --> 00:24:10,200 Speaker 8: what the revenues would be, and here's the economic effects. 444 00:24:10,320 --> 00:24:12,200 Speaker 8: And in such as it's going back to what we 445 00:24:12,280 --> 00:24:15,080 Speaker 8: talked about just a moment ago. If we have revenue 446 00:24:15,119 --> 00:24:17,639 Speaker 8: coming in that will reduce the amount of crowding out 447 00:24:18,200 --> 00:24:20,720 Speaker 8: and boost GDP. And of course on the other side, 448 00:24:20,920 --> 00:24:24,120 Speaker 8: the tariffs would reduce the efficiency of the economy, and 449 00:24:24,400 --> 00:24:26,600 Speaker 8: you know that would go in the opposite direction with GDP. 450 00:24:27,840 --> 00:24:31,280 Speaker 3: Mention that the outset here. You're the easiest target in Washington, 451 00:24:31,280 --> 00:24:34,280 Speaker 3: aren't you. Almost by design, by structure, you've made it 452 00:24:34,320 --> 00:24:37,439 Speaker 3: clear nonpartisan. That's almost like a kick me sign. In 453 00:24:37,440 --> 00:24:40,119 Speaker 3: this incredibly political environment we're in. Does it make your 454 00:24:40,200 --> 00:24:40,760 Speaker 3: job harder? 455 00:24:41,640 --> 00:24:47,119 Speaker 6: It's tempted to look behind me after that sign. 456 00:24:47,440 --> 00:24:51,439 Speaker 8: Now you know, CBO is a mission oriented place and 457 00:24:51,480 --> 00:24:53,680 Speaker 8: the people who come to CBO are two hundred and 458 00:24:53,680 --> 00:24:56,720 Speaker 8: seventy colleagues. We are mission oriented. We are here to 459 00:24:56,760 --> 00:24:57,400 Speaker 8: support them. 460 00:24:57,600 --> 00:24:58,560 Speaker 6: It's not always. 461 00:24:58,359 --> 00:25:01,920 Speaker 8: Vice versa, but that's just part of the and whatever 462 00:25:01,960 --> 00:25:04,639 Speaker 8: information they need, our job is to get it to 463 00:25:04,680 --> 00:25:06,520 Speaker 8: them what they need, when they need it. 464 00:25:07,160 --> 00:25:09,920 Speaker 2: Well, we appreciate you being here at least right now, 465 00:25:09,960 --> 00:25:12,600 Speaker 2: as you have those deadlines to meet. Eventually, when we 466 00:25:12,640 --> 00:25:15,840 Speaker 2: look at ultimately the size of this legislation, however big 467 00:25:15,920 --> 00:25:18,760 Speaker 2: it ends up. Philip Swagel, Director of the Congressional Budget Office, 468 00:25:18,800 --> 00:25:20,359 Speaker 2: thank you so much for spending time. 469 00:25:20,200 --> 00:25:20,720 Speaker 11: With us here. 470 00:25:20,720 --> 00:25:25,120 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 471 00:25:25,200 --> 00:25:28,639 Speaker 1: us live weekdays at noon and five pm Eastern on Apple, 472 00:25:28,680 --> 00:25:32,080 Speaker 1: Cockley and Android Auto with the Bloomberg Business App. Listen 473 00:25:32,119 --> 00:25:35,240 Speaker 1: on demand wherever you get your podcasts, or watch us 474 00:25:35,280 --> 00:25:37,560 Speaker 1: live on YouTube. 475 00:25:37,920 --> 00:25:39,960 Speaker 3: We're waiting for a ruling here, a federal judge set 476 00:25:40,000 --> 00:25:43,560 Speaker 3: to scrutinize the Trump administration's attempt to throw out the 477 00:25:43,560 --> 00:25:46,160 Speaker 3: corruption charges the case against the Mayor of New York, 478 00:25:46,359 --> 00:25:50,879 Speaker 3: Eric Adams, remembering yesterday that Hockel was hold up with 479 00:25:51,440 --> 00:25:53,359 Speaker 3: city leaders trying to figure out the next move. She 480 00:25:53,400 --> 00:25:56,760 Speaker 3: may in fact following We're waiting for this ruling. Once 481 00:25:56,800 --> 00:25:59,520 Speaker 3: that happens, may in fact move to oust Eric Adams. 482 00:25:59,520 --> 00:26:02,639 Speaker 3: That's something that will be keeping tabs on for you 483 00:26:02,720 --> 00:26:06,600 Speaker 3: here today as attention shifts to Miami. This is not 484 00:26:06,640 --> 00:26:08,800 Speaker 3: a crypto story, although I guess it could become. You've 485 00:26:08,840 --> 00:26:12,239 Speaker 3: got to be crypto bros crawling all around the FII. Right, 486 00:26:12,280 --> 00:26:15,280 Speaker 3: We'll have to ask Tyler. This is the big summit here, 487 00:26:15,320 --> 00:26:19,679 Speaker 3: funded by the Saudi Investment Fund, right, the Future Investment 488 00:26:19,760 --> 00:26:24,359 Speaker 3: Initiative Institute. Not likely a place Joe Biden would have 489 00:26:24,400 --> 00:26:27,480 Speaker 3: been dropping a keynote speech in the first month of 490 00:26:27,560 --> 00:26:31,600 Speaker 3: his first term. But here we are joining the likes 491 00:26:31,600 --> 00:26:37,640 Speaker 3: of TikTok Ceo, shoot you leaders of other big tech companies, 492 00:26:37,680 --> 00:26:40,800 Speaker 3: Think Oracle, think Uber. Yes, the President of the United 493 00:26:40,840 --> 00:26:43,600 Speaker 3: States will be there five pm Eastern time, so says 494 00:26:43,600 --> 00:26:46,399 Speaker 3: the schedule. We're going to carry the speech live here 495 00:26:47,240 --> 00:26:49,720 Speaker 3: on Bloomberg. That'll be in the late edition to balance 496 00:26:49,760 --> 00:26:52,080 Speaker 3: a power. But we get a treat right now because 497 00:26:52,119 --> 00:26:55,320 Speaker 3: Tyler has already made her way to Miami. She's got 498 00:26:55,320 --> 00:26:57,960 Speaker 3: the machete down there, clearing through all the brush to 499 00:26:58,000 --> 00:26:59,760 Speaker 3: get to the real story, and is with us right 500 00:26:59,800 --> 00:27:03,199 Speaker 3: now from FII at Miami beach Tyler, what's going on 501 00:27:03,240 --> 00:27:04,920 Speaker 3: down there ahead of the big speech tonight. 502 00:27:07,280 --> 00:27:09,560 Speaker 7: Yeah, hey, Joe, Well, we know that President Trump is 503 00:27:09,680 --> 00:27:12,439 Speaker 7: likely to really focus this on and increase that he 504 00:27:12,520 --> 00:27:15,400 Speaker 7: wants to see when it comes to US investment. You'll 505 00:27:15,440 --> 00:27:18,119 Speaker 7: recall that during his first week in office, the Saudi 506 00:27:18,160 --> 00:27:21,080 Speaker 7: Crown Prince called him and said that Saudi Arabia would 507 00:27:21,080 --> 00:27:24,000 Speaker 7: be investing six hundred billion dollars in the US when 508 00:27:24,000 --> 00:27:26,679 Speaker 7: it came to investments and trade over a period of 509 00:27:26,720 --> 00:27:29,879 Speaker 7: four years. That was considered to be a pretty big pledge. Right, 510 00:27:29,920 --> 00:27:33,800 Speaker 7: That mounts about fifty five percent of Saudi Arabia's GDP. However, 511 00:27:33,880 --> 00:27:36,399 Speaker 7: President Trump said that that wasn't enough. He called for 512 00:27:36,440 --> 00:27:40,800 Speaker 7: Saudi Arabia to instead increase that number to one trillion dollars. 513 00:27:40,840 --> 00:27:44,520 Speaker 7: That number, expert say is highly unlikely. However, it has 514 00:27:44,600 --> 00:27:48,040 Speaker 7: spurred us. You've been talking about these business interests to 515 00:27:48,119 --> 00:27:51,040 Speaker 7: come here to Miami to talk about potentially how this 516 00:27:51,560 --> 00:27:54,800 Speaker 7: increased flow of capital between the two countries could be 517 00:27:54,800 --> 00:27:57,080 Speaker 7: beneficial for them. And there's a real sense here on 518 00:27:57,119 --> 00:27:59,399 Speaker 7: the ground that the Saudis would like to focus on 519 00:27:59,600 --> 00:28:04,040 Speaker 7: terms of of agreement, right, investments and artificial intelligence of 520 00:28:04,400 --> 00:28:08,120 Speaker 7: advanced manufacturing things like this, particularly as they find themselves 521 00:28:08,520 --> 00:28:10,680 Speaker 7: in the center of some of the White House's key 522 00:28:10,720 --> 00:28:13,879 Speaker 7: policies this week, such as hosting the US Russia talks. 523 00:28:13,880 --> 00:28:16,119 Speaker 7: But Joe, to be clear, there are still, of course, 524 00:28:16,440 --> 00:28:19,280 Speaker 7: other contention points that could come up depending on which 525 00:28:19,280 --> 00:28:21,520 Speaker 7: way President Trump would like to go, including his plan 526 00:28:21,600 --> 00:28:24,280 Speaker 7: when it comes to Gaza, as well as recent complaints 527 00:28:24,320 --> 00:28:27,200 Speaker 7: on oil prices. So we'll have to wait and see. 528 00:28:27,240 --> 00:28:29,159 Speaker 7: We did inquire with the White House to see if 529 00:28:29,160 --> 00:28:31,199 Speaker 7: we could get any sort of preview and they just 530 00:28:31,240 --> 00:28:33,320 Speaker 7: told us to stay tuned, but we will be here 531 00:28:33,359 --> 00:28:35,520 Speaker 7: at five pm Eastern when he starts. 532 00:28:36,000 --> 00:28:37,680 Speaker 3: Well that's the exactly what I was going to ask, 533 00:28:37,760 --> 00:28:39,239 Speaker 3: So we're going to get the weave then, right, you 534 00:28:39,280 --> 00:28:41,680 Speaker 3: just rolled out like six stories. He'll probably hit them all. 535 00:28:41,920 --> 00:28:43,400 Speaker 3: Do the ad lib? What does he have about an 536 00:28:43,440 --> 00:28:47,240 Speaker 3: hour in store here? And who's in this crowd? Tyler? 537 00:28:49,200 --> 00:28:51,480 Speaker 7: Actually yes, about an hour. According to the schedule, he 538 00:28:51,560 --> 00:28:53,960 Speaker 7: is set to depart here at six fifteen eastern, so 539 00:28:54,400 --> 00:28:56,640 Speaker 7: give or take there. And we know that there are 540 00:28:56,680 --> 00:29:00,160 Speaker 7: some big tech titans. You mentioned the TikTok Ceo, so 541 00:29:00,280 --> 00:29:04,840 Speaker 7: Ken Griffin, Steve Cohen, we know that other industry leaders, 542 00:29:04,880 --> 00:29:08,160 Speaker 7: including chief executives of Uber and Oracle, will all be 543 00:29:08,320 --> 00:29:10,320 Speaker 7: here and we talk about the weave. I'm also interested 544 00:29:10,360 --> 00:29:12,440 Speaker 7: to see if he makes any remarks about potentially a 545 00:29:12,480 --> 00:29:15,920 Speaker 7: PGA live merger. That's something that often comes up, and 546 00:29:16,000 --> 00:29:20,160 Speaker 7: we're talking about Saudi backed ventures, right, and something that 547 00:29:20,520 --> 00:29:24,080 Speaker 7: has often divided Washington on a biportisan basis when it 548 00:29:24,120 --> 00:29:27,160 Speaker 7: comes to Congress, which has launched investigations into this merger 549 00:29:27,280 --> 00:29:30,560 Speaker 7: amid criticism of Saudi Arabia's record when it comes to 550 00:29:30,640 --> 00:29:32,880 Speaker 7: human rights abuses, for example. So whether or not dat 551 00:29:33,040 --> 00:29:35,120 Speaker 7: could come up is also a big question, but it 552 00:29:35,160 --> 00:29:38,480 Speaker 7: could be a wide range of things here as President 553 00:29:38,520 --> 00:29:40,880 Speaker 7: Trump makes his debut here in. 554 00:29:40,800 --> 00:29:44,280 Speaker 3: Miami, the big debut. Yeah, we'll carry it live boy, 555 00:29:44,280 --> 00:29:46,680 Speaker 3: good luck getting the reservation at Joe's tonight, although Tyler 556 00:29:46,720 --> 00:29:49,080 Speaker 3: could probably get in. How about Tyler, Kendall, look at 557 00:29:49,080 --> 00:29:51,000 Speaker 3: the shot. If you're with us on YouTube, Tyler knows 558 00:29:51,040 --> 00:29:53,840 Speaker 3: how to live set up in Miami. Check this out. 559 00:29:54,280 --> 00:29:57,080 Speaker 3: Look like you're on entertainment tonight. We'll get back with 560 00:29:57,120 --> 00:29:58,640 Speaker 3: Tyler a little bit later on Thank you, of course. 561 00:29:58,680 --> 00:30:02,800 Speaker 3: As always, Kendall, I'm Joe Matthew and Washington on balance 562 00:30:02,800 --> 00:30:06,360 Speaker 3: of power, where we're balancing a number of stories that 563 00:30:06,440 --> 00:30:09,520 Speaker 3: become the weave. We're going to hear about the tariffs 564 00:30:09,520 --> 00:30:12,480 Speaker 3: as well, right. President Trump was just talking about them 565 00:30:12,520 --> 00:30:13,760 Speaker 3: last evening. Here's what he said. 566 00:30:14,840 --> 00:30:18,040 Speaker 12: Some of the biggest companies in the world and because 567 00:30:18,040 --> 00:30:21,040 Speaker 12: of what we're doing economically and through tariffs and taxes 568 00:30:21,080 --> 00:30:24,160 Speaker 12: and incentives, and they want to come back into the 569 00:30:24,320 --> 00:30:25,040 Speaker 12: United States. 570 00:30:25,160 --> 00:30:28,640 Speaker 2: Have you decided specifically what the auto tariff rain should be. 571 00:30:28,920 --> 00:30:32,600 Speaker 12: Yeah, I probably will tell you that on April second, 572 00:30:33,080 --> 00:30:35,280 Speaker 12: but it'll be in the neighborhood of twenty five percent. 573 00:30:35,400 --> 00:30:37,479 Speaker 12: We want to give them time to come in because, 574 00:30:37,520 --> 00:30:39,440 Speaker 12: as you know, when they come into the United States 575 00:30:39,520 --> 00:30:42,160 Speaker 12: and they have their plant or factory here, there is 576 00:30:42,240 --> 00:30:45,040 Speaker 12: no tariff. So we want to give them a little 577 00:30:45,040 --> 00:30:45,640 Speaker 12: bit of a chance. 578 00:30:47,960 --> 00:30:51,480 Speaker 3: Donald Trump at mar A Lago. This is why Nathan 579 00:30:51,560 --> 00:30:58,040 Speaker 3: Dean's phone keeps ringing, because the game keeps changing, the dates, move, 580 00:30:58,800 --> 00:31:01,920 Speaker 3: the timing, the implement the size of the tariff. Now 581 00:31:01,920 --> 00:31:05,120 Speaker 3: we're twenty five on auto's all right. This is why 582 00:31:05,160 --> 00:31:08,040 Speaker 3: we have Nathan, of course, our top policy analyst at 583 00:31:08,040 --> 00:31:11,200 Speaker 3: Bloomberg Intelligence here in Washington, Nathan Dean's the phone just 584 00:31:11,680 --> 00:31:14,080 Speaker 3: it keeps ringing. What's the big question these days? 585 00:31:14,200 --> 00:31:16,520 Speaker 13: Well, I mean, obviously on the tariff front, yes, this 586 00:31:16,600 --> 00:31:19,160 Speaker 13: question of will President Trump move forward. I mean, we 587 00:31:19,200 --> 00:31:21,320 Speaker 13: had a client this morning ask you know, he's starting 588 00:31:21,360 --> 00:31:23,800 Speaker 13: to sound like a boy who cried wolf. And you 589 00:31:23,880 --> 00:31:25,160 Speaker 13: know what we have to go back to and what 590 00:31:25,200 --> 00:31:27,280 Speaker 13: we tell our clients is when it comes to tariff's look, 591 00:31:27,440 --> 00:31:30,720 Speaker 13: President Trump truly believes in tariffs. But the question is 592 00:31:30,880 --> 00:31:33,440 Speaker 13: what nuggets can we glean from his statements and his 593 00:31:33,480 --> 00:31:35,959 Speaker 13: truth social posts to see if there's any way that 594 00:31:36,080 --> 00:31:38,719 Speaker 13: other countries could come back and create a negotiation. This 595 00:31:38,760 --> 00:31:40,040 Speaker 13: is what we saw with Canada, this is what we 596 00:31:40,040 --> 00:31:42,040 Speaker 13: saw in Mexico, this is what we saw with Columbia. 597 00:31:42,120 --> 00:31:44,680 Speaker 13: The question for these reciprocal tariffs is is this a 598 00:31:44,720 --> 00:31:47,720 Speaker 13: simple measure of you charge us, we charge you. Then 599 00:31:47,760 --> 00:31:50,240 Speaker 13: there's a high chance these tariffs will go into fruition. 600 00:31:50,680 --> 00:31:52,840 Speaker 13: But if there's other things that like, say that there's 601 00:31:52,960 --> 00:31:56,600 Speaker 13: negotiation with the European Union on cars or maybe banks 602 00:31:56,600 --> 00:31:57,640 Speaker 13: in Canada. 603 00:31:57,320 --> 00:31:59,040 Speaker 6: Things that President Trump has talked about. 604 00:31:59,200 --> 00:32:02,160 Speaker 13: If there's negotiationations that take place, potentially these tariffs will 605 00:32:02,200 --> 00:32:04,640 Speaker 13: come back but you know, ultimately you do have to 606 00:32:04,640 --> 00:32:07,280 Speaker 13: prepare for these tariffs because at a certain point, we 607 00:32:07,320 --> 00:32:09,160 Speaker 13: do think President Trump is going to move forward like 608 00:32:09,200 --> 00:32:11,000 Speaker 13: he did with China and ten percent market. 609 00:32:11,000 --> 00:32:13,120 Speaker 3: It's a bit interesting. I mean, you're hearing from investors 610 00:32:13,680 --> 00:32:16,080 Speaker 3: and they're saying, you know, let us know when it matters, guys, 611 00:32:16,120 --> 00:32:17,560 Speaker 3: let us know when we should care the yes a 612 00:32:17,640 --> 00:32:18,840 Speaker 3: piece at a new high yesterday. 613 00:32:19,000 --> 00:32:21,560 Speaker 13: Well, but that's the point is these tariffs haven't come 614 00:32:21,600 --> 00:32:23,320 Speaker 13: in and we haven't seen the impact yet on the 615 00:32:23,360 --> 00:32:26,240 Speaker 13: American consumer, right, and so one of our basic case 616 00:32:26,240 --> 00:32:28,680 Speaker 13: scenarios for these tariffs is is that if we are 617 00:32:28,680 --> 00:32:31,320 Speaker 13: going to see tariffs move forward outside of a universal tariff, 618 00:32:31,600 --> 00:32:33,800 Speaker 13: if you see tariffs moving forward, they'll probably be in 619 00:32:33,800 --> 00:32:38,080 Speaker 13: industries the American consumer won't see initially. You know, think 620 00:32:38,120 --> 00:32:40,719 Speaker 13: of food prices, you think of potash, you know mean 621 00:32:40,960 --> 00:32:44,240 Speaker 13: Canada fertilizer, you know the industry there. So you know, 622 00:32:44,400 --> 00:32:46,960 Speaker 13: we'll see. I mean, obviously it's hard to predict, and 623 00:32:47,000 --> 00:32:48,800 Speaker 13: we have to always apologize to our clients that we 624 00:32:48,840 --> 00:32:51,520 Speaker 13: don't know what's going to happen here, but you have 625 00:32:51,560 --> 00:32:54,120 Speaker 13: to prepare for them always with the idea that these 626 00:32:54,160 --> 00:32:57,440 Speaker 13: deadlines are not deadlines. These are self imposed deadlines. And 627 00:32:57,480 --> 00:32:59,840 Speaker 13: so President Trump can always come back and say, based 628 00:32:59,880 --> 00:33:02,720 Speaker 13: on upon my conversation with Prime Minister Trudeau or with 629 00:33:02,800 --> 00:33:05,479 Speaker 13: the European Union, these tariffs have been pushed off, and 630 00:33:05,560 --> 00:33:07,680 Speaker 13: so then we'll just fight, you know, see that that 631 00:33:08,440 --> 00:33:10,240 Speaker 13: you know that delay, and we'll have to deal with 632 00:33:10,280 --> 00:33:11,040 Speaker 13: accordingly with it. 633 00:33:11,080 --> 00:33:13,520 Speaker 3: Well, it's interesting because tariffs were supposed to help pay 634 00:33:13,560 --> 00:33:16,680 Speaker 3: for tax cuts or this is like before we even 635 00:33:16,760 --> 00:33:19,080 Speaker 3: got to the election, never mind the inauguration. That was 636 00:33:19,120 --> 00:33:20,920 Speaker 3: part of the argument. You got to have them all together, 637 00:33:21,240 --> 00:33:24,240 Speaker 3: extend Trump tax cuts. Look at these beautiful tariffs they 638 00:33:24,240 --> 00:33:27,080 Speaker 3: helped to pay for because they raise a lot of revenue. Uh, 639 00:33:27,880 --> 00:33:29,920 Speaker 3: we're working on the tax cuts now. In fact, there's 640 00:33:29,960 --> 00:33:32,160 Speaker 3: a budget resolution that's moving. Well, we've got one on 641 00:33:32,200 --> 00:33:35,400 Speaker 3: both sides, both chambers, House and Senate. Whether it's one 642 00:33:35,400 --> 00:33:38,240 Speaker 3: big beautiful bill or another, we could have a standoff. 643 00:33:38,560 --> 00:33:40,800 Speaker 3: But aren't we missing a major component here? If these 644 00:33:40,840 --> 00:33:41,600 Speaker 3: are just threats? 645 00:33:41,840 --> 00:33:44,400 Speaker 13: Yeah, you know when it comes to the reconciliation fight, 646 00:33:44,520 --> 00:33:46,880 Speaker 13: you know, we really don't care from a market perspective, 647 00:33:46,880 --> 00:33:49,680 Speaker 13: whether it's one big beautiful bill or two bills. Right, well, 648 00:33:49,720 --> 00:33:51,560 Speaker 13: we care about our Are the tax cuts going to 649 00:33:51,600 --> 00:33:53,520 Speaker 13: be dealt with? Is there four point five trillion dollars 650 00:33:53,600 --> 00:33:54,760 Speaker 13: worth of tax extensions? 651 00:33:54,800 --> 00:33:55,080 Speaker 3: Yes? 652 00:33:55,320 --> 00:33:57,240 Speaker 13: Is that going to add to the deficit or is 653 00:33:57,280 --> 00:33:59,680 Speaker 13: it revenue neutral or budget neutral? We won't know that 654 00:33:59,760 --> 00:34:01,480 Speaker 13: until the Senate part of Thementarian gets in there and 655 00:34:01,520 --> 00:34:03,440 Speaker 13: we start to see what the offsets, whether it's the 656 00:34:03,440 --> 00:34:06,160 Speaker 13: Inflation Reduction Act. So we're still probably about two to 657 00:34:06,200 --> 00:34:08,480 Speaker 13: three months away from where the markets really want to 658 00:34:08,520 --> 00:34:11,560 Speaker 13: start seeing the specifics. You know, we don't think that, 659 00:34:11,640 --> 00:34:12,920 Speaker 13: you know, the House is going to be able to 660 00:34:12,920 --> 00:34:16,160 Speaker 13: come up with a resolution, you know, plan with specifics 661 00:34:16,280 --> 00:34:18,759 Speaker 13: within Speaker Johnson's time frame of April in May. I 662 00:34:18,760 --> 00:34:21,160 Speaker 13: wouldn't be surprised if we had this conversation in July 663 00:34:21,480 --> 00:34:24,319 Speaker 13: and we were talking about specifics then. But when it 664 00:34:24,320 --> 00:34:27,000 Speaker 13: comes to tariffs, just note that if tariffs do go 665 00:34:27,080 --> 00:34:30,800 Speaker 13: into the reconciliation discussion, then it becomes a congressional tariff, 666 00:34:31,000 --> 00:34:33,560 Speaker 13: not a presidential tariff, and it sort of, you know, 667 00:34:33,760 --> 00:34:37,359 Speaker 13: handcuffs President Trump's ability to negotiate if it goes into 668 00:34:37,400 --> 00:34:39,720 Speaker 13: the record. But again, we have never seen what's happened 669 00:34:39,760 --> 00:34:43,240 Speaker 13: with the External Revenue Service that President Trump floated about earlier. 670 00:34:43,239 --> 00:34:45,120 Speaker 3: It's going to have a conversation with the head of 671 00:34:45,120 --> 00:34:48,120 Speaker 3: the CBO coming up in the next hour. The ability 672 00:34:48,160 --> 00:34:51,080 Speaker 3: to score all this is impossible, right well, I mean, look, 673 00:34:51,320 --> 00:34:54,799 Speaker 3: if you start talking about external factors like tariffs, the 674 00:34:54,880 --> 00:34:56,960 Speaker 3: idea of dynamic scoring, we're not about to change the 675 00:34:57,000 --> 00:34:57,839 Speaker 3: way we do this now. 676 00:34:58,000 --> 00:34:59,960 Speaker 13: And we're telling our clients don't worry about the sea 677 00:35:00,320 --> 00:35:03,920 Speaker 13: scoring all that much. I mean, because ultimately, and you know, 678 00:35:04,040 --> 00:35:05,520 Speaker 13: the Congress is going to figure out a way or 679 00:35:05,560 --> 00:35:07,520 Speaker 13: the Republicans will figure out a way to get it 680 00:35:07,560 --> 00:35:09,480 Speaker 13: close to the centerm. Parliamentarium will approve it. 681 00:35:09,520 --> 00:35:09,800 Speaker 3: Sure. 682 00:35:09,840 --> 00:35:13,760 Speaker 13: The question is is that will Republican lawmakers, certain Republican 683 00:35:13,840 --> 00:35:17,960 Speaker 13: lawmakers go forth to pursue and vote for a reconciliation 684 00:35:18,040 --> 00:35:21,640 Speaker 13: package that potentially could increase the deficit. If the CBO 685 00:35:21,719 --> 00:35:24,239 Speaker 13: comes back and says, look, we see economic growth here, 686 00:35:24,280 --> 00:35:26,880 Speaker 13: but the deficit is going to increase by one to 687 00:35:26,880 --> 00:35:29,840 Speaker 13: three trillion dollars because of this, can they get the 688 00:35:30,000 --> 00:35:32,080 Speaker 13: votes in the House when you can only afford to 689 00:35:32,120 --> 00:35:34,399 Speaker 13: lose three at the moment, Can you get the votes 690 00:35:34,400 --> 00:35:36,319 Speaker 13: in the House. That's the more bigger question is the 691 00:35:36,360 --> 00:35:39,279 Speaker 13: political question because if it looks like this is going 692 00:35:39,320 --> 00:35:42,880 Speaker 13: to be increasing the deficit, you know, the tariff question, 693 00:35:43,040 --> 00:35:45,560 Speaker 13: the Doge question, could all be moot because it comes 694 00:35:45,600 --> 00:35:46,839 Speaker 13: down to those Republican. 695 00:35:46,520 --> 00:35:48,960 Speaker 3: Lawmakers, comes down to three w Wasserman Schultz is on 696 00:35:49,000 --> 00:35:51,520 Speaker 3: the other days say we're just looking for three good Republicans. 697 00:35:51,760 --> 00:35:54,680 Speaker 3: We'll see about that, because we have breaking news from 698 00:35:54,680 --> 00:35:56,759 Speaker 3: New York. Looks like you're going to be able to 699 00:35:56,760 --> 00:35:59,080 Speaker 3: maybe drive south of sixtieth Street again here and park 700 00:35:59,120 --> 00:36:03,080 Speaker 3: your car the lot, confirms the Department of Transportation. If 701 00:36:03,120 --> 00:36:05,120 Speaker 3: you're with us here on Bloomberg, I know this is 702 00:36:05,160 --> 00:36:07,839 Speaker 3: important to you, especially if you're driving around New York, 703 00:36:08,360 --> 00:36:10,320 Speaker 3: or maybe you're not driving around New York because of 704 00:36:10,360 --> 00:36:14,520 Speaker 3: the congestion pricing confirming the termination of the New York 705 00:36:14,560 --> 00:36:17,680 Speaker 3: congestion pricing program. This was a New York Post report, 706 00:36:17,719 --> 00:36:19,759 Speaker 3: as you heard from Trolley Pellett a short time ago. 707 00:36:20,200 --> 00:36:22,840 Speaker 3: Now it's a fat headline from the US government DOT 708 00:36:22,960 --> 00:36:26,759 Speaker 3: confirming termination of congestion pricing program. Just another example of 709 00:36:26,760 --> 00:36:28,759 Speaker 3: Donald Trump putting his finger on the scale here on 710 00:36:28,760 --> 00:36:29,640 Speaker 3: the state level as well. 711 00:36:29,880 --> 00:36:30,120 Speaker 13: Yeah. 712 00:36:30,120 --> 00:36:32,840 Speaker 3: Absolutely, that's them o coming out of this White House. 713 00:36:33,200 --> 00:36:37,360 Speaker 3: Nathan Dean Bloomberg Intelligence. You're his client because he's with 714 00:36:37,480 --> 00:36:39,360 Speaker 3: us here on Balance of Power. Thank you. Nathan is 715 00:36:39,560 --> 00:36:41,480 Speaker 3: always as we try to find our way forward on 716 00:36:41,840 --> 00:36:45,560 Speaker 3: so many issues from reconciliation, tax cuts, and tariffs coming up, 717 00:36:45,560 --> 00:36:48,239 Speaker 3: will assemble our panel, Rick Davis and Kristen Hahn with 718 00:36:48,320 --> 00:36:50,080 Speaker 3: us today right here on Bloomberg. 719 00:36:51,520 --> 00:36:54,960 Speaker 1: You're listening to the Bloomberg Balance of Power Podcast. Catch 720 00:36:55,040 --> 00:36:58,520 Speaker 1: us live weekdays at noon and five pm Eastern on Apple, 721 00:36:58,560 --> 00:37:01,759 Speaker 1: Cocklay and Android Auto the Blueberg Business App. You can 722 00:37:01,800 --> 00:37:05,279 Speaker 1: also listen live on Amazon Alexa from our flagship New 723 00:37:05,360 --> 00:37:10,680 Speaker 1: York station, Just Say Alexa played Bloomberg eleven thirty. 724 00:37:11,280 --> 00:37:13,680 Speaker 3: The big sit down with not only Donald Trump but 725 00:37:13,800 --> 00:37:16,200 Speaker 3: Elon Musk. I guess they recorded this several days ago. 726 00:37:16,520 --> 00:37:21,400 Speaker 3: It actually went to tape last week. Talking about their relationship. 727 00:37:22,640 --> 00:37:24,920 Speaker 3: They really do seem to love each other. My goodness 728 00:37:24,920 --> 00:37:27,680 Speaker 3: after listening to this conversation for a while, but also 729 00:37:28,000 --> 00:37:30,160 Speaker 3: the work of the dough Now this got to be 730 00:37:30,200 --> 00:37:33,400 Speaker 3: a little bit interesting because the White House, since the 731 00:37:33,400 --> 00:37:37,279 Speaker 3: interview was recorded, had to delineate in the courts that well, 732 00:37:37,320 --> 00:37:39,719 Speaker 3: Elon Musk doesn't actually run the doge and he's a 733 00:37:39,840 --> 00:37:44,880 Speaker 3: senior presidential advisor, but speaking for the apparatus here, Elon 734 00:37:44,960 --> 00:37:47,440 Speaker 3: Musk talking quite a bit about the work that they're 735 00:37:47,480 --> 00:37:51,480 Speaker 3: trying to do here and the functions, as he calls it, 736 00:37:51,560 --> 00:37:53,920 Speaker 3: of this entity. Listen to Elon Musk on Fox. 737 00:37:54,640 --> 00:37:57,080 Speaker 5: One of the biggest functions of the Dog team is 738 00:37:57,160 --> 00:37:59,720 Speaker 5: just making sure that the presidential executive orders are actually 739 00:37:59,719 --> 00:38:02,719 Speaker 5: carrying out. And this is I just want to play it. 740 00:38:02,760 --> 00:38:06,520 Speaker 5: This is a very important thing because the president is 741 00:38:06,680 --> 00:38:10,279 Speaker 5: the elected representative of the people, so it's representing the 742 00:38:10,320 --> 00:38:13,440 Speaker 5: will of the people. And if the bureaucracy is fighting 743 00:38:13,440 --> 00:38:16,920 Speaker 5: the will of the people and preventing the present the 744 00:38:16,960 --> 00:38:20,279 Speaker 5: president for implementing what the people want, then what we 745 00:38:20,360 --> 00:38:23,120 Speaker 5: live in is a bureaucracy and not a democracy. 746 00:38:24,840 --> 00:38:28,000 Speaker 3: Let's start there with our great panel today. Rick Davis 747 00:38:28,120 --> 00:38:31,280 Speaker 3: is with US Republican strategist partner at Stone Court Capital 748 00:38:31,320 --> 00:38:35,799 Speaker 3: and Bloomberg Politics contributor, alongside Kristin Hahn, Democratic strategist and 749 00:38:36,200 --> 00:38:38,759 Speaker 3: partner at Rock Solutions. Kristin, Rick, great to have both 750 00:38:38,760 --> 00:38:40,879 Speaker 3: of you here. You know, look, we could talk about 751 00:38:40,920 --> 00:38:42,760 Speaker 3: the Doge all day long, and there's a lot of news. 752 00:38:42,800 --> 00:38:44,839 Speaker 3: The group is turning to the Pentagon next here, Rick, 753 00:38:44,880 --> 00:38:47,560 Speaker 3: But I want to ask you about the optics of 754 00:38:47,600 --> 00:38:50,560 Speaker 3: that presentation. I'm not sure I've ever seen an interview 755 00:38:50,560 --> 00:38:53,880 Speaker 3: where a sitting president of the United States chose to 756 00:38:53,960 --> 00:38:56,760 Speaker 3: share the stage with someone else, you know, I guess 757 00:38:56,760 --> 00:39:00,120 Speaker 3: other than their spouse. Maybe. What do you think about 758 00:39:00,160 --> 00:39:04,040 Speaker 3: Donald Trump showing himself on par with Elon Musk taking 759 00:39:04,120 --> 00:39:07,840 Speaker 3: questions about policy together, speaking openly about their relationship. What 760 00:39:07,920 --> 00:39:09,080 Speaker 3: was the point of that exercise? 761 00:39:10,239 --> 00:39:13,719 Speaker 9: Yeah, I think that it seems that President Trump is 762 00:39:13,760 --> 00:39:18,920 Speaker 9: a little sensitive to all the stories about Elon Musk 763 00:39:19,040 --> 00:39:22,719 Speaker 9: and his influence and whether he's really the shadow president. 764 00:39:23,200 --> 00:39:26,600 Speaker 9: Even he even addressed it in the interview where he's 765 00:39:26,640 --> 00:39:31,200 Speaker 9: talking very frankly about people are all claiming that, you know, basically, 766 00:39:31,280 --> 00:39:35,759 Speaker 9: I'm a puppet and you must admit. I mean, like, 767 00:39:35,840 --> 00:39:38,360 Speaker 9: that's a I've never seen an interview like that with 768 00:39:38,440 --> 00:39:41,239 Speaker 9: a president and Elon must sitting there with a blue 769 00:39:41,280 --> 00:39:43,400 Speaker 9: blazer and a T shirt that says tech support. 770 00:39:43,600 --> 00:39:45,680 Speaker 3: It's like, yeah, I'm nothing but a tech support for 771 00:39:45,760 --> 00:39:46,040 Speaker 3: the guy. 772 00:39:46,160 --> 00:39:48,279 Speaker 9: I mean, like, I mean, I'm sorry, I mean like 773 00:39:48,320 --> 00:39:50,520 Speaker 9: it's like a Saturday Night Live routine. 774 00:39:53,239 --> 00:39:57,520 Speaker 3: To have a president himself involved. Kristin what did you 775 00:39:57,560 --> 00:39:58,799 Speaker 3: think of all of this? And what do you think 776 00:39:58,880 --> 00:40:02,120 Speaker 3: jd Vance was doing at home as he watched this 777 00:40:02,200 --> 00:40:02,680 Speaker 3: on TV? 778 00:40:04,719 --> 00:40:07,040 Speaker 11: I don't know, hopefully it's not watching this. I mean 779 00:40:07,120 --> 00:40:12,320 Speaker 11: it's interesting because you know, apparently Elon Musk's son doesn't 780 00:40:12,360 --> 00:40:14,680 Speaker 11: seem to think that Donald Trump is the president either, 781 00:40:15,080 --> 00:40:17,000 Speaker 11: if you believe what he whispered to him during that 782 00:40:17,719 --> 00:40:20,640 Speaker 11: weird other press conference that they had. But at the 783 00:40:20,760 --> 00:40:23,279 Speaker 11: end of the day, you know, Elon Musk, if you 784 00:40:23,440 --> 00:40:26,080 Speaker 11: try to like wade through all the crazy and the weird, 785 00:40:26,120 --> 00:40:29,239 Speaker 11: I mean, he's doing a lot of things that are 786 00:40:29,280 --> 00:40:33,160 Speaker 11: having a massive impact, and he just says that he's 787 00:40:33,200 --> 00:40:36,680 Speaker 11: being you know, transparent. He just and that we should 788 00:40:36,719 --> 00:40:39,640 Speaker 11: believe him because he's tweeting things here and there, and 789 00:40:40,000 --> 00:40:42,719 Speaker 11: there's crowdsourcing of information. But I can tell you that 790 00:40:42,760 --> 00:40:47,239 Speaker 11: people even inside these agencies don't quite know what's going on. 791 00:40:47,680 --> 00:40:50,520 Speaker 11: They ended up firing a number of people who are 792 00:40:50,520 --> 00:40:54,719 Speaker 11: working on the bird flu epidemic on accidents. They're trying 793 00:40:54,719 --> 00:40:57,160 Speaker 11: to hire them back now. So I'm not sure exactly 794 00:40:57,200 --> 00:41:02,160 Speaker 11: what Elon Musk is referring to when he's talking about transparency. 795 00:41:02,400 --> 00:41:05,239 Speaker 11: You know, I saw Mitch Landrew was doing. A former 796 00:41:05,320 --> 00:41:07,160 Speaker 11: mayor of New Orleans was doing an interview earlier. That 797 00:41:07,200 --> 00:41:09,880 Speaker 11: made a lot of sense to me. He said, you know, 798 00:41:09,960 --> 00:41:13,400 Speaker 11: I had to cut the budget by twenty percent at 799 00:41:13,400 --> 00:41:16,239 Speaker 11: a really difficult time, and you have to do it surgically. 800 00:41:16,400 --> 00:41:18,800 Speaker 11: He's like, you know, I can cut off twenty percent 801 00:41:18,840 --> 00:41:21,680 Speaker 11: of my weight of my body, but if I cut 802 00:41:21,719 --> 00:41:23,640 Speaker 11: off my leg, you know, I'll bleed to death. So 803 00:41:23,680 --> 00:41:25,239 Speaker 11: I think that was a pretty good analogy. 804 00:41:26,680 --> 00:41:29,920 Speaker 3: A scalpel, not a chainsaw. Rick. I don't know if 805 00:41:29,920 --> 00:41:32,719 Speaker 3: he saw the wall of receipts. You guys can both 806 00:41:32,760 --> 00:41:34,759 Speaker 3: weigh in on this, but you know, there has been 807 00:41:34,800 --> 00:41:37,560 Speaker 3: a real public relations effort, not just in the interview 808 00:41:37,640 --> 00:41:41,440 Speaker 3: last night, but to show what the DOGE is doing online. 809 00:41:41,440 --> 00:41:45,719 Speaker 3: They're even debunking tweets and putting up cost cutting. But 810 00:41:45,800 --> 00:41:49,080 Speaker 3: it hasn't always gone the way they hoped. As The 811 00:41:49,080 --> 00:41:51,720 Speaker 3: New York Times reports, the cuts on the page amounted 812 00:41:51,800 --> 00:41:56,359 Speaker 3: to about sixteen billion dollars in savings that were itemized here. 813 00:41:56,480 --> 00:41:59,560 Speaker 3: Almost half of the line item savings could be attributed 814 00:41:59,600 --> 00:42:03,400 Speaker 3: to a sinking contracts for Immigration and Customs Enforcement, an 815 00:42:03,440 --> 00:42:07,319 Speaker 3: eight billion dollar contract, it said. Closer scrutiny found that 816 00:42:07,400 --> 00:42:10,960 Speaker 3: was an eight million dollar contract Rick, And so the 817 00:42:11,000 --> 00:42:14,200 Speaker 3: receipts are leaving some people wanting how important is it 818 00:42:14,239 --> 00:42:16,799 Speaker 3: for Doughs to be transparent to the dollar figure here? 819 00:42:17,719 --> 00:42:21,440 Speaker 9: Yeah, well, I think it's especially trans important now because 820 00:42:22,040 --> 00:42:25,360 Speaker 9: I see, you know, moving around the internet that I 821 00:42:25,400 --> 00:42:27,360 Speaker 9: don't know if this is the case or not, but 822 00:42:27,560 --> 00:42:30,640 Speaker 9: Elon Musk suggesting, hey, let's write everybody a five thousand 823 00:42:30,680 --> 00:42:33,960 Speaker 9: dollars check as a dividend from all the hard work 824 00:42:34,000 --> 00:42:36,160 Speaker 9: that we've done at DOGE, and you know, it just 825 00:42:36,239 --> 00:42:38,520 Speaker 9: hearkens back on you know, George W. 826 00:42:38,640 --> 00:42:39,200 Speaker 3: Bush. 827 00:42:39,719 --> 00:42:42,320 Speaker 9: You know, we had a surplus when he took office, 828 00:42:42,400 --> 00:42:45,319 Speaker 9: and he decided to give everybody you know, a cut 829 00:42:45,320 --> 00:42:48,359 Speaker 9: of that and didn't make a material difference in most 830 00:42:48,400 --> 00:42:51,360 Speaker 9: americans household budget, but it killed the surplus that the 831 00:42:51,400 --> 00:42:54,640 Speaker 9: federal government had and we immediately started definit spending, which 832 00:42:54,680 --> 00:42:58,000 Speaker 9: is where we've been ever since. So I'm a little 833 00:42:58,040 --> 00:43:01,880 Speaker 9: confused because I read the same stories you do, Joe. 834 00:43:02,800 --> 00:43:05,440 Speaker 9: Whether or not this is a six billion dollar savings 835 00:43:05,520 --> 00:43:08,520 Speaker 9: or sixty billion dollar savings, that's a pretty big gap, 836 00:43:08,840 --> 00:43:11,040 Speaker 9: you would think if they're doing all this work and 837 00:43:11,080 --> 00:43:13,960 Speaker 9: you're taking all the shots for doing it that you 838 00:43:14,000 --> 00:43:18,440 Speaker 9: want to itemize like what the taxpayer's benefits are the 839 00:43:19,560 --> 00:43:21,719 Speaker 9: receipts wasn't a great way to do it. There ought 840 00:43:21,719 --> 00:43:23,400 Speaker 9: to be a more professional way to do that. We 841 00:43:23,440 --> 00:43:26,280 Speaker 9: ought to be knowing what we're savings as we cut. 842 00:43:26,960 --> 00:43:30,280 Speaker 9: And by the way, all this should be factored into 843 00:43:30,800 --> 00:43:34,000 Speaker 9: the congressional activity because I heard the President in that 844 00:43:34,120 --> 00:43:38,560 Speaker 9: interview say we're not cutting anything associated with Social Security, Medicare, 845 00:43:38,560 --> 00:43:41,880 Speaker 9: and Medicaid, which is fine. I mean, he's been saying 846 00:43:41,880 --> 00:43:45,040 Speaker 9: that for quite a long time, except you know, eight 847 00:43:45,120 --> 00:43:48,520 Speaker 9: hundred and fifty billion dollars worth of savings that they're 848 00:43:48,600 --> 00:43:52,160 Speaker 9: applying to the tax cuts comes out of medicaid. And 849 00:43:52,239 --> 00:43:57,680 Speaker 9: so maybe the Republican House leadership didn't get the memo 850 00:43:57,840 --> 00:44:00,600 Speaker 9: that Donald Trump saying, don't cut any Medicaid funding. So 851 00:44:01,160 --> 00:44:03,320 Speaker 9: it's all a lot of confusion right now, which I 852 00:44:03,360 --> 00:44:05,960 Speaker 9: think is the one thing that everybody can agree on 853 00:44:06,040 --> 00:44:07,719 Speaker 9: is nobody really knows what's going on. 854 00:44:08,840 --> 00:44:10,800 Speaker 3: So maybe we're cutting off a pinky finger down a 855 00:44:10,880 --> 00:44:14,680 Speaker 3: leg here, Kristen. But this idea of the Doge dividend, 856 00:44:15,320 --> 00:44:18,280 Speaker 3: this this came from Elon Musk on Twitter. He posted 857 00:44:18,280 --> 00:44:21,279 Speaker 3: this says, going to check with the President on this 858 00:44:21,400 --> 00:44:24,560 Speaker 3: idea to pitch the president on a dividend based on 859 00:44:24,640 --> 00:44:28,280 Speaker 3: savings that the DOGE achieved. But I thought the point 860 00:44:28,320 --> 00:44:30,840 Speaker 3: here was to cut the deficit. If you send all 861 00:44:30,880 --> 00:44:34,200 Speaker 3: the money back, the deficit still needs to be paid, 862 00:44:34,239 --> 00:44:35,799 Speaker 3: doesn't it. 863 00:44:35,800 --> 00:44:39,359 Speaker 11: It does that. It really was remarkable when I saw that, 864 00:44:39,640 --> 00:44:41,440 Speaker 11: and I totally agree with Reco. Mean, you've got to 865 00:44:41,440 --> 00:44:44,040 Speaker 11: figure out what what are we trying to accomplish here? 866 00:44:44,080 --> 00:44:46,239 Speaker 11: I mean, never mind the fact that you will never 867 00:44:46,320 --> 00:44:48,840 Speaker 11: get at the truly get at the debt and deficit 868 00:44:49,000 --> 00:44:52,880 Speaker 11: without you know, with just waste frawden abuse, it's not possible. 869 00:44:52,960 --> 00:44:55,920 Speaker 11: You have to address entitlement reform, and you have to 870 00:44:55,920 --> 00:44:59,200 Speaker 11: look at tax reform as well. So, you know, I'm 871 00:44:59,200 --> 00:45:01,239 Speaker 11: not sure exactly what what they're trying to accomplish, because 872 00:45:01,280 --> 00:45:05,800 Speaker 11: they're looking forward to moving the baseline around and figuring 873 00:45:05,880 --> 00:45:10,000 Speaker 11: out how to add, you know, to renew the Trump 874 00:45:10,040 --> 00:45:13,239 Speaker 11: tax cuts without adding to the deficit, which is just 875 00:45:13,280 --> 00:45:17,680 Speaker 11: funny money and which should be offensive to your viewers 876 00:45:18,120 --> 00:45:21,880 Speaker 11: and listeners. But you know, I think if Elon Muss 877 00:45:21,920 --> 00:45:24,720 Speaker 11: has said that he's trying to draw down the deficit, 878 00:45:24,800 --> 00:45:27,000 Speaker 11: like you said, what are we doing here? What are 879 00:45:27,000 --> 00:45:29,480 Speaker 11: we trying to accomplish? And also it doesn't take a 880 00:45:29,480 --> 00:45:31,680 Speaker 11: whole lot of scrutiny to realize that it was eight 881 00:45:31,920 --> 00:45:33,280 Speaker 11: billion and not eight billions. 882 00:45:36,480 --> 00:45:39,680 Speaker 3: Thanks for listening to the Balance of Power podcast. Make 883 00:45:39,680 --> 00:45:42,640 Speaker 3: sure to subscribe if you haven't already, at Apple, Spotify, 884 00:45:42,760 --> 00:45:45,319 Speaker 3: or wherever you get your podcasts, and you can find 885 00:45:45,400 --> 00:45:48,640 Speaker 3: us live every weekday from Washington, DC at noontime Eastern 886 00:45:48,920 --> 00:45:50,360 Speaker 3: at Bloomberg dot com.