Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us
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Speaker 2: Therefore, the Honorable Mike Johnson of the State of Louisiana,
Speaker 2: having received a majority of the votes cast is Julie
Speaker 2: elected Speaker of the House of Representatives for the one
Speaker 2: hundred and eighteenth Congress.
Speaker 3: There it is well at least half the room on
Speaker 3: its feet, as it's made of fisher Here Republicans of
Speaker 3: plotting following twenty two days of chaos without a Speaker
Speaker 3: of the House. Patrick McHenry enjoying his final moments as
Speaker 3: the keeper of the gabble in the Speaker's rostrum. Live
Speaker 3: sound from the House floor here on Bloomberg Radio. I'm
Speaker 3: Joe Matthew in Washington as we spend time with our
Speaker 3: panel Jim Kessler and Lisa Camuso Miller and Bloomberg's Gregory
Speaker 3: Cordy with me in studio here on a day that
Speaker 3: I'm guessing tell me if I'm wrong, Gregory Mike Johnson
Speaker 3: couldn't have imagined even last weekend.
Speaker 4: That's exactly what I was going through my mind. And
Speaker 4: his world's about to change. As we've said, he's now
Speaker 4: second in line to the presidency after Vice President Kamwa Harris.
Speaker 4: He has now instantaneously got a security detail that he
Speaker 4: hasn't gotten before. Because he is now in that line
Speaker 4: of succession, He's going to have to be read in
Speaker 4: on some of the nation's most sensitive secrets. Things he's
Speaker 4: never heard before. Things he's never heard before, the things
Speaker 4: that he needs to know. Frankly, he is on the
Speaker 4: Armed Services Committee, but doesn't have particular background in intelligence
Speaker 4: in foreign affairs, so he will have to get up
Speaker 4: to speed on that we've been talking about. He's got
Speaker 4: to bring not only a fractured Republican conference together, but
Speaker 4: now he's got to reach out to Hakeem Jeffries, the
Speaker 4: Minority Leader. He's got to reach out to the Senate,
Speaker 4: Mitch McConnell, and Chuck Schumer in the Senate. He's part
Speaker 4: of that gang of foreign now, and at some point
Speaker 4: he's going to pick up I would expect Joe Biden
Speaker 4: may already be lining up that phone call. That's one
Speaker 4: thing that we know that President Biden is very good
Speaker 4: about is making these sort of congratuatory calls. I would
Speaker 4: expect that to happen before the afternoon is over, to
Speaker 4: introduce each other. And yeah, so this is now a
Speaker 4: guy that none of us knew much about just a
Speaker 4: couple of days ago, maybe even until last night, that
Speaker 4: now is going to be part of the regular conversation
Speaker 4: Washington d C.
Speaker 3: Incredible stuff. Lisa, you mentioned having worked for the speaker.
Speaker 3: You've got a staff of about thirty five. When does
Speaker 3: the hiring begin?
Speaker 5: Almost immediately. But the good news is that there's lots
Speaker 5: of really talented people on Capitol Hill that know how
Speaker 5: this works and know how the process comes to other
Speaker 5: And the great news for the new Speaker is that
Speaker 5: that those people are available and willing to help it
Speaker 5: make him be successful. And so that alone gives a
Speaker 5: lot of confidence to something someone like him, to know
Speaker 5: that there are great, talented people on the leadership staff
Speaker 5: that already can be very supportive to him. He's going
Speaker 5: to have a seamless transition. That's the one thing I
Speaker 5: can be certain of because I know how talented those
Speaker 5: people are. They are the unsung heroes of the last
Speaker 5: three weeks that have been working day and night to
Speaker 5: make sure that this thing happened unsuccessfully a few times over.
Speaker 5: But it'll be interesting and I think it'll be a
Speaker 5: positive direction for the House going forward.
Speaker 3: Him, Speaker Johnson is going to have to work with
Speaker 3: the leader next door, that would be your former boss,
Speaker 3: Chuck Schumer. How soon do these two get together?
Speaker 6: I imagine it's going to happen very quickly, and there's
Speaker 6: some serious work that needs to be done. And you know,
Speaker 6: as we remarked on earlier, Leader McConnell and Leader Schumer,
Speaker 6: y're roughly the same place, same with Jefferies, same with Biden.
Speaker 6: So in some ways it's four against one here. And
Speaker 6: you know, I think Mike Johnson's going to have to
Speaker 6: figure out a way to get his you know what
Speaker 6: he needs out of this, but also move these just
Speaker 6: critical spending bills and pieces of legislation forward at this
Speaker 6: remarkably critical time in the world right now.
Speaker 3: All right, many thanks to our panel for a marathon
Speaker 3: session here. Jim Kessler at Third Way, Lisa Camusa Miller
Speaker 3: at RESET Public Affairs, many thanks for your insights and
Speaker 3: bringing your experience to us here. They're good friends of
Speaker 3: the program and awfully glad that you could be with
Speaker 3: us through this. Who knew starting an hour ago that
Speaker 3: we would experience all of this together, Lisa and Jim,
Speaker 3: many thanks to you and Gregory Cordy. We talk about
Speaker 3: hiring up here, setting up the office. Then is the
Speaker 3: matter of actual business. What's going to be the priority
Speaker 3: a continuing resolution or the supplemental funding for Israel and Ukraine.
Speaker 4: Well, I mean one thing even before that is the
Speaker 4: clock starts ticking right now of forty eight hours on
Speaker 4: a privileged resolution to expel George Santos, one of the
Speaker 4: low thorns in the side of the past African business.
Speaker 4: It actually is under house rules, it's privileged, so it
Speaker 4: has to come to a vote at the time of
Speaker 4: a speaker's choosing, now that we have a speaker, but
Speaker 4: within the next forty eight hours, and of course you
Speaker 4: know this was a difficult problem for Kevin McCarthy because
Speaker 4: he relied on George Santos's vote, but his is a
Speaker 4: congressman from New York who's under indictment. We all know
Speaker 4: this saga, right, This is another one of the soap
Speaker 4: operas that we've had in this year in Congress. So
Speaker 4: that's actually one of the first orders of business. Then
Speaker 4: we have a little bit of time until the middle
Speaker 4: of next month to pass a spending bill. So I
Speaker 4: would have to think that the supplemental for Israel and
Speaker 4: Ukraine takes top priority. But that's also politically tricky through
Speaker 4: those advanced as one bill, as the President certainly would like,
Speaker 4: because the support for Israel is a lot more popular
Speaker 4: than support for Ukraine, and maybe UKRAINI can come along
Speaker 4: for the ride. But that's one of the issues that
Speaker 4: was forcing this chaos in the Republican conference is where
Speaker 4: these speaker candidates were on that question was a decisive
Speaker 4: factor that may have killed some of these previous speaker candidates.
Speaker 3: Gregory many thanks for being with us here in the
Speaker 3: clutch as always, Gregory Cordy, great to have you, Bloomberg
Speaker 3: Politics reporter, I'm Joe Matthew and Washington as we bring
Speaker 3: you live to the capital once again.
Speaker 1: Here.
Speaker 3: If you're with us on YouTube, you've been seeing the
Speaker 3: House floor, Let's go outdoors now. Bloomberg's Kaylee Lines is
Speaker 3: just outside the chamber and I suspect we'll be talking
Speaker 3: to a lot of lawmakers in just a matter of moments.
Speaker 3: But she's ours first, right now, Kaylee, what's the vibe
Speaker 3: out there now that this is official.
Speaker 7: Well, there's definitely a sense of relief, especially for all
Speaker 7: the reporters out here with me who have been at
Speaker 7: this now for weeks, Joe out here each and every
Speaker 7: day trying to figure out who the next Seaker of
Speaker 7: the House will be. But of course now we know
Speaker 7: it's Mike Johnson. We actually are expecting that he may
Speaker 7: speak to press later on. They're setting up a press
Speaker 7: conference just behind me, so we'll hear from the now
Speaker 7: speaker himself shortly. But I would imagine and as we
Speaker 7: wait for more lawmakers to come down the steps, that
Speaker 7: there is going to be a bit of a sigh
Speaker 7: of relief that this battle is actually over. The House
Speaker 7: has a speaker and they can get back to the
Speaker 7: business of legislating.
Speaker 3: Well, that's right to your point, though, we have to
Speaker 3: go through a few stages before we get to actual governance,
Speaker 3: and that includes delivering a message. This is going to
Speaker 3: be an outdoor news conference, Kaylee. Will there be a
Speaker 3: big crowd, will he have the conference behind him or
Speaker 3: do we have yet to learn all of these things.
Speaker 7: We have yet to learn exactly who's going to be
Speaker 7: in front of the mics. What I can tell you
Speaker 7: is behind the mics, there is a lot of TV cameras,
Speaker 7: there's ropes going up, there are reporters crawling all around
Speaker 7: here getting ready to ask questions of now Speaker Johnson.
Speaker 7: So I would imagine the crowd is going to be
Speaker 7: pretty big, as this is a historic day. The fifty
Speaker 7: six Speaker of the House has been elected after twenty
Speaker 7: more more than three weeks without one, and there's going
Speaker 7: to be some pretty pressing questions for him, given as
Speaker 7: you were just discussing, until about twenty four hours ago,
Speaker 7: a lot of people didn't even know who Mike Johnson was,
Speaker 7: and now the policy he wants to push forward is
Speaker 7: really going to matter, not just for what happens here
Speaker 7: in Capitol Hill, but for the country as a whole.
Speaker 3: This is great behind the scenes stuff here, especially if
Speaker 3: you're with us on YouTube. Go there now, search Bloomberg
Speaker 3: Global News and check this out. You'll see Kaylee outdoors.
Speaker 3: I'm also hearing producers counting down on their live shots
Speaker 3: next to you, Kaylee. And this is the way it works.
Speaker 3: You can feel free to turn the camra tell us
Speaker 3: what's happening here because this is the gathering, the spontaneous
Speaker 3: gathering of reporters who come out of the trees practically
Speaker 3: for an event like this.
Speaker 6: Yeah.
Speaker 7: Well, actually, just to my right, Joe, Congressman Bob Good
Speaker 7: of Virginia is huddling with a few of my colleagues. Here.
Speaker 7: There's other ropes going on around me, so I'm afraid
Speaker 7: I might get moved here in a second. They're trying
Speaker 7: to establish a perimeter essentially just in front of the steps,
Speaker 7: to clear the way for where the podium is, where
Speaker 7: the speaker. Now speaker is assumed to be talking, and
Speaker 7: they're making gestures. So I'm just going to slowly start
Speaker 7: shifting to the side.
Speaker 3: Please, don't get a rest.
Speaker 7: You can see the road. Glad I moved, Yes.
Speaker 3: Look at that. This is the real stuff. You won't
Speaker 3: see that on the cable news networks, you know, Kaylee,
Speaker 3: I suspect that staircase is going to be full of
Speaker 3: lawmakers in a bit. Do you have an ETA on
Speaker 3: the news conference?
Speaker 7: It should be beginning shortly now that the vote has
Speaker 7: finally wrapped up. Once everything is gabbled and complete in there,
Speaker 7: we'll see how quickly around they will turn this around
Speaker 7: and actually bring them outside, and whether or not other
Speaker 7: members will be descending down the steps on their owner.
Speaker 7: If everyone's going to come out together as a conference,
Speaker 7: We're all staying tuned for that. Joe and I apologize
Speaker 7: for the taping sound. There's a lot of chords and
Speaker 7: plugs that know it to effort like this one.
Speaker 3: Yeah, I'll let you leave this awkward situation, Kayley. Thank
Speaker 3: you for showing that too us. This is absolutely fascinating.
Speaker 3: You know, look, it's your backyard, but not everybody gets
Speaker 3: to see this every day. Just think of like these
Speaker 3: guys are going to be friends for life, these reporters
Speaker 3: who've been there for twenty two days, that Kaye will
Speaker 3: have to introduce me at some point to everyone she's met.
Speaker 3: Thank you, Kaylee. I'll see you back here in the
Speaker 3: Bureau for Balance of Power a bit later on, and
Speaker 3: of course Kaylee will bring us some of the sites
Speaker 3: and sounds of what's about to happen on Capitol Hill.
Speaker 3: What a moment to have Libby Kantrill, the head of
Speaker 3: US Public Policy at PIMC. We've been talking about this
Speaker 3: for twenty two days and she's with us.
Speaker 1: Now.
Speaker 3: Your timing as usual is impeccable, Libby, we have a
Speaker 3: fifty sixth Speaker of the House. I don't even know
Speaker 3: what to ask you. First, Is the market signing a
Speaker 3: bit of relief for me?
Speaker 8: I mean, at long last, right, even I think the
Speaker 8: markets haven't really been so focused on this, obviously, and
Speaker 8: this sort collided with a lot of other geopolitical and
Speaker 8: other issues happening, particularly in the US treasury market, So
Speaker 8: I don't think the markets have really been paying all
Speaker 8: that much attention to it. However, as as we all know,
Speaker 8: not to kind of nerd out here a little bit,
Speaker 8: but we all know that the term premium in the
Speaker 8: US yield curve treasuries have backed up, and that sort
Speaker 8: of elusive term premium can include a lot of things,
Speaker 8: including just concerns about the governance of the United States,
Speaker 8: And so you know, you could argue that some of
Speaker 8: the backup and treasury yields that we've seen is at
Speaker 8: least in part due to these concerns about just the
Speaker 8: ability of Washington to function. So I guess in that respect,
Speaker 8: you would think that yes, the markets would likely breathe
Speaker 8: a sigh of relief.
Speaker 9: We can get into it.
Speaker 8: But there's also maybe some clarity around how we move
Speaker 8: forward on the government funding question as well.
Speaker 3: Okay, well, what do you think about that? Because Mike
Speaker 3: Johnson says he's willing to grab that third rail called
Speaker 3: a continuing resolution, and it doesn't seem to be a
Speaker 3: problem for the Conference the way it was for Kevin McCarthy.
Speaker 3: Can he actually do this?
Speaker 8: And this is the great irony, of course, is that
Speaker 8: what got former Speaker McCarthy ousted was working with Democrats
Speaker 8: to pass that short term staff gap funding bill. And
Speaker 8: yet now I guess Speaker elect Johnson has indicated that's
Speaker 8: exactly what he will do as well, in order to
Speaker 8: buy more time. Now, ironically or maybe interestingly, he did
Speaker 8: not representive Johnson did not vote for that stop gap
Speaker 8: bill back in late September, But to your point, he
Speaker 8: has indicated that he does plan on passing a stop
Speaker 8: gap again to buy more time for the House to
Speaker 8: pass those single subject appropriations bills, which I think is
Speaker 8: sort of a distinction without a difference for many people,
Speaker 8: for most people and the markets, but for many members
Speaker 8: of Congress, particularly among the House Freedom co because that
Speaker 8: has been really a decisive issue for them. They have
Speaker 8: wanted to tackle appropriations, spending bills one at a time
Speaker 8: versus what is usual at the minibus are omnibus where
Speaker 8: bills are all sort of stuck together and passed at
Speaker 8: the eleventh hour.
Speaker 9: So you know, we'll.
Speaker 8: See you know again. His sort of fiscal record is
Speaker 8: one more of austerity. He has advocated for spending cuts
Speaker 8: in many different respects, and again he voted for a
Speaker 8: voted against that funding bill. He's voted against Ukraine funding
Speaker 8: several times as well. So this may not be a
Speaker 8: totally smooth glide path, but at least as of now,
Speaker 8: he is indicating that he will move forward in a
Speaker 8: way that certainly the markets will will appreciate.
Speaker 3: The President of the United States is speaking right now
Speaker 3: along with the Prime Minister of Australia on the other
Speaker 3: end of Pennsylvania Avenue. They're holding a bilateral news conference
Speaker 3: that was set to start almost an hour ago. At
Speaker 3: this point, Libby, do you want to hear him address
Speaker 3: any of these issues? What does the market want to
Speaker 3: hear him say about a continuing resolution and about the
Speaker 3: supplemental budget request?
Speaker 8: Oh about the President saying yeah, I mean, of course,
Speaker 8: you know, I think what the market's going to be
Speaker 8: more in tune to in terms of this meeting, you know,
Speaker 8: with one of our closest allies is probably around the
Speaker 8: question of China and sort of how we move forward together,
Speaker 8: you know, with Australia on that issue. You know, I
Speaker 8: think that the President has been very clear that he
Speaker 8: wants to avoid a government shutdown, that he will work
Speaker 8: with anybody who is in leadership to that end. Now,
Speaker 8: of course, this is a bit of an interesting dynamic
Speaker 8: because the speakerl Lot Johnson, you did not vote to
Speaker 8: certify the twenty twenty election, so you know right off
Speaker 8: that that maybe puts things on a bit of an
Speaker 8: awkward foot. But you know, Biden is sort of a
Speaker 8: constant legislator at heart, and I think he will work
Speaker 8: with whomever he needs to work with you to get
Speaker 8: things to get things done, at least at least that's
Speaker 8: what people say, most likely.
Speaker 3: Spending time with Libby Cantrell, head of public policy at PIMCO,
Speaker 3: with a Speaker of the House. It is actually official now,
Speaker 3: Mike Johnson voted to be the fifty sixth Speaker a
Speaker 3: short time ago in the House of Representatives.
Speaker 2: In their tallies that the total number of votes cast
Speaker 2: is four hundred and twenty nine, of which the Honorable
Speaker 2: Mike Johnson of the State of Louisiana has received two
Speaker 2: hundred and twenty votes, and the Honorable Hakeem Jeffries of
Speaker 2: the State of New York has received two hundred and
Speaker 2: nine votes. Therefore, the Honorable Mike Johnson of the State
Speaker 2: of Louisiana having received a majority of the votes cast
Speaker 2: as Julie elected Speaker of the House of Representatives for
Speaker 2: the one hundred and eighteenth Congress.
Speaker 3: Yes, indeed, Patrick McHenry, don't be confused by what you're
Speaker 3: seeing on YouTube that took place a short time ago,
Speaker 3: making it all official. Hackem Jeffries, the minority leader and
Speaker 3: obviously Speaker Johnson now official. Libby, how important will it
Speaker 3: be for these two Jeffries and Johnson to show a
Speaker 3: united front or are we beyond that?
Speaker 1: In Washington?
Speaker 8: Well, I will just say that the Republicans seemed happy
Speaker 8: that they finally got to that threshold. I will just
Speaker 8: take you to commenting on that that latest clip that
Speaker 8: you played, they are I think that folks were exhausted
Speaker 8: and they were frustrated, and they just wanted to move forward.
Speaker 8: And that's one of the reasons why you Representative Johnson,
Speaker 8: who most people don't know. I mean many people on
Speaker 8: the Hill don't know him very well, but certainly kind
Speaker 8: of nationally, he doesn't have the same profile that certainly
Speaker 8: former Speaker McCarthy or Pelosi and Pelosi had Joe. In
Speaker 8: terms of your question about how important it is for
Speaker 8: the two of them to work together, I mean, clearly,
Speaker 8: you you know, it's important to have a working, constructive
Speaker 8: relationship with folks across the aisle. Johnson doesn't really he
Speaker 8: just hasn't been sort of in the leadership mix, so
Speaker 8: it's difficult to sort of assess at this point kind
Speaker 8: of what his approach will be working with Democrats. But
Speaker 8: as we have seen kind of painfully over the last
Speaker 8: few weeks, for many things, Republicans will need and Speaker
Speaker 8: Johnson or througher elect Johnson will need Democrats to to
Speaker 8: to pass things and to advance, you know, the entire
Speaker 8: kind of Nations agenda, So it is important. I do
Speaker 8: think there is you know, poisoning of the well here, however,
Speaker 8: but you know, I think that they will both be
Speaker 8: side we'll try to kind of move forward. I do
Speaker 8: think there is a Republicans or of the sense of
Speaker 8: urgency among Republicans to sort of move forward, focus on legislating,
Speaker 8: focus on kind of the business of the day, and
Speaker 8: try to put this as far in the rear view
Speaker 8: mirror as possible. And of course we won't know what
Speaker 8: the political implications of all of this is until next November.
Speaker 3: Do you have a sense that this is a speaker
Speaker 3: who can finish the job or would suffer potentially the
Speaker 3: same fate as Kevin McCarthy.
Speaker 9: I do not want to even imagine that we would
Speaker 9: be back here again. I think that they want, folks.
Speaker 9: I'm sure you don't.
Speaker 8: I mean, this is you know, there are other things
Speaker 8: happening in the world, and this is not something that
Speaker 8: we've we've all been consumed with this, you know, so regrettably.
Speaker 8: But you know, I think that they I think folks
Speaker 8: will be incredibly reticent to use this the motion to
Speaker 8: maake it again in this session of Congress. Now, Joe,
Speaker 8: as you as you well know, though, there's just not
Speaker 8: that much time left in this Congress because practically in
Speaker 8: an election year, you know, most both sides usually try
Speaker 8: to send their members home by kind of Midsummer to
Speaker 8: start campaigning and then only bring them back in the
Speaker 8: fall for kind.
Speaker 9: Of muth pass issues.
Speaker 8: So the sort of idea that this might be a
Speaker 8: really productive Congress of legislating, which I don't think we
Speaker 8: really had anyway, but certainly we don't have that now,
Speaker 8: just because we haven't even passed you know, funding bills.
Speaker 9: There's the you know, the farm bill, there's the NDAA.
Speaker 8: Then of course there's Ukraine and Israel funding as well,
Speaker 8: so they have a lot on their plate, and I
Speaker 8: would assume that, you know, not much more than kind
Speaker 8: of the bare minimum gets done gets done this Congress.
Speaker 8: The last thing I will say, which I think has
Speaker 8: been important to markets, that I'm not sure folks should
Speaker 8: feel hopeful is energy permitting reform. That was there's sort
Speaker 8: of a down payment, if you remember, in the debt
Speaker 8: sealing deal, with kind of a promise to address that
Speaker 8: later in this Congress. I think that with all of
Speaker 8: this not nobody should be should be hopeful that there
Speaker 8: is a you know, big grand bargain on energy permitting reform. Now,
Speaker 8: you know, never say never, but at least at this
Speaker 8: point it doesn't it doesn't look likely.
Speaker 3: Well, you point out in your notes of clients. Winning
Speaker 3: is easy, Governing is harder, and I'm sure he's about
Speaker 3: to get a sense of that if he doesn't already
Speaker 3: here with the just the daunting amount of work that
Speaker 3: lies ahead. Libby, what do you make of, if anything.
Speaker 3: I don't know if this is an issue for the
Speaker 3: markets or one for you on a personal level. The
Speaker 3: comments around his attempts to overturn the twenty twenty election.
Speaker 3: Is that's something that will follow him throughout his speakership
Speaker 3: or is that an issue that's being excized as we speak.
Speaker 8: Yeah, So I think that the kind of the read
Speaker 8: through for the markets or the economy is just if
Speaker 8: it has political implications come in twenty twenty four, and
Speaker 8: I think the way that it could, you know, potentially,
Speaker 8: and it's really too early to say. I think that,
Speaker 8: as you know, Joe, a lot haven't been Washington. Folks
Speaker 8: are so breathless about something, how this is just going
Speaker 8: to be sort of existential, and then they just move.
Speaker 9: On and no one even talks about it again.
Speaker 8: So, you know, I'm a little bit reticent about trying
Speaker 8: to drought too many political conclusions, but the market would
Speaker 8: care if there were political consequences. This particular if it
Speaker 8: makes the eighteen Republicans who are defending House districts in
Speaker 8: those districts where President Biden won, so basically purplish districts,
Speaker 8: if you will, if it makes them even more even
Speaker 8: more vulnerable going into twenty twenty four. And of course,
Speaker 8: as we now all painfully know, you know, Republicans only
Speaker 8: have a five seat majority, and so they only need
Speaker 8: to lose five seats in order to in order to
Speaker 8: lose the House. And of course, again there's eighteen districts,
Speaker 8: So I think that's kind of the tie in. If
Speaker 8: having a very sort of you know, work by zone
Speaker 8: amission conservative speaker who didn't vote to certify the twenty
Speaker 8: twenty election, does that make them, these moderate moderate Republicans
Speaker 8: from the places like New York and California even more
Speaker 8: vulnerable going into twenty twenty four, And does that make
Speaker 8: the House vulnerable to flip to Democratic control.
Speaker 9: That will be an issue for the market, because.
Speaker 8: Of course the Trump tax cuts among other fiscal issues
Speaker 8: will be up in twenty twenty five.
Speaker 3: Well, I just imagine the fund that we're going to
Speaker 3: have fear. At least we know who we're going to
Speaker 3: be talking about for the next little bit here. Libby Cantrell,
Speaker 3: many thanks for being with us on this historic day.
Speaker 3: We have a speaker and of course the voice from
Speaker 3: PIMCO to back it up. It's great to see Libyan.
Speaker 3: Thank you as always for joining us here on the
Speaker 3: fastest show in politics. It's certainly moving today in Washington
Speaker 3: as we balance stories on both ends of Pennsylvania Avenue.
Speaker 3: The breaker, of course, Mike Johnson is now Speaker. Johnson
Speaker 3: the fifty sixth Speaker and has the job officially, following
Speaker 3: a protracted process that went through three nominees before we
Speaker 3: got to this one.
Speaker 1: You're listening to The Bloomberg Sound on podcast. Catch the
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Speaker 3: If you're just joined seeing us, we have a lot
Speaker 3: to catch up on. We now have a Speaker of
Speaker 3: the House. It actually happened, Mike Johnson, Speaker number fifty
Speaker 3: six as official. He just spoke to the House of
Speaker 3: Representatives and will be speaking to reporters momentarily support from
Speaker 3: the full conference. Nothing like what we saw for Tom
Speaker 3: m or Jim Jordan, Steve Scalise, not a single no vote.
Speaker 3: As he moves forward with the message of unity here
Speaker 3: in the Republican Conference, we'll see if governing will follow. Apparently,
Speaker 3: as Michael McCall told us over a week ago, congressman
Speaker 3: who chairs the Foreign Affairs Committee in the House, the
Speaker 3: first order of business will be bringing a resolution to
Speaker 3: the floor condemning the terror attack by Hamas against Israel
Speaker 3: and supporting Israel as we move forward here. Separately, Joe Biden,
Speaker 3: speaking earlier today in a bilateral news conference with the
Speaker 3: Prime Minister of Australia, speaking to this request for funding
Speaker 3: and this is important because we've talked a lot about
Speaker 3: it through the guys of Israel and Ukraine. This is
Speaker 3: one hundred and six billion dollars he's asking for, and
Speaker 3: supplemental funds would also send money to Taiwan and to
Speaker 3: our southern border for border security. But Bloomberg Government reminds
Speaker 3: us there's more to this as well. Inside that budget
Speaker 3: request also includes money for the Submarine Industrial Base as
Speaker 3: part of our alliance with Australia. Remembering this pact between
Speaker 3: the US, the UK and Australia to counter China's military expansion.
Speaker 3: This would help to pay for that, and it's something
Speaker 3: that we want to talk about, among other issues with
Speaker 3: Jennifer Welsh, Bloomberg Economics Chief geo economics analyst. It's great
Speaker 3: to see you, Jennifer, as someone who of course comes
Speaker 3: out of the national security space. We're juggling a lot
Speaker 3: of priorities here, but they all seem to be when
Speaker 3: it comes to our defense. Included in this supplemental budget request.
Speaker 3: How important is that money for the submarine program with Australia.
Speaker 10: Well, thanks so much again for having me on, Joe.
Speaker 10: It's a pleasure to be here. It's incredibly important. One
Speaker 10: of the challenges that Aucus has faced, and this was
Speaker 10: brought up during the press conference that President Biden just had,
Speaker 10: was the issue of Congressional support for it. And one
Speaker 10: of the main areas of concern for Congress has been
Speaker 10: the DIB issue, as you noted, and the problem there
Speaker 10: is that the submarine deal includes transferring Virginia class subs
Speaker 10: to Australia. But right now the United States it's struggling
Speaker 10: to reach its goal of making two Virginia Class subs
Speaker 10: every year. You add on top of that the need
Speaker 10: to sustain our forces and to transfer to Australia, and
Speaker 10: there's a question there of whether or not we can
Speaker 10: do both these things at the same time.
Speaker 3: Of course, we're asking for sixty billion dollars for Ukraine.
Speaker 3: We're asking for billions more in Israel. And the President
Speaker 3: did speak to the situation in Israel. Here's what he said, Jennifer,
Speaker 3: and we'll have you respond. This is Joe Biden a
Speaker 3: short time ago in the garden.
Speaker 11: The anger of the hurt, the sense of outrage that
Speaker 11: the Israeli people are feeling after the brutally inflicted devastation
Speaker 11: by Hamas is completely understandable. Israel has the right and
Speaker 11: I would add responsibility to respond to the slaughter of
Speaker 11: their people. And we will ensure Israel has what it
Speaker 11: needs to defend itself against these terrorists. That's a guarantee.
Speaker 1: Yep.
Speaker 3: We're asking Israel to slow its role and in fact
Speaker 3: delay the invasion of Gaza. The headline on the terminal
Speaker 3: Biden asking Israel to delay ground war if it helps
Speaker 3: to free hostages. And there's been talk about a potential
Speaker 3: release of more hostages here. Is that what we're waiting for, Jenny.
Speaker 3: Are we potentially going to be in a world where
Speaker 3: there is no invasion of Gaza.
Speaker 10: That's a really good question, and it does seem to
Speaker 10: be a fast moving target in terms of you know,
Speaker 10: Israel saying in terms of their plans for the ground
Speaker 10: offensive kind of changing day by day. More recently, they've
Speaker 10: kind of moved away from referring to it as an
Speaker 10: invasion and more towards an operation, saying that it's going
Speaker 10: to be a lot more targeted. And I think there's
Speaker 10: a couple of factors at play. I think certainly the
Speaker 10: ongoing hostage negotiations are part of it. Certainly US concerns
Speaker 10: are part of it, and as part of an effort
Speaker 10: to avoid this from becoming a broader regional conflict and
Speaker 10: kind of stirring and rest across.
Speaker 6: The Middle East.
Speaker 10: But I think Israeli forces are also very concerned about
Speaker 10: having to fight on multiple fronts already they're taking incoming
Speaker 10: from Hasbela forces. I think there's some concern about whether
Speaker 10: or not they have the bandwidth, in particular air defense bandwidth,
Speaker 10: in order to manage additional incoming coming from Husbola, if
Speaker 10: they start to increase the scale of their attacks to
Speaker 10: take advantage of a ground offensive. And then there's the
Speaker 10: complexity of the ground offensive itself. Gaza is obviously a
Speaker 10: very dense area. There's also the potential for many, many
Speaker 10: tunnels that we don't have great insight into, for Hamasfide
Speaker 10: to be hiding in. It could be a very dangerous operation.
Speaker 10: And I think the United States as well as other
Speaker 10: partners have been counseling Israel to really carefully plan that
Speaker 10: out and to plan out for what happens after the offensive.
Speaker 10: Their goal is to remove Hamas, but what happens after
Speaker 10: Hamas is gone?
Speaker 3: A lot of good questions here, the presidents saying earlier
Speaker 3: today in the Rose Garden, what I've indicated to him
Speaker 3: by that he means, Benjamin Netanyaho is that if that's
Speaker 3: possible to get these folks out safely, that's what he
Speaker 3: should do. It's their decision. But of course Benjamin Netanyahu
Speaker 3: doesn't want to lose the US in this fight. How
Speaker 3: closely is he listening to Joe Biden, No, I would.
Speaker 10: Say, compared to where we were soon after the October
Speaker 10: seventh attack, and where we are today. Again that ground
Speaker 10: offensive hasn't happened. It seemed to be on the bridge
Speaker 10: of it, you know, several weeks ago. Now we've seen
Speaker 10: Israel kind of budge a little bit on making sure
Speaker 10: aid is flowing into Gaza. We've seen them, you know,
Speaker 10: start to address concerns about civilian casualties, include coming out
Speaker 10: very clear on the nature of the hospital attack that
Speaker 10: happened last week. So I do think that Israel is
Speaker 10: listening to the US. I think also US regional support
Speaker 10: has been helpful to sort of reassuring Israel, both the
Speaker 10: presence of US forces in the region as well as
Speaker 10: US efforts to try and line up regional powers to
Speaker 10: at least, if not at the very least support Israel,
Speaker 10: then to at least, you know, kind of decry the
Speaker 10: attack and not foment or add fire to the flame.
Speaker 10: So I think all of that is helping sort of
Speaker 10: take us down a steparate too, at least temporarily in
Speaker 10: the conflict. But it remains to be seen, you know,
Speaker 10: where Israel goes from here, and I think the Biden
Speaker 10: administration is being very careful to at least publicly indicate
Speaker 10: that this is still very much within Israel's agency rather
Speaker 10: than being directed by the US. That being said, I
Speaker 10: think behind closed doors, the US is very much counseling
Speaker 10: Israel to approach us in a way that is both
Speaker 10: good for Israel strategically and in the long term, but
Speaker 10: also helps further inflame avoid further inflaming regional tensions.
Speaker 3: Jenny Welch helps to advise our Bloomberg Economics team here
Speaker 3: in Washington, and it's great to have you back, Jenny.
Speaker 4: Thank you for the insights.
Speaker 3: Jenny Welch at Bloomberg with us on sound On as
Speaker 3: we move forward here with a speaker of the house,
Speaker 3: dare to dream it's true. If you're just joining us,
Speaker 3: Joe Biden will soon be talking to speaker Mike Johnson.
Speaker 3: We'll let you know when that phone call takes place.
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