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

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Speaker 1: Bloomberg Balance of Power podcast.

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Speaker 2: Catch us live weekdays at noon Eastern on appocarplay and

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Speaker 2: enroun Auto with the Bloomberg Business app. Listen on demand

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Speaker 2: wherever you get your podcasts, or watch us live on YouTube.

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Speaker 3: It's just Tuesday.

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Speaker 1: We packed it a lot yesterday.

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Speaker 3: I thought maybe you just have to check sometimes before

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Speaker 3: you sign the check. I'm Joe Matthew in the Nation's capital.

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Speaker 3: Good to see you Tuesday, yes edition of Balance of Power,

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Speaker 3: the fastest show in politics here on Bloomberg Radio, on

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Speaker 3: the satellite radio, and on YouTube. Find us now on

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Speaker 3: YouTube by searching Bloomberg Business News Live. We'll be off

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Speaker 3: to the races again for another couple of hours here

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Speaker 3: with news. Well kind of on this funding deadline that's approaching.

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Speaker 3: So here we are ten days out right. The government

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Speaker 3: runs out of money on the twentieth of December. I've

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Speaker 3: been talking about this every day for weeks. Nothing's changed

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Speaker 3: really in terms of a deal to avoid this. Yet

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Speaker 3: no one's talking about a shutdown. We're just going to

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Speaker 3: drag this thing, I guess right to the last minute.

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Speaker 3: But we do have a sense of what the next

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Speaker 3: Congress is going to be doing when it comes to

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Speaker 3: the sequence of dealing with the border, dealing with the

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Speaker 3: Trump era tax cuts. And that's where we start our

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Speaker 3: conversation today with Mike Dorning. Bloomberg Deputy Congressional Editor, has

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Speaker 3: been covering this for some time. Mike, it's good to see.

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Speaker 3: Welcome to be here always. So I want to pick

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Speaker 3: through a couple of these. Let's just start with the

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Speaker 3: funding deadline cr till mid March is what everyone's talking about.

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Speaker 3: Why don't we just get to it.

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Speaker 4: Well, there's a couple of things that are outstanding, but

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Speaker 4: most importantly.

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Speaker 5: Is the size of the disaster AID.

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Speaker 4: Okay, and here you have several problems cross cutting and

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Speaker 4: it makes it hard to work out something within the House.

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Speaker 3: Republicans, this is agency funding to respond to the two

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Speaker 3: big hurricanes.

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Speaker 4: Yes, and also some of it going back to the

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Speaker 4: Maui disaster.

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Speaker 5: On the one.

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Speaker 4: Hand, you don't really want to risk that people aren't

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Speaker 4: going to have the money to keep working on the

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Speaker 4: disaster AID in North Carolina and South Carolina and Hawaii

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Speaker 4: and California, lots of other places there have been disasters.

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Speaker 4: On the other hand, you have number one, a conservative

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Speaker 4: group within the House, Republicans that always wants to pay

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Speaker 4: for this by cutting other things. That says, hey, you know,

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Speaker 4: we always have disasters, so you should be cutting something else,

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Speaker 4: not just adding to the BOT. And then you also

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Speaker 4: have people fighting over how much money there should be

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Speaker 4: in disaster aid.

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Speaker 5: So that's the main thing.

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Speaker 4: That's the sticking point attention over how much money to

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Speaker 4: give to disasters aid and whether you should pay for

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Speaker 4: it or not.

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Speaker 5: They're not going to.

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Speaker 4: Pay for it in the end. That's just like something

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Speaker 4: you have to get passed. Where that goes, but the

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Speaker 4: size of it will be the main hold up. You

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Speaker 4: can also use that as a carrot later on by

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Speaker 4: not funding it enough so that when you need to

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Speaker 4: get the next thing through the North Carolina, South Carolina, California, Hawaii,

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Speaker 4: people are like, I got to vote for this.

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Speaker 5: Because I can't cut off my constituents.

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Speaker 1: So you have done this.

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Speaker 5: Before, yeh ndaa.

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Speaker 3: I'll ask you about funding the government in the new

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Speaker 3: year and so forth. And by the way, are we

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Speaker 3: going with March, is that the cr will fund this

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Speaker 3: till March.

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Speaker 5: We can We'll see it'll be some kind of somewhere soon.

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Speaker 3: The Annual Defense Authorization here every year it's must pass.

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Speaker 3: Looks like this will pass. We got top lines over

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Speaker 3: the weekend. But really interesting that there's a fourteen percent

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Speaker 3: pay raise for junior enlisted troops.

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Speaker 5: Nobody can vote against that, right, Yeah. The problem is

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Speaker 5: it is getting caught up in other things.

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Speaker 4: You would think that it would get through, but they've

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Speaker 4: got on the one hand, they want to do some

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Speaker 4: things that with transgender troops that make progressives unhappy. There's

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Speaker 4: some things that some of the conservatives feel like they

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Speaker 4: want more things they want like restrictions on abortion and

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Speaker 4: travel for abortion and things like that. So you can

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Speaker 4: lose those things. My guess is, one way or another,

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Speaker 4: whether you do the NDAA or you do some other

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Speaker 4: stripped down thing, those troops will get that raise reasonably

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Speaker 4: soon because like everyone like believes the junior enlisted troops

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Speaker 4: need a raise. I mean, some of them are on

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Speaker 4: food staffs. It's like these are people who are defending

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Speaker 4: the gun trap. Maybe they should make a decent living.

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Speaker 3: That's quite a sweetener there. If you're on the fence

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Speaker 3: about all of this. So the transition, then the two

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Speaker 3: words that seem to change the world for Pete Hegseth

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Speaker 3: were good conversations Jony Ernst with a fairly benign statement,

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Speaker 3: but many folks thought she might sink his nomination, her

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Speaker 3: concerns over sexual assault in the military, her experience as

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Speaker 3: a woman serving in combat. But boy, things have changed

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Speaker 3: a lot this week. But he woke up on Monday,

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Speaker 3: following the ernest statement and knowing that to be a

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Speaker 3: meeting and hearing Donald Trump on Meet the Press. Wait

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Speaker 3: a minute, maybe this guy, yea, he makes the.

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Speaker 4: Great and she kind of revived that nomination a little

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Speaker 4: yesterday He was definitely gasping for breath. There Two things

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Speaker 4: happened over the weekend or late last week.

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Speaker 5: And over the weekend.

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Speaker 4: Number one, she had kind of been completely noncommittal, given

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Speaker 4: him a very polite cold shoulder, and clearly was hoping

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Speaker 4: that he would just die and Trump would withdraw it.

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Speaker 4: But Trump moved in supported him some. And then the

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Speaker 4: Conservatives came in hard on her and said, you know

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Speaker 4: you don't you don't do more to support him, we'll

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Speaker 4: challenge you in your primary in two years now. She

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Speaker 4: hasn't said she'll support him, but she said some kind words,

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Speaker 4: positive vibes and in Washington. That can be crucial because

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Speaker 4: he just needs to make it to the next week,

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Speaker 4: and without some sort of kind vibes, it was looking

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Speaker 4: like you might not and you live to fight another day.

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Speaker 5: You could win.

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Speaker 3: Huge pressure campaign for Joni Ernst in this case, so

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Speaker 3: you start to pull out the lens a little bit.

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Speaker 3: Tulsi Gabbard being pretty well received yesterday on Capitol Hill,

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Speaker 3: starting to answer questions about Syria and so forth, reminding

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Speaker 3: people she has a top secret security clearance and her.

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Speaker 5: Top secret is not that high a security cleer, but.

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Speaker 3: Had that since her visit to Syria in twenty seventeen.

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Speaker 3: I don't have one of those. And then there's RFK Junior,

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Speaker 3: who's going to be holding meetings next week we're reading

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Speaker 3: now on the Hill, will start his meetings. Is there

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Speaker 3: a world at which all three of these controversial nominees

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Speaker 3: initially seen as controversial are in fact confirmed.

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Speaker 4: Yeah, there's definitely a world where all three are confirmed.

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Speaker 4: It's it's it's quite possible. I still think Hegsith is

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Speaker 4: probably in the most danger of those three because the

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Speaker 4: disagreements with Tulsei Gabbard and RFK Junior are kind of

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Speaker 4: policy ordered they may be very basic policy. You know,

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Speaker 4: she was sort of seemed to be supportive of the

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Speaker 4: Assad regime in Russia. Not the personal chant, but like hegxith,

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Speaker 4: the personal challenges are of easy to understand for everyday

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Speaker 4: Americans and salacious, you know, allegations of rape, you know, drunkenness,

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Speaker 4: financial mismanagement. That's something that like tends to be more

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Speaker 4: of a wildfire and the press and people talk about it.

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Speaker 5: You might agree or disagree with.

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Speaker 4: RFK june your sort of unorthodox views about vaccines or

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Speaker 4: Tulsey's views about intervention abroad and foreign governments, but they're

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Speaker 4: not like the thing that excites people as much.

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Speaker 3: Well, it's really interesting. At the same time, maybe ask

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Speaker 3: this slightly differently. Let's say they all get to their

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Speaker 3: confirmation hearings. What kind of a show are Democrats going

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Speaker 3: to put on here? Even if they are confirmed? These

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Speaker 3: could be some very difficult and personal questions posted to

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Speaker 3: Pete hegseeth could be for RFK Junior as well, his

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Speaker 3: history with drugs, his past comments, allegations again of sexual

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Speaker 3: advances that might not play too well publicly. What are

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Speaker 3: democrats prepared to do in terms of making a stink

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Speaker 3: about any of these people.

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Speaker 4: I would imagine they are going to make a huge

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Speaker 4: stink about all three of these people. And the important

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Speaker 4: thing is each of these people are now being introduced

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Speaker 4: to the American people. These impressions where our parents told

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Speaker 4: us first impressions matter. Look someone in the eyes, shake

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Speaker 4: them in the hand, shake their hand. These will set

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Speaker 4: the public impressions of these high profile people. And in

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Speaker 4: those confirmation hearings, I would be very surprised if you

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Speaker 4: don't see Democrats pushing the allegations against Pete Hegseth, the

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Speaker 4: sexual misconduct ones. I would be very surprised if you

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Speaker 4: don't see a strong effort to characterize Tulsea Gabbard as

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Speaker 4: a potential national security risk and RFK Junior his unorthodox

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Speaker 4: views about health and vaccines and frame them for the

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Speaker 4: American people. Whether they get approved or not a different question.

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Speaker 4: And Democrats essentially can be outvoted. The question is some

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Speaker 4: of them there might be some Republicans who also don't

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Speaker 4: want to go along with them.

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Speaker 3: Yeah, exactly, And of course it'll all be aired out

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Speaker 3: in public. Even if they do make the grade. Some

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Speaker 3: damage could be done here.

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Speaker 4: Just the confirmation here, right, it's all the debate going.

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Speaker 3: Absolutely. We have weeks until we're at the point of

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Speaker 3: getting a vote. Mike, thank you so much. Mike Dorning

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Speaker 3: covering the transition for US and the funding deadline in Washington.

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Speaker 3: We're ten days out. We'll get this figured out at

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Speaker 3: some point, and of course you'll hear about it right

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Speaker 3: here on Balance of Power.

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Speaker 1: You're listening to the Bloomberg Balance of Power podcast Ken

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Speaker 1: Just Live weekdays at noon Eastern on Applecarplay and then

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Speaker 1: roid Oro with the Bloomberg Business Ad.

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Speaker 2: You can also listen live on Amazon Alexa from our

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Speaker 2: flagship New York station Just Say Alexa playing Bloomberg eleven thirty.

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Speaker 6: I'm Kaylee Lines alongside Joe Matthew in Washington. This is

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Speaker 6: Balance of Power on Bloomberg TV and radio, where we're

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Speaker 6: continuing to keep track of the Trump transition and his

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Speaker 6: nominees who have been frequenting Washington and more specifically Capitol

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Speaker 6: Hill in recent days. Is is they try to make

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Speaker 6: their cases for Senate confirmation. This includes some of the

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Speaker 6: more controversial picks that are out there, including Tulsei Gabbert

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Speaker 6: for Director of National Intelligence, Pete Hegseth for Secretary of Defense,

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Speaker 6: and next week, as Joe mentioned just moments ago, RFK Junior,

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Speaker 6: the nominee to lead to the Health and Human Services Department,

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Speaker 6: will be making his rounds as well, all of them

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Speaker 6: trying to make the case, Joe, to get to the

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Speaker 6: requisite number of votes required to actually take these cabinet

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Speaker 6: level positions. And it does seem that the calculation around

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Speaker 6: the difficulty some of these may actually have in getting

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Speaker 6: to confirmation has shifted within the last week. For Pete Hegseth.

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Speaker 3: Especially, well, that's right, and he as Joni Ernst to

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Speaker 3: thank largely for that good conversations. I believe the statement

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Speaker 3: suggesting that they had another meeting, it went well and

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Speaker 3: she would like to help him get to the hearing.

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Speaker 3: The question was would he even get that far to

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Speaker 3: take questions from senators publicly? Here Hegseth meeting today with

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Speaker 3: Senators John Cornyn, Cydy Hyde Smith and Steve Danes were

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Speaker 3: also following. As you mentioned, Tulci Gabbard with more meetings

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Speaker 3: today as well. Yesterday was day one. She's just getting rolling.

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Speaker 3: Hegseeth has been up there for some time now. Tom

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Speaker 3: Cotton and Jim Rish, the two Republican senators meeting today

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Speaker 3: with Tulci Gabbart incoming Senate Intelligence Chair, and then of

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Speaker 3: course foreign relations. That's where we want to start our

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Speaker 3: conversation with Megan Scully, who drives our congressional coverage here

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Speaker 3: as our editor in Washington, DC. Megan, let's start with

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Speaker 3: Pete Hegseth because Kaylee points out wisely that it's just

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Speaker 3: the vibes have shifted quite a bit over the past

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Speaker 3: couple of days. People were on a watch for him

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Speaker 3: to withdraw a lah Matt Gates until Jony Ernst put

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Speaker 3: out her statement allowed for another meeting, will he get

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Speaker 3: to a hearing.

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Speaker 5: So let's just.

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Speaker 7: Step back for a second and explain why Joni Ernst

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Speaker 7: is so pivotal here, and that is because she is

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Speaker 7: a combat veteran, she sits on the Armed Services Committee,

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Speaker 7: and she's a survivor of sexual assault, and the allegations

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Speaker 7: which heg Seth has denied, of sexual sis out have

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Speaker 7: been looming over this whole confirmation process. So she has

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Speaker 7: been considered the key vote here, the lynch pin. There

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Speaker 7: are several others who you know, such as Senator Collins

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Speaker 7: Senator Murkowski who could still vote against him. Should note

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Speaker 7: that Ernest has not said she'd support him, that she

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Speaker 7: would just support him through the process get him to

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Speaker 7: that confirmation hearing. So more work needs to be done,

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Speaker 7: but certainly it seems more likely after her statement last

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Speaker 7: night than at any other point of this confirmation process.

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Speaker 6: Well, so then the question becomes to what extent we

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Speaker 6: can attribute her tone here or her lack of willingness

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Speaker 6: to this point to give a firm yes or firm

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Speaker 6: no to the pressure she is getting from the magabase

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Speaker 6: of the Republican Party and the threats to potentially primary

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Speaker 6: her in her next election fight.

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Speaker 7: Absolutely, a lot of this is about self preservation. She

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Speaker 7: could face a primary from the right if she does

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Speaker 7: not support Hegseth, and so she's feeling that pressure at home.

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Speaker 7: It is certainly, you know, putting some of her legacy

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Speaker 7: is indeed on the issue of military sexual assault, and

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Speaker 7: sort of putting that at odds with her own, you know,

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Speaker 7: instincts to survive in her next re election campaign.

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Speaker 3: Interesting to hear, not only to your point from Jonie Ernst,

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Speaker 3: but we're watching Susan Collins and Lisa Murkowski asked about

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Speaker 3: why they were even having meetings with Pete hegseth to

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Speaker 3: begin with. Colin said, how else am I going to

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Speaker 3: get a sense of him and ask questions? Murkowski said,

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Speaker 3: don't you want to know who your accusers are? What

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Speaker 3: do you make of these replies in the pressure campaign

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Speaker 3: that they might be feeling.

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Speaker 7: So this is bringing back a lot of memories for

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Speaker 7: I think many of us to the Brett Kavanaugh confirmation process,

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Speaker 7: where Susan Collins and Murkowski were, you know, sort of

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Speaker 7: the key votes and Collins ended up voting after a vote,

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Speaker 7: after a speech on the floor, voting to support his nomination.

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Speaker 7: And of course he'll to got confirmed despite the allegations

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Speaker 7: of sexual assault, which he also denied. So but it

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Speaker 7: is very standard. I think it would be malpractice for

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Speaker 7: them not to sit down and talk to him. You know,

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Speaker 7: he is a nominee, and you know, I think that

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Speaker 7: the meetings are par for the course here. This is

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Speaker 7: you know, they can ask him pressing questions and uh

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Speaker 7: and and go back and forth in terms of his

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Speaker 7: priorities should he be. In terms at the head of

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Speaker 7: the Defense Department, Susan Collins will be the chairperson of

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Speaker 7: the Appropriations Committee and half of all federal discretionary spending

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Speaker 7: is defense spending, so she's certainly that is certainly something

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Speaker 7: else she needs to talk to him about.

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Speaker 6: I want to talk about Tolsey Gabbard as well, because

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Speaker 6: the spotlight on her nomination has perhaps intensified given the

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Speaker 6: events of the last several days and the downfall of

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Speaker 6: the now oustra sized Syrian dictator Boscher Alasad, who of

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Speaker 6: course she met with in Damascus years ago. Is that

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Speaker 6: net helpful for her confirmation prospects because the question was

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Speaker 6: about her relationship with the SOD who is no longer

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Speaker 6: leading Syria and therefore isn't necessarily as much of a

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Speaker 6: live question for an incoming administration as he would have

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Speaker 6: been before.

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Speaker 7: I think that is still very much to be determined

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Speaker 7: as we sort out what is next in Syria. But

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Speaker 7: the bigger question and concerns about Gabbard really have to

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Speaker 7: do less with a SAD and more about her freelancing

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Speaker 7: on a matter of very sensitive national security and foreign

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Speaker 7: policy when she was a sitting member of the House

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Speaker 7: and she went and met with Asad in Syria, So

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Speaker 7: it's there will be I assume still questions about what

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Speaker 7: she would do as the Director of National Intelligence when

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Speaker 7: it comes to some of these other regimes in the world.

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Speaker 3: Well, so we move on. If I can throw another

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Speaker 3: log on the fire to RFK Junior, who will reportedly

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Speaker 3: be on the Hill next week, Bloomberg reporting that he's

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Speaker 3: got a meeting with Senator Tommy Tuberville. What are these hearings,

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Speaker 3: assuming they get to hearings, going to be like for Democrats?

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Speaker 3: Are they coming in off the top rope here hot

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Speaker 3: with tough questions and the easels are going to be

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Speaker 3: set up in the hearing rooms or is it happening

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Speaker 3: now in advance of the hearings.

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Speaker 7: So right now we're seeing most of the nominees just

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Speaker 7: meeting with Republicans they need They know that most of

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Speaker 7: these nominations are only going to get passed on a

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Speaker 7: party line vote, at least the controversial ones, and that's

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Speaker 7: if they're lucky they can get that party line vote.

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Speaker 7: Going into the hearings, Democrats are certainly, you know, this

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Speaker 7: will be their moment to grill these nominees and to

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Speaker 7: go back to the Kavanaugh confirmation once again, you know,

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Speaker 7: we saw Democrats who were in the minority really grilling.

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Speaker 7: You know, there were famous moments of Kamala Harris and

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Speaker 7: Amy Klobash are all people who went on to run

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Speaker 7: for the presidency, really you know, hitting the spotlight and

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Speaker 7: making national news, and we will certainly see that, particularly

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Speaker 7: with the most controversial of these nominees.

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Speaker 6: So we have a lot to look forward to come January, obviously,

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Speaker 6: but this Congress, before the next one can hold these

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Speaker 6: hearings and do all of their business in twenty twenty five,

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Speaker 6: they still have business to figure out this year, including

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Speaker 6: ten days from now a funding deadline, yes to continue

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Speaker 6: the government funding and to not shut it down. With

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Speaker 6: just ten days out, we still have no clarity on

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Speaker 6: what kind of continuing resolution or other solution will be

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Speaker 6: put forward. How much longer is this going to take?

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Speaker 7: Although you know, you're a veteran of these negotiations, you

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Speaker 7: know that nothing actually comes together until the last few

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Speaker 7: hours before a shutdown. You know, I feel like there

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Speaker 7: is a very little appetite for any kind of disruption

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Speaker 7: in government spending, you know, particularly as the Congress is

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Speaker 7: coming to a close, and as is the Biden administration.

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Speaker 7: We're going to see most of that funding kicked to

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Speaker 7: the spring and where they can a Republican Congress and

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Speaker 7: a Republican administration can hash out the details. Where we

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Speaker 7: might see some movement or we expect to see some

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Speaker 7: movement in the coming weeks, is on the issue of

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Speaker 7: emergency aid, and we could see a package coming together

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Speaker 7: pretty quickly on that, and.

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Speaker 6: It probably will be close or not close to the

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Speaker 6: one hundred billion dollars requested by the White House.

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Speaker 7: I think that there are there is talk even among

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Speaker 7: Republicans of getting close to that, but just a few

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Speaker 7: votes could swing anything either way, so I know that

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Speaker 7: to be true.

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Speaker 6: All right. Bloomberg's Megan Scully, who leads our Capital Influence

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Speaker 6: team here in Washington, thank you for joining us here

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Speaker 6: on Balance of Power. And we of course have much

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Speaker 6: more coming up on the program as well as we

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Speaker 6: consider not just what's happening in the transition, but the

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Speaker 6: incredible circumstances this transition is happening in is there's been

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Speaker 6: really incredible developments in geopolitics, with what has happened in Syria,

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Speaker 6: still an issue for the Biden administration to deal with,

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Speaker 6: but one that the Trump administration will inherit.

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Speaker 3: Yeah, that's for sure. We'll have more on that coming

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Speaker 3: up later, and certainly the timing with Tulsea Gabbard arriving

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Speaker 3: in the Senate is quite remarkable. They wouldn't believe the

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Speaker 3: stuff if you wrote.

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Speaker 2: It that way.

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Speaker 3: I'm Joe Matthew alongside Kaylee Lions. We'll have a lot

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Speaker 3: more ahead right here on Bloomberg.

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

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Speaker 2: Catch Just Live weekdays at noon Eastern on Applecarplay and

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Speaker 2: then Rouno with the Bloomberg Business app. Listen on demand

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Speaker 2: wherever you get your podcasts, or watch us live on YouTube.

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Speaker 3: There is a very pronounced conversation underway right now with

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Speaker 3: a lame duck session in Congress, the wind down of

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Speaker 3: the Biden administration and the uptake here of the transition

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Speaker 3: to the next Trump administration about what to do with Syria.

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Speaker 3: Following this incredibly fast moving series of events over the weekend, Kaylee,

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Speaker 3: we saw Damascus fall, Bishar Ala, Sad move to Moscow,

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Speaker 3: and everyone is moving to their own benefit here, including

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Speaker 3: Israel into that buffer zone along the Syrian border and

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Speaker 3: deploying troops beyond that buffer zone for the first time

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Speaker 3: since nineteen seventy four, with a lot of questions about

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Speaker 3: their motivations as well.

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Speaker 6: Well, and the Israeli Defense Force is saying today that

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Speaker 6: they have been targeting strategic weapons stockpiles in Syria, and

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Speaker 6: in fact, according to the IDF, within the last forty

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Speaker 6: eight hours, have struck most of those stockpiles. We're talking

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Speaker 6: here about things like C two sea missiles, anti aircraft

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Speaker 6: batteries and the like. The intention here, of course, to

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Speaker 6: make sure that while there is this power vacuum in

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Speaker 6: Syria right now. A lack of clarity about what exactly

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Speaker 6: happens now that Asad is gone a dictator deposed, the

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Speaker 6: rebels that overtook him and ultimately pushed him out of

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Speaker 6: the country are designated terrorist organization by the US HTS.

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Speaker 6: Is not clear yet when you talk to experts on

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Speaker 6: the Middle East, as we have done over the last

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Speaker 6: several days, as to whether or not they are an

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Speaker 6: entity that can be entrusted entirely at this.

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Speaker 3: Time, Yeap, this is something that we wanted to talk

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Speaker 3: to Wadham's about, who runs our national security coverage out

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Speaker 3: of Washington, d C. And has been rather busy the

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Speaker 3: last couple of days. Nick, It's great to see you.

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Speaker 3: When will we have answers to these questions because we're

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Speaker 3: looking at obviously a power vacuum. We have seen one

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Speaker 3: of these individuals reach to become a formal prime minister.

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Speaker 3: How long will that hold?

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Speaker 8: What's happening well, I mean this is the question that

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Speaker 8: the US is really grappling with, and obviously Israel as well.

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Speaker 8: I mean, the challenge here is everybody was very happy

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Speaker 8: to see Bashar al Asad go, but really there are

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Speaker 8: just so many questions about HTS, as you mentioned, a

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Speaker 8: designated terrorist group. So far, the administration line is they're

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Speaker 8: saying the right things. They're saying they want to empower Syrians,

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Speaker 8: maybe potentially do some sort of transitional government. But you know,

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Speaker 8: there are so many different factions who seem to have

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Speaker 8: control of various parts of Syrian Some of them are

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Speaker 8: I mean the Islamic State. I mean, these are the

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Speaker 8: guys that the US spent untold hundreds of millions of

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Speaker 8: dollars to eradicate a few years ago, and they are

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Speaker 8: in some way on the rise again. So there's a

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Speaker 8: real question. I think that's why you see some of

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Speaker 8: these moves by Israel hitting, hitting these military targets. They

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Speaker 8: do not want this material to fall into the wrong hand.

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Speaker 8: So I mean a ton of unknowns right now.

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Speaker 6: Well, and it's not just Israel. We should point out

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Speaker 6: the US has targeted dozens of ISIS sites, specifically in

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Speaker 6: parts of Syria. And yet at the same time we're

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Speaker 6: hearing from both the Biden administration and we've heard from

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Speaker 6: Donald Trump that they are still trying to keep a

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Speaker 6: distance to a certain degree here with what's going to

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Speaker 6: happen next. If there is that concern about a potential

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Speaker 6: resurgence of ISIS, why won't the US get more intimately

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Speaker 6: involved in this?

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Speaker 8: I mean, so, this is what they have said for

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Speaker 8: a long time, this is not our fight. We do

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Speaker 8: not want to get involved, and then they it could

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Speaker 8: become our fight, rightly, because it has been our fight.

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Speaker 8: I mean, Donald Trump, people forget this. Donald Trump, in

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Speaker 8: his first administration, his first overseas sort of formal military

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Speaker 8: action was strikes against Syria in twenty seventeen. During this

439
00:24:01,040 --> 00:24:03,480
Speaker 8: was during his summit with xijin Ping and mar Laga

440
00:24:03,520 --> 00:24:06,919
Speaker 8: where he slipped out and ordered these Tomahawk missile strikes

441
00:24:06,960 --> 00:24:10,920
Speaker 8: on Syria. Then he did so again after Syria used

442
00:24:11,000 --> 00:24:13,719
Speaker 8: chemical after the Asad regime used chemical weapons against its

443
00:24:13,720 --> 00:24:17,040
Speaker 8: own people. So you have this pattern where the administration

444
00:24:17,160 --> 00:24:19,920
Speaker 8: says they don't want to have anything to do with Syria,

445
00:24:20,080 --> 00:24:22,720
Speaker 8: and then they have a lot to do with Syria. Obviously,

446
00:24:23,400 --> 00:24:26,320
Speaker 8: the Islamic State and as you mentioned, I mean they

447
00:24:26,359 --> 00:24:31,000
Speaker 8: pronounced the Islamic State eradicated, but clearly it keeps sort

448
00:24:31,040 --> 00:24:33,600
Speaker 8: of cropping back up and they have to do these strikes.

449
00:24:33,600 --> 00:24:36,920
Speaker 8: The big question is going to be what happens if

450
00:24:37,119 --> 00:24:41,399
Speaker 8: the Islamic State affiliates itself in some way with HTS

451
00:24:41,440 --> 00:24:44,040
Speaker 8: and you start to see not just a situation where

452
00:24:44,200 --> 00:24:47,520
Speaker 8: the Islamic State is sort of poking its head above

453
00:24:47,520 --> 00:24:50,440
Speaker 8: the parapet as it were, but in a situation where

454
00:24:50,480 --> 00:24:53,919
Speaker 8: they are actually helping run the government. Then does the

455
00:24:54,000 --> 00:24:57,000
Speaker 8: US want to go to war with the of self

456
00:24:57,000 --> 00:24:59,960
Speaker 8: proclaimed new government of Syria. That is something they really

457
00:25:00,119 --> 00:25:01,320
Speaker 8: do not want to have to answer.

458
00:25:01,520 --> 00:25:05,400
Speaker 3: Considering the small number of American troops in Syria at

459
00:25:05,400 --> 00:25:07,760
Speaker 3: the moment, to what extent can the US or should

460
00:25:07,800 --> 00:25:13,440
Speaker 3: the US leverage allied Kurdish forces still in the country.

461
00:25:14,080 --> 00:25:18,160
Speaker 8: Well, the Kurdish forces question is also hugely complicated because

462
00:25:18,200 --> 00:25:21,960
Speaker 8: Turkey another country that is trying to seize some sort

463
00:25:21,960 --> 00:25:25,600
Speaker 8: of advantage here amid the chaos in Syria. Sees the

464
00:25:25,720 --> 00:25:28,119
Speaker 8: Kurdish fighters as a sworn enemy. This has been a

465
00:25:28,200 --> 00:25:31,520
Speaker 8: huge point of tension with the United States. And obviously

466
00:25:31,560 --> 00:25:33,520
Speaker 8: when you have a situation where there's so many other

467
00:25:33,760 --> 00:25:37,960
Speaker 8: priorities for the US where they want Turkey's help on

468
00:25:38,080 --> 00:25:43,160
Speaker 8: squeezing Iran, on squeezing Russia NATO membership. Who knows what's

469
00:25:43,200 --> 00:25:45,639
Speaker 8: going to happen with Ukraine. I mean, there's just so

470
00:25:45,680 --> 00:25:48,800
Speaker 8: many How big of a priority are these Kurdish fighters

471
00:25:48,840 --> 00:25:52,560
Speaker 8: going to be for this administration, given Turkey feels so

472
00:25:52,600 --> 00:25:56,160
Speaker 8: strongly about it. So it's a real question of also prioritization,

473
00:25:56,200 --> 00:25:58,479
Speaker 8: which incidentally is what you saw with Russia why they

474
00:25:58,480 --> 00:26:02,760
Speaker 8: are not supporting Syria. They'reorities were Ukraine. And now we

475
00:26:02,880 --> 00:26:06,240
Speaker 8: have what exactly the situation we've seen unfolded.

476
00:26:06,200 --> 00:26:09,200
Speaker 6: Well, and now Russia has potentially lost a critical port

477
00:26:09,320 --> 00:26:12,320
Speaker 6: in the Mediterranean as a result. On Iran though, which

478
00:26:12,320 --> 00:26:15,680
Speaker 6: you just mentioned. Obviously, Syria and Lebanon border each other.

479
00:26:15,760 --> 00:26:18,520
Speaker 6: Iran has used Syria as a conduit to get weapons

480
00:26:18,520 --> 00:26:22,760
Speaker 6: to Hesblow, which already has been seriously diminished by the

481
00:26:22,840 --> 00:26:26,520
Speaker 6: Israeli offensive over the last several months. Now that potential

482
00:26:26,520 --> 00:26:29,440
Speaker 6: line of replenishment has been broken. So what does that

483
00:26:29,600 --> 00:26:32,600
Speaker 6: do to not just Aron's ability to operate with its

484
00:26:32,600 --> 00:26:35,879
Speaker 6: most powerful proxy, but also do for Israel as it

485
00:26:35,920 --> 00:26:38,000
Speaker 6: still has conflict ongoing.

486
00:26:37,600 --> 00:26:38,480
Speaker 4: With these proxies.

487
00:26:38,640 --> 00:26:41,600
Speaker 8: Right well, I mean they are now in a putative

488
00:26:41,600 --> 00:26:45,160
Speaker 8: ceasefire with Hesbolah, so they've sort of declared at least

489
00:26:45,160 --> 00:26:47,680
Speaker 8: for the time being, a cessation of hostilities. I mean, look,

490
00:26:47,720 --> 00:26:51,199
Speaker 8: in some ways, Israel is going to proclaim this as

491
00:26:51,240 --> 00:26:54,440
Speaker 8: a major victory. They went after has Belah, they put

492
00:26:54,440 --> 00:26:57,600
Speaker 8: the squeeze on Iran, and you have essentially seen Iran

493
00:26:57,760 --> 00:27:02,080
Speaker 8: and has Belah retreating from Syria's created this situation we

494
00:27:02,200 --> 00:27:05,240
Speaker 8: have now, so you know it is it's an extraordinary moment.

495
00:27:05,280 --> 00:27:08,440
Speaker 8: I mean, the chess pieces are just moving all over

496
00:27:08,560 --> 00:27:11,080
Speaker 8: and who has control and who doesn't are just very

497
00:27:11,200 --> 00:27:13,600
Speaker 8: very difficult to figure out. But you know what we

498
00:27:13,720 --> 00:27:16,919
Speaker 8: are starting to see, which is worrisome is after the

499
00:27:16,960 --> 00:27:21,520
Speaker 8: initial almost jubilation about the fact that Asad has left,

500
00:27:21,600 --> 00:27:24,639
Speaker 8: it's like, okay, well who comes now? And this is

501
00:27:24,680 --> 00:27:28,640
Speaker 8: going to be very very complicated Israel, as you mentioned,

502
00:27:29,000 --> 00:27:31,480
Speaker 8: I mean, yes, you can say, okay, they are defending

503
00:27:31,800 --> 00:27:35,399
Speaker 8: themselves outside of this buffer zone, but a lot of

504
00:27:35,400 --> 00:27:37,960
Speaker 8: people will see this as a land grab and you know,

505
00:27:38,119 --> 00:27:41,720
Speaker 8: changing the facts on the ground right as they jockey

506
00:27:41,720 --> 00:27:42,320
Speaker 8: for position.

507
00:27:42,440 --> 00:27:46,280
Speaker 3: Well, interesting comments from Benjamin Netnyahu yesterday, effectively taking credit

508
00:27:47,160 --> 00:27:50,800
Speaker 3: for what happened. In his remarks to the nation, he

509
00:27:50,840 --> 00:27:53,919
Speaker 3: said his country had reshaped the Middle East as we

510
00:27:54,080 --> 00:27:57,600
Speaker 3: promised we would do. We've heard so much about the

511
00:27:57,720 --> 00:28:00,960
Speaker 3: errors made by Russia and leading to this. To what

512
00:28:01,040 --> 00:28:02,760
Speaker 3: extent is he correct?

513
00:28:03,080 --> 00:28:06,520
Speaker 8: Well, I mean, certainly going after Hesbo Lah and essentially

514
00:28:06,560 --> 00:28:10,320
Speaker 8: decimating them, putting that pressure on Iran. I mean, you know,

515
00:28:10,840 --> 00:28:14,440
Speaker 8: the US there was a call a senior administration official

516
00:28:14,520 --> 00:28:17,080
Speaker 8: did with reporters over the weekend as this happened. There

517
00:28:17,200 --> 00:28:19,480
Speaker 8: was a little bit of credit taking there as well

518
00:28:19,560 --> 00:28:22,560
Speaker 8: by the US. Listen, we are we created the conditions

519
00:28:22,600 --> 00:28:25,960
Speaker 8: for a very brittle regime with sanctions both on Iran

520
00:28:26,040 --> 00:28:30,120
Speaker 8: and Syria. So a lot of folks taking credit. Will

521
00:28:30,160 --> 00:28:32,800
Speaker 8: be very interesting to see how many are taking credit

522
00:28:33,040 --> 00:28:35,960
Speaker 8: six months from now if they don't like this new

523
00:28:36,920 --> 00:28:39,920
Speaker 8: government that takes control and Surrey and what the situation

524
00:28:40,040 --> 00:28:41,600
Speaker 8: is on the ground there and whether it's a force

525
00:28:41,640 --> 00:28:43,920
Speaker 8: for stability or further instability in the region.

526
00:28:44,200 --> 00:28:47,680
Speaker 3: Well, almost like he's seen this before. Nick Wadham's great

527
00:28:47,680 --> 00:28:49,800
Speaker 3: to see you. Thanks for the insights and the reporting.

528
00:28:49,800 --> 00:28:52,480
Speaker 3: Our national security team is doing great work Kayley on

529
00:28:52,520 --> 00:28:54,320
Speaker 3: the terminal and online on the story. If you're looking

530
00:28:54,360 --> 00:28:56,920
Speaker 3: for the latest in the Middle East, look no further.

531
00:28:57,160 --> 00:29:00,320
Speaker 3: We've got a big day tomorrow, CPI Day. Yeah, on

532
00:29:00,360 --> 00:29:02,959
Speaker 3: the road here when it comes to kind of gauging

533
00:29:03,040 --> 00:29:05,400
Speaker 3: the next move by the FED, but also getting the

534
00:29:05,400 --> 00:29:07,800
Speaker 3: political backdrop to this incoming administration.

535
00:29:08,000 --> 00:29:10,400
Speaker 6: Yeah, although I think for our audience here on Bloomberg

536
00:29:10,400 --> 00:29:11,880
Speaker 6: TV and Radio, the FED is going to be the

537
00:29:11,920 --> 00:29:15,840
Speaker 6: most important question that is addressed first next Wednesday. Of course,

538
00:29:15,880 --> 00:29:18,240
Speaker 6: the decision, and it's a kind of live one. It's

539
00:29:18,280 --> 00:29:19,960
Speaker 6: not clear if we're going to get another twenty five

540
00:29:19,960 --> 00:29:23,360
Speaker 6: basis point cut, and tomorrow's data could help the market

541
00:29:23,960 --> 00:29:25,440
Speaker 6: decide one way or another.

542
00:29:25,160 --> 00:29:26,840
Speaker 3: What it thinks is going to happen, for sure. Michael

543
00:29:26,880 --> 00:29:29,240
Speaker 3: McKee is watching this for us, of course, and always

544
00:29:29,280 --> 00:29:31,560
Speaker 3: a pleasure to spend a couple of minutes with our

545
00:29:31,600 --> 00:29:34,440
Speaker 3: economics editor at Bloomberg TV in radio. Michael, what are

546
00:29:34,480 --> 00:29:35,800
Speaker 3: you looking for tomorrow dighty thirty?

547
00:29:36,280 --> 00:29:38,360
Speaker 9: Well, we're actually looking for something we haven't seen in

548
00:29:38,360 --> 00:29:40,080
Speaker 9: a while, which is a bit of a rise in

549
00:29:40,320 --> 00:29:43,080
Speaker 9: inflation CPI on a month over a month basis, the

550
00:29:43,160 --> 00:29:46,240
Speaker 9: headline expected to go up a tenth of a percentage

551
00:29:46,240 --> 00:29:48,840
Speaker 9: point faster than it has over the last four months,

552
00:29:49,200 --> 00:29:51,600
Speaker 9: three tenths gain. But that would push the year over

553
00:29:51,760 --> 00:29:54,240
Speaker 9: year number up to two point seven percent from two

554
00:29:54,320 --> 00:29:57,680
Speaker 9: point six And while it may be energy related, while

555
00:29:57,760 --> 00:30:01,120
Speaker 9: maybe housing related, in things the FED can effect, just

556
00:30:01,240 --> 00:30:04,200
Speaker 9: the fact that it goes up is not going to

557
00:30:04,240 --> 00:30:05,120
Speaker 9: make people happy.

558
00:30:06,560 --> 00:30:09,000
Speaker 6: Well, so if it goes up slightly, why would rates

559
00:30:09,040 --> 00:30:11,640
Speaker 6: go down slightly? Mike, what's the justification?

560
00:30:12,360 --> 00:30:15,480
Speaker 9: Well, the betting at the FED is this is just temporary.

561
00:30:15,520 --> 00:30:17,680
Speaker 9: It's kind of a one off thing. And if you

562
00:30:17,840 --> 00:30:21,960
Speaker 9: deconstruct what we see in the CPI, almost all of

563
00:30:22,000 --> 00:30:24,920
Speaker 9: the rise that we're getting these days is in housing,

564
00:30:24,960 --> 00:30:27,040
Speaker 9: and the Fed's been waiting for that to drop, and

565
00:30:27,080 --> 00:30:29,320
Speaker 9: there isn't much they can do. They can lower interest

566
00:30:29,360 --> 00:30:31,760
Speaker 9: rates to try to bring down housing costs, but there's

567
00:30:31,880 --> 00:30:35,560
Speaker 9: just not enough housing supply available to make a major difference,

568
00:30:35,600 --> 00:30:38,480
Speaker 9: so they're kind of looking through that right now. The

569
00:30:38,520 --> 00:30:41,479
Speaker 9: other question is what's happened to food. We know that

570
00:30:41,600 --> 00:30:44,800
Speaker 9: with the October hurricanes, there may have been some problems

571
00:30:44,800 --> 00:30:47,440
Speaker 9: with fruits and vegetables and things like that. So there

572
00:30:47,440 --> 00:30:50,000
Speaker 9: may be things that the Fed can't do a lot about,

573
00:30:50,480 --> 00:30:53,800
Speaker 9: and they think the economy is in good enough shape

574
00:30:53,840 --> 00:30:56,880
Speaker 9: that they can lower rates, and that they should because

575
00:30:57,080 --> 00:30:59,680
Speaker 9: they don't want to see unemployment start to rise.

576
00:31:00,880 --> 00:31:04,200
Speaker 3: Joe Biden speaking a little bit earlier at Brookings about

577
00:31:04,200 --> 00:31:06,520
Speaker 3: his own economic record and a bit of a warning

578
00:31:07,200 --> 00:31:10,720
Speaker 3: of what might come with the next administration. Let's listen

579
00:31:10,760 --> 00:31:11,280
Speaker 3: to what he said.

580
00:31:11,640 --> 00:31:16,240
Speaker 10: You seem determined both steep universal tarffs on all important

581
00:31:16,240 --> 00:31:19,360
Speaker 10: goods brought to this country on the mistaken the league

582
00:31:20,280 --> 00:31:22,880
Speaker 10: as foreign countries will bear the cost of those tars

583
00:31:23,440 --> 00:31:26,600
Speaker 10: rather than the American consumer, who think pays for this.

584
00:31:28,160 --> 00:31:30,320
Speaker 10: I believe this approach is a major mistake.

585
00:31:32,680 --> 00:31:35,880
Speaker 3: We know Michael McKee how he feels I think about

586
00:31:36,080 --> 00:31:40,120
Speaker 3: Donald Trump's economic plans. How will his own economic record

587
00:31:41,000 --> 00:31:43,920
Speaker 3: be remembered here in the early stages as we look

588
00:31:44,000 --> 00:31:46,080
Speaker 3: back on the term of Joe Biden.

589
00:31:46,520 --> 00:31:49,640
Speaker 9: Well, I suspect it's going to be remembered reasonably well.

590
00:31:49,680 --> 00:31:53,920
Speaker 9: When you look at the overall macroeconomic statistics, and unemployment

591
00:31:54,040 --> 00:31:58,080
Speaker 9: was really low, Inflation went up because of the pandemic

592
00:31:58,160 --> 00:32:02,320
Speaker 9: and has come down significantly, still could before he leaves

593
00:32:02,320 --> 00:32:06,400
Speaker 9: office even farther. And growth has been very strong, stronger

594
00:32:06,400 --> 00:32:11,680
Speaker 9: than anticipated each quarter this year. So overall, in that sense,

595
00:32:11,960 --> 00:32:14,800
Speaker 9: his record is good. The issue is going to be

596
00:32:15,360 --> 00:32:18,920
Speaker 9: how historians square that with the fact that Americans felt

597
00:32:19,400 --> 00:32:23,080
Speaker 9: things were not good and voted basically the Democrats out

598
00:32:23,120 --> 00:32:23,560
Speaker 9: of office.

599
00:32:25,000 --> 00:32:27,600
Speaker 6: Yeah, and not just at the executive branch level. With

600
00:32:27,680 --> 00:32:29,520
Speaker 6: his success or, Mike just quickly on what he was

601
00:32:29,560 --> 00:32:33,080
Speaker 6: speaking about, this notion that tariffs are a bad idea.

602
00:32:33,080 --> 00:32:35,920
Speaker 6: A lot of economists obviously do think that will be inflationary.

603
00:32:35,960 --> 00:32:38,360
Speaker 6: How quickly could that translate into an end of the

604
00:32:38,400 --> 00:32:41,800
Speaker 6: cutting cycle for the Federal Reserve? Potentially it would.

605
00:32:41,560 --> 00:32:44,720
Speaker 9: Probably take a little while, Kley. Now Trump Trump comes

606
00:32:44,720 --> 00:32:51,160
Speaker 9: into office with some already with some executive orders, some

607
00:32:51,320 --> 00:32:55,880
Speaker 9: authorizations from the USTR to impose some tariffs, so he

608
00:32:55,920 --> 00:32:59,600
Speaker 9: could start right away. But then we have supply chains

609
00:32:59,600 --> 00:33:01,720
Speaker 9: that are fairly long. It takes a while for the

610
00:33:01,760 --> 00:33:04,840
Speaker 9: prices to get through. We do pay them in one

611
00:33:04,880 --> 00:33:08,080
Speaker 9: way or another, or companies in the US will pay them,

612
00:33:08,160 --> 00:33:10,840
Speaker 9: but it probably wouldn't show up at inflation until later

613
00:33:11,200 --> 00:33:16,120
Speaker 9: next year or in twenty twenty six, so the president

614
00:33:16,120 --> 00:33:18,280
Speaker 9: can do it for a while, and you know that

615
00:33:18,320 --> 00:33:20,640
Speaker 9: people are gonna be watching closely though, for any sign

616
00:33:20,680 --> 00:33:21,680
Speaker 9: of price increases.

617
00:33:22,800 --> 00:33:26,000
Speaker 6: Well we know Michael McKee will as always, who of

618
00:33:26,040 --> 00:33:28,720
Speaker 6: course covers international economics and policy for us here on

619
00:33:28,720 --> 00:33:31,320
Speaker 6: Bloomberg TV and Radio. Mike, thank you very much. We'll

620
00:33:31,360 --> 00:33:34,200
Speaker 6: be looking for Mike's analysis when that CPI data drops.

621
00:33:38,240 --> 00:33:41,440
Speaker 3: Thanks for listening to the Balance of Power podcast. Make

622
00:33:41,480 --> 00:33:44,440
Speaker 3: sure to subscribe if you haven't already, at Apple, Spotify,

623
00:33:44,520 --> 00:33:47,080
Speaker 3: or wherever you get your podcasts, and you can find

624
00:33:47,160 --> 00:33:50,400
Speaker 3: us live every weekday from Washington, DC at noontime Eastern

625
00:33:50,720 --> 00:33:52,120
Speaker 3: at Bloomberg dot com.