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Speaker 3: It's just Tuesday.
Speaker 1: We packed it a lot yesterday.
Speaker 3: I thought maybe you just have to check sometimes before
Speaker 3: you sign the check. I'm Joe Matthew in the Nation's capital.
Speaker 3: Good to see you Tuesday, yes edition of Balance of Power,
Speaker 3: the fastest show in politics here on Bloomberg Radio, on
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Speaker 3: to the races again for another couple of hours here
Speaker 3: with news. Well kind of on this funding deadline that's approaching.
Speaker 3: So here we are ten days out right. The government
Speaker 3: runs out of money on the twentieth of December. I've
Speaker 3: been talking about this every day for weeks. Nothing's changed
Speaker 3: really in terms of a deal to avoid this. Yet
Speaker 3: no one's talking about a shutdown. We're just going to
Speaker 3: drag this thing, I guess right to the last minute.
Speaker 3: But we do have a sense of what the next
Speaker 3: Congress is going to be doing when it comes to
Speaker 3: the sequence of dealing with the border, dealing with the
Speaker 3: Trump era tax cuts. And that's where we start our
Speaker 3: conversation today with Mike Dorning. Bloomberg Deputy Congressional Editor, has
Speaker 3: been covering this for some time. Mike, it's good to see.
Speaker 3: Welcome to be here always. So I want to pick
Speaker 3: through a couple of these. Let's just start with the
Speaker 3: funding deadline cr till mid March is what everyone's talking about.
Speaker 3: Why don't we just get to it.
Speaker 4: Well, there's a couple of things that are outstanding, but
Speaker 4: most importantly.
Speaker 5: Is the size of the disaster AID.
Speaker 4: Okay, and here you have several problems cross cutting and
Speaker 4: it makes it hard to work out something within the House.
Speaker 3: Republicans, this is agency funding to respond to the two
Speaker 3: big hurricanes.
Speaker 4: Yes, and also some of it going back to the
Speaker 4: Maui disaster.
Speaker 5: On the one.
Speaker 4: Hand, you don't really want to risk that people aren't
Speaker 4: going to have the money to keep working on the
Speaker 4: disaster AID in North Carolina and South Carolina and Hawaii
Speaker 4: and California, lots of other places there have been disasters.
Speaker 4: On the other hand, you have number one, a conservative
Speaker 4: group within the House, Republicans that always wants to pay
Speaker 4: for this by cutting other things. That says, hey, you know,
Speaker 4: we always have disasters, so you should be cutting something else,
Speaker 4: not just adding to the BOT. And then you also
Speaker 4: have people fighting over how much money there should be
Speaker 4: in disaster aid.
Speaker 5: So that's the main thing.
Speaker 4: That's the sticking point attention over how much money to
Speaker 4: give to disasters aid and whether you should pay for
Speaker 4: it or not.
Speaker 5: They're not going to.
Speaker 4: Pay for it in the end. That's just like something
Speaker 4: you have to get passed. Where that goes, but the
Speaker 4: size of it will be the main hold up. You
Speaker 4: can also use that as a carrot later on by
Speaker 4: not funding it enough so that when you need to
Speaker 4: get the next thing through the North Carolina, South Carolina, California, Hawaii,
Speaker 4: people are like, I got to vote for this.
Speaker 5: Because I can't cut off my constituents.
Speaker 1: So you have done this.
Speaker 5: Before, yeh ndaa.
Speaker 3: I'll ask you about funding the government in the new
Speaker 3: year and so forth. And by the way, are we
Speaker 3: going with March, is that the cr will fund this
Speaker 3: till March.
Speaker 5: We can We'll see it'll be some kind of somewhere soon.
Speaker 3: The Annual Defense Authorization here every year it's must pass.
Speaker 3: Looks like this will pass. We got top lines over
Speaker 3: the weekend. But really interesting that there's a fourteen percent
Speaker 3: pay raise for junior enlisted troops.
Speaker 5: Nobody can vote against that, right, Yeah. The problem is
Speaker 5: it is getting caught up in other things.
Speaker 4: You would think that it would get through, but they've
Speaker 4: got on the one hand, they want to do some
Speaker 4: things that with transgender troops that make progressives unhappy. There's
Speaker 4: some things that some of the conservatives feel like they
Speaker 4: want more things they want like restrictions on abortion and
Speaker 4: travel for abortion and things like that. So you can
Speaker 4: lose those things. My guess is, one way or another,
Speaker 4: whether you do the NDAA or you do some other
Speaker 4: stripped down thing, those troops will get that raise reasonably
Speaker 4: soon because like everyone like believes the junior enlisted troops
Speaker 4: need a raise. I mean, some of them are on
Speaker 4: food staffs. It's like these are people who are defending
Speaker 4: the gun trap. Maybe they should make a decent living.
Speaker 3: That's quite a sweetener there. If you're on the fence
Speaker 3: about all of this. So the transition, then the two
Speaker 3: words that seem to change the world for Pete Hegseth
Speaker 3: were good conversations Jony Ernst with a fairly benign statement,
Speaker 3: but many folks thought she might sink his nomination, her
Speaker 3: concerns over sexual assault in the military, her experience as
Speaker 3: a woman serving in combat. But boy, things have changed
Speaker 3: a lot this week. But he woke up on Monday,
Speaker 3: following the ernest statement and knowing that to be a
Speaker 3: meeting and hearing Donald Trump on Meet the Press. Wait
Speaker 3: a minute, maybe this guy, yea, he makes the.
Speaker 4: Great and she kind of revived that nomination a little
Speaker 4: yesterday He was definitely gasping for breath. There Two things
Speaker 4: happened over the weekend or late last week.
Speaker 5: And over the weekend.
Speaker 4: Number one, she had kind of been completely noncommittal, given
Speaker 4: him a very polite cold shoulder, and clearly was hoping
Speaker 4: that he would just die and Trump would withdraw it.
Speaker 4: But Trump moved in supported him some. And then the
Speaker 4: Conservatives came in hard on her and said, you know
Speaker 4: you don't you don't do more to support him, we'll
Speaker 4: challenge you in your primary in two years now. She
Speaker 4: hasn't said she'll support him, but she said some kind words,
Speaker 4: positive vibes and in Washington. That can be crucial because
Speaker 4: he just needs to make it to the next week,
Speaker 4: and without some sort of kind vibes, it was looking
Speaker 4: like you might not and you live to fight another day.
Speaker 5: You could win.
Speaker 3: Huge pressure campaign for Joni Ernst in this case, so
Speaker 3: you start to pull out the lens a little bit.
Speaker 3: Tulsi Gabbard being pretty well received yesterday on Capitol Hill,
Speaker 3: starting to answer questions about Syria and so forth, reminding
Speaker 3: people she has a top secret security clearance and her.
Speaker 5: Top secret is not that high a security cleer, but.
Speaker 3: Had that since her visit to Syria in twenty seventeen.
Speaker 3: I don't have one of those. And then there's RFK Junior,
Speaker 3: who's going to be holding meetings next week we're reading
Speaker 3: now on the Hill, will start his meetings. Is there
Speaker 3: a world at which all three of these controversial nominees
Speaker 3: initially seen as controversial are in fact confirmed.
Speaker 4: Yeah, there's definitely a world where all three are confirmed.
Speaker 4: It's it's it's quite possible. I still think Hegsith is
Speaker 4: probably in the most danger of those three because the
Speaker 4: disagreements with Tulsei Gabbard and RFK Junior are kind of
Speaker 4: policy ordered they may be very basic policy. You know,
Speaker 4: she was sort of seemed to be supportive of the
Speaker 4: Assad regime in Russia. Not the personal chant, but like hegxith,
Speaker 4: the personal challenges are of easy to understand for everyday
Speaker 4: Americans and salacious, you know, allegations of rape, you know, drunkenness,
Speaker 4: financial mismanagement. That's something that like tends to be more
Speaker 4: of a wildfire and the press and people talk about it.
Speaker 5: You might agree or disagree with.
Speaker 4: RFK june your sort of unorthodox views about vaccines or
Speaker 4: Tulsey's views about intervention abroad and foreign governments, but they're
Speaker 4: not like the thing that excites people as much.
Speaker 3: Well, it's really interesting. At the same time, maybe ask
Speaker 3: this slightly differently. Let's say they all get to their
Speaker 3: confirmation hearings. What kind of a show are Democrats going
Speaker 3: to put on here? Even if they are confirmed? These
Speaker 3: could be some very difficult and personal questions posted to
Speaker 3: Pete hegseeth could be for RFK Junior as well, his
Speaker 3: history with drugs, his past comments, allegations again of sexual
Speaker 3: advances that might not play too well publicly. What are
Speaker 3: democrats prepared to do in terms of making a stink
Speaker 3: about any of these people.
Speaker 4: I would imagine they are going to make a huge
Speaker 4: stink about all three of these people. And the important
Speaker 4: thing is each of these people are now being introduced
Speaker 4: to the American people. These impressions where our parents told
Speaker 4: us first impressions matter. Look someone in the eyes, shake
Speaker 4: them in the hand, shake their hand. These will set
Speaker 4: the public impressions of these high profile people. And in
Speaker 4: those confirmation hearings, I would be very surprised if you
Speaker 4: don't see Democrats pushing the allegations against Pete Hegseth, the
Speaker 4: sexual misconduct ones. I would be very surprised if you
Speaker 4: don't see a strong effort to characterize Tulsea Gabbard as
Speaker 4: a potential national security risk and RFK Junior his unorthodox
Speaker 4: views about health and vaccines and frame them for the
Speaker 4: American people. Whether they get approved or not a different question.
Speaker 4: And Democrats essentially can be outvoted. The question is some
Speaker 4: of them there might be some Republicans who also don't
Speaker 4: want to go along with them.
Speaker 3: Yeah, exactly, And of course it'll all be aired out
Speaker 3: in public. Even if they do make the grade. Some
Speaker 3: damage could be done here.
Speaker 4: Just the confirmation here, right, it's all the debate going.
Speaker 3: Absolutely. We have weeks until we're at the point of
Speaker 3: getting a vote. Mike, thank you so much. Mike Dorning
Speaker 3: covering the transition for US and the funding deadline in Washington.
Speaker 3: We're ten days out. We'll get this figured out at
Speaker 3: some point, and of course you'll hear about it right
Speaker 3: here on Balance of Power.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast Ken
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Speaker 6: I'm Kaylee Lines alongside Joe Matthew in Washington. This is
Speaker 6: Balance of Power on Bloomberg TV and radio, where we're
Speaker 6: continuing to keep track of the Trump transition and his
Speaker 6: nominees who have been frequenting Washington and more specifically Capitol
Speaker 6: Hill in recent days. Is is they try to make
Speaker 6: their cases for Senate confirmation. This includes some of the
Speaker 6: more controversial picks that are out there, including Tulsei Gabbert
Speaker 6: for Director of National Intelligence, Pete Hegseth for Secretary of Defense,
Speaker 6: and next week, as Joe mentioned just moments ago, RFK Junior,
Speaker 6: the nominee to lead to the Health and Human Services Department,
Speaker 6: will be making his rounds as well, all of them
Speaker 6: trying to make the case, Joe, to get to the
Speaker 6: requisite number of votes required to actually take these cabinet
Speaker 6: level positions. And it does seem that the calculation around
Speaker 6: the difficulty some of these may actually have in getting
Speaker 6: to confirmation has shifted within the last week. For Pete Hegseth.
Speaker 3: Especially, well, that's right, and he as Joni Ernst to
Speaker 3: thank largely for that good conversations. I believe the statement
Speaker 3: suggesting that they had another meeting, it went well and
Speaker 3: she would like to help him get to the hearing.
Speaker 3: The question was would he even get that far to
Speaker 3: take questions from senators publicly? Here Hegseth meeting today with
Speaker 3: Senators John Cornyn, Cydy Hyde Smith and Steve Danes were
Speaker 3: also following. As you mentioned, Tulci Gabbard with more meetings
Speaker 3: today as well. Yesterday was day one. She's just getting rolling.
Speaker 3: Hegseeth has been up there for some time now. Tom
Speaker 3: Cotton and Jim Rish, the two Republican senators meeting today
Speaker 3: with Tulci Gabbart incoming Senate Intelligence Chair, and then of
Speaker 3: course foreign relations. That's where we want to start our
Speaker 3: conversation with Megan Scully, who drives our congressional coverage here
Speaker 3: as our editor in Washington, DC. Megan, let's start with
Speaker 3: Pete Hegseth because Kaylee points out wisely that it's just
Speaker 3: the vibes have shifted quite a bit over the past
Speaker 3: couple of days. People were on a watch for him
Speaker 3: to withdraw a lah Matt Gates until Jony Ernst put
Speaker 3: out her statement allowed for another meeting, will he get
Speaker 3: to a hearing.
Speaker 5: So let's just.
Speaker 7: Step back for a second and explain why Joni Ernst
Speaker 7: is so pivotal here, and that is because she is
Speaker 7: a combat veteran, she sits on the Armed Services Committee,
Speaker 7: and she's a survivor of sexual assault, and the allegations
Speaker 7: which heg Seth has denied, of sexual sis out have
Speaker 7: been looming over this whole confirmation process. So she has
Speaker 7: been considered the key vote here, the lynch pin. There
Speaker 7: are several others who you know, such as Senator Collins
Speaker 7: Senator Murkowski who could still vote against him. Should note
Speaker 7: that Ernest has not said she'd support him, that she
Speaker 7: would just support him through the process get him to
Speaker 7: that confirmation hearing. So more work needs to be done,
Speaker 7: but certainly it seems more likely after her statement last
Speaker 7: night than at any other point of this confirmation process.
Speaker 6: Well, so then the question becomes to what extent we
Speaker 6: can attribute her tone here or her lack of willingness
Speaker 6: to this point to give a firm yes or firm
Speaker 6: no to the pressure she is getting from the magabase
Speaker 6: of the Republican Party and the threats to potentially primary
Speaker 6: her in her next election fight.
Speaker 7: Absolutely, a lot of this is about self preservation. She
Speaker 7: could face a primary from the right if she does
Speaker 7: not support Hegseth, and so she's feeling that pressure at home.
Speaker 7: It is certainly, you know, putting some of her legacy
Speaker 7: is indeed on the issue of military sexual assault, and
Speaker 7: sort of putting that at odds with her own, you know,
Speaker 7: instincts to survive in her next re election campaign.
Speaker 3: Interesting to hear, not only to your point from Jonie Ernst,
Speaker 3: but we're watching Susan Collins and Lisa Murkowski asked about
Speaker 3: why they were even having meetings with Pete hegseth to
Speaker 3: begin with. Colin said, how else am I going to
Speaker 3: get a sense of him and ask questions? Murkowski said,
Speaker 3: don't you want to know who your accusers are? What
Speaker 3: do you make of these replies in the pressure campaign
Speaker 3: that they might be feeling.
Speaker 7: So this is bringing back a lot of memories for
Speaker 7: I think many of us to the Brett Kavanaugh confirmation process,
Speaker 7: where Susan Collins and Murkowski were, you know, sort of
Speaker 7: the key votes and Collins ended up voting after a vote,
Speaker 7: after a speech on the floor, voting to support his nomination.
Speaker 7: And of course he'll to got confirmed despite the allegations
Speaker 7: of sexual assault, which he also denied. So but it
Speaker 7: is very standard. I think it would be malpractice for
Speaker 7: them not to sit down and talk to him. You know,
Speaker 7: he is a nominee, and you know, I think that
Speaker 7: the meetings are par for the course here. This is
Speaker 7: you know, they can ask him pressing questions and uh
Speaker 7: and and go back and forth in terms of his
Speaker 7: priorities should he be. In terms at the head of
Speaker 7: the Defense Department, Susan Collins will be the chairperson of
Speaker 7: the Appropriations Committee and half of all federal discretionary spending
Speaker 7: is defense spending, so she's certainly that is certainly something
Speaker 7: else she needs to talk to him about.
Speaker 6: I want to talk about Tolsey Gabbard as well, because
Speaker 6: the spotlight on her nomination has perhaps intensified given the
Speaker 6: events of the last several days and the downfall of
Speaker 6: the now oustra sized Syrian dictator Boscher Alasad, who of
Speaker 6: course she met with in Damascus years ago. Is that
Speaker 6: net helpful for her confirmation prospects because the question was
Speaker 6: about her relationship with the SOD who is no longer
Speaker 6: leading Syria and therefore isn't necessarily as much of a
Speaker 6: live question for an incoming administration as he would have
Speaker 6: been before.
Speaker 7: I think that is still very much to be determined
Speaker 7: as we sort out what is next in Syria. But
Speaker 7: the bigger question and concerns about Gabbard really have to
Speaker 7: do less with a SAD and more about her freelancing
Speaker 7: on a matter of very sensitive national security and foreign
Speaker 7: policy when she was a sitting member of the House
Speaker 7: and she went and met with Asad in Syria, So
Speaker 7: it's there will be I assume still questions about what
Speaker 7: she would do as the Director of National Intelligence when
Speaker 7: it comes to some of these other regimes in the world.
Speaker 3: Well, so we move on. If I can throw another
Speaker 3: log on the fire to RFK Junior, who will reportedly
Speaker 3: be on the Hill next week, Bloomberg reporting that he's
Speaker 3: got a meeting with Senator Tommy Tuberville. What are these hearings,
Speaker 3: assuming they get to hearings, going to be like for Democrats?
Speaker 3: Are they coming in off the top rope here hot
Speaker 3: with tough questions and the easels are going to be
Speaker 3: set up in the hearing rooms or is it happening
Speaker 3: now in advance of the hearings.
Speaker 7: So right now we're seeing most of the nominees just
Speaker 7: meeting with Republicans they need They know that most of
Speaker 7: these nominations are only going to get passed on a
Speaker 7: party line vote, at least the controversial ones, and that's
Speaker 7: if they're lucky they can get that party line vote.
Speaker 7: Going into the hearings, Democrats are certainly, you know, this
Speaker 7: will be their moment to grill these nominees and to
Speaker 7: go back to the Kavanaugh confirmation once again, you know,
Speaker 7: we saw Democrats who were in the minority really grilling.
Speaker 7: You know, there were famous moments of Kamala Harris and
Speaker 7: Amy Klobash are all people who went on to run
Speaker 7: for the presidency, really you know, hitting the spotlight and
Speaker 7: making national news, and we will certainly see that, particularly
Speaker 7: with the most controversial of these nominees.
Speaker 6: So we have a lot to look forward to come January, obviously,
Speaker 6: but this Congress, before the next one can hold these
Speaker 6: hearings and do all of their business in twenty twenty five,
Speaker 6: they still have business to figure out this year, including
Speaker 6: ten days from now a funding deadline, yes to continue
Speaker 6: the government funding and to not shut it down. With
Speaker 6: just ten days out, we still have no clarity on
Speaker 6: what kind of continuing resolution or other solution will be
Speaker 6: put forward. How much longer is this going to take?
Speaker 7: Although you know, you're a veteran of these negotiations, you
Speaker 7: know that nothing actually comes together until the last few
Speaker 7: hours before a shutdown. You know, I feel like there
Speaker 7: is a very little appetite for any kind of disruption
Speaker 7: in government spending, you know, particularly as the Congress is
Speaker 7: coming to a close, and as is the Biden administration.
Speaker 7: We're going to see most of that funding kicked to
Speaker 7: the spring and where they can a Republican Congress and
Speaker 7: a Republican administration can hash out the details. Where we
Speaker 7: might see some movement or we expect to see some
Speaker 7: movement in the coming weeks, is on the issue of
Speaker 7: emergency aid, and we could see a package coming together
Speaker 7: pretty quickly on that, and.
Speaker 6: It probably will be close or not close to the
Speaker 6: one hundred billion dollars requested by the White House.
Speaker 7: I think that there are there is talk even among
Speaker 7: Republicans of getting close to that, but just a few
Speaker 7: votes could swing anything either way, so I know that
Speaker 7: to be true.
Speaker 6: All right. Bloomberg's Megan Scully, who leads our Capital Influence
Speaker 6: team here in Washington, thank you for joining us here
Speaker 6: on Balance of Power. And we of course have much
Speaker 6: more coming up on the program as well as we
Speaker 6: consider not just what's happening in the transition, but the
Speaker 6: incredible circumstances this transition is happening in is there's been
Speaker 6: really incredible developments in geopolitics, with what has happened in Syria,
Speaker 6: still an issue for the Biden administration to deal with,
Speaker 6: but one that the Trump administration will inherit.
Speaker 3: Yeah, that's for sure. We'll have more on that coming
Speaker 3: up later, and certainly the timing with Tulsea Gabbard arriving
Speaker 3: in the Senate is quite remarkable. They wouldn't believe the
Speaker 3: stuff if you wrote.
Speaker 2: It that way.
Speaker 3: I'm Joe Matthew alongside Kaylee Lions. We'll have a lot
Speaker 3: more ahead right here on Bloomberg.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast.
Speaker 2: Catch Just Live weekdays at noon Eastern on Applecarplay and
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Speaker 2: wherever you get your podcasts, or watch us live on YouTube.
Speaker 3: There is a very pronounced conversation underway right now with
Speaker 3: a lame duck session in Congress, the wind down of
Speaker 3: the Biden administration and the uptake here of the transition
Speaker 3: to the next Trump administration about what to do with Syria.
Speaker 3: Following this incredibly fast moving series of events over the weekend, Kaylee,
Speaker 3: we saw Damascus fall, Bishar Ala, Sad move to Moscow,
Speaker 3: and everyone is moving to their own benefit here, including
Speaker 3: Israel into that buffer zone along the Syrian border and
Speaker 3: deploying troops beyond that buffer zone for the first time
Speaker 3: since nineteen seventy four, with a lot of questions about
Speaker 3: their motivations as well.
Speaker 6: Well, and the Israeli Defense Force is saying today that
Speaker 6: they have been targeting strategic weapons stockpiles in Syria, and
Speaker 6: in fact, according to the IDF, within the last forty
Speaker 6: eight hours, have struck most of those stockpiles. We're talking
Speaker 6: here about things like C two sea missiles, anti aircraft
Speaker 6: batteries and the like. The intention here, of course, to
Speaker 6: make sure that while there is this power vacuum in
Speaker 6: Syria right now. A lack of clarity about what exactly
Speaker 6: happens now that Asad is gone a dictator deposed, the
Speaker 6: rebels that overtook him and ultimately pushed him out of
Speaker 6: the country are designated terrorist organization by the US HTS.
Speaker 6: Is not clear yet when you talk to experts on
Speaker 6: the Middle East, as we have done over the last
Speaker 6: several days, as to whether or not they are an
Speaker 6: entity that can be entrusted entirely at this.
Speaker 3: Time, Yeap, this is something that we wanted to talk
Speaker 3: to Wadham's about, who runs our national security coverage out
Speaker 3: of Washington, d C. And has been rather busy the
Speaker 3: last couple of days. Nick, It's great to see you.
Speaker 3: When will we have answers to these questions because we're
Speaker 3: looking at obviously a power vacuum. We have seen one
Speaker 3: of these individuals reach to become a formal prime minister.
Speaker 3: How long will that hold?
Speaker 8: What's happening well, I mean this is the question that
Speaker 8: the US is really grappling with, and obviously Israel as well.
Speaker 8: I mean, the challenge here is everybody was very happy
Speaker 8: to see Bashar al Asad go, but really there are
Speaker 8: just so many questions about HTS, as you mentioned, a
Speaker 8: designated terrorist group. So far, the administration line is they're
Speaker 8: saying the right things. They're saying they want to empower Syrians,
Speaker 8: maybe potentially do some sort of transitional government. But you know,
Speaker 8: there are so many different factions who seem to have
Speaker 8: control of various parts of Syrian Some of them are
Speaker 8: I mean the Islamic State. I mean, these are the
Speaker 8: guys that the US spent untold hundreds of millions of
Speaker 8: dollars to eradicate a few years ago, and they are
Speaker 8: in some way on the rise again. So there's a
Speaker 8: real question. I think that's why you see some of
Speaker 8: these moves by Israel hitting, hitting these military targets. They
Speaker 8: do not want this material to fall into the wrong hand.
Speaker 8: So I mean a ton of unknowns right now.
Speaker 6: Well, and it's not just Israel. We should point out
Speaker 6: the US has targeted dozens of ISIS sites, specifically in
Speaker 6: parts of Syria. And yet at the same time we're
Speaker 6: hearing from both the Biden administration and we've heard from
Speaker 6: Donald Trump that they are still trying to keep a
Speaker 6: distance to a certain degree here with what's going to
Speaker 6: happen next. If there is that concern about a potential
Speaker 6: resurgence of ISIS, why won't the US get more intimately
Speaker 6: involved in this?
Speaker 8: I mean, so, this is what they have said for
Speaker 8: a long time, this is not our fight. We do
Speaker 8: not want to get involved, and then they it could
Speaker 8: become our fight, rightly, because it has been our fight.
Speaker 8: I mean, Donald Trump, people forget this. Donald Trump, in
Speaker 8: his first administration, his first overseas sort of formal military
Speaker 8: action was strikes against Syria in twenty seventeen. During this
Speaker 8: was during his summit with xijin Ping and mar Laga
Speaker 8: where he slipped out and ordered these Tomahawk missile strikes
Speaker 8: on Syria. Then he did so again after Syria used
Speaker 8: chemical after the Asad regime used chemical weapons against its
Speaker 8: own people. So you have this pattern where the administration
Speaker 8: says they don't want to have anything to do with Syria,
Speaker 8: and then they have a lot to do with Syria. Obviously,
Speaker 8: the Islamic State and as you mentioned, I mean they
Speaker 8: pronounced the Islamic State eradicated, but clearly it keeps sort
Speaker 8: of cropping back up and they have to do these strikes.
Speaker 8: The big question is going to be what happens if
Speaker 8: the Islamic State affiliates itself in some way with HTS
Speaker 8: and you start to see not just a situation where
Speaker 8: the Islamic State is sort of poking its head above
Speaker 8: the parapet as it were, but in a situation where
Speaker 8: they are actually helping run the government. Then does the
Speaker 8: US want to go to war with the of self
Speaker 8: proclaimed new government of Syria. That is something they really
Speaker 8: do not want to have to answer.
Speaker 3: Considering the small number of American troops in Syria at
Speaker 3: the moment, to what extent can the US or should
Speaker 3: the US leverage allied Kurdish forces still in the country.
Speaker 8: Well, the Kurdish forces question is also hugely complicated because
Speaker 8: Turkey another country that is trying to seize some sort
Speaker 8: of advantage here amid the chaos in Syria. Sees the
Speaker 8: Kurdish fighters as a sworn enemy. This has been a
Speaker 8: huge point of tension with the United States. And obviously
Speaker 8: when you have a situation where there's so many other
Speaker 8: priorities for the US where they want Turkey's help on
Speaker 8: squeezing Iran, on squeezing Russia NATO membership. Who knows what's
Speaker 8: going to happen with Ukraine. I mean, there's just so
Speaker 8: many How big of a priority are these Kurdish fighters
Speaker 8: going to be for this administration, given Turkey feels so
Speaker 8: strongly about it. So it's a real question of also prioritization,
Speaker 8: which incidentally is what you saw with Russia why they
Speaker 8: are not supporting Syria. They'reorities were Ukraine. And now we
Speaker 8: have what exactly the situation we've seen unfolded.
Speaker 6: Well, and now Russia has potentially lost a critical port
Speaker 6: in the Mediterranean as a result. On Iran though, which
Speaker 6: you just mentioned. Obviously, Syria and Lebanon border each other.
Speaker 6: Iran has used Syria as a conduit to get weapons
Speaker 6: to Hesblow, which already has been seriously diminished by the
Speaker 6: Israeli offensive over the last several months. Now that potential
Speaker 6: line of replenishment has been broken. So what does that
Speaker 6: do to not just Aron's ability to operate with its
Speaker 6: most powerful proxy, but also do for Israel as it
Speaker 6: still has conflict ongoing.
Speaker 4: With these proxies.
Speaker 8: Right well, I mean they are now in a putative
Speaker 8: ceasefire with Hesbolah, so they've sort of declared at least
Speaker 8: for the time being, a cessation of hostilities. I mean, look,
Speaker 8: in some ways, Israel is going to proclaim this as
Speaker 8: a major victory. They went after has Belah, they put
Speaker 8: the squeeze on Iran, and you have essentially seen Iran
Speaker 8: and has Belah retreating from Syria's created this situation we
Speaker 8: have now, so you know it is it's an extraordinary moment.
Speaker 8: I mean, the chess pieces are just moving all over
Speaker 8: and who has control and who doesn't are just very
Speaker 8: very difficult to figure out. But you know what we
Speaker 8: are starting to see, which is worrisome is after the
Speaker 8: initial almost jubilation about the fact that Asad has left,
Speaker 8: it's like, okay, well who comes now? And this is
Speaker 8: going to be very very complicated Israel, as you mentioned,
Speaker 8: I mean, yes, you can say, okay, they are defending
Speaker 8: themselves outside of this buffer zone, but a lot of
Speaker 8: people will see this as a land grab and you know,
Speaker 8: changing the facts on the ground right as they jockey
Speaker 8: for position.
Speaker 3: Well, interesting comments from Benjamin Netnyahu yesterday, effectively taking credit
Speaker 3: for what happened. In his remarks to the nation, he
Speaker 3: said his country had reshaped the Middle East as we
Speaker 3: promised we would do. We've heard so much about the
Speaker 3: errors made by Russia and leading to this. To what
Speaker 3: extent is he correct?
Speaker 8: Well, I mean, certainly going after Hesbo Lah and essentially
Speaker 8: decimating them, putting that pressure on Iran. I mean, you know,
Speaker 8: the US there was a call a senior administration official
Speaker 8: did with reporters over the weekend as this happened. There
Speaker 8: was a little bit of credit taking there as well
Speaker 8: by the US. Listen, we are we created the conditions
Speaker 8: for a very brittle regime with sanctions both on Iran
Speaker 8: and Syria. So a lot of folks taking credit. Will
Speaker 8: be very interesting to see how many are taking credit
Speaker 8: six months from now if they don't like this new
Speaker 8: government that takes control and Surrey and what the situation
Speaker 8: is on the ground there and whether it's a force
Speaker 8: for stability or further instability in the region.
Speaker 3: Well, almost like he's seen this before. Nick Wadham's great
Speaker 3: to see you. Thanks for the insights and the reporting.
Speaker 3: Our national security team is doing great work Kayley on
Speaker 3: the terminal and online on the story. If you're looking
Speaker 3: for the latest in the Middle East, look no further.
Speaker 3: We've got a big day tomorrow, CPI Day. Yeah, on
Speaker 3: the road here when it comes to kind of gauging
Speaker 3: the next move by the FED, but also getting the
Speaker 3: political backdrop to this incoming administration.
Speaker 6: Yeah, although I think for our audience here on Bloomberg
Speaker 6: TV and Radio, the FED is going to be the
Speaker 6: most important question that is addressed first next Wednesday. Of course,
Speaker 6: the decision, and it's a kind of live one. It's
Speaker 6: not clear if we're going to get another twenty five
Speaker 6: basis point cut, and tomorrow's data could help the market
Speaker 6: decide one way or another.
Speaker 3: What it thinks is going to happen, for sure. Michael
Speaker 3: McKee is watching this for us, of course, and always
Speaker 3: a pleasure to spend a couple of minutes with our
Speaker 3: economics editor at Bloomberg TV in radio. Michael, what are
Speaker 3: you looking for tomorrow dighty thirty?
Speaker 9: Well, we're actually looking for something we haven't seen in
Speaker 9: a while, which is a bit of a rise in
Speaker 9: inflation CPI on a month over a month basis, the
Speaker 9: headline expected to go up a tenth of a percentage
Speaker 9: point faster than it has over the last four months,
Speaker 9: three tenths gain. But that would push the year over
Speaker 9: year number up to two point seven percent from two
Speaker 9: point six And while it may be energy related, while
Speaker 9: maybe housing related, in things the FED can effect, just
Speaker 9: the fact that it goes up is not going to
Speaker 9: make people happy.
Speaker 6: Well, so if it goes up slightly, why would rates
Speaker 6: go down slightly? Mike, what's the justification?
Speaker 9: Well, the betting at the FED is this is just temporary.
Speaker 9: It's kind of a one off thing. And if you
Speaker 9: deconstruct what we see in the CPI, almost all of
Speaker 9: the rise that we're getting these days is in housing,
Speaker 9: and the Fed's been waiting for that to drop, and
Speaker 9: there isn't much they can do. They can lower interest
Speaker 9: rates to try to bring down housing costs, but there's
Speaker 9: just not enough housing supply available to make a major difference,
Speaker 9: so they're kind of looking through that right now. The
Speaker 9: other question is what's happened to food. We know that
Speaker 9: with the October hurricanes, there may have been some problems
Speaker 9: with fruits and vegetables and things like that. So there
Speaker 9: may be things that the Fed can't do a lot about,
Speaker 9: and they think the economy is in good enough shape
Speaker 9: that they can lower rates, and that they should because
Speaker 9: they don't want to see unemployment start to rise.
Speaker 3: Joe Biden speaking a little bit earlier at Brookings about
Speaker 3: his own economic record and a bit of a warning
Speaker 3: of what might come with the next administration. Let's listen
Speaker 3: to what he said.
Speaker 10: You seem determined both steep universal tarffs on all important
Speaker 10: goods brought to this country on the mistaken the league
Speaker 10: as foreign countries will bear the cost of those tars
Speaker 10: rather than the American consumer, who think pays for this.
Speaker 10: I believe this approach is a major mistake.
Speaker 3: We know Michael McKee how he feels I think about
Speaker 3: Donald Trump's economic plans. How will his own economic record
Speaker 3: be remembered here in the early stages as we look
Speaker 3: back on the term of Joe Biden.
Speaker 9: Well, I suspect it's going to be remembered reasonably well.
Speaker 9: When you look at the overall macroeconomic statistics, and unemployment
Speaker 9: was really low, Inflation went up because of the pandemic
Speaker 9: and has come down significantly, still could before he leaves
Speaker 9: office even farther. And growth has been very strong, stronger
Speaker 9: than anticipated each quarter this year. So overall, in that sense,
Speaker 9: his record is good. The issue is going to be
Speaker 9: how historians square that with the fact that Americans felt
Speaker 9: things were not good and voted basically the Democrats out
Speaker 9: of office.
Speaker 6: Yeah, and not just at the executive branch level. With
Speaker 6: his success or, Mike just quickly on what he was
Speaker 6: speaking about, this notion that tariffs are a bad idea.
Speaker 6: A lot of economists obviously do think that will be inflationary.
Speaker 6: How quickly could that translate into an end of the
Speaker 6: cutting cycle for the Federal Reserve? Potentially it would.
Speaker 9: Probably take a little while, Kley. Now Trump Trump comes
Speaker 9: into office with some already with some executive orders, some
Speaker 9: authorizations from the USTR to impose some tariffs, so he
Speaker 9: could start right away. But then we have supply chains
Speaker 9: that are fairly long. It takes a while for the
Speaker 9: prices to get through. We do pay them in one
Speaker 9: way or another, or companies in the US will pay them,
Speaker 9: but it probably wouldn't show up at inflation until later
Speaker 9: next year or in twenty twenty six, so the president
Speaker 9: can do it for a while, and you know that
Speaker 9: people are gonna be watching closely though, for any sign
Speaker 9: of price increases.
Speaker 6: Well we know Michael McKee will as always, who of
Speaker 6: course covers international economics and policy for us here on
Speaker 6: Bloomberg TV and Radio. Mike, thank you very much. We'll
Speaker 6: be looking for Mike's analysis when that CPI data drops.
Speaker 3: Thanks for listening to the Balance of Power podcast. Make
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