1
00:00:00,880 --> 00:00:04,360
Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch us

2
00:00:04,400 --> 00:00:07,520
Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the

3
00:00:07,640 --> 00:00:10,760
Speaker 1: iHeartRadio app and the Bloomberg Business app, or listen on

4
00:00:10,800 --> 00:00:12,800
Speaker 1: demand wherever you get your podcasts.

5
00:00:14,160 --> 00:00:17,079
Speaker 2: I'm Joe, Matthew and Washington, where we're still waiting on

6
00:00:17,160 --> 00:00:20,280
Speaker 2: a deal. That's the real headline here. No deal as

7
00:00:20,280 --> 00:00:22,560
Speaker 2: we approach the X date. But questions are growing louder

8
00:00:22,560 --> 00:00:26,159
Speaker 2: now from Republicans in the House, particularly about whether the

9
00:00:26,239 --> 00:00:29,160
Speaker 2: date is real. You've heard some question this here on

10
00:00:29,360 --> 00:00:33,360
Speaker 2: sound On before remembering that, Janet Yellen sent another letter

11
00:00:33,440 --> 00:00:35,720
Speaker 2: yesterday reiterating her take, we run out of money as

12
00:00:35,760 --> 00:00:39,960
Speaker 2: soon as June one. Fast forward to this morning. House

13
00:00:40,000 --> 00:00:42,640
Speaker 2: Majority Leader Stevescalise in a briefing.

14
00:00:42,479 --> 00:00:45,199
Speaker 3: Well, we'd like to see more transparency on how they

15
00:00:45,240 --> 00:00:48,000
Speaker 3: come to that date. But Janet Yell and herself actually

16
00:00:48,040 --> 00:00:51,159
Speaker 3: left the door open to delaying that in her tweets yesterday.

17
00:00:51,240 --> 00:00:54,960
Speaker 3: The comments that she sent out yesterday implied that it's

18
00:00:55,040 --> 00:00:58,800
Speaker 3: June first or later, giving some openness to the idea

19
00:00:58,840 --> 00:01:01,560
Speaker 3: that June first may not be the so called X state. So,

20
00:01:02,320 --> 00:01:04,560
Speaker 3: you know, haven't really been able to see a lot

21
00:01:04,600 --> 00:01:07,640
Speaker 3: of transparency, but it looks like they're hedging now and

22
00:01:07,720 --> 00:01:09,880
Speaker 3: opening up the door to move that date.

23
00:01:09,720 --> 00:01:11,880
Speaker 2: Back, hedging and opening up the door. To be clear,

24
00:01:11,959 --> 00:01:14,240
Speaker 2: no one at the Treasure Department is actually saying that,

25
00:01:14,720 --> 00:01:18,040
Speaker 2: at least not publicly. But Washington woke up to a

26
00:01:18,080 --> 00:01:20,520
Speaker 2: big story today saying the Treasury Department sent a memo

27
00:01:20,600 --> 00:01:24,360
Speaker 2: to government agencies asking if some of these payments next

28
00:01:24,360 --> 00:01:27,160
Speaker 2: month might be flexible. The Washington Post says the administration

29
00:01:27,280 --> 00:01:29,200
Speaker 2: is looking for ways to buy more time here. The

30
00:01:29,200 --> 00:01:34,320
Speaker 2: Treasury responds, quote classic Washington speak. To produce an accurate

31
00:01:34,360 --> 00:01:38,560
Speaker 2: forecast around the debt limit is critical. The Treasury have

32
00:01:38,640 --> 00:01:43,520
Speaker 2: updated information on the magnitude and timing of agency payments unquote.

33
00:01:44,840 --> 00:01:47,520
Speaker 2: So no shocker that Republicans are seizing on this. Let's

34
00:01:47,520 --> 00:01:51,559
Speaker 2: get the latest from Bloomberg's Eric Wasson, who's been helping

35
00:01:51,640 --> 00:01:55,400
Speaker 2: us spearhead our coverage here at Bloomberg. And I'm sure

36
00:01:55,400 --> 00:01:57,240
Speaker 2: he's looking forward to a deal being struck then he

37
00:01:57,280 --> 00:01:59,840
Speaker 2: can talk to his family again. Eric, welcome back. Is

38
00:01:59,840 --> 00:02:01,760
Speaker 2: the XT date really in doubt here or is this

39
00:02:01,840 --> 00:02:03,560
Speaker 2: kind of the latest talking point from the Hill.

40
00:02:04,640 --> 00:02:06,440
Speaker 4: Well, you know, I think they do generally doubt, at

41
00:02:06,520 --> 00:02:09,359
Speaker 4: least as some of the House Republicans like Matt Gates

42
00:02:09,360 --> 00:02:12,160
Speaker 4: who came out and said Yellen has given us less

43
00:02:12,200 --> 00:02:16,080
Speaker 4: math than an eighth grader with their algebra assignment. They

44
00:02:16,120 --> 00:02:18,320
Speaker 4: do want to see more evidence. But it also does

45
00:02:18,400 --> 00:02:21,040
Speaker 4: help the negotiations for Republicans.

46
00:02:21,080 --> 00:02:22,360
Speaker 5: If you have a couple of people who.

47
00:02:22,320 --> 00:02:24,880
Speaker 4: Quote sound like mad men who are willing to default,

48
00:02:25,200 --> 00:02:29,240
Speaker 4: that could potentially give more leverage to McCarthy, just like

49
00:02:29,320 --> 00:02:33,240
Speaker 4: people talking about the fourteenth Amendment or the coin on

50
00:02:33,280 --> 00:02:36,960
Speaker 4: the progressive side might give Biden a little more. So,

51
00:02:37,080 --> 00:02:39,400
Speaker 4: you know, basically I would see I would see it

52
00:02:39,440 --> 00:02:42,119
Speaker 4: in the context of the theater surrounding the talks which

53
00:02:42,160 --> 00:02:44,600
Speaker 4: are happening behind closed doors. A few feature of me

54
00:02:45,000 --> 00:02:46,200
Speaker 4: even as we speak.

55
00:02:46,080 --> 00:02:48,960
Speaker 2: So you're staking this whole thing out here. Do we

56
00:02:49,040 --> 00:02:52,920
Speaker 2: know if Speaker McCarthy will talk to President Biden today?

57
00:02:52,919 --> 00:02:54,480
Speaker 2: He suggested as much last night.

58
00:02:55,560 --> 00:02:58,440
Speaker 4: He just came in and told my colleague Ari and

59
00:02:58,520 --> 00:03:00,880
Speaker 4: I that he has not talked to Biden yet and

60
00:03:00,919 --> 00:03:03,239
Speaker 4: he's not scheduled to go there today. But he didn't

61
00:03:03,520 --> 00:03:05,680
Speaker 4: say that he wouldn't talk to him. So at this

62
00:03:05,720 --> 00:03:07,760
Speaker 4: point they haven't talked, but they could connect later.

63
00:03:08,000 --> 00:03:10,560
Speaker 2: So and of course this isn't some big grand meeting

64
00:03:10,560 --> 00:03:12,320
Speaker 2: in the Oval Office every time, right, he could pick

65
00:03:12,360 --> 00:03:14,359
Speaker 2: up the phone actually talk to the President without the

66
00:03:14,440 --> 00:03:15,639
Speaker 2: drama we saw yesterday.

67
00:03:16,440 --> 00:03:18,160
Speaker 4: Yes, and I think there are more phone calls than

68
00:03:18,200 --> 00:03:21,120
Speaker 4: are reported between the two inside Eric.

69
00:03:21,200 --> 00:03:24,959
Speaker 2: Lastly, is Patrick McHenry sort of the lead negotiator now.

70
00:03:25,200 --> 00:03:27,400
Speaker 2: He seemed to step up in a pretty big way yesterday.

71
00:03:28,480 --> 00:03:30,600
Speaker 4: You know, he is a pretty big I think part

72
00:03:30,639 --> 00:03:33,960
Speaker 4: of it was Kerk Graves was not immediately available at

73
00:03:33,960 --> 00:03:36,960
Speaker 4: that time, but you know, he and Graves are both

74
00:03:36,960 --> 00:03:39,520
Speaker 4: the lead negotiators. I think you know, they're both people

75
00:03:39,520 --> 00:03:41,960
Speaker 4: who are serious about the dead ceiling, serious about getting

76
00:03:41,960 --> 00:03:46,120
Speaker 4: a deal. They're not from the extreme conference. But grave

77
00:03:46,240 --> 00:03:48,520
Speaker 4: is a key player. He's sort of been a mediator

78
00:03:48,520 --> 00:03:51,600
Speaker 4: between what's called the Five Families process and the House Conference,

79
00:03:51,600 --> 00:03:54,920
Speaker 4: between the five different ideological groups. So he knows where

80
00:03:54,920 --> 00:03:57,400
Speaker 4: the fault lines lie. And I think he's really what

81
00:03:57,480 --> 00:04:00,240
Speaker 4: he says, you know, we have to cut spending next

82
00:04:00,320 --> 00:04:02,200
Speaker 4: year compared to this year. I think that's a real

83
00:04:02,240 --> 00:04:04,480
Speaker 4: red line for them. I don't think McCarthy can sell

84
00:04:04,520 --> 00:04:07,200
Speaker 4: it to the majority of his conference without being able

85
00:04:07,200 --> 00:04:09,280
Speaker 4: to say we cut spending because they've made such a

86
00:04:09,280 --> 00:04:09,840
Speaker 4: big deal of it.

87
00:04:11,400 --> 00:04:13,760
Speaker 2: Eric, thank you, appreciate your standing by You need Eric

88
00:04:13,840 --> 00:04:16,240
Speaker 2: on that wall, and that's why he's there. Eric Watson Bloomberg,

89
00:04:16,240 --> 00:04:20,000
Speaker 2: a congressional reporter. This is the man staking out the meetings,

90
00:04:20,040 --> 00:04:21,920
Speaker 2: waiting for the goods. When you see a headline run

91
00:04:21,960 --> 00:04:24,080
Speaker 2: across the terminal, that's because Eric just heard it with

92
00:04:24,120 --> 00:04:26,920
Speaker 2: his own ears. And I've been deeply curious to know

93
00:04:26,960 --> 00:04:28,800
Speaker 2: what Miam mcguinnis thinks about all of this. It's been

94
00:04:28,800 --> 00:04:30,760
Speaker 2: a couple of weeks since we've spoken with the president

95
00:04:31,120 --> 00:04:34,279
Speaker 2: of the Committee for a Responsible Federal Budget, and here

96
00:04:34,320 --> 00:04:37,040
Speaker 2: she is now, Maya. I'm wondering your take on this

97
00:04:37,320 --> 00:04:42,279
Speaker 2: Washington Post story about the Treasury Department memo. Are lawmakers

98
00:04:42,360 --> 00:04:49,080
Speaker 2: reading into this, are Republicans even projecting? Or is this

99
00:04:49,279 --> 00:04:51,120
Speaker 2: just the way it goes when a Treasury department is

100
00:04:51,120 --> 00:04:53,600
Speaker 2: trying to figure out exactly how much money it has left.

101
00:04:54,480 --> 00:04:54,800
Speaker 4: Yeah.

102
00:04:54,920 --> 00:04:57,440
Speaker 6: I think the points Eric made were exactly right. But

103
00:04:57,680 --> 00:05:02,120
Speaker 6: one it is impossible to note specific X state and

104
00:05:02,200 --> 00:05:06,400
Speaker 6: I would say if there is one earnest, straightforward Secretary

105
00:05:06,400 --> 00:05:08,559
Speaker 6: of the Treasury, it is Janet Yellen and I believe

106
00:05:08,600 --> 00:05:10,919
Speaker 6: that she is telling it like she believe it, that

107
00:05:10,960 --> 00:05:14,359
Speaker 6: there is no kind of purposeful manipulation going on. But

108
00:05:14,440 --> 00:05:16,560
Speaker 6: the truth is, we don't know on a day by

109
00:05:16,640 --> 00:05:19,320
Speaker 6: day basis how much revenue are coming into the treasury

110
00:05:19,320 --> 00:05:21,840
Speaker 6: and exactly what that X state will be. But if

111
00:05:21,839 --> 00:05:25,200
Speaker 6: you take a step back, it shouldn't come down to that.

112
00:05:25,600 --> 00:05:28,760
Speaker 6: We shouldn't be waiting until the exact last minute to

113
00:05:28,760 --> 00:05:31,520
Speaker 6: get a deal that has to get done completed in

114
00:05:31,560 --> 00:05:34,120
Speaker 6: this way. And so it kind of terrifies me the

115
00:05:34,240 --> 00:05:37,000
Speaker 6: energy that is being spent on as of you know,

116
00:05:37,080 --> 00:05:40,080
Speaker 6: can we wait? Are there more days, hours, minute seconds

117
00:05:40,120 --> 00:05:42,880
Speaker 6: instead of how about looks like we're pretty close to

118
00:05:42,920 --> 00:05:45,240
Speaker 6: a deal. This is great, let's get this done and

119
00:05:45,320 --> 00:05:47,159
Speaker 6: let's never wait until the last minute.

120
00:05:47,360 --> 00:05:51,080
Speaker 2: Again, it appears that revenue is off the table. Kevin

121
00:05:51,160 --> 00:05:54,159
Speaker 2: McCarthy has at least been saying that Joe Biden doesn't

122
00:05:54,200 --> 00:05:56,800
Speaker 2: seem to think that it is off the table. And

123
00:05:56,839 --> 00:05:59,000
Speaker 2: I just wonder your ideas here, because we talk a

124
00:05:59,000 --> 00:06:02,039
Speaker 2: lot about cutting spend, but raising money is another matter.

125
00:06:02,080 --> 00:06:04,280
Speaker 2: And there were a couple of really important comments last

126
00:06:04,320 --> 00:06:06,520
Speaker 2: evening around the meeting. One was at the beginning and

127
00:06:06,560 --> 00:06:09,600
Speaker 2: that was President Biden referring to loopholes, tax loopholes.

128
00:06:09,600 --> 00:06:13,160
Speaker 7: Here he is to cut spending, but here's a disagreement.

129
00:06:13,240 --> 00:06:15,880
Speaker 8: We have to I think we should be looking at

130
00:06:16,040 --> 00:06:19,640
Speaker 8: tax loopholes and make sure the wealthy pays their fresh share.

131
00:06:19,640 --> 00:06:20,799
Speaker 1: I think revenue matters.

132
00:06:21,120 --> 00:06:24,160
Speaker 2: I think revenue matters, he said, And then in the driveway,

133
00:06:24,240 --> 00:06:25,960
Speaker 2: Kevin McCarthy was asked about it.

134
00:06:26,120 --> 00:06:29,880
Speaker 9: No, just to be clear, why when you talk about

135
00:06:30,000 --> 00:06:33,440
Speaker 9: raising revenue, if you look at the fifty year average

136
00:06:33,440 --> 00:06:36,800
Speaker 9: of America, how much money have we brought in by revenue,

137
00:06:37,000 --> 00:06:41,080
Speaker 9: that would be roughly about seventeen percent of GDP. Right now,

138
00:06:41,120 --> 00:06:45,600
Speaker 9: we're bringing almost twenty percent of GDP in in revenue. Now,

139
00:06:45,760 --> 00:06:48,520
Speaker 9: how many times does that happen in modern history? Only

140
00:06:48,600 --> 00:06:51,840
Speaker 9: twice in nineteen forty four and in two thousand. So

141
00:06:51,880 --> 00:06:54,359
Speaker 9: you're bringing in more money at a higher percentage at

142
00:06:54,400 --> 00:06:55,120
Speaker 9: any other time.

143
00:06:55,279 --> 00:06:58,719
Speaker 2: That's remarkable, By the way, if those numbers are true. Maya,

144
00:06:58,800 --> 00:07:01,240
Speaker 2: because so many people point back to the twenty seventeen

145
00:07:01,360 --> 00:07:05,839
Speaker 2: tax cuts, is sort of goring the revenue sides of

146
00:07:05,960 --> 00:07:08,520
Speaker 2: our budget. But I wonder your take on this. If

147
00:07:08,920 --> 00:07:12,360
Speaker 2: you want a responsible federal budget, is it only cuts

148
00:07:12,480 --> 00:07:16,560
Speaker 2: or should we be essentially undoing some of those seventeen

149
00:07:16,600 --> 00:07:17,200
Speaker 2: tax cuts.

150
00:07:18,320 --> 00:07:20,520
Speaker 6: Listen, there is no question that to deal with the

151
00:07:20,560 --> 00:07:24,760
Speaker 6: fiscal situation that we have, everything should be on the

152
00:07:24,760 --> 00:07:27,520
Speaker 6: table and the negotiations that are taking place. And I

153
00:07:27,560 --> 00:07:29,120
Speaker 6: am glad that it looks like we're going to have

154
00:07:29,160 --> 00:07:31,720
Speaker 6: some saving along with the debt ceiling increase, because that

155
00:07:31,760 --> 00:07:34,000
Speaker 6: makes sense and we've done it many times in the past.

156
00:07:34,400 --> 00:07:36,680
Speaker 6: But the negotiations that are taking place are only on

157
00:07:36,760 --> 00:07:39,800
Speaker 6: a tiny portion of the budget, and frankly not the

158
00:07:39,840 --> 00:07:43,000
Speaker 6: most problematic portion. So if we were serious, and I

159
00:07:43,040 --> 00:07:45,000
Speaker 6: hope what they will choose to do is include some

160
00:07:45,120 --> 00:07:48,400
Speaker 6: kind of fiscal commissions that does this. We would put

161
00:07:48,880 --> 00:07:52,040
Speaker 6: the big biggest programs, socialcurity and medicare, both of which

162
00:07:52,080 --> 00:07:55,160
Speaker 6: are headed towards insolvency if we don't make changes. The

163
00:07:55,200 --> 00:07:58,000
Speaker 6: rest of the budget, including defense, which may or may

164
00:07:58,040 --> 00:08:00,200
Speaker 6: not be able to have cuts, but they're saving to

165
00:08:00,240 --> 00:08:02,320
Speaker 6: be had. There may be increases they have to have also,

166
00:08:02,880 --> 00:08:04,920
Speaker 6: and absolutely revenues.

167
00:08:04,640 --> 00:08:05,680
Speaker 10: Would be on the table.

168
00:08:06,120 --> 00:08:08,960
Speaker 6: That said, that's not going to happen in this negotiation.

169
00:08:09,360 --> 00:08:11,640
Speaker 6: For some reason, and I will never really understand this.

170
00:08:11,800 --> 00:08:14,720
Speaker 6: The Senate never participated They didn't put forth a budget

171
00:08:14,880 --> 00:08:17,320
Speaker 6: or a framework or anything, and if they had, they

172
00:08:17,360 --> 00:08:19,880
Speaker 6: might have said, these are the revenue increases we want,

173
00:08:19,960 --> 00:08:22,960
Speaker 6: but that never became part of this negotiation until last minute,

174
00:08:22,960 --> 00:08:27,560
Speaker 6: which means it's unlikely to work. There are a couple options. One,

175
00:08:27,720 --> 00:08:30,000
Speaker 6: there are things like user fees, which aren't the same

176
00:08:30,080 --> 00:08:33,280
Speaker 6: as revenues that have been used and supported by Republicans

177
00:08:33,280 --> 00:08:35,320
Speaker 6: in the past, that maybe could be part of the deal,

178
00:08:35,800 --> 00:08:38,960
Speaker 6: or other things that would sort of help the Democrats

179
00:08:39,000 --> 00:08:41,280
Speaker 6: get some of the policies that they want. But I

180
00:08:41,320 --> 00:08:44,600
Speaker 6: will say, in terms of Speaker McCarthy's point about high revenues,

181
00:08:45,440 --> 00:08:47,960
Speaker 6: I wish that were the case. Those numbers are coming

182
00:08:48,000 --> 00:08:51,960
Speaker 6: down quickly. Revenues were at a very high level last year.

183
00:08:52,840 --> 00:08:54,520
Speaker 6: We had money from crypto, we had a lot of

184
00:08:54,520 --> 00:08:57,160
Speaker 6: money that was coming in early. It does not appear

185
00:08:57,160 --> 00:08:59,559
Speaker 6: that they are going to remain that high, and now

186
00:08:59,640 --> 00:09:01,920
Speaker 6: we have revenues that are much lower and closer to

187
00:09:01,920 --> 00:09:04,040
Speaker 6: what the CBO and others were expecting when they said

188
00:09:04,080 --> 00:09:07,440
Speaker 6: tax cuts wouldn't generate all this additional revenue. So I

189
00:09:07,480 --> 00:09:09,480
Speaker 6: don't want I mean, we all wish tax cuts could

190
00:09:09,480 --> 00:09:12,240
Speaker 6: pay for themselves, but they don't and I hope that

191
00:09:12,240 --> 00:09:15,160
Speaker 6: that kind of that doesn't become a storyline again. The

192
00:09:15,240 --> 00:09:16,959
Speaker 6: real issue is we need to look at the biggest

193
00:09:16,960 --> 00:09:20,400
Speaker 6: problematic parts of the budget, socialcurity, medicare, and taxes. They

194
00:09:20,440 --> 00:09:22,080
Speaker 6: all need to be on the table whenever we do

195
00:09:22,160 --> 00:09:25,080
Speaker 6: a really big deal that gets at the overall problem.

196
00:09:25,280 --> 00:09:27,559
Speaker 6: But this is looking like it will be a great,

197
00:09:27,800 --> 00:09:28,760
Speaker 6: great first step.

198
00:09:29,360 --> 00:09:31,360
Speaker 2: So what are you hearing from leaders right now? Maya

199
00:09:31,480 --> 00:09:34,640
Speaker 2: bring us in from the darkness. Here is Patrick McHenry

200
00:09:34,679 --> 00:09:36,280
Speaker 2: the closer. Are they going to get this done the

201
00:09:36,320 --> 00:09:37,280
Speaker 2: next couple of days.

202
00:09:38,040 --> 00:09:41,640
Speaker 6: I think Congressman mckenry and Congressman Graves are both. I

203
00:09:41,679 --> 00:09:43,839
Speaker 6: think that what I'm hearing is everybody's doing a very

204
00:09:43,840 --> 00:09:46,560
Speaker 6: good job negotiating. And the main thing is I'm not

205
00:09:46,640 --> 00:09:49,200
Speaker 6: hearing much about the details, which means they're not leaking,

206
00:09:49,200 --> 00:09:51,640
Speaker 6: and that is excellent. So I'm very real sured about

207
00:09:51,679 --> 00:09:54,080
Speaker 6: the team on all sides. We're doing the negotiations. I

208
00:09:54,120 --> 00:09:56,920
Speaker 6: think what Speaker McCarthy has said out there about what

209
00:09:57,040 --> 00:09:59,319
Speaker 6: matters to them is right, which is they really would

210
00:09:59,320 --> 00:10:02,120
Speaker 6: like to see it cut indiscretionary spending. There's a lot

211
00:10:02,120 --> 00:10:04,520
Speaker 6: of ways to get at that number, and then you

212
00:10:04,559 --> 00:10:07,240
Speaker 6: can kind of come to the zone of possible agreement

213
00:10:07,280 --> 00:10:08,960
Speaker 6: by looking at the other parts of the bill to

214
00:10:09,400 --> 00:10:11,599
Speaker 6: how long will those caps last? I don't think it

215
00:10:11,600 --> 00:10:13,840
Speaker 6: will be the full ten years. How long will the

216
00:10:13,840 --> 00:10:16,400
Speaker 6: debt ceiling increase before? I think it will be longer

217
00:10:16,440 --> 00:10:18,560
Speaker 6: than the one year that the Republicans had asked for.

218
00:10:19,040 --> 00:10:22,199
Speaker 6: What other savings may be included in this? And again

219
00:10:22,360 --> 00:10:24,640
Speaker 6: my big hope, will there be a fiscal commission that

220
00:10:24,640 --> 00:10:27,240
Speaker 6: looks at the real drivers of the problem and also

221
00:10:27,480 --> 00:10:29,920
Speaker 6: reforming the debt ceiling, which we need to get done

222
00:10:29,920 --> 00:10:32,160
Speaker 6: with and for all, because we can't do this drama.

223
00:10:32,240 --> 00:10:34,720
Speaker 6: None of us can take this again and it's not

224
00:10:34,800 --> 00:10:35,640
Speaker 6: good for the country.

225
00:10:35,640 --> 00:10:38,839
Speaker 2: Obviously, PTSD from all of these mayas. When you say

226
00:10:38,840 --> 00:10:40,920
Speaker 2: a reform, do we mean align with the fiscal year?

227
00:10:42,679 --> 00:10:45,200
Speaker 6: No for debtsull reform. First off, you can't get rid

228
00:10:45,240 --> 00:10:46,480
Speaker 6: of it entirely because.

229
00:10:46,160 --> 00:10:48,840
Speaker 2: They get rid of it. Okay, well, no, I wouldn't.

230
00:10:48,840 --> 00:10:51,960
Speaker 6: I wouldn't get rid of it entirely unless it's replaced

231
00:10:52,000 --> 00:10:54,880
Speaker 6: by something else. Because we have no constraint on our borrowing.

232
00:10:55,160 --> 00:10:57,680
Speaker 6: We don't budget. We haven't passed a budget on time

233
00:10:57,720 --> 00:11:00,720
Speaker 6: in twenty years, and if you do decide the budget,

234
00:11:01,280 --> 00:11:03,560
Speaker 6: there is no limit on how much you can borrow,

235
00:11:03,640 --> 00:11:05,480
Speaker 6: So we do need a limit on the borrowing. But

236
00:11:05,559 --> 00:11:07,959
Speaker 6: it shouldn't be this crazy setup where you are able

237
00:11:07,960 --> 00:11:11,600
Speaker 6: to pass legislation that does approve of borrowing and then

238
00:11:11,720 --> 00:11:14,440
Speaker 6: months or years later refuse to pay those bills. It

239
00:11:14,440 --> 00:11:16,640
Speaker 6: should be aligned so that if you're voting to borrow,

240
00:11:16,760 --> 00:11:19,400
Speaker 6: you're also voting to increase the debt felling or we

241
00:11:19,520 --> 00:11:22,079
Speaker 6: change it so it's a policy that doesn't have default

242
00:11:23,000 --> 00:11:26,240
Speaker 6: as the hammer, because that's just a bigger punishment than

243
00:11:26,280 --> 00:11:27,720
Speaker 6: we can absorb as an economy.

244
00:11:28,080 --> 00:11:30,920
Speaker 2: As a world, it does feel like madness every time

245
00:11:30,960 --> 00:11:33,160
Speaker 2: we come back around to this, Maya, thank you so much,

246
00:11:33,240 --> 00:11:36,320
Speaker 2: Maya McGinnis delivering us from this madness to the President

247
00:11:36,360 --> 00:11:38,520
Speaker 2: of the Committee for a Responsible Federal Budget. I say

248
00:11:38,520 --> 00:11:40,480
Speaker 2: that because it's nice to talk to grownups, and that's

249
00:11:40,520 --> 00:11:42,880
Speaker 2: what we try to do here. As we cut through

250
00:11:42,920 --> 00:11:44,560
Speaker 2: the talking points a bit, and to that end, our

251
00:11:44,600 --> 00:11:46,720
Speaker 2: panel is with us Rick Davis and Jeanie Shansey, no

252
00:11:46,720 --> 00:11:49,920
Speaker 2: Bloomberg Politics contributors. We're going to be talking a little

253
00:11:49,920 --> 00:11:53,000
Speaker 2: bit with Congressman Jim McGovern from Massachusetts to get the

254
00:11:53,040 --> 00:11:55,520
Speaker 2: Democratic side of this, Rick Davis, I wonder your thoughts

255
00:11:55,520 --> 00:11:58,520
Speaker 2: here following the big meeting last night and the posturing

256
00:11:58,559 --> 00:12:01,240
Speaker 2: this morning. Listen to the way the talking points changed.

257
00:12:01,280 --> 00:12:03,760
Speaker 2: This is Tom Emmer, the Republican whip in the House.

258
00:12:03,840 --> 00:12:07,400
Speaker 8: We're nine days out from the Biden administration's default deadline,

259
00:12:08,200 --> 00:12:14,160
Speaker 8: and one thing remains absolutely clear. Whatever default Joe Biden

260
00:12:14,320 --> 00:12:17,120
Speaker 8: is threatening is on Joe Biden.

261
00:12:17,280 --> 00:12:20,280
Speaker 2: That's a pretty interesting change of tune here, because Joe

262
00:12:20,280 --> 00:12:22,319
Speaker 2: Biden thought that that's what everyone was going to say

263
00:12:22,320 --> 00:12:26,040
Speaker 2: about Speaker McCarthy. Rick, the Republicans have been very deliberate

264
00:12:26,320 --> 00:12:28,760
Speaker 2: and very nimble with their talking points here this week.

265
00:12:28,800 --> 00:12:30,640
Speaker 2: This is a new layer, right, Yeah, there's.

266
00:12:30,440 --> 00:12:32,360
Speaker 11: No question, and I think that the GOP in the

267
00:12:32,360 --> 00:12:38,640
Speaker 11: House have gotten right flanked and really are driving the

268
00:12:38,920 --> 00:12:43,080
Speaker 11: messaging around who to blame. The bad news is that

269
00:12:43,120 --> 00:12:45,760
Speaker 11: they think that that's actually something that matters right now,

270
00:12:46,240 --> 00:12:49,040
Speaker 11: which means that they don't have a lot of confidence

271
00:12:49,040 --> 00:12:51,920
Speaker 11: that there's a deal that they're going to get that

272
00:12:52,040 --> 00:12:55,640
Speaker 11: will make them happy. And unfortunately this kind of blame

273
00:12:55,679 --> 00:12:58,600
Speaker 11: game also digs in the opposite sides. Right of course,

274
00:12:58,679 --> 00:13:01,320
Speaker 11: now the Democrats are like, oh, we can't let them

275
00:13:01,360 --> 00:13:02,520
Speaker 11: blame you know, Biden.

276
00:13:02,600 --> 00:13:02,840
Speaker 2: Biden.

277
00:13:03,440 --> 00:13:05,920
Speaker 11: Biden's on the ticket next year. We got to like

278
00:13:06,000 --> 00:13:08,839
Speaker 11: defend that guy, and so they'll be there'll be a

279
00:13:08,880 --> 00:13:12,200
Speaker 11: requisite pushback. I mean, you know, politics is physics, opposite

280
00:13:12,200 --> 00:13:16,160
Speaker 11: and equal reactions. So I do think it's a it's

281
00:13:16,160 --> 00:13:19,720
Speaker 11: a negative when it comes to actually having an atmosphere

282
00:13:20,200 --> 00:13:22,040
Speaker 11: that can promote getting a deal done.

283
00:13:22,280 --> 00:13:25,160
Speaker 2: Genie, it's according to Tom Emmery, what does he say

284
00:13:25,240 --> 00:13:31,839
Speaker 2: Joe Biden's default deadline? As Steve Scalice questions the accuracy

285
00:13:32,080 --> 00:13:34,280
Speaker 2: of the X date, what does that tell us about

286
00:13:34,280 --> 00:13:35,000
Speaker 2: where we are here?

287
00:13:35,600 --> 00:13:40,160
Speaker 12: Well, it's it's frustrating beyond belief because the reality is

288
00:13:40,160 --> 00:13:42,800
Speaker 12: is that it is the Republicans who don't want to

289
00:13:42,800 --> 00:13:45,000
Speaker 12: pay the debts that the nation has incurred and who

290
00:13:45,000 --> 00:13:47,720
Speaker 12: have walked us to this point. We do need to

291
00:13:47,800 --> 00:13:50,640
Speaker 12: talk about spending in this country. But Mayo was one

292
00:13:50,640 --> 00:13:53,760
Speaker 12: thousand percent right. We are talking about a tiny portion

293
00:13:53,800 --> 00:13:56,280
Speaker 12: of the budget, not the biggest, not the most problematic,

294
00:13:56,520 --> 00:13:59,040
Speaker 12: and the Republican push for cuts that limit Save and

295
00:13:59,080 --> 00:14:03,800
Speaker 12: Grow plan it was cutting forty seven percent from discretionary programs.

296
00:14:04,120 --> 00:14:06,640
Speaker 12: And then you want to couple that with madness. You

297
00:14:06,720 --> 00:14:09,319
Speaker 12: also had Kevin McCarthy talking about not letting the Trump

298
00:14:09,400 --> 00:14:12,800
Speaker 12: tax cut expire adds another three trillion dollars to the debt.

299
00:14:12,960 --> 00:14:15,760
Speaker 12: So you know, if they're really serious about spending they

300
00:14:15,800 --> 00:14:17,960
Speaker 12: we would be having a serious discussion. And I say

301
00:14:17,960 --> 00:14:19,760
Speaker 12: that on both sides because we do need to talk

302
00:14:19,800 --> 00:14:22,800
Speaker 12: about social Security, Medicare, and defense and we are not

303
00:14:22,920 --> 00:14:25,320
Speaker 12: doing that. And Joe Biden is right, it can only

304
00:14:25,320 --> 00:14:27,160
Speaker 12: be spending cuts, although we need them. It has to

305
00:14:27,200 --> 00:14:31,960
Speaker 12: be revenue as well.

306
00:14:34,640 --> 00:14:38,040
Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch the

307
00:14:38,080 --> 00:14:41,920
Speaker 1: program live weekdays at one Eastern on Bloomberg Radio, the

308
00:14:42,000 --> 00:14:45,320
Speaker 1: tune in app, Bloomberg dot Com, and the Bloomberg Business App.

309
00:14:45,480 --> 00:14:48,320
Speaker 1: You can also listen live on Amazon Alexa from our

310
00:14:48,360 --> 00:14:53,600
Speaker 1: flagship New York station. Just say Alexa play Bloomberg eleven thirty.

311
00:14:54,360 --> 00:14:57,600
Speaker 2: We add the voice of Congressman Jim McGovern, the Democrat

312
00:14:57,680 --> 00:15:01,160
Speaker 2: from Massachusetts, ranking member on the Rules commit who's one

313
00:15:01,160 --> 00:15:04,560
Speaker 2: of the gatekeepers of legislation that gets to the floor. Congressman,

314
00:15:04,560 --> 00:15:07,160
Speaker 2: it's great to have you back here. We're talking about

315
00:15:07,160 --> 00:15:11,040
Speaker 2: this shifting narrative around this whole debt ceiling debate. As

316
00:15:11,040 --> 00:15:13,840
Speaker 2: your Republican colleagues in the House now doubt whether the

317
00:15:14,000 --> 00:15:15,000
Speaker 2: X date is real?

318
00:15:15,160 --> 00:15:15,480
Speaker 4: Do you.

319
00:15:17,360 --> 00:15:20,640
Speaker 5: Well, I have no reason to doubt that it's real.

320
00:15:20,680 --> 00:15:24,440
Speaker 5: I mean, I mean, to have this conversation Joe that

321
00:15:24,520 --> 00:15:27,680
Speaker 5: somehow you know June Forest is in a real date

322
00:15:28,400 --> 00:15:33,480
Speaker 5: is ludicrous. I mean, because you know, I mean, our

323
00:15:33,560 --> 00:15:36,760
Speaker 5: leading economists are saying that that's the date. I mean,

324
00:15:36,920 --> 00:15:39,480
Speaker 5: let's get let's get on with it, let's get this done.

325
00:15:40,200 --> 00:15:43,720
Speaker 2: What are you hearing from the leadership at this point, Congressman,

326
00:15:43,760 --> 00:15:45,920
Speaker 2: Because it's kind of difficult for us to tell what's real.

327
00:15:45,960 --> 00:15:49,600
Speaker 2: There's so much bluster and so much noise here. Congressman

328
00:15:49,880 --> 00:15:52,760
Speaker 2: Patrick McHenry, who was in the room last evening as

329
00:15:52,760 --> 00:15:55,080
Speaker 2: one of the Republican negotiators, says he doesn't feel the

330
00:15:55,200 --> 00:15:59,760
Speaker 2: urgency of coming from this White House. Obviously, the White

331
00:15:59,760 --> 00:16:03,360
Speaker 2: House says it's got non starters with Kevin McCarthy. But

332
00:16:03,440 --> 00:16:06,160
Speaker 2: I feel like that's that's for me to to to

333
00:16:06,280 --> 00:16:09,080
Speaker 2: sort of metabolize in the media. What's really going on.

334
00:16:09,120 --> 00:16:10,640
Speaker 2: Are we actually on the verge of a deal?

335
00:16:10,920 --> 00:16:13,640
Speaker 5: Well, let's let's be honest here. I mean, the only

336
00:16:13,680 --> 00:16:17,720
Speaker 5: reason why we're at this crisis moment is because Republicans

337
00:16:17,760 --> 00:16:20,680
Speaker 5: have put us here. I mean, the debt sailing under

338
00:16:20,720 --> 00:16:26,240
Speaker 5: Trump was dealt dealt with three different occasions, you know, independently. Uh.

339
00:16:26,280 --> 00:16:28,720
Speaker 5: You know, Trump is on record as saying that, you know,

340
00:16:28,760 --> 00:16:31,760
Speaker 5: this was it's important that we not politicize the dead sailing.

341
00:16:32,440 --> 00:16:35,280
Speaker 5: Now that he's no longer president, he's okay with politicizing it.

342
00:16:35,360 --> 00:16:38,360
Speaker 5: So the Republicans, but this is a terrible president. We

343
00:16:38,400 --> 00:16:39,760
Speaker 5: want to have a talk, We want to have a

344
00:16:39,760 --> 00:16:43,760
Speaker 5: discussion about spending, spending priorities, and you know, we ought

345
00:16:43,760 --> 00:16:45,840
Speaker 5: to be we ought we ought to have that discussion

346
00:16:46,240 --> 00:16:49,680
Speaker 5: during the budget or during the appropriations process. So this

347
00:16:49,760 --> 00:16:53,360
Speaker 5: is all this is. This is a a manufactured crisis

348
00:16:53,680 --> 00:16:56,800
Speaker 5: that quite frankly, could adversely impact our markets, could adversely

349
00:16:57,480 --> 00:17:02,120
Speaker 5: uh impact uh the economy overall. You can see a recession.

350
00:17:02,160 --> 00:17:04,720
Speaker 5: I mean this, this this is dangerous. This is a

351
00:17:04,800 --> 00:17:07,440
Speaker 5: dangerous game that they're playing, and they are to stop it.

352
00:17:07,960 --> 00:17:10,480
Speaker 5: They're in control of the House. You know, they can

353
00:17:10,640 --> 00:17:14,280
Speaker 5: report out appropriation bills that reflect their values. The Senate

354
00:17:14,320 --> 00:17:18,320
Speaker 5: has to uh ast bills, do we reconcile them, and

355
00:17:18,359 --> 00:17:20,480
Speaker 5: they go to the to the present. That's the way

356
00:17:20,520 --> 00:17:24,600
Speaker 5: this process works. But this notion that you know we're

357
00:17:24,640 --> 00:17:26,719
Speaker 5: giving a ransom, note that if you don't do this,

358
00:17:27,400 --> 00:17:30,320
Speaker 5: you know we're gonna we're gonna ruin the economy. It's

359
00:17:30,359 --> 00:17:32,160
Speaker 5: it's it's unconscionable that we're at this point.

360
00:17:33,320 --> 00:17:38,159
Speaker 2: Your your passion issue, Congressman, is hunger, solving the hunger

361
00:17:38,200 --> 00:17:41,440
Speaker 2: crisis in this country. And I wonder if this conversation

362
00:17:41,520 --> 00:17:44,760
Speaker 2: about adding work requirements to SNAP and other social benefits

363
00:17:44,760 --> 00:17:47,560
Speaker 2: as a non starter for you, could could you see

364
00:17:47,600 --> 00:17:49,840
Speaker 2: yourself voting against a deal that includes.

365
00:17:49,480 --> 00:17:52,880
Speaker 5: Them, Yes, I would, I mean without look at I'm

366
00:17:52,880 --> 00:17:56,560
Speaker 5: sick and tired of of of trying to deal with

367
00:17:56,560 --> 00:18:00,119
Speaker 5: our budgetary challenges by screwing poor people. And that's what

368
00:18:00,200 --> 00:18:03,880
Speaker 5: this is about. There are already work requirements as part

369
00:18:03,920 --> 00:18:07,200
Speaker 5: of the SNAP program for able body adults without dependence.

370
00:18:07,800 --> 00:18:11,960
Speaker 5: Those who are not fulfilling those work requirements are people

371
00:18:12,000 --> 00:18:17,320
Speaker 5: graduating out of foster care, veterans, people with undi undiagnosed

372
00:18:17,320 --> 00:18:20,520
Speaker 5: mental illnesses. I mean, do we really want to take

373
00:18:20,680 --> 00:18:23,520
Speaker 5: food away from these individuals? And by the way, such

374
00:18:23,520 --> 00:18:25,480
Speaker 5: as taking food away from them in the short term,

375
00:18:26,080 --> 00:18:28,720
Speaker 5: if you don't comply with some of these rules, you

376
00:18:28,840 --> 00:18:31,840
Speaker 5: lose the benefit for three years, really, I mean, and

377
00:18:32,119 --> 00:18:33,719
Speaker 5: at the end of the day, it's going to mean

378
00:18:33,800 --> 00:18:37,680
Speaker 5: nothing in terms of getting our fiscal health and order.

379
00:18:37,720 --> 00:18:41,920
Speaker 5: So let's have the conversation on food benefits. I think

380
00:18:41,960 --> 00:18:44,960
Speaker 5: we will win. I think most people in this country

381
00:18:45,000 --> 00:18:48,240
Speaker 5: do not believe that the way you get people to

382
00:18:48,280 --> 00:18:51,159
Speaker 5: go to work is by making them hungry. But this

383
00:18:51,240 --> 00:18:54,679
Speaker 5: should not be linked to the dead sailing periods. And

384
00:18:54,720 --> 00:18:57,720
Speaker 5: by the way, some of the ideas that the Republicans

385
00:18:57,720 --> 00:19:01,760
Speaker 5: are floating include work with US vironments for mothers with

386
00:19:01,920 --> 00:19:04,760
Speaker 5: children as young as seven years old. I mean, this

387
00:19:05,640 --> 00:19:07,720
Speaker 5: is where they're going. They're not going after tax cuts

388
00:19:07,720 --> 00:19:11,280
Speaker 5: from millionaires and billionaires. We're not touching the Pentagon budget.

389
00:19:11,320 --> 00:19:14,600
Speaker 5: They can't find a nickel in the Pentagon budget, or're

390
00:19:14,600 --> 00:19:19,680
Speaker 5: not talking about any other any revenues. And instead their

391
00:19:19,760 --> 00:19:23,800
Speaker 5: target is poor people. And that tells you all that

392
00:19:23,840 --> 00:19:25,679
Speaker 5: you need to know about where their values are.

393
00:19:25,760 --> 00:19:28,200
Speaker 2: Well, let's just stick on that for a moment, because

394
00:19:28,240 --> 00:19:31,359
Speaker 2: Republican lawmakers who have come on the air say, look,

395
00:19:31,440 --> 00:19:34,640
Speaker 2: this is this is not the deal that some are

396
00:19:34,680 --> 00:19:37,160
Speaker 2: making it out to be. We're talking about able bodied

397
00:19:37,200 --> 00:19:39,400
Speaker 2: adults with no dependence.

398
00:19:39,840 --> 00:19:42,600
Speaker 10: Right, that's Okay, so so just.

399
00:19:42,600 --> 00:19:46,280
Speaker 2: Respond to that, why why shouldn't they.

400
00:19:44,520 --> 00:19:48,199
Speaker 5: Don't without defendant could be a veteran with post traumatic

401
00:19:48,240 --> 00:19:51,359
Speaker 5: stress syndrome. It could be an individual with an undiagnosed

402
00:19:51,400 --> 00:19:55,320
Speaker 5: mental illness. Could be somebody who's you know, who is

403
00:19:55,440 --> 00:19:59,560
Speaker 5: qualified for disability but has not yet gone through the process.

404
00:20:00,040 --> 00:20:02,760
Speaker 5: It could be somebody who just graduated out of foster care.

405
00:20:03,359 --> 00:20:05,640
Speaker 5: I mean, the bottom line is the people that they

406
00:20:05,640 --> 00:20:11,080
Speaker 5: are going after are the most vulnerable people in our society. Uh.

407
00:20:11,119 --> 00:20:14,280
Speaker 5: And you know, uh, you know, and and and let's

408
00:20:14,280 --> 00:20:18,320
Speaker 5: be clear, this is a sliver, a tiny sliver of

409
00:20:18,359 --> 00:20:22,040
Speaker 5: the program. And I just can't believe that the way

410
00:20:22,080 --> 00:20:27,000
Speaker 5: you want to achieve savings is by going after this

411
00:20:27,640 --> 00:20:32,520
Speaker 5: incredibly vulnerable population, you know. And by the way, you know,

412
00:20:33,200 --> 00:20:35,399
Speaker 5: we we also know that this is the beginning. The

413
00:20:35,440 --> 00:20:38,359
Speaker 5: Republicans have a bill that would actually go after able

414
00:20:38,359 --> 00:20:41,880
Speaker 5: bodied delts with dependents, including mothers, which children as youngest seven.

415
00:20:42,160 --> 00:20:45,119
Speaker 5: But the idea that somehow this is the norm, as

416
00:20:45,200 --> 00:20:48,399
Speaker 5: Kevin McCarthy said, you know that that people are just collecting,

417
00:20:48,840 --> 00:20:51,120
Speaker 5: you know, a snap benefit by sitting on your couch

418
00:20:51,160 --> 00:20:54,240
Speaker 5: and doing nothing is ludicrous. And by the way, you know,

419
00:20:54,359 --> 00:20:56,880
Speaker 5: just so people understand, you know what the average snap

420
00:20:56,920 --> 00:21:00,520
Speaker 5: benefit is per person per day. It's six bucks, that's it,

421
00:21:01,040 --> 00:21:03,440
Speaker 5: two dollars per meal. You can't even buy a cup

422
00:21:03,480 --> 00:21:06,639
Speaker 5: of coffee for two dollars. So you know, they're going

423
00:21:06,720 --> 00:21:11,000
Speaker 5: after this buneral population, trying to take away a easily

424
00:21:11,320 --> 00:21:16,320
Speaker 5: six dollars a day from these individuals. And somehow they're

425
00:21:16,320 --> 00:21:19,480
Speaker 5: trying to masquerade as being physically responsible. They don't want

426
00:21:19,480 --> 00:21:23,600
Speaker 5: to touch there. You know, they tax cuts for billionaires

427
00:21:23,600 --> 00:21:26,719
Speaker 5: and millions of big corporations. This is ridiculous, you know,

428
00:21:26,800 --> 00:21:29,600
Speaker 5: and this really is about values. And by the way,

429
00:21:29,640 --> 00:21:32,119
Speaker 5: the majority of able body that dotes without dependents, the

430
00:21:32,240 --> 00:21:36,359
Speaker 5: majority who can work, they actually work. So the work

431
00:21:36,359 --> 00:21:39,840
Speaker 5: requirement that's in place, you know that that compels them

432
00:21:39,880 --> 00:21:42,280
Speaker 5: to work, they're complying with it. But we need to

433
00:21:42,359 --> 00:21:45,520
Speaker 5: allow for there to be exceptions and for them to

434
00:21:45,520 --> 00:21:48,199
Speaker 5: be waivers. Whant it is appropriate and but you know,

435
00:21:48,400 --> 00:21:49,680
Speaker 5: and by the way, if you live in a in

436
00:21:49,760 --> 00:21:52,560
Speaker 5: a in a rural community, uh in a in an

437
00:21:52,600 --> 00:21:56,000
Speaker 5: area where there's no public transportation, and you know, I

438
00:21:56,000 --> 00:21:59,480
Speaker 5: mean you can't get to a work training program. You know,

439
00:21:59,560 --> 00:22:02,520
Speaker 5: you who's your benefit for three years. It's just not right.

440
00:22:02,680 --> 00:22:05,119
Speaker 2: Okay, So Congressman, and this is very helpful for us

441
00:22:05,119 --> 00:22:09,480
Speaker 2: to get the view of progressive Democrats in the House.

442
00:22:09,560 --> 00:22:09,879
Speaker 1: Right now.

443
00:22:09,880 --> 00:22:12,119
Speaker 2: If you were in the room and you had to

444
00:22:12,160 --> 00:22:14,560
Speaker 2: hash this out with Kevin McCarthy, where would you cut?

445
00:22:15,840 --> 00:22:17,640
Speaker 5: Yeah, well, I mean I look at it. I would

446
00:22:17,680 --> 00:22:20,840
Speaker 5: I would revisit some of these tax cuts for the

447
00:22:21,040 --> 00:22:23,720
Speaker 5: for the for millionaires and billionaires of big corporations. I'd

448
00:22:23,720 --> 00:22:26,719
Speaker 5: go after subsidies for the fossil fuel industry. I'd go

449
00:22:26,760 --> 00:22:29,520
Speaker 5: after the Pentagon budget. I mean we we we ought to.

450
00:22:29,640 --> 00:22:31,320
Speaker 5: I mean we we want we want a tough but

451
00:22:31,480 --> 00:22:34,720
Speaker 5: lean military budget. And I can't believe for the life

452
00:22:34,760 --> 00:22:37,560
Speaker 5: of me that people can't figure out, you know, where

453
00:22:37,600 --> 00:22:40,000
Speaker 5: the waste is and and to and to clean that up.

454
00:22:40,119 --> 00:22:42,600
Speaker 5: But I wouldn't be going after poor people. I wouldn't

455
00:22:42,600 --> 00:22:44,000
Speaker 5: be going after the most vulnerable.

456
00:22:44,200 --> 00:22:46,119
Speaker 2: So Pentagon spending should be on the table.

457
00:22:46,640 --> 00:22:49,080
Speaker 5: It should be on the table. Absolutely. Absolutely.

458
00:22:49,359 --> 00:22:51,960
Speaker 2: Couldn't that compromise our funding of the war effort in Ukraine?

459
00:22:51,960 --> 00:22:52,880
Speaker 2: Would you worry about that?

460
00:22:52,960 --> 00:22:57,080
Speaker 5: Oh? No, No, I mean the Pentagon budget is that

461
00:22:57,600 --> 00:23:01,400
Speaker 5: with many astronomical amounts, you know, I mean, on on

462
00:23:01,400 --> 00:23:05,160
Speaker 5: on the Pentagon budget. No one's talking about sacrificing our

463
00:23:05,200 --> 00:23:08,800
Speaker 5: commitment to helping Ukraine. But you mean to tell me

464
00:23:08,800 --> 00:23:11,440
Speaker 5: that you can't figure out some weapons systems in our

465
00:23:11,560 --> 00:23:14,760
Speaker 5: in our that we're spending money on right now, weapon

466
00:23:14,800 --> 00:23:16,520
Speaker 5: systems by the way, that the Joint chiefs of Staff

467
00:23:16,560 --> 00:23:18,480
Speaker 5: don't even want, that we can't find a way to

468
00:23:18,520 --> 00:23:21,960
Speaker 5: cut I mean, come on, I mean it is you know,

469
00:23:22,640 --> 00:23:24,480
Speaker 5: we have to get real about it. But I also

470
00:23:24,520 --> 00:23:28,040
Speaker 5: say to Kevin McCarthy, this is not the place to

471
00:23:28,119 --> 00:23:30,880
Speaker 5: do this, to have this discussion. This is about paying

472
00:23:30,920 --> 00:23:34,000
Speaker 5: bills we've already accumulated. If you don't want to accumulate

473
00:23:34,040 --> 00:23:37,119
Speaker 5: more bills, then you need to focus on what happens

474
00:23:37,160 --> 00:23:40,320
Speaker 5: next the budget and the appropriations process. You know, why

475
00:23:40,320 --> 00:23:43,560
Speaker 5: do we always need to cut cut cut spending, you

476
00:23:43,600 --> 00:23:46,160
Speaker 5: know when it comes to regular people. But nobody asks

477
00:23:46,160 --> 00:23:49,480
Speaker 5: a question about two trillion dollars in tax cuts for billionaires.

478
00:23:50,200 --> 00:23:52,879
Speaker 5: And that's kind of the discussion we're having right now.

479
00:23:53,560 --> 00:23:55,920
Speaker 5: And I get it. The Republicans don't believe we should

480
00:23:55,920 --> 00:23:59,960
Speaker 5: help those for vulnerable in this country, and I feel

481
00:24:00,080 --> 00:24:02,760
Speaker 5: sorry for them because it reflects the values of the

482
00:24:02,760 --> 00:24:05,520
Speaker 5: Republican Party. Right now. At the bottom line, this is

483
00:24:05,760 --> 00:24:09,040
Speaker 5: this discussion ought to be happening, not as part of

484
00:24:09,040 --> 00:24:12,520
Speaker 5: the debt stilling discussion. It ought to be happening in

485
00:24:12,600 --> 00:24:15,280
Speaker 5: the context of the appropriations process.

486
00:24:15,600 --> 00:24:19,360
Speaker 2: Yeah, that's a whole other show, Regular Order. Congressman, it's

487
00:24:19,359 --> 00:24:22,280
Speaker 2: great to have you, Congressman Jim McGovern, the gentleman from Worcester,

488
00:24:22,920 --> 00:24:25,159
Speaker 2: many thanks for being with us today. Congressman, that's spent

489
00:24:25,200 --> 00:24:26,680
Speaker 2: a long time. I want to hear from the panel

490
00:24:26,720 --> 00:24:29,199
Speaker 2: on this because we actually have not spoken with a

491
00:24:29,280 --> 00:24:33,240
Speaker 2: progressive Democrat on this who's actually in office and has

492
00:24:33,280 --> 00:24:35,360
Speaker 2: a say in what's going to be coming down the pike.

493
00:24:35,400 --> 00:24:38,320
Speaker 2: Here Jeanie Shanzo and Rick Davis. Jeanie, what's your thought here,

494
00:24:38,880 --> 00:24:42,880
Speaker 2: particularly on work requirements. You just heard full articulation from

495
00:24:42,880 --> 00:24:46,160
Speaker 2: a progressive Democrat who will vote no on this deal

496
00:24:46,320 --> 00:24:48,119
Speaker 2: if they're in there. So what does Joe Biden do?

497
00:24:48,800 --> 00:24:51,360
Speaker 12: Yeah, it's going to be tough for Biden. He has

498
00:24:51,440 --> 00:24:53,600
Speaker 12: supported this in the past, as he made clear, and

499
00:24:53,640 --> 00:24:55,960
Speaker 12: you have progressives pushing back and I have to say,

500
00:24:56,000 --> 00:24:59,440
Speaker 12: I think that was so insightful to hear Representative McGovern

501
00:24:59,600 --> 00:25:02,880
Speaker 12: speak about this position and the issue of values and

502
00:25:02,920 --> 00:25:05,000
Speaker 12: so so much of what he said was so meaningful.

503
00:25:05,359 --> 00:25:07,800
Speaker 12: I do think there is a place for a discussion.

504
00:25:08,240 --> 00:25:10,520
Speaker 12: Look at if they want to extend it by five

505
00:25:10,600 --> 00:25:13,399
Speaker 12: years from fifty to fifty five or fifty to fifty six.

506
00:25:13,800 --> 00:25:16,040
Speaker 12: I think that should be open for discussion in terms

507
00:25:16,080 --> 00:25:18,680
Speaker 12: of the age range. But he made a really important point.

508
00:25:18,760 --> 00:25:22,119
Speaker 12: We're talking six dollars a day, and the reality of

509
00:25:22,200 --> 00:25:26,440
Speaker 12: this thing is they don't want to talk about dealing

510
00:25:26,520 --> 00:25:30,320
Speaker 12: with where we can get real revenue, which is getting

511
00:25:30,359 --> 00:25:34,480
Speaker 12: rid of the Trump tax decrease. You know, that is

512
00:25:34,520 --> 00:25:36,200
Speaker 12: what they really should talk about, and they're not even

513
00:25:36,240 --> 00:25:39,359
Speaker 12: talking about that. They're talking about extending it. And so

514
00:25:39,640 --> 00:25:41,720
Speaker 12: this is where the conversation should be. But he's right,

515
00:25:41,760 --> 00:25:43,320
Speaker 12: this is not the time or the place to have it.

516
00:25:43,400 --> 00:25:43,520
Speaker 4: Now.

517
00:25:43,600 --> 00:25:46,080
Speaker 12: We've got to raise the debt ceiling, pay our debts,

518
00:25:46,119 --> 00:25:48,240
Speaker 12: and then have the discussion when we talk about the

519
00:25:48,280 --> 00:25:49,280
Speaker 12: budget for next year.

520
00:25:49,840 --> 00:25:52,600
Speaker 2: So imagine being Joe Biden and you get Jim McGovern

521
00:25:52,640 --> 00:25:55,440
Speaker 2: on the phone. Rick. That's you know, that's a real

522
00:25:55,480 --> 00:25:58,760
Speaker 2: reality check as you're trying to do some deal making here,

523
00:25:58,800 --> 00:26:02,080
Speaker 2: realizing you could lose dozens, if not over a hundred,

524
00:26:02,119 --> 00:26:03,639
Speaker 2: of your own members in the House.

525
00:26:04,119 --> 00:26:06,800
Speaker 11: Yeah, I doubt if there's anywhere near one hundred. Jim

526
00:26:06,840 --> 00:26:09,640
Speaker 11: McGovern's in the House of Representatives in the Democratic Caucus,

527
00:26:10,320 --> 00:26:12,760
Speaker 11: and so I don't think it's that big a risk

528
00:26:13,480 --> 00:26:17,480
Speaker 11: to the Biden administration to sign on to a package

529
00:26:17,520 --> 00:26:21,720
Speaker 11: of cuts that actually aren't well represented by Jim mcgoverer's

530
00:26:21,760 --> 00:26:24,600
Speaker 11: presentation just now, right, I mean he talks about it

531
00:26:24,640 --> 00:26:27,320
Speaker 11: is if we were actually cutting the food stamp assistance.

532
00:26:27,680 --> 00:26:28,000
Speaker 1: We're not.

533
00:26:28,119 --> 00:26:30,920
Speaker 11: We're making you know, we're Republicans are trying to get

534
00:26:31,240 --> 00:26:34,560
Speaker 11: work requirements put on it, work requirements that, by his

535
00:26:34,600 --> 00:26:39,200
Speaker 11: own description, are with people who are able bodied, and

536
00:26:39,680 --> 00:26:43,800
Speaker 11: if they turn out to have undiagnosed PTSD, then they

537
00:26:43,960 --> 00:26:47,240
Speaker 11: finding them and diagnosing their PTSD is a probably good

538
00:26:47,240 --> 00:26:49,880
Speaker 11: thing for those folks to get into a program where

539
00:26:49,880 --> 00:26:50,639
Speaker 11: they can be helped.

540
00:26:50,680 --> 00:26:51,600
Speaker 2: So I don't know.

541
00:26:51,720 --> 00:26:54,920
Speaker 11: I mean, like again, you know, AOC talking points is

542
00:26:55,480 --> 00:26:59,520
Speaker 11: probably not a productive negotiation tool right now for the

543
00:26:59,560 --> 00:27:02,960
Speaker 11: Biden mine. They know, and they've already made a decision

544
00:27:03,000 --> 00:27:06,199
Speaker 11: that they're going to support spending cuts based on what

545
00:27:06,240 --> 00:27:10,600
Speaker 11: the President said, and nobody on that wing of the

546
00:27:10,640 --> 00:27:13,480
Speaker 11: Democratic Party, the liberal left is going to like that.

547
00:27:13,640 --> 00:27:16,399
Speaker 11: And so he's just going to have to take his lumps,

548
00:27:16,440 --> 00:27:19,200
Speaker 11: but he'll get the vast majority of the Democratic Caucus

549
00:27:19,240 --> 00:27:20,679
Speaker 11: to support whatever he signs on.

550
00:27:20,760 --> 00:27:20,840
Speaker 5: Too.

551
00:27:21,119 --> 00:27:25,080
Speaker 2: We've heard Primalajaiopaul and you mentioned Alexandria Costio Qrtez. You

552
00:27:25,119 --> 00:27:28,000
Speaker 2: lost the Progressive caucus on this, and that could amount

553
00:27:28,040 --> 00:27:30,320
Speaker 2: to one hundred. I realized, Rick, doubt's that number, Genie,

554
00:27:30,320 --> 00:27:32,160
Speaker 2: But I just wonder where the line is here, because

555
00:27:32,200 --> 00:27:35,600
Speaker 2: a lot of progressives listen to Jim McGovern particularly on

556
00:27:35,680 --> 00:27:38,719
Speaker 2: this issue. Remember, and during COVID he had the end

557
00:27:38,800 --> 00:27:41,240
Speaker 2: Hunger Now mask on for the better part of two years.

558
00:27:41,240 --> 00:27:43,920
Speaker 2: He just held the first hunger summit at the White

559
00:27:43,960 --> 00:27:46,399
Speaker 2: House since the Nixon administration. And he's just not going

560
00:27:46,440 --> 00:27:47,080
Speaker 2: to budge on this.

561
00:27:47,560 --> 00:27:49,240
Speaker 12: No, he won't budge on it. And you know, in

562
00:27:49,280 --> 00:27:51,280
Speaker 12: the end, I don't think we know what the number is.

563
00:27:51,320 --> 00:27:53,639
Speaker 12: But the reality is is that this is going to

564
00:27:53,720 --> 00:27:56,200
Speaker 12: be decided by the middle. On both sides. They will

565
00:27:56,240 --> 00:27:58,760
Speaker 12: lose some on the left and some on the right.

566
00:27:58,800 --> 00:28:00,639
Speaker 12: It's going to be the middle that votes for this.

567
00:28:00,960 --> 00:28:04,480
Speaker 12: And on the Democratic side, they will support the president

568
00:28:04,800 --> 00:28:07,320
Speaker 12: the vast majority, and they'll figure out how many they

569
00:28:07,320 --> 00:28:10,520
Speaker 12: can lose we simply cannot go down the road of default.

570
00:28:10,640 --> 00:28:13,080
Speaker 12: And so I don't think you're going to see enough

571
00:28:13,119 --> 00:28:17,080
Speaker 12: Democrats or Republicans move away from this to lead us

572
00:28:17,080 --> 00:28:19,199
Speaker 12: down that path, at least I hope not. But I

573
00:28:19,240 --> 00:28:22,480
Speaker 12: think it's so important to reiterate, why again are we

574
00:28:22,600 --> 00:28:26,119
Speaker 12: talking about, as McGovern said, taking from the most vulnerable

575
00:28:26,200 --> 00:28:30,320
Speaker 12: in society under this pretext of us not paying our bills.

576
00:28:30,600 --> 00:28:34,480
Speaker 12: That's the reality that is maddening to not just progressives,

577
00:28:34,480 --> 00:28:38,360
Speaker 12: but many, many Democrats, and I would suspect Republicans. We

578
00:28:38,480 --> 00:28:43,000
Speaker 12: should have responsible spending plans in place, a responsible budget,

579
00:28:43,040 --> 00:28:45,760
Speaker 12: and it should not be on the backs of the poor. Yes,

580
00:28:45,840 --> 00:28:48,880
Speaker 12: they can talk about raising the age for work requirements

581
00:28:48,880 --> 00:28:50,920
Speaker 12: all these things, but that should not be the only

582
00:28:50,960 --> 00:28:54,240
Speaker 12: discussion we're having right now. What about those Trump's tax cuts?

583
00:28:54,240 --> 00:28:57,240
Speaker 12: What about raising taxes? What about all the other ways

584
00:28:57,240 --> 00:28:59,840
Speaker 12: in which we generate revenue? Hey, what about the irs agents?

585
00:28:59,840 --> 00:29:02,600
Speaker 12: There's a lot of places to raise revenue. If they

586
00:29:02,680 --> 00:29:04,560
Speaker 12: want to deal with that responsibly, they should do it

587
00:29:04,560 --> 00:29:07,280
Speaker 12: outside the discussion of defaulted Rick, what do you.

588
00:29:07,240 --> 00:29:11,160
Speaker 2: Think of Patrick McHenry swooping in here fairly late in

589
00:29:11,160 --> 00:29:13,560
Speaker 2: the game as one of the lead negotiators, if not

590
00:29:13,600 --> 00:29:16,640
Speaker 2: the lead negotiator chair of the Finance Committee, and he

591
00:29:16,720 --> 00:29:19,680
Speaker 2: spoke from the House last evening after the meeting. He said,

592
00:29:19,720 --> 00:29:22,920
Speaker 2: there's a lack of urgency on the path of the

593
00:29:23,000 --> 00:29:26,719
Speaker 2: side of the White House. What do you make of him?

594
00:29:26,760 --> 00:29:28,640
Speaker 2: It was just the two of them, It was McCarthy

595
00:29:28,720 --> 00:29:31,320
Speaker 2: and McHenry, and I thought we'd have some good cop,

596
00:29:31,360 --> 00:29:33,320
Speaker 2: bad cop, but it was kind of like bad cop,

597
00:29:33,360 --> 00:29:36,280
Speaker 2: bad cop. I'm not sure that the public facing strategy.

598
00:29:36,360 --> 00:29:37,400
Speaker 2: What are they trying to do here?

599
00:29:38,080 --> 00:29:40,920
Speaker 11: Yeah, look, I think they're trying to add some fire

600
00:29:41,000 --> 00:29:46,680
Speaker 11: to the discussions. Obviously, the week has now transpired since

601
00:29:47,640 --> 00:29:50,720
Speaker 11: President Biden went to the G seven, and I think

602
00:29:50,760 --> 00:29:54,560
Speaker 11: everybody had hoped that the staff level conversations could have

603
00:29:54,600 --> 00:29:56,960
Speaker 11: resulted in a deal that was on his desk when

604
00:29:56,960 --> 00:29:59,160
Speaker 11: he got back, and the fact that that didn't happen

605
00:29:59,840 --> 00:30:02,480
Speaker 11: is a pox both on the White House negotiators point

606
00:30:02,480 --> 00:30:08,080
Speaker 11: of view, but also on the Speaker's team because this

607
00:30:08,360 --> 00:30:11,160
Speaker 11: urgency issue seems to have been bypassed ince day one.

608
00:30:11,280 --> 00:30:13,960
Speaker 11: It took them ninety days to more than ninety days

609
00:30:14,000 --> 00:30:16,040
Speaker 11: to actually sit down and have a conversation about the

610
00:30:16,040 --> 00:30:19,240
Speaker 11: debt ceiling. The President doesn't seem really keen to do

611
00:30:19,280 --> 00:30:21,400
Speaker 11: anything about it. When he controlled the House and the

612
00:30:21,440 --> 00:30:24,080
Speaker 11: Senate before the midterms, it could have fixed it then.

613
00:30:24,920 --> 00:30:27,560
Speaker 11: So this idea that everyone's been kind of kicking the

614
00:30:27,600 --> 00:30:31,120
Speaker 11: can down the road to the point where now we

615
00:30:31,280 --> 00:30:34,640
Speaker 11: have our backs up against the wall. And I'm a

616
00:30:34,720 --> 00:30:36,920
Speaker 11: little bit actually surprised that we haven't heard from the

617
00:30:36,920 --> 00:30:40,040
Speaker 11: White House make the same claim. But they seem to

618
00:30:40,080 --> 00:30:43,080
Speaker 11: be the punching dummy right now. The Speaker's office is

619
00:30:43,080 --> 00:30:45,440
Speaker 11: clearly going out and trying to place the blame on

620
00:30:45,520 --> 00:30:47,880
Speaker 11: the White House, and the White House is taking it

621
00:30:48,200 --> 00:30:50,280
Speaker 11: on the chin, I think, in hopes of trying to

622
00:30:50,280 --> 00:30:52,000
Speaker 11: get a deal done and not poisonou water.

623
00:30:52,800 --> 00:30:56,320
Speaker 1: You're listening to the Bloomberg Sound on podcast Catch us

624
00:30:56,360 --> 00:30:59,480
Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the

625
00:30:59,560 --> 00:31:02,560
Speaker 1: iHeart Radio app and the Blog Business app, or listening

626
00:31:02,600 --> 00:31:04,720
Speaker 1: on demand wherever you get your podcasts.

627
00:31:06,000 --> 00:31:08,280
Speaker 2: Kayley, it's good to see you. Last time we were

628
00:31:08,280 --> 00:31:10,840
Speaker 2: talking here we're waiting for this meeting to wrap. YEP,

629
00:31:11,080 --> 00:31:13,040
Speaker 2: that was last evening on Balance of Power. Not a

630
00:31:13,080 --> 00:31:14,840
Speaker 2: lot has happened since then. They had a little bit

631
00:31:14,880 --> 00:31:17,720
Speaker 2: of a session. I guess last evening, Eric Wasson tells

632
00:31:17,800 --> 00:31:21,560
Speaker 2: us the Speaker and the President have not spoken yet today.

633
00:31:21,720 --> 00:31:22,120
Speaker 7: Mm hmm.

634
00:31:22,880 --> 00:31:25,360
Speaker 2: But everyone's chewing on the X date now again, and

635
00:31:25,400 --> 00:31:27,920
Speaker 2: I think it's largely because of this Washington Post article

636
00:31:28,480 --> 00:31:32,880
Speaker 2: questioning the methodology there, and maybe more specifically, this memo

637
00:31:32,960 --> 00:31:36,160
Speaker 2: that the Treasury, I guess sent out asking agencies to

638
00:31:36,200 --> 00:31:37,640
Speaker 2: be flexible with their payments.

639
00:31:37,880 --> 00:31:41,000
Speaker 13: Yeah, asking federal agencies whether they can make some of

640
00:31:41,000 --> 00:31:45,000
Speaker 13: those upcoming payments at a later date. So it seems like,

641
00:31:45,040 --> 00:31:47,360
Speaker 13: according to this reporting, that it is the Treasury Department

642
00:31:47,440 --> 00:31:50,360
Speaker 13: kind of looking for ways that it can conserve cash

643
00:31:50,400 --> 00:31:53,760
Speaker 13: and potentially prolong this thing a little while long.

644
00:31:53,840 --> 00:31:57,360
Speaker 2: You never backdated a check, right, You wouldn't do that.

645
00:31:57,440 --> 00:32:01,000
Speaker 13: People don't use checks anymore, you know, not.

646
00:32:00,880 --> 00:32:03,920
Speaker 2: Really, that's I just don't know. It's the only way

647
00:32:03,920 --> 00:32:04,560
Speaker 2: I know.

648
00:32:04,640 --> 00:32:06,880
Speaker 13: But I do think that this is This is quite

649
00:32:06,880 --> 00:32:10,560
Speaker 13: interesting because we had Jane Yellen yesterday writing a fresh

650
00:32:10,640 --> 00:32:13,440
Speaker 13: letter sending it to congressional leaders saying it is now

651
00:32:13,840 --> 00:32:17,960
Speaker 13: highly highly likely that the government will run out of

652
00:32:17,960 --> 00:32:20,720
Speaker 13: the ability to fulfill all of its obligations by as

653
00:32:20,720 --> 00:32:22,680
Speaker 13: early as June first. And now you have kind of

654
00:32:22,720 --> 00:32:28,040
Speaker 13: a chorus of voices saying, is it really June first? Like,

655
00:32:28,040 --> 00:32:30,040
Speaker 13: that's just kind of I mean, that's obviously not a

656
00:32:30,040 --> 00:32:32,280
Speaker 13: direct quote, but that's just kind of the vibe.

657
00:32:32,480 --> 00:32:35,360
Speaker 2: Well, it's more and like, well, how did they come

658
00:32:35,480 --> 00:32:38,520
Speaker 2: up with the number of the majority leader Steve Scalee.

659
00:32:38,520 --> 00:32:41,680
Speaker 3: I don't know what methods they have. It seems like

660
00:32:41,720 --> 00:32:45,200
Speaker 3: she's indicated they've looked at some different options. Like to

661
00:32:45,240 --> 00:32:46,600
Speaker 3: hear what she has to say.

662
00:32:46,400 --> 00:32:48,320
Speaker 2: About that, I'm not sure they did say they were

663
00:32:48,320 --> 00:32:51,560
Speaker 2: looking at different options. But again referring to the memo, right,

664
00:32:51,600 --> 00:32:55,040
Speaker 2: here's more a more complete form what Scalice was trying

665
00:32:55,040 --> 00:32:56,640
Speaker 2: to say in the briefing this one, Well, we'd like.

666
00:32:56,600 --> 00:32:59,440
Speaker 3: To see more transparency on how they come to that date.

667
00:32:59,480 --> 00:33:02,520
Speaker 3: But Jennet Ellen herself actually left the door open to

668
00:33:02,640 --> 00:33:05,719
Speaker 3: delaying that in her tweets yesterday at the comments that

669
00:33:05,800 --> 00:33:09,640
Speaker 3: she sent out yesterday implied that it's June first or later,

670
00:33:10,000 --> 00:33:13,560
Speaker 3: giving some openness to the idea that June first may

671
00:33:13,600 --> 00:33:16,040
Speaker 3: not be the so called XT date. So, you know,

672
00:33:16,760 --> 00:33:19,080
Speaker 3: haven't really been able to see a lot of transparency,

673
00:33:19,360 --> 00:33:21,800
Speaker 3: but it looks like they're hedging now and opening up

674
00:33:21,840 --> 00:33:23,400
Speaker 3: the door to move that date.

675
00:33:23,280 --> 00:33:26,880
Speaker 2: Back opening up the door. That language never changed, right, that,

676
00:33:27,200 --> 00:33:30,520
Speaker 2: in fact, highly was the only right right. But she's

677
00:33:30,560 --> 00:33:33,560
Speaker 2: been saying as early ascause they can't exactly pinpoint.

678
00:33:33,760 --> 00:33:36,239
Speaker 13: I think that's really the point here, is that and

679
00:33:36,280 --> 00:33:37,960
Speaker 13: we have to be very careful every time you and

680
00:33:38,040 --> 00:33:41,280
Speaker 13: I discussed this, Joe to say as early as June first,

681
00:33:41,520 --> 00:33:44,560
Speaker 13: because she's talking about a window of time here, and

682
00:33:44,600 --> 00:33:48,160
Speaker 13: she says the actual date could be days or weeks later. Sure, again,

683
00:33:48,320 --> 00:33:50,720
Speaker 13: it's not perfect math that they're that they're trying to

684
00:33:50,800 --> 00:33:55,440
Speaker 13: do here. I think so sticking to the June first

685
00:33:55,560 --> 00:33:57,960
Speaker 13: date as like a hard and fast deadline maybe what

686
00:33:59,240 --> 00:34:00,720
Speaker 13: they are taking a sho with here, But I'm not

687
00:34:00,760 --> 00:34:03,600
Speaker 13: sure that's actually what the Treasury Secretary is saying.

688
00:34:03,880 --> 00:34:05,880
Speaker 2: She would not have said that, I think in those

689
00:34:05,960 --> 00:34:09,640
Speaker 2: words Goldmen Sachs. By the way, penciling in June seventh

690
00:34:09,760 --> 00:34:13,560
Speaker 2: or eighth, Morgan Stanley says June eighth is its base

691
00:34:13,640 --> 00:34:17,360
Speaker 2: case for an X date, which would actually be consistent

692
00:34:17,400 --> 00:34:18,480
Speaker 2: with what she's saying.

693
00:34:18,200 --> 00:34:20,880
Speaker 13: Here, was right within the window of time.

694
00:34:20,880 --> 00:34:23,759
Speaker 2: Early to mid June something and something, all right, So

695
00:34:24,520 --> 00:34:27,040
Speaker 2: there's that part of it. Patrick McHenry also looming large

696
00:34:27,040 --> 00:34:29,400
Speaker 2: in the negotiations. He says, there's a lack of urgency

697
00:34:29,480 --> 00:34:31,359
Speaker 2: on the side of the White House. So we'll see

698
00:34:31,360 --> 00:34:34,640
Speaker 2: where we go here. Douglas Holseeken is going to help

699
00:34:34,719 --> 00:34:36,880
Speaker 2: us talk through some of this stuff. The president of

700
00:34:36,880 --> 00:34:40,000
Speaker 2: the American Action Forum held a couple of pretty important

701
00:34:40,080 --> 00:34:42,920
Speaker 2: jobs that bring us to this moment. He was the

702
00:34:43,080 --> 00:34:46,000
Speaker 2: chief economist the Council of Economic Advisors also director of

703
00:34:46,000 --> 00:34:48,919
Speaker 2: the Congressional Budget Office, so he has sat on both

704
00:34:49,000 --> 00:34:52,839
Speaker 2: ends of Pennsylvania Avenue for this very argument. And Doug,

705
00:34:52,880 --> 00:34:54,640
Speaker 2: it's great to have you back with us here on

706
00:34:54,680 --> 00:34:57,080
Speaker 2: Bloomberg Radio. Do you question the X date?

707
00:34:58,960 --> 00:35:00,880
Speaker 10: The XT date isn't a day. I think you guys

708
00:35:00,880 --> 00:35:05,440
Speaker 10: have nailed the issue right, So next week, yeah for

709
00:35:05,840 --> 00:35:08,520
Speaker 10: the listeners, right. You want to think of this like

710
00:35:08,600 --> 00:35:11,719
Speaker 10: a checking account. Money flows in, money flows out, and

711
00:35:11,800 --> 00:35:14,040
Speaker 10: if it keeps blowing out and doesn't come in, you

712
00:35:14,400 --> 00:35:17,280
Speaker 10: hit the X date, and so you have to guess

713
00:35:17,520 --> 00:35:20,040
Speaker 10: how much will flow in. And that's been the bigness

714
00:35:20,080 --> 00:35:22,560
Speaker 10: this year. We're runn about one hundred fifty billion below

715
00:35:22,600 --> 00:35:25,640
Speaker 10: what people thought we'd get in the way of tax revenue,

716
00:35:26,040 --> 00:35:28,080
Speaker 10: and that's why we're talking about June one instead of

717
00:35:28,200 --> 00:35:30,239
Speaker 10: the middle of August as we were a couple months ago.

718
00:35:30,840 --> 00:35:32,799
Speaker 10: But you also have to look at the money flowing out,

719
00:35:32,880 --> 00:35:35,680
Speaker 10: and it's not known with certainly when people are going

720
00:35:35,680 --> 00:35:39,680
Speaker 10: to show up ANCTU paid, and so you guess roughly

721
00:35:39,960 --> 00:35:42,919
Speaker 10: when it's gonna hit, but you can't know exactly for sure,

722
00:35:43,239 --> 00:35:45,719
Speaker 10: And to be honest, I don't think we should find

723
00:35:45,719 --> 00:35:48,359
Speaker 10: out if you better to get it right and not learn.

724
00:35:49,080 --> 00:35:51,080
Speaker 2: Thank you for bringing us to the point.

725
00:35:53,120 --> 00:35:57,440
Speaker 10: Yeah, I think I think the essential message is it

726
00:35:57,520 --> 00:35:59,840
Speaker 10: is a short amount of time, particularly when compared with

727
00:36:00,080 --> 00:36:03,720
Speaker 10: the time it takes Congress to pass legislation, and Speaker

728
00:36:03,800 --> 00:36:06,640
Speaker 10: McCarthy in particular has made some promises of seventy two

729
00:36:06,640 --> 00:36:11,480
Speaker 10: hours to examine the legislation, no fast tracking, those skipping steps.

730
00:36:11,600 --> 00:36:13,880
Speaker 10: So you know, you've got three days in the House,

731
00:36:13,920 --> 00:36:17,279
Speaker 10: a week in the Senate. It's time to make a deal.

732
00:36:17,640 --> 00:36:20,239
Speaker 13: Yeah, nine days until June first, which again not hard

733
00:36:20,239 --> 00:36:23,040
Speaker 13: and fast deadline. But the Treasury Secretary has also warned

734
00:36:23,600 --> 00:36:26,520
Speaker 13: of the potential problems that come with getting too close

735
00:36:27,040 --> 00:36:29,480
Speaker 13: to the X state, so we have to factor that

736
00:36:29,560 --> 00:36:33,959
Speaker 13: in as well. We did hear from another congressman earlier today,

737
00:36:34,000 --> 00:36:39,000
Speaker 13: Republican Chip Roy of Texas calling default warnings a manufactured

738
00:36:39,120 --> 00:36:41,640
Speaker 13: crisis to force Republicans to step back from some of

739
00:36:41,680 --> 00:36:44,200
Speaker 13: their demands. He said, the fact is we're going to

740
00:36:44,239 --> 00:36:46,560
Speaker 13: have cash in June. We're not going to default on

741
00:36:46,560 --> 00:36:50,000
Speaker 13: our debt. That's just completely false. We've got the money

742
00:36:50,040 --> 00:36:52,280
Speaker 13: to do it, is that correct.

743
00:36:53,960 --> 00:36:57,880
Speaker 10: The Treasury likes to have twenty five billion dollars on

744
00:36:58,040 --> 00:37:01,480
Speaker 10: hand as cushion, and so the X date really is

745
00:37:01,520 --> 00:37:04,040
Speaker 10: when you go below twenty five billion. So there will

746
00:37:04,040 --> 00:37:07,680
Speaker 10: be money on hand. So that's true, but there won't

747
00:37:07,680 --> 00:37:13,480
Speaker 10: be enough to finance the government's cash needs. And you know,

748
00:37:14,239 --> 00:37:16,879
Speaker 10: he may believe that the Treasury can in real time

749
00:37:16,960 --> 00:37:21,600
Speaker 10: prioritize payments and make sure we don't have a missed

750
00:37:22,320 --> 00:37:25,759
Speaker 10: interest payment or principal payment. I'm not as confident that

751
00:37:26,040 --> 00:37:27,839
Speaker 10: some other people might be. I think there's a good

752
00:37:27,920 --> 00:37:31,680
Speaker 10: chance something goes wrong in that process. And the reality

753
00:37:31,719 --> 00:37:35,919
Speaker 10: is prioritization is just another extraordinary measure where you put

754
00:37:35,920 --> 00:37:39,280
Speaker 10: off the inevitable. The inevitable is you raise the debt limit,

755
00:37:39,480 --> 00:37:41,600
Speaker 10: and so they need to just accept that at the

756
00:37:41,600 --> 00:37:45,400
Speaker 10: outset and stop using extraordinary steps to avoid it and

757
00:37:45,680 --> 00:37:47,360
Speaker 10: find out what it will take together the two eighteen

758
00:37:47,360 --> 00:37:49,400
Speaker 10: in the House, sixteen the Senate and have the present assignment.

759
00:37:49,800 --> 00:37:50,960
Speaker 10: That's the issue.

760
00:37:51,880 --> 00:37:54,120
Speaker 2: How much of this is bluster right now? You just

761
00:37:54,160 --> 00:37:58,440
Speaker 2: heard what Kayley mentioned about Chip Roy. We spoke earlier,

762
00:37:58,480 --> 00:38:01,319
Speaker 2: by the way, with Jim McGovern for the progressive view

763
00:38:01,480 --> 00:38:04,279
Speaker 2: on this, Douglas, and he's a no vote if work

764
00:38:04,320 --> 00:38:07,960
Speaker 2: requirements are added to the bill. So things are starting

765
00:38:07,960 --> 00:38:10,160
Speaker 2: to narrow a little bit for these negotiators here, if

766
00:38:10,160 --> 00:38:12,799
Speaker 2: they're going to appeal to the center, do you feel

767
00:38:12,800 --> 00:38:15,120
Speaker 2: like they're actually getting close to a final product here?

768
00:38:15,160 --> 00:38:16,920
Speaker 2: I know everybody's talking to the media, but what's really

769
00:38:17,000 --> 00:38:18,360
Speaker 2: going on in that room.

770
00:38:18,800 --> 00:38:20,920
Speaker 10: Well, first of all, there's a lot of bluster here, right.

771
00:38:21,000 --> 00:38:23,840
Speaker 10: The essence of brinkmanship is to say it's going to

772
00:38:23,920 --> 00:38:26,719
Speaker 10: be really really bad for you, and I says, no, no, no,

773
00:38:26,760 --> 00:38:29,040
Speaker 10: it's gonna be really really bad for you. You've got

774
00:38:29,080 --> 00:38:29,640
Speaker 10: to make a deal.

775
00:38:29,680 --> 00:38:33,080
Speaker 5: And so of course they're going to try to sort.

776
00:38:32,880 --> 00:38:36,040
Speaker 10: Of lobby for their case. But you know, the outlines

777
00:38:36,080 --> 00:38:38,799
Speaker 10: of a deal have been pretty visible for a while now,

778
00:38:39,480 --> 00:38:42,040
Speaker 10: and the number of people in the room is shrinking.

779
00:38:42,080 --> 00:38:45,080
Speaker 10: That's good because if your voices need to come to

780
00:38:45,120 --> 00:38:48,320
Speaker 10: an agreement. It's been elevated. The President is now sitting

781
00:38:48,320 --> 00:38:52,440
Speaker 10: down talking with the Speaker, and those are the ingredients

782
00:38:52,800 --> 00:38:55,560
Speaker 10: of getting ts. This is something that the President has

783
00:38:55,560 --> 00:38:57,960
Speaker 10: done many times while in the Senate. It's something that

784
00:38:58,000 --> 00:39:02,040
Speaker 10: mister McCarthy's been through eleven twenty thirteen. They both know

785
00:39:02,080 --> 00:39:06,360
Speaker 10: the stakes, they both know their constituencies. It strikes me

786
00:39:06,400 --> 00:39:09,600
Speaker 10: as promising we're getting a deal, but I'd be more

787
00:39:09,600 --> 00:39:11,600
Speaker 10: relaxed if they had one, And.

788
00:39:11,560 --> 00:39:13,839
Speaker 13: I guess it's a question of who ultimately gets more

789
00:39:13,920 --> 00:39:15,680
Speaker 13: of what they want in the deal. Joe, did you

790
00:39:15,719 --> 00:39:18,800
Speaker 13: see the tweet from our very own Joe Wisenthal earlier today.

791
00:39:19,640 --> 00:39:23,279
Speaker 5: Yeah, I'm really quite mystified by the way this gets

792
00:39:23,280 --> 00:39:24,640
Speaker 5: framed in some circles.

793
00:39:25,080 --> 00:39:26,920
Speaker 10: There will not be a win for the Republicans here.

794
00:39:27,000 --> 00:39:28,520
Speaker 10: There will not be a win for the President. There

795
00:39:28,520 --> 00:39:30,960
Speaker 10: won't be a win for the Senate Democrats. The only

796
00:39:31,000 --> 00:39:33,279
Speaker 10: winners or losers are the American people. If they get

797
00:39:33,280 --> 00:39:35,640
Speaker 10: a deal, we win. If they don't, we lose. They

798
00:39:35,680 --> 00:39:39,880
Speaker 10: will inevitably get something they're sort of okay with. Maybe

799
00:39:40,280 --> 00:39:41,840
Speaker 10: this is going to be the kind of thing that

800
00:39:41,920 --> 00:39:45,080
Speaker 10: gets past holding your nose, because no one's going to

801
00:39:45,120 --> 00:39:46,919
Speaker 10: get everything they want. There will be no clean win

802
00:39:47,280 --> 00:39:47,960
Speaker 10: anywhere in this.

803
00:39:49,239 --> 00:39:51,960
Speaker 13: Okay, that's a very valid point, considering that we are

804
00:39:52,000 --> 00:39:54,640
Speaker 13: talking about the full faith and credit of the United States.

805
00:39:54,640 --> 00:39:57,880
Speaker 13: I don't think anyone is, you know, trying to downplay

806
00:39:57,880 --> 00:39:59,640
Speaker 13: the stakes here. What I more mean is that the

807
00:39:59,680 --> 00:40:03,360
Speaker 13: Biden administration had consistently said it wasn't going to negotiate

808
00:40:03,400 --> 00:40:06,320
Speaker 13: over this, and now it finds itself at the negotiating table.

809
00:40:06,400 --> 00:40:08,440
Speaker 13: So it is going to have to give in a

810
00:40:08,480 --> 00:40:12,200
Speaker 13: way that it originally intended not to. And we consistently

811
00:40:12,239 --> 00:40:15,520
Speaker 13: hear from the Treasury Secretary that really there's no alternative here.

812
00:40:15,600 --> 00:40:18,239
Speaker 13: The only thing that can happens that Congress raises the

813
00:40:18,280 --> 00:40:20,080
Speaker 13: debt ceiling. So it feels like there may be a

814
00:40:20,160 --> 00:40:23,480
Speaker 13: lack of a backup plan as well. Doesn't that give

815
00:40:23,520 --> 00:40:26,960
Speaker 13: the Republicans more leverage to get they what they would

816
00:40:27,000 --> 00:40:28,200
Speaker 13: like to see in a package.

817
00:40:29,480 --> 00:40:33,000
Speaker 10: I think the President made a strategic error at the outset.

818
00:40:33,080 --> 00:40:35,839
Speaker 10: I mean, to stand up and say I'm not negotiating

819
00:40:36,320 --> 00:40:40,000
Speaker 10: is to negotiate. That's your initial position, And they've been

820
00:40:40,000 --> 00:40:42,279
Speaker 10: negotiating all along, whether they wanted to admit it or not.

821
00:40:42,880 --> 00:40:46,040
Speaker 10: But by waiting so long to genuinely engage, the starting

822
00:40:46,080 --> 00:40:51,240
Speaker 10: point became the House passed bill, and that gives Republicans

823
00:40:51,320 --> 00:40:54,840
Speaker 10: an enormous advantage in shaping the final product. If it

824
00:40:54,880 --> 00:40:58,560
Speaker 10: had been a White House proposal that contained policy writers,

825
00:40:58,600 --> 00:41:00,439
Speaker 10: that would have been the starting point would have given

826
00:41:00,440 --> 00:41:04,799
Speaker 10: them more of an advantage. So they've been negotiating, whether

827
00:41:04,840 --> 00:41:07,480
Speaker 10: they want to admit it or not, they're negotiating from

828
00:41:07,520 --> 00:41:10,920
Speaker 10: a position where the Republicans showed a surprising ability to

829
00:41:10,960 --> 00:41:12,400
Speaker 10: get something through the House. I don't think a lot

830
00:41:12,440 --> 00:41:15,200
Speaker 10: of people didn't think that would happened, and so they're

831
00:41:15,200 --> 00:41:19,360
Speaker 10: playing catchup. But in the end, you know, as I said,

832
00:41:19,680 --> 00:41:21,720
Speaker 10: to raise the deliment, you have to pass the law.

833
00:41:21,920 --> 00:41:25,200
Speaker 10: And passing the law is the political art of getting

834
00:41:25,239 --> 00:41:27,319
Speaker 10: the bipartisan agreement in the House Senate and having the

835
00:41:27,320 --> 00:41:29,960
Speaker 10: president's fund it. And so what's going to end up

836
00:41:29,960 --> 00:41:32,000
Speaker 10: in there is going to be the minimum necessary to

837
00:41:32,000 --> 00:41:34,719
Speaker 10: get sixty to eighteen in the President's signature, and that'll

838
00:41:34,760 --> 00:41:35,040
Speaker 10: be it.

839
00:41:35,440 --> 00:41:37,960
Speaker 2: We've got new modeling, a new forecast here from Bloomberg

840
00:41:38,000 --> 00:41:42,279
Speaker 2: Intelligence on what exactly might happen to the economy and

841
00:41:42,320 --> 00:41:45,880
Speaker 2: specifically the job market in an extreme scenario, as they

842
00:41:45,880 --> 00:41:49,319
Speaker 2: put it, if Republicans forced through significant spending cuts like

843
00:41:49,360 --> 00:41:51,439
Speaker 2: the bill that was passed, what does it limit save

844
00:41:51,560 --> 00:41:54,080
Speaker 2: grow They sat down with the bill and they actually

845
00:41:54,760 --> 00:41:57,279
Speaker 2: put projections out over the course of a couple of

846
00:41:57,360 --> 00:42:00,600
Speaker 2: years Douglas. They found that it would mean an additional

847
00:42:00,680 --> 00:42:04,080
Speaker 2: five hundred and seventy thousand job losses relative to a

848
00:42:04,120 --> 00:42:08,560
Speaker 2: baseline of a clean debt limit increase. Now, of course,

849
00:42:08,920 --> 00:42:11,200
Speaker 2: we all know that that bill is not going to

850
00:42:11,200 --> 00:42:14,560
Speaker 2: be the final product, but our chief economist Ana Wong

851
00:42:14,920 --> 00:42:17,879
Speaker 2: brought it down to a two year deal, something that

852
00:42:17,920 --> 00:42:20,960
Speaker 2: President Biden timeline that he favors. It would still be

853
00:42:21,000 --> 00:42:23,840
Speaker 2: a couple one hundred thousand job losses. Is that in

854
00:42:23,880 --> 00:42:24,680
Speaker 2: the cards here.

855
00:42:26,880 --> 00:42:31,120
Speaker 10: It may or may not be. The reality is that

856
00:42:31,840 --> 00:42:34,520
Speaker 10: it will slow the growth of demand in the economy,

857
00:42:34,880 --> 00:42:37,839
Speaker 10: and we know that part of it. The FED then

858
00:42:37,920 --> 00:42:40,040
Speaker 10: has a lot more flexibility than what it does. It's

859
00:42:40,080 --> 00:42:43,439
Speaker 10: been supposing the demand all by itself and leaning hard

860
00:42:43,440 --> 00:42:46,920
Speaker 10: on rate increases to do it. It could easily not

861
00:42:47,040 --> 00:42:49,000
Speaker 10: have to raise as much as it would. It would

862
00:42:49,000 --> 00:42:51,400
Speaker 10: have to even gets a cut before I thought it

863
00:42:51,440 --> 00:42:54,720
Speaker 10: had to. And so it may be there to engineer

864
00:42:54,719 --> 00:42:57,680
Speaker 10: the soft landing and not lose those Huh. Really hard

865
00:42:57,719 --> 00:43:00,560
Speaker 10: to say, but the key is that the fiscal doesn't

866
00:43:00,560 --> 00:43:02,319
Speaker 10: work in isolation. And I think the FED would like

867
00:43:02,360 --> 00:43:04,080
Speaker 10: to help this point thought, that's for sure.

868
00:43:04,960 --> 00:43:05,560
Speaker 1: That's so.

869
00:43:05,600 --> 00:43:08,520
Speaker 2: The cold hearted version of that is this would do

870
00:43:08,600 --> 00:43:10,759
Speaker 2: the Fed's job for it, right, because you can't lick

871
00:43:10,760 --> 00:43:13,719
Speaker 2: inflation without denting the job market, right, killy, Right.

872
00:43:13,760 --> 00:43:15,640
Speaker 13: All they can do is try to get demand down

873
00:43:15,680 --> 00:43:18,040
Speaker 13: because they can't do anything about supply constraints and that

874
00:43:18,120 --> 00:43:21,960
Speaker 13: contributor to inflation. As we talk about the fiscal policy outlook,

875
00:43:22,000 --> 00:43:25,239
Speaker 13: I was reading your Daily Dish note earlier today in

876
00:43:25,280 --> 00:43:27,960
Speaker 13: which you said the fiscal outlook cannot be stabilized until

877
00:43:27,960 --> 00:43:30,440
Speaker 13: the gap and growth rates of spending and revenue is closed.

878
00:43:30,480 --> 00:43:34,080
Speaker 13: Your basic thesis being it can't be just tax, tax, tax,

879
00:43:34,160 --> 00:43:36,279
Speaker 13: It must control the growth of spending. But do you

880
00:43:36,280 --> 00:43:39,440
Speaker 13: think it is a mistake to not consider taxes in

881
00:43:39,480 --> 00:43:41,920
Speaker 13: this when the Republicans say they will not consider, you know,

882
00:43:42,040 --> 00:43:44,880
Speaker 13: raising more revenue, is that really the best way to

883
00:43:44,920 --> 00:43:45,800
Speaker 13: address the deficit.

884
00:43:47,239 --> 00:43:51,600
Speaker 10: So let's be real clear. My position is number one,

885
00:43:51,719 --> 00:43:55,120
Speaker 10: we have very big budget problems, and you have to

886
00:43:55,160 --> 00:44:00,000
Speaker 10: talk about mandatory spending Social Security, Medicare, Medicaid, Total Care,

887
00:44:00,600 --> 00:44:03,640
Speaker 10: that constellation of programs, and you will have to talk

888
00:44:03,640 --> 00:44:06,279
Speaker 10: about the tax code and raising that revenue. Neither of

889
00:44:06,280 --> 00:44:08,120
Speaker 10: those is on the table. And this death ceiling deal,

890
00:44:08,320 --> 00:44:10,320
Speaker 10: this death feeling deal, is about raising the dead ceiling,

891
00:44:10,440 --> 00:44:13,359
Speaker 10: and it's going to contain a mixture policies that really

892
00:44:13,480 --> 00:44:16,360
Speaker 10: aren't going to address our fiscal position at all. In

893
00:44:16,400 --> 00:44:19,200
Speaker 10: my view, they're tiny by comparison.

894
00:44:18,760 --> 00:44:19,960
Speaker 5: To the size of the problem.

895
00:44:20,760 --> 00:44:23,080
Speaker 10: The key, though, is if you if you look at

896
00:44:23,120 --> 00:44:26,880
Speaker 10: any of our tax bases, income taxes, sales taxes, payroll taxes,

897
00:44:26,920 --> 00:44:29,799
Speaker 10: things like that, they all grow basically at the rate

898
00:44:29,800 --> 00:44:32,160
Speaker 10: of growth of the nominal economy. So imagine we get

899
00:44:32,160 --> 00:44:34,359
Speaker 10: back to two percent inflation, two percent growth, get four

900
00:44:34,360 --> 00:44:37,719
Speaker 10: percent growth, about four percent growth in revenue. Now, you

901
00:44:37,760 --> 00:44:40,720
Speaker 10: can move it up and down with tax increases, but

902
00:44:40,760 --> 00:44:42,560
Speaker 10: once you have the tax going place, it grows it

903
00:44:42,600 --> 00:44:45,120
Speaker 10: about four percent a year. So Security is growing at

904
00:44:45,120 --> 00:44:47,880
Speaker 10: seven point two percent, Medicare is growing at you know,

905
00:44:48,000 --> 00:44:51,000
Speaker 10: six point five percent. You're never going to close the

906
00:44:51,000 --> 00:44:54,440
Speaker 10: gap unless you get through your inside as well.

907
00:44:54,600 --> 00:44:57,640
Speaker 2: Douglas holtz Echan great to have you back with us here.

908
00:44:57,760 --> 00:45:02,000
Speaker 2: Maybe next time we talk, mister Holtzeekin, will have a deal.

909
00:45:02,440 --> 00:45:06,960
Speaker 2: Maybe imagine a world.

910
00:45:09,560 --> 00:45:12,920
Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch the

911
00:45:12,960 --> 00:45:16,840
Speaker 1: program live weekdays at one Eastern on Bloomberg Radio, the

912
00:45:16,880 --> 00:45:20,240
Speaker 1: tune in app, Bloomberg dot Com, and the Bloomberg Business App.

913
00:45:20,360 --> 00:45:23,200
Speaker 1: You can also listen live on Amazon Alexa from our

914
00:45:23,239 --> 00:45:29,120
Speaker 1: flagship New York station. Just say Alexa play Bloomberg eleven thirty.

915
00:45:29,760 --> 00:45:31,560
Speaker 2: So we moved to the war in Ukraine. This is

916
00:45:31,600 --> 00:45:34,560
Speaker 2: really important. Look, everyone's obsessing over the debt ceiling right now,

917
00:45:34,560 --> 00:45:36,560
Speaker 2: and with good reason, but we thought this was important

918
00:45:36,560 --> 00:45:39,600
Speaker 2: to have this conversation today because it's also happening as

919
00:45:39,600 --> 00:45:41,560
Speaker 2: we speak, and in any other time, this would probably

920
00:45:41,600 --> 00:45:42,240
Speaker 2: be our lead.

921
00:45:42,080 --> 00:45:42,759
Speaker 1: Story right now.

922
00:45:42,760 --> 00:45:47,399
Speaker 2: For starters, Victor Orbon, the Hungarian Prime minister digging in

923
00:45:47,440 --> 00:45:53,920
Speaker 2: here over European Union a to Ukraine, offering sympathy for

924
00:45:54,040 --> 00:45:57,920
Speaker 2: his neighbor, but saying that he does not believe Ukraine

925
00:45:57,960 --> 00:46:02,279
Speaker 2: can win the war against Russia. So that generates a headline.

926
00:46:02,560 --> 00:46:04,400
Speaker 2: And we know that this is all happening against the

927
00:46:04,440 --> 00:46:07,920
Speaker 2: backdrop of these initial stages of a spring offensive. And

928
00:46:07,960 --> 00:46:11,200
Speaker 2: remember that nuclear power plant, the Zapparisia nuclear power plant

929
00:46:11,760 --> 00:46:14,080
Speaker 2: that was being shelled a couple of months ago. People

930
00:46:14,160 --> 00:46:16,160
Speaker 2: thought it was could be on the brink of a meltdown.

931
00:46:16,680 --> 00:46:21,120
Speaker 2: It's still a major problem. The seventh time the plant

932
00:46:21,160 --> 00:46:25,120
Speaker 2: has been disconnected from the power grid since being seized

933
00:46:25,120 --> 00:46:29,040
Speaker 2: by Russias invading forces. According to the International Atomic Energy Agency,

934
00:46:29,040 --> 00:46:31,400
Speaker 2: they're still shelling this plant. They're also pulling the power

935
00:46:31,440 --> 00:46:34,480
Speaker 2: and when that happens, it kicks over to a generator. Yeah,

936
00:46:34,920 --> 00:46:37,040
Speaker 2: and at some point there might not be enough diesel

937
00:46:37,080 --> 00:46:38,960
Speaker 2: in those generators to keep it going. And that's where

938
00:46:39,000 --> 00:46:41,239
Speaker 2: we run into a major problem. If that thing were

939
00:46:41,360 --> 00:46:44,360
Speaker 2: to melt down, it would be the biggest story so

940
00:46:44,480 --> 00:46:46,680
Speaker 2: far in the war. Would certainly be a game changer

941
00:46:46,719 --> 00:46:47,280
Speaker 2: for Ukraine.

942
00:46:47,400 --> 00:46:50,000
Speaker 13: Yeah, and not just for Ukraine, for wider Europe, because

943
00:46:50,040 --> 00:46:53,640
Speaker 13: this is the biggest nuclear facility on the contant number

944
00:46:53,640 --> 00:46:57,239
Speaker 13: where right, And to your point, even when you have

945
00:46:57,560 --> 00:47:00,239
Speaker 13: reactors shut down, you still need a constant supply of

946
00:47:00,280 --> 00:47:04,200
Speaker 13: electricity to keep that nuclear fuel cool exactly and prevent

947
00:47:04,760 --> 00:47:06,759
Speaker 13: a meltdown. That is really the issue here is this

948
00:47:06,840 --> 00:47:11,040
Speaker 13: is still quite frankly and very vulnerable territory.

949
00:47:11,080 --> 00:47:13,480
Speaker 2: That's why we wanted to bring back Marianna, but Jaron,

950
00:47:13,560 --> 00:47:17,360
Speaker 2: senior research associate with the Project on Managing the Atom

951
00:47:17,920 --> 00:47:21,160
Speaker 2: at the Harvard Kennedy Schools Belfer Center. Marianna, it's great

952
00:47:21,160 --> 00:47:23,400
Speaker 2: to have you back here on Bloomberg. We talked months

953
00:47:23,400 --> 00:47:26,280
Speaker 2: ago when this was a so called front page story,

954
00:47:26,280 --> 00:47:28,480
Speaker 2: and I feel like it ought to be now how

955
00:47:28,480 --> 00:47:32,960
Speaker 2: close the disaster is Zaparisha, Well.

956
00:47:32,800 --> 00:47:36,240
Speaker 7: Joe and Kylie, thank you so much for inviting me back,

957
00:47:36,480 --> 00:47:39,680
Speaker 7: and thank you actually for bringing this topic back to

958
00:47:40,840 --> 00:47:41,480
Speaker 7: our attention.

959
00:47:41,719 --> 00:47:42,759
Speaker 5: We're trying because, of.

960
00:47:42,719 --> 00:47:47,239
Speaker 7: Course, as you were saying, they trouble or the situation

961
00:47:48,000 --> 00:47:51,080
Speaker 7: as the Putiger Nuclear powplant has not gone away. It's

962
00:47:51,120 --> 00:47:53,719
Speaker 7: the largest nuclear power plant. It's still occupied by a

963
00:47:53,760 --> 00:48:00,560
Speaker 7: hostile military force. This is absolutely unprecedented, right, so we

964
00:48:00,600 --> 00:48:04,400
Speaker 7: are really learning as we go of what can and

965
00:48:04,440 --> 00:48:08,840
Speaker 7: cannot be done to keep this plant secure. You mentioned

966
00:48:08,840 --> 00:48:14,279
Speaker 7: that it have been disconnected from electricity. You know, there

967
00:48:14,320 --> 00:48:17,719
Speaker 7: are backup generators of course, that kick in when that happens.

968
00:48:18,080 --> 00:48:21,560
Speaker 7: The problem is generators that are deployed there, they're not

969
00:48:22,000 --> 00:48:26,600
Speaker 7: designed to be switched on and off multiple times over

970
00:48:26,640 --> 00:48:29,040
Speaker 7: a very short period of time. So one of the

971
00:48:29,080 --> 00:48:33,120
Speaker 7: concerns is that these generators literally will will break down

972
00:48:33,960 --> 00:48:36,479
Speaker 7: and there won't be a backup generator next time there's

973
00:48:36,520 --> 00:48:41,640
Speaker 7: a power outage. Clearly there's some redundancy there. There's about

974
00:48:41,680 --> 00:48:45,680
Speaker 7: twenty generators that are helping out. But that's one of

975
00:48:45,760 --> 00:48:49,680
Speaker 7: the things that nuclear engineers and engineers that are thinking

976
00:48:49,719 --> 00:48:53,920
Speaker 7: about these things are considering how to make you know,

977
00:48:54,040 --> 00:48:56,799
Speaker 7: a better, more robust, and more reliable generator for such

978
00:48:56,840 --> 00:48:57,240
Speaker 7: a case.

979
00:48:57,800 --> 00:49:02,040
Speaker 13: Well, and of course, Mariana, that's you know, technology and equipment.

980
00:49:02,080 --> 00:49:04,800
Speaker 13: There's also the question of the people and the actual

981
00:49:04,840 --> 00:49:06,000
Speaker 13: staff at the power plant.

982
00:49:07,640 --> 00:49:11,560
Speaker 7: Absolutely, so as far as we know, the actual critical

983
00:49:11,760 --> 00:49:16,400
Speaker 7: systems and equipment is still functional. It's still intact. We

984
00:49:16,480 --> 00:49:21,640
Speaker 7: know that because there is a permanent mission rotating mission,

985
00:49:21,680 --> 00:49:24,760
Speaker 7: but there's a permanent presence of the International Atomic Energy

986
00:49:24,800 --> 00:49:27,480
Speaker 7: Agency at the plant. There's three people at any given

987
00:49:27,600 --> 00:49:29,759
Speaker 7: point of time to come in for four weeks and

988
00:49:29,800 --> 00:49:32,520
Speaker 7: then they rotate out. So right now we are on

989
00:49:32,880 --> 00:49:35,759
Speaker 7: i think maybe the ninth mission since they started in

990
00:49:36,719 --> 00:49:40,640
Speaker 7: September last year, So we know that, you know, the

991
00:49:40,680 --> 00:49:44,240
Speaker 7: plant is sort of okay in terms of its physical

992
00:49:44,239 --> 00:49:50,080
Speaker 7: integrity for now, but the human and organizational situation is

993
00:49:50,200 --> 00:49:54,360
Speaker 7: really quite dire. So before the war there were about

994
00:49:54,480 --> 00:49:58,680
Speaker 7: eleven thousand people working at the plant. Now, of course

995
00:49:58,719 --> 00:50:04,040
Speaker 7: that's including you know, genitors and nurses and all this

996
00:50:04,239 --> 00:50:08,440
Speaker 7: sort of auxiliary staff. But of the core operating staff,

997
00:50:08,480 --> 00:50:12,320
Speaker 7: the fact that's needed to run a nuclear six nuclear reactors,

998
00:50:13,160 --> 00:50:17,000
Speaker 7: there were about twelve hundreds. Right now we're down to

999
00:50:17,360 --> 00:50:21,160
Speaker 7: about five hundreds, so that's less than half of people

1000
00:50:21,280 --> 00:50:26,160
Speaker 7: that are required to run these very demanding critical facilities.

1001
00:50:27,080 --> 00:50:31,480
Speaker 7: And they're working under really terrible conditions. Right they have

1002
00:50:32,239 --> 00:50:34,920
Speaker 7: an occupying force, they have military people with guns and

1003
00:50:34,960 --> 00:50:38,280
Speaker 7: they're operating rooms. They're afraid for their safety. They're afraid

1004
00:50:38,320 --> 00:50:41,680
Speaker 7: for the safety of their family that lives near Buying

1005
00:50:41,719 --> 00:50:45,240
Speaker 7: and not Hoddad. Many people have left. Others who stayed

1006
00:50:45,320 --> 00:50:48,239
Speaker 7: came under pressure to sign contracts with the Russians, with

1007
00:50:48,719 --> 00:50:55,360
Speaker 7: Russian operator Rosatom, you know, and we hear stories of torture,

1008
00:50:55,520 --> 00:51:00,120
Speaker 7: of pressure, of blackmail. So you can only imagine what

1009
00:51:00,200 --> 00:51:03,319
Speaker 7: it is like to run a nuclear power plant under

1010
00:51:03,360 --> 00:51:07,399
Speaker 7: those conditions. And the equipment is only as good as

1011
00:51:07,440 --> 00:51:10,239
Speaker 7: the people who run it. Right, you can have a

1012
00:51:10,280 --> 00:51:14,040
Speaker 7: perfectly so you know, found cooling system, but if there

1013
00:51:14,160 --> 00:51:17,280
Speaker 7: isn't a person who does regular maintenance, and who checks

1014
00:51:17,280 --> 00:51:20,760
Speaker 7: that it's running properly. Then it's a it's a real problem.

1015
00:51:21,400 --> 00:51:25,040
Speaker 2: This is actual nuclear science. How worried are you with

1016
00:51:25,160 --> 00:51:28,440
Speaker 2: all of that, said Marianna about this spring offensive and

1017
00:51:28,840 --> 00:51:32,560
Speaker 2: what a counter offensive could bring, I.

1018
00:51:32,560 --> 00:51:36,360
Speaker 7: Am quite worried. To quote a director general of the

1019
00:51:36,400 --> 00:51:40,479
Speaker 7: IA orfl Grosy, we're sort of flipping a coin here

1020
00:51:40,560 --> 00:51:43,680
Speaker 7: every time. We know that there are reports and there

1021
00:51:43,680 --> 00:51:47,000
Speaker 7: are confirmed reports that some of the turbine halls, some

1022
00:51:47,040 --> 00:51:50,719
Speaker 7: of these reactor units have been mined by the Russians.

1023
00:51:50,760 --> 00:51:58,359
Speaker 7: There's military equipment deployed to the power plant, so it's

1024
00:51:58,480 --> 00:52:02,439
Speaker 7: very difficult to know and to divine Russian intentions. They

1025
00:52:02,480 --> 00:52:05,800
Speaker 7: clearly have not seized this plant. To operate this plant,

1026
00:52:05,880 --> 00:52:09,840
Speaker 7: they weren't unable to connect it to the Russian controlled grid.

1027
00:52:10,280 --> 00:52:13,080
Speaker 7: They're not looking at this as an asset that they

1028
00:52:13,520 --> 00:52:15,919
Speaker 7: want to, you know, an economic asset that they want

1029
00:52:16,000 --> 00:52:20,760
Speaker 7: to cherish and develop and use. Their reports of looting

1030
00:52:21,480 --> 00:52:24,680
Speaker 7: the training center for this kind of reactor, the BDER

1031
00:52:24,840 --> 00:52:30,600
Speaker 7: one thousand reactors that's deployed there, that has been demolished,

1032
00:52:30,920 --> 00:52:35,200
Speaker 7: just vandalized, you know, if you remember reports from Chernobyl

1033
00:52:35,320 --> 00:52:39,200
Speaker 7: just kind of this mindless bandalism that took place. Some

1034
00:52:39,360 --> 00:52:42,640
Speaker 7: of it is also going on as Apudisia today. So

1035
00:52:42,800 --> 00:52:46,400
Speaker 7: one only wonders what the Russians might be up to

1036
00:52:46,719 --> 00:52:50,800
Speaker 7: and what they might do when they see Ukrainian forces

1037
00:52:50,840 --> 00:52:56,720
Speaker 7: coming or there is a successful offensive Ukrainian offensive very soon,

1038
00:52:57,680 --> 00:52:59,640
Speaker 7: and that worries me quite a bit. I think we

1039
00:52:59,800 --> 00:53:04,360
Speaker 7: really underestimated the length to which the Russian leadership and

1040
00:53:04,360 --> 00:53:08,080
Speaker 7: the Russian military will go to break every rule of engagement,

1041
00:53:08,239 --> 00:53:12,880
Speaker 7: every rule of war there is, And so that's what

1042
00:53:13,040 --> 00:53:14,040
Speaker 7: kind of keeps me up.

1043
00:53:13,920 --> 00:53:16,239
Speaker 2: At night, to be honest, Well, that's for sure. That's

1044
00:53:16,280 --> 00:53:17,920
Speaker 2: why I wanted to talk to you, Mariana. We'd like

1045
00:53:17,960 --> 00:53:20,680
Speaker 2: to stay close with you on this as this spring

1046
00:53:20,719 --> 00:53:24,600
Speaker 2: offensive gathers steam. Mariana with Jaron Senior research associate with

1047
00:53:24,640 --> 00:53:27,560
Speaker 2: the Project on Managing the Atom. How perfect for this

1048
00:53:27,600 --> 00:53:30,120
Speaker 2: conversation at the Harvard Kennedy School's Belford Center. You know,

1049
00:53:30,160 --> 00:53:33,320
Speaker 2: we talk so much, Kayley, about what you know, the

1050
00:53:33,400 --> 00:53:36,080
Speaker 2: F sixteen's or some other weapons system might do to

1051
00:53:36,239 --> 00:53:40,280
Speaker 2: escalate the war, bring it across borders. This would instantly

1052
00:53:40,360 --> 00:53:43,880
Speaker 2: erase borders if were to melt down, and we would

1053
00:53:43,920 --> 00:53:47,120
Speaker 2: be having a very different conversation about it, so people

1054
00:53:47,160 --> 00:53:53,080
Speaker 2: need to know about it. Thanks for listening to The

1055
00:53:53,160 --> 00:53:56,080
Speaker 2: Sound On podcast. Make sure to subscribe if you haven't already,

1056
00:53:56,160 --> 00:53:59,040
Speaker 2: at Apple, Spotify, and anywhere else you get your podcasts,

1057
00:53:59,400 --> 00:54:02,080
Speaker 2: and you can find us live every weekday from Washington,

1058
00:54:02,160 --> 00:54:05,040
Speaker 2: d C. At one pm Eastern Time at Bloomberg dot

1059
00:54:05,080 --> 00:54:06,880
Speaker 2: com