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Speaker 2: Alongside Jordan's King Abdullah, President Trump holding forth in an
Speaker 2: unexpected news conference that was supposed to be close press
Speaker 2: and a meeting that will extend through the day. Here,
Speaker 2: of course, the first Arab leader to visit this new
Speaker 2: White House at a precarious time in the Middle East,
Speaker 2: Donald Trump speaking to his proposals for the Gaza strip
Speaker 2: that are quite controversial and one that the King of
Speaker 2: Jordan is likely not going to be agreeing with even
Speaker 2: after meetings today. Although Kaylee, as we just heard from
Speaker 2: King Abdullah, Jordan will be receiving a couple of thousand
Speaker 2: sick Palestinian children as opposed to the hundreds of thousands
Speaker 2: of potential refugees under the eyes of Donald Trump that
Speaker 2: he was hoping Jordan might accept. I'm Joe Matthew alongside
Speaker 2: Kaylee Lines in Washington. This is Balance of Power on
Speaker 2: Bloomberg TV. And radio. Interesting to have the media in
Speaker 2: the room for what was supposed to be a private conversation.
Speaker 3: Yeah, and there is no telling whether or not this
Speaker 3: is something the King of Jordan was actually looking forward
Speaker 3: to considering. They made a point to not schedule a
Speaker 3: joint press conference where they would have to field questions
Speaker 3: from reporters, and yet they did have to do so
Speaker 3: inside the Oval Office. To your point, show the number
Speaker 3: two thousand six children from Gaza that Jordan has agreed
Speaker 3: to accept, but no such agreements made on wider acceptance
Speaker 3: of those who are currently in Gaza, and no real
Speaker 3: input from the King of Jordan as to Donald Trump's
Speaker 3: plan for the US to take over Gaza. The King
Speaker 3: suggested that the Egyptian plan needs to be looked at
Speaker 3: as well. Really, no commitments made on that front, even
Speaker 3: though clearly the President of the United States is doubling
Speaker 3: down on that.
Speaker 2: Yeah, and suggested they were ninety percent on the way
Speaker 2: to a deal with Egypt. I think was the word
Speaker 2: that he used. So we'll see what comes from all
Speaker 2: of this. This is obviously an important conversation since Donald
Speaker 2: Trump came into office and he has reiterated his threat
Speaker 2: for all Hell to break out in Gaza if hostages
Speaker 2: are not released by noontime on Saturday. He said he
Speaker 2: did not accept that to happen. Expect that to happen.
Speaker 1: Kid.
Speaker 3: Yeah, So we want to get into all of this
Speaker 3: now and turn to Ian Marlow, who covers foreign policy
Speaker 3: for US here at Bloomberg and is here with us
Speaker 3: in our Washington, d C. Studio. So, Ian, obviously there's
Speaker 3: a lot to work through here. But when it comes
Speaker 3: to the plans and Gaza specifically, there's first the notion
Speaker 3: that Palestinians would be forced to leave Gaza and unclear
Speaker 3: listening to the President just now as to whether or
Speaker 3: not they would be welcome back to it once the
Speaker 3: land is redeveloped. Then there's the question of who would
Speaker 3: actually accept these individuals if they dained to leave. Are
Speaker 3: we getting clarity on whether there's going to be cooperation
Speaker 3: with what President Trump wants to do here.
Speaker 4: No, And the only thing I think the whole region
Speaker 4: can agree on is that this idea is a total
Speaker 4: non starter. It is fascinating to watch the Jordanian king
Speaker 4: kind of squirm in his chair there, possibly not even
Speaker 4: realizing this was going to be a public meeting. With
Speaker 4: media there asking questions, asking questions to him about whether
Speaker 4: he would accept Palestinians. You have to remember, throughout the
Speaker 4: whole Biden administration, throughout several decades, the idea of Palestinians
Speaker 4: being expelled from Gaza is unbelievably offensive to to so
Speaker 4: many people across the Middle East. And as part of
Speaker 4: the animating idea, you know that there's the animating challenge
Speaker 4: but behind the Israeli Palestinian conflict, and and Trump is
Speaker 4: coming in here hoping to ignore history and view this
Speaker 4: as a real estate deal. And the Jordanian king, who
Speaker 4: himself is dealing with a bit of a shaky proposition
Speaker 4: at home in terms of the population, the popularity of
Speaker 4: the monarchy and UH, and you know, potential unrest that
Speaker 4: they worry about will kind of trickle over the border
Speaker 4: from from from the West Bank into join Uh. There's
Speaker 4: huge concerns there about what being forced to take Palestinians
Speaker 4: out of out of Gaza, you know, out of Palace,
Speaker 4: you know what they view as Palestine and have them
Speaker 4: never come back. I mean, this is just it's it's
Speaker 4: for for Jordanians, for Egyptians. This is not going to
Speaker 4: happen and so it's it's very interesting to see how
Speaker 4: Trump is going to keep pushing this forward. What he
Speaker 4: hopes to get. Is it just to pressure Hamas into
Speaker 4: taking a deal. Is it something he's going to really
Speaker 4: fully carry through on. It's it's fascinating to watch.
Speaker 2: What happens at noontime Saturday.
Speaker 4: Yeah, it'll be interesting to see exactly how Hamas and
Speaker 4: Israel deal with this. To some degree, Israel and the
Speaker 4: Israeli far right are the only people in the region
Speaker 4: or in the world who are really taking the idea
Speaker 4: of expelling Palestinians from Gaza seriously. To them, the idea
Speaker 4: is great. I mean, there's a lot on the Israeli
Speaker 4: right who who want to do that and have wanted
Speaker 4: to do that for years, and they want the West
Speaker 4: Bank as well. So it's that idea has found traction
Speaker 4: in Israel in a way that it it hasn't, and
Speaker 4: so it's now that it's being tied up with the
Speaker 4: actual hostage release process in the ceasefire. I don't know
Speaker 4: if that's incredibly combustible or whether it you know, whether
Speaker 4: it's a good thing or a bad thing in terms
Speaker 4: of piling pressure for them to keep the deal going
Speaker 4: because you know, the alternative that Trump is offering is
Speaker 4: just so extreme. You can imagine the Jordanians and the Egyptians,
Speaker 4: you know, want the ceasefire to keep going. They don't
Speaker 4: want to see, you know, you know, some renewed conflict.
Speaker 3: Aium well, and on the kind of extremity of what
Speaker 3: the president is proposing. He was asked by journalists in
Speaker 3: the Oval Office this notion that this is not US
Speaker 3: sovereign territory we're talking about. When he was asked by
Speaker 3: what authority he thinks the US can go in, he
Speaker 3: just said, US authority suggested they wouldn't have to buy Gaza,
Speaker 3: they can just go in Ian is that's not true.
Speaker 4: It's not true, It's not possible. You know a lot
Speaker 4: of people who have watched the region for decades, who
Speaker 4: have worked for the US government, are just saying this
Speaker 4: idea does not make any sense, and that privately a
Speaker 4: lot of the Arab officials think this is it's nutty, right,
Speaker 4: And it's just a.
Speaker 3: Question if anyone would act to stop the US trying
Speaker 3: to do this, if Donald Trump were really just send
Speaker 3: people over.
Speaker 4: Yeah, it's hard to see it. It's hard to even
Speaker 4: fathom what that would what that would look like other
Speaker 4: than boots on the ground, and boots on the ground
Speaker 4: is something that you know, a lot of people who
Speaker 4: voted for him, a lot of people you know, in
Speaker 4: his defense department, don't really want to see. And so
Speaker 4: it'll be interesting to see what that looks like. I mean,
Speaker 4: Gaza is largely rubble now. It is a very complicated,
Speaker 4: tragic situation. And again, like you know, the White House
Speaker 4: is selling this is outside the box thinking. And you know, potentially,
Speaker 4: you know, as the authors of the Abraham Accords that
Speaker 4: united parts of the region before in the last administration,
Speaker 4: maybe they have some track record thinking outside the box
Speaker 4: on this. But for many people who look at these
Speaker 4: issues seriously, it's hard to see how any of the
Speaker 4: logistics or mechanics or practicalities of this would work in
Speaker 4: any way at all.
Speaker 2: Insights from Ian Marlow. Thank you Ian, as always reporting
Speaker 2: on diplomacyed foreign policy here at Bloomberg in Washington.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
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Speaker 1: New York station, Just Say Alexa played Bloomberg eleven thirty.
Speaker 2: We've been balancing a couple of developing and breaking stories
Speaker 2: since we came to air at noontime Eastern. It was
Speaker 2: only about an hour ago, in fact, that fed Share J.
Speaker 2: Powell wrapped his first of two days of testimony on
Speaker 2: Capitol Hill, making it clear that no interest rate cuts
Speaker 2: are coming anytime soon.
Speaker 5: With our policy stance now significantly less restricted than it
Speaker 5: restrictive than it had been, and the economy remaining strong,
Speaker 5: we do not need to be in a hurry to
Speaker 5: adjust our policy stance. We know that reducing policy restraint
Speaker 5: too fast or too much could hinder progress on inflation.
Speaker 2: Also watching and listening today, Diane Swank, chief economist KPMG,
Speaker 2: with us now live on Bloomberg TV and Radio. Diane,
Speaker 2: it's great to have you back. Thank you for your
Speaker 2: patients as we balance a couple of stories here based
Speaker 2: on what you just heard from Chair Powell today, and
Speaker 2: of course we're going to have another conversation on the
Speaker 2: House side tomorrow, and the fact that basically rate cuts
Speaker 2: are not fully priced in until September. Should the fed
Speaker 2: Share just take the next six months off.
Speaker 6: I think the Fed's going to take more than the
Speaker 6: next six months off. The bottom line is the FED
Speaker 6: is made very clear that they're not going to front
Speaker 6: run any policies by this administration. I think that's important.
Speaker 6: The other side of it is they have eased that
Speaker 6: last cut in December was controversial within the Federal Reserve.
Speaker 6: We saw the descent, but we also saw thirty percent
Speaker 6: of participants that were at that meeting did not see
Speaker 6: any cuts at all going forward. And the fact that j.
Speaker 6: Powell was much more open to the fact that the
Speaker 6: neutral rate had moved up substantially from where we were
Speaker 6: pre pandemic is important as well, because the fear is
Speaker 6: with inflation still smoldering out there, you could easily reignite
Speaker 6: inflation and that is not a place they want to be.
Speaker 6: And frankly, all the economic data makes them very comfortable
Speaker 6: being on the sidelines well.
Speaker 3: As we talk about inflation smoldering, though Diane Chairman Powell
Speaker 3: today suggested that inflation expectations are still well anchored, and
Speaker 3: I wonder if you share that view. Consider on the
Speaker 3: subject of data, we had missed figures that showed inflation
Speaker 3: expectations rising on the part of the consumer because of tariffs.
Speaker 3: Is there not a risk here that an unanchoring could
Speaker 3: be upon us.
Speaker 6: I think there is a risk that ungreed could be
Speaker 6: upon us. We saw in the University of Michigan Index
Speaker 6: two months in a row where fears of inflation moved
Speaker 6: up on fears of tariffs. So clearly that's in the
Speaker 6: consumer's mindset. CEOs are not showing as much of an
Speaker 6: increase in their inflation expectations, and they've actually continued to
Speaker 6: come down. And there's mixed news from the New York
Speaker 6: Fed as well. Their surveys show that a pickup in
Speaker 6: inflation in December, but expectations by consumers in January, because
Speaker 6: we did not get the initial tariff announcements on the
Speaker 6: inauguration day that actually came off a little bit. So
Speaker 6: there's a lot of mixed news down that. But we've
Speaker 6: also seen within the FED themselves debating whether or not
Speaker 6: inflation expectations are well anchored and could they be unanchored.
Speaker 6: We heard Lori Logan address this from the Dallas FED
Speaker 6: two and I think that's very important to remember, is
Speaker 6: that the debate within the FED is really heating up
Speaker 6: as inflation is not cooling as fast as they'd like,
Speaker 6: and that concern about reigniting those smolder numbers is still
Speaker 6: out there.
Speaker 2: So to what extent then, could tariffs still change the
Speaker 2: view of the Fed. We've basically got a thirty day
Speaker 2: review underway right now when it comes to Canada and
Speaker 2: Mexico for instance, Donald Trump has also been promising more
Speaker 2: when it comes to reciprocal tariffs. What is it going
Speaker 2: to take for tariffs to change the forecast? For Jpowell?
Speaker 6: Well, this is a FED that doesn't want to front
Speaker 6: run any policy, so they'll wait and see what the
Speaker 6: actual impact of tariffs are and what tariffs are actually implemented.
Speaker 6: That said, we do know that historically the tariffs are
Speaker 6: inflationary unless we see a big spike in unemployment, and
Speaker 6: those two things have not yet occurred, and so the
Speaker 6: FED doesn't want to get too far ahead of itself.
Speaker 6: But the bottom line is, if tariffs are enacted without
Speaker 6: a spike in employment unemployment, you will see the FED
Speaker 6: act and continue to stay on the sidelines. Hopefully they
Speaker 6: don't want to have to reverse course and after raise
Speaker 6: rates against after they cut rates so much, And I
Speaker 6: think that's important as well, because if we're talking about
Speaker 6: a much higher neutral rate, what is it? And nobody
Speaker 6: actually knows what the neutral rate is. That's sort of
Speaker 6: a fuzzy number that moves around, and the concern is
Speaker 6: that we could be already too close to it. And
Speaker 6: that's something I think that you're going to see much
Speaker 6: more of a debate within the FED coming out in
Speaker 6: terms of people talking differently about how they see inflation
Speaker 6: going forward.
Speaker 3: Well, and of course it's not just the FED talking
Speaker 3: amongst themselves, Diane, but people talking about the FED, including
Speaker 3: those in this administration. Just last week, we had an
Speaker 3: exclusive conversation with Scott Best and the new Treasury Secretary
Speaker 3: suggesting he does not want to weigh in on monetary policy,
Speaker 3: basically saying that this administration is not concerned as to
Speaker 3: whether or not the FED wants is to cut rates
Speaker 3: or high rates. They're just trying to make sure that
Speaker 3: the tenure yield goes down. We heard the Chairman talking
Speaker 3: about this in the testimony today, that actually the FED
Speaker 3: only has so much control over things like mortgage race
Speaker 3: because it's about what the tenure is doing. Do you
Speaker 3: see the ability for fiscal conversations happening here in Washington,
Speaker 3: even if the FED is not really trying to take
Speaker 3: those into accounts, still altering what borrowing costs look like
Speaker 3: in this.
Speaker 6: Economy absolutely, I mean everything from deficit financying of tax
Speaker 6: cuts that could push the yield up even further. On
Speaker 6: the other side of it, some of the spending cuts
Speaker 6: that they're trying to attempt to do may actually take
Speaker 6: some of the steam out of the upward rise in
Speaker 6: bond yields. So clearly this is outside of the Fed's purview.
Speaker 6: They can only do what they can do at the
Speaker 6: short end of the curve. The Treasury Secretary is also
Speaker 6: made clear that he would like to change some things
Speaker 6: that he's doing at the long end of the cur
Speaker 6: her and perhaps be able. There has been a statements
Speaker 6: by the administration they'd like to see a dollar depreciation.
Speaker 6: That's why they're so focused on the long end of
Speaker 6: the yield curve. What is unclear is how much they
Speaker 6: could actually engineer that on their own.
Speaker 2: What's the higher deficits mean for inflation, Diane, particularly if
Speaker 2: the Trump tax cuts, if extended, are not paid for.
Speaker 6: Well. The extension of the tax cuts alone aren't all
Speaker 6: that stimulative because we're already in place, so you know,
Speaker 6: falling off a cliff of not extending the tax cuts
Speaker 6: that would be holding back the economy quite dramatically. What
Speaker 6: really matters is the composition of tax cuts going forward.
Speaker 6: Are they going to be just extensions and sweeteners for
Speaker 6: individuals or will there also be some offsets on investment
Speaker 6: to try to offset any losses we see due to
Speaker 6: tariffs and the higher costs of tariffs. And that's where
Speaker 6: a lot of debate is currently going on in Washington
Speaker 6: and trying to think about how do we think about
Speaker 6: expensing investments right now? How do we think about R
Speaker 6: and D. I don't think they're going to come up
Speaker 6: with any solutions on that till year end because it
Speaker 6: is so complicated. But depending on where the tax cuts
Speaker 6: actually come, that will have a different effect on the
Speaker 6: overall treasury bond market. But we have seen some return
Speaker 6: globally of the bond vigilantes, and I don't think they're
Speaker 6: limited anymore to developing economies alone. We've already seen the
Speaker 6: UK and France actually feel their ire.
Speaker 3: Well, Diane. Obviously, the argument the administration makes in favor
Speaker 3: of tax cuts is that is going to juice growth,
Speaker 3: but I do wonder what realistically you think GDP growth
Speaker 3: expectations will look like if yes, you get those tax cuts,
Speaker 3: or at the very least we don't fall off a cliff,
Speaker 3: but it's coming with tariffs, with changes in the labor
Speaker 3: market because of deportations from the reduction and size of
Speaker 3: the federal government. How does all of that come together
Speaker 3: as one big picture?
Speaker 6: What really is an issue of sequencing what happens first
Speaker 6: and what matters first? Because the tax cuts are likely
Speaker 6: backloaded into twenty twenty six and twenty twenty seven, so
Speaker 6: the upward effect on growth is in those years. Well,
Speaker 6: the suppressing effect of higher inflation and the immigration losses
Speaker 6: that comes up front as well. It depends on how fast.
Speaker 6: Usually we see these things evolve very slowly, but the
Speaker 6: shock and add that the administration has been going for
Speaker 6: to get faster economic results, particularly on the immigration front,
Speaker 6: could also have more damaging effects. We already have heard,
Speaker 6: certainly anecdotally from a lot of firms that have said
Speaker 6: they're not able to do the kind of things that
Speaker 6: they thought they could because workers literally aren't showing up
Speaker 6: because of fear of deportation. So that has its own
Speaker 6: stagnating effect on the economy and its own drag on
Speaker 6: economic growth. It also cuts into our ability to grow
Speaker 6: potential growth. And of course we know immigration is a
Speaker 6: big part of the deficit in terms of lowering it
Speaker 6: because immigrants pay into Social Security and Medicare, but they
Speaker 6: cannot collect it unless they ever achieve a Green card
Speaker 6: or actual US citizenship.
Speaker 3: All right, Diane Swank helping us look at all the
Speaker 3: different pieces of this puzzle. Chief economist at KPMG, thank
Speaker 3: you for joining us here on Balance of Powers. We
Speaker 3: watch from Washington the testimony Jerome Powell gave on Capitol
Speaker 3: Hill earlier today.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
Speaker 1: us live weekdays at noon and five pm Eastern on Apple,
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Speaker 2: Good to have you with us here on the Tuesday
Speaker 2: edition of Ballance of Power on Bloombird TV and Radio.
Speaker 2: I am Joe Matthew alongside Kaylee Liones in Washington, where
Speaker 2: Donald Trump today is meeting with the King of Jordan.
Speaker 2: Will keep eyes on what may come from their can
Speaker 2: continued meetings. They already allowed reporters into the Oval office
Speaker 2: for a while. Not too much news, but Jordan has
Speaker 2: agreed to take a couple of thousand sick Palestinian children
Speaker 2: as Donald Trump looks for more help in resettling Palestinian refugees.
Speaker 2: I'll tell you what though, when it comes to the
Speaker 2: executive actions, Kayley, that we've seen from this White House,
Speaker 2: the courts have been very busy. Usaid employees are suing,
Speaker 2: universities are filing over NIH funding cuts, public citizen claims,
Speaker 2: foreign aid freeze, labor unions filing a challenge over the DOGE.
Speaker 2: Just got another ruling here yep. Doge remains temporarily blocked
Speaker 2: from accessing Treasury data. Of course, the hand was in
Speaker 2: the cookie jar pretty early on this one, as the
Speaker 2: payment system is in fact seized by the DOGE.
Speaker 3: Yeah, or a granted access to and a federal judge
Speaker 3: had already earlier this week or over the weekend ruled
Speaker 3: that they cannot have access to that system. Then there
Speaker 3: was concern on the part of the government, the Department
Speaker 3: of Justice counter saying that actually they were cutting off
Speaker 3: Treasury officials' ability to access the system as well. So
Speaker 3: it's a bit of a revision to the restrictions from
Speaker 3: the federal judge leadership at the Treasury is now exempted.
Speaker 3: Dog can still not get in, but obviously that probably
Speaker 3: only does so much to pacify those concerned or to
Speaker 3: alleviate what the administration is saying is the courts acting
Speaker 3: in a way that they should not be exercising authority
Speaker 3: over executive power.
Speaker 2: It's an interesting moment here, as we saw in the
Speaker 2: first Trump administration and now in the second, just testing
Speaker 2: a lot of ideas in the courts as Congress watches along.
Speaker 2: That's where we start our conversation with our signature panel.
Speaker 2: They're back today, Rick Davis, partner at Stone Court Capital,
Speaker 2: Republican strategist and Bloomberg Politics contributor, alongside Democratic analyst Genie Shanzano,
Speaker 2: Bloomberg Politics contributor and political science professor at Iona University.
Speaker 2: What do you think here, Genie? It was a read
Speaker 2: only as we understand it, read only access to the
Speaker 2: Treasury's payment system and personal information that was tied to it.
Speaker 2: Is keeping guardrails up here? Will the courts be the answer,
Speaker 2: the check and the balance to this Trump White House
Speaker 2: of Congress will not be.
Speaker 7: They are trying to be that check. I don't know
Speaker 7: if it will sustain long term, because, of course, we
Speaker 7: have a vice president who just the other day said
Speaker 7: they can rule, and you know, we may not listen
Speaker 7: to those rulings, and that has set off this real
Speaker 7: concern that we will see a constitutional conflict like we've
Speaker 7: never seen between the executive and the judicial branch. But
Speaker 7: the reality is the judge is right about this. The
Speaker 7: when you look at the Treasury, the issues of privacy,
Speaker 7: cyber security, the constitutional issues, the security threats arising from
Speaker 7: what has happened by letting people who have not been
Speaker 7: properly vetted and who are not nonpartisan civil servants have
Speaker 7: access to these systems is incredibly dangerous. Not to mention
Speaker 7: the that it is Congress who the Supreme Court has
Speaker 7: long agreed authorizes the funding, and it is not the
Speaker 7: will of the Treasury or the executive branch to decide
Speaker 7: when they listen and when they don't. That is long
Speaker 7: set an American constitutional law and should not be upended
Speaker 7: by people who have not been elected or anyone else.
Speaker 3: Quite frankly, well so too Genie's point.
Speaker 5: Rick.
Speaker 3: Obviously, we can look at each of these cases in
Speaker 3: the judge's rulings individually, whether it's USA idea or NIH related,
Speaker 3: if it's birthright citizenship, But all of this broadly seems
Speaker 3: to be about a question around the constitution. Do you
Speaker 3: sense that there is a kind of constitutional crisis brewing
Speaker 3: just weeks into this administration.
Speaker 6: No? Not.
Speaker 8: At this point, I'm not exactly sure how much of
Speaker 8: this is constitutional and how much of it's not. I
Speaker 8: am not a constitutional expert, so I'm my own layman's
Speaker 8: point of view is that this is actually a strategy
Speaker 8: that the Trump administration is actually trying to foment, which is,
Speaker 8: let's poke around and see whether or not we can
Speaker 8: extend the power of the executive branch by treading on
Speaker 8: some of the things that have historically been the purview
Speaker 8: of Congress and even in some cases the judicial system,
Speaker 8: and then let the judicial system tell me whether I'm
Speaker 8: right or wrong. And so far that's pretty much how
Speaker 8: it's been played out. As you pointed out, there are
Speaker 8: a lot of lawsuits on the issues that have been
Speaker 8: presented as far as access to and manipulation of agency
Speaker 8: funding for congressionally approved programs, and I think that it's
Speaker 8: going to be a real test for the judicial branch
Speaker 8: to say how much they feel this executive encroachment into
Speaker 8: the congressional authority is allowed. And the greatest, I think
Speaker 8: interesting aspect of all this is the credible lack of
Speaker 8: engagement by Congress. Republicans in Congress seem perfectly happy to
Speaker 8: abdicate their authorities to this executive branch, and I would
Speaker 8: I would caution him only that if Democrats were ever
Speaker 8: elected to the presidency again, they're going to want to
Speaker 8: have that authority and Republicans are going to probably try
Speaker 8: to resist it. So you're you're putting yourselves in an
Speaker 8: interesting position of having to seed this temporarily to this president,
Speaker 8: and you know, no telling who's going to be the
Speaker 8: next president and whether or not you're going to want
Speaker 8: that to happen again. So I think we're creating precedent
Speaker 8: more than breaking constitutional mandates. But I think the courts
Speaker 8: are going to tell us just how far this administration
Speaker 8: can go.
Speaker 2: Well, how about Democrats in Congress? Genie is Hakim Jeffrey's
Speaker 2: the right leader for right now?
Speaker 7: He's the leader we have. You know, Democrats don't have
Speaker 7: a lot of they don't they're not empowered really to
Speaker 7: push back. They are trying to do some of that.
Speaker 7: There is a lot of disagreement in the Democratic Party
Speaker 7: on how best to do that, and I think we're
Speaker 7: going to say see that rather play out, particularly when
Speaker 7: it comes to raising the debt ceiling when it comes
Speaker 7: to the funding for this year. One of the problems
Speaker 7: is is that Democrats have long sought protection in the courts,
Speaker 7: and that is not a viable solution for a political party.
Speaker 7: So they need to win the hearts and minds of
Speaker 7: the voters. These cases that are going up through the
Speaker 7: courts will continue to go up. But I would just
Speaker 7: say that what's changed on the part of the Trump
Speaker 7: administration here is the rhetoric. In the past, they have
Speaker 7: appealed decisions they didn't like, but accepted the rulings. What
Speaker 7: we have heard from jd. Vance, what we have heard
Speaker 7: from Elon Musk, even what the President hinted at, which
Speaker 7: has gotten people very concerned about a constitutional crisis, is
Speaker 7: the idea that judges have stepped over their ease on this.
Speaker 7: They don't have the power to set limits on the
Speaker 7: executive branch, and if they try, we may beating. The
Speaker 7: Trump administration not listen to that that is if it happens,
Speaker 7: a constitutional crisis like we've never seen before in the
Speaker 7: modern era, and that's what's got people concerned. So far,
Speaker 7: they have listened, but when it gets to the final arbiter,
Speaker 7: the Supreme Court, if they choose not to listen because
Speaker 7: they don't like the outcome, that is a constitutional crisis,
Speaker 7: and that is something that you know, in American history,
Speaker 7: would put us in unprecedented times.
Speaker 2: Judy Shanzino and Rick Davis our signature panel. It's great
Speaker 2: to have you both back with us again today on
Speaker 2: Bloomberg TV and Radio. It's Balance of Power, the Tuesday edition.
Speaker 2: I'm Joe Matthew alongside Kaylee Lions in Washington. As we
Speaker 2: turn our attention Kaylee back to the Middle East. The
Speaker 2: King of Jordan at the White House today does not
Speaker 2: agree with Donald Trump on a two state solution.
Speaker 3: Yeah, not willing to buy into the US taking over
Speaker 3: gaza Idea either. We're going to get into that with
Speaker 3: a former ambassador to Jordan, David Hale, is on his
Speaker 3: way in next on Balance of Power on Bloomberg TV
Speaker 3: and Radio.
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Speaker 3: Kaylee Lines alongside Joe Matthew. Here in Washington, where an
Speaker 3: important meeting has taken place today at the White House
Speaker 3: between President Donald Trump and King of Dullah of Jordan,
Speaker 3: with much on the agenda and in fact the two
Speaker 3: sitting down together in the Oval Office and welcoming press
Speaker 3: in despite our previous understanding that there would not be
Speaker 3: a press involved in much of this meeting. No joint
Speaker 3: press conference was scheduled, and still the two of them
Speaker 3: fielded a number of questions from reporters about Donald Trump's
Speaker 3: plans for Gaza, specifically in the role Jordan would play
Speaker 3: in them. Here's a taste of what President Trump said
Speaker 3: about his vision.
Speaker 2: It's not a complex thing to do.
Speaker 9: And with the United States being in control of that
Speaker 9: piece of land, a fairly large piece of land, you
Speaker 9: can have stability in the Middle East for the first time,
Speaker 9: and the Palestine inje or the people that live now
Speaker 9: in Gaza will be living beautifully in another location.
Speaker 2: When asked by reporters if he planned personally to help
Speaker 2: develop portions of Gaza, the President said no, and so
Speaker 2: we're glad to bring you a voice of experience on
Speaker 2: this matter and someone with great experience in the region.
Speaker 2: David Hale is with this global fellow with the Wilson Center,
Speaker 2: former Undersecretary of State for Political Affairs, and most importantly,
Speaker 2: former ambassador to Yes Jordan along with Pakistan and Lebanon.
Speaker 2: Mister ambassador, welcome. It's great to have you with us
Speaker 2: here today on Bloomberg TV and radio. You know the
Speaker 2: stakeholders here, and I wonder before we get to some
Speaker 2: of the substance, what you make of this move to
Speaker 2: bring the press pool into the Oval office for what
Speaker 2: was supposed to be a closed press meeting. It's this
Speaker 2: all part of the pressure play.
Speaker 10: Well, I don't know exactly what was going on. It's
Speaker 10: common and normal to have the press there. So even
Speaker 10: if it wasn't originally planned, I'm sure that the King
Speaker 10: wasn't going to object if the President Trump suggested.
Speaker 6: They do it.
Speaker 2: He didn't look terribly comfortable, no, because it.
Speaker 10: Was a surprise, and you know he speaks English very well,
Speaker 10: but it's not his native language, so he may not
Speaker 10: have been fully prepared for it.
Speaker 2: But the fact of.
Speaker 10: The matter is that the king is one of our
Speaker 10: closest allies, one of our most reliable partners, not just
Speaker 10: in the Middle East but globally, and the conversation that
Speaker 10: they undoubtedly had was potentially quite consequential.
Speaker 3: Well, and the conversation itself could be uncomfortable when you
Speaker 3: consider what ask the President is making here. He wants Jordan,
Speaker 3: together with Egypt, to accept millions of Palestinians into the
Speaker 3: country so that Gaza can be redeveloped. Is there any
Speaker 3: way the President is going to be able to convince
Speaker 3: the King that that is a suitable plan.
Speaker 10: Today, Well, my guess is that the King probably behind
Speaker 10: closed doors, thank to the President for at least demonstrating
Speaker 10: concern for the welfare of the people living in Gaza,
Speaker 10: which a lot of people don't seem to want to express,
Speaker 10: and to try to think about new ideas, because frankly,
Speaker 10: new realities do require creative thinking. Now, this may be
Speaker 10: more creative than people are prepared to swallow, but at
Speaker 10: least it's the beginning of a conversation and I'm sure
Speaker 10: if the King were able to offer ideas of his
Speaker 10: own to compliment what the President is offering, then there's
Speaker 10: a conversation to be had.
Speaker 2: So that's my question for you. They're back behind closed
Speaker 2: doors now, So what extent can King Abdullah bring Donald
Speaker 2: Trump into his fold and talk about the stakes in
Speaker 2: the region and why this may be asking the impossible.
Speaker 10: Well, again, in my experience, a lot of presidents, and
Speaker 10: I don't mean this as criticism, it's understandable, don't necessarily
Speaker 10: know all the details and all the problems that led
Speaker 10: us into these dilemmas that we face like today. So
Speaker 10: that's one task I think for the king is to
Speaker 10: explain the realities on the ground. And for Jordan, there
Speaker 10: are two realities. One is a already have been generous
Speaker 10: since sixty percent of their population is Palestinian origin, and
Speaker 10: there is a Jordanian West East Bank population that is
Speaker 10: rock solid with the king. They are his base, but
Speaker 10: they don't want one more Palestinian, so that's a political reality.
Speaker 10: The second problem is that the whole issue between the
Speaker 10: Palestinians and Israelis is largely now to summarize one of
Speaker 10: land for security, and so the Palestinians are loath to
Speaker 10: give up their land without any kind of guarantees about
Speaker 10: what they keep. It's the land, it's the dispute is
Speaker 10: over the land, and so if the king were to
Speaker 10: come along and cooperate with a proposal that deprived them
Speaker 10: of that, he would be viewed.
Speaker 2: As a trader.
Speaker 3: Well, and the President has suggested that Palestinians wouldn't necessarily
Speaker 3: be welcomed back to Gaza, that they would be in
Speaker 3: nicer conditions in his view elsewhere. He suggested as well
Speaker 3: when he was asked by a reporter that the US
Speaker 3: does have the authority to do this, to just go
Speaker 3: in to Gaza and not buy it, he says, but
Speaker 3: just take it over as its own. What authority is that, master.
Speaker 10: Well, the legal status of Gaza is a little bit
Speaker 10: nebulous anyway. It's not just a matter of law or authority,
Speaker 10: but also what our interests are, and I think our
Speaker 10: interests are to work carefully and wisely with the Israelis,
Speaker 10: the Palestinians, and the Arabs to come up with a
Speaker 10: solution that will improve the welfare of the people living
Speaker 10: in Gaza, but also get us back on a path
Speaker 10: toward finding a durable solution.
Speaker 2: The President indicated in a conversation with reporters last evening
Speaker 2: that he would be open to threatening at least to
Speaker 2: pull some funding from Jordan. I don't know if you'd
Speaker 2: take him at his word there, but what we'll we
Speaker 2: be talking about to what extent does Jordan rely on
Speaker 2: US funding? We certainly know how it relies on military support.
Speaker 6: Right.
Speaker 10: We provide over a billion dollars a year to Jordan,
Speaker 10: so it's quite substantial. But we do it because it's
Speaker 10: in our interest, not necessarily because it's in Jordan's interest
Speaker 10: is of course as well. But we do it because
Speaker 10: the King of Jordan and the Government of Jordan and
Speaker 10: army and intelligence services are solid partners. This is an
Speaker 10: island of moderation on Israel's eastern border, and if we
Speaker 10: risk put in jeopardy that support, it puts in jeopardy
Speaker 10: the stability of the monarchy, and I think that would
Speaker 10: be an extremely dangerous course to take.
Speaker 6: Well.
Speaker 3: And we should remember as well last year when Aron
Speaker 3: sent the barrage of missiles and drones over to Israel.
Speaker 3: It was the US and UK that were helping take
Speaker 3: those down, but Jordan Air Defense Jordanian air defense was
Speaker 3: involved in that too. Obviously, that is just one of
Speaker 3: the players we're talking about here, though there's Egypt as well,
Speaker 3: and King of Dolah said, we need to see the
Speaker 3: Egyptian plan too. Are they on the same page the
Speaker 3: two of them together? Will Egypt be viewing this any differently?
Speaker 10: Well, Jordan will probably seek an Arab consensus for any outcome,
Speaker 10: and obviously it may serve his purposes to hide a
Speaker 10: bit behind the absence of an Arab consensus to support this.
Speaker 10: It's the Saudis will really matter, and they've already rejected
Speaker 10: this proposal. But you know, you touched on a very
Speaker 10: important point, which is that Jordan is an ally of
Speaker 10: ours in dealing with the Iranian problem, and so a
Speaker 10: lot of this is frankly a distraction from the real issue,
Speaker 10: which should be strategically, how do we do something that
Speaker 10: permanently puts around the reversal of fortune that Duran has suffered.
Speaker 10: How do we make that permanent? And Jordan has a
Speaker 10: big role to play and a lot of at stake
Speaker 10: in that, and so I hope they're also discussing some
Speaker 10: of those.
Speaker 2: Issues, Ambassador. This is all further complicated by Donald Trump's
Speaker 2: threat for all hell to break out again starting at
Speaker 2: noontime Saturday in Gaza if hostages are not released. He
Speaker 2: indicated just now he doesn't expect them to be released
Speaker 2: to the extent that you know, King Abdullah, what does
Speaker 2: he make of talk like that and what might Gaza
Speaker 2: look like at noon on Saturday.
Speaker 10: Well, my interpretation is just as voud as anyone else's.
Speaker 10: But was that the President was speaking about his expectations
Speaker 10: of reality, not necessarily that he was threatening that or
Speaker 10: he wanted that.
Speaker 2: But that would mean the ceasefire agreement is out the window.
Speaker 10: That he believes that if they don't provide, if we
Speaker 10: don't finish phase one, there won't be a phase two, Yes,
Speaker 10: and if there's no phase two, there will be a
Speaker 10: resumption of the war. So that's a statement of fact.
Speaker 10: King of Bella also understands those facts. So we should
Speaker 10: be doing what we can to sustain the ceasefire process.
Speaker 10: The problem there is that Phase two of the ceasefire
Speaker 10: calls for the withdrawal of the idea fully from Gaza,
Speaker 10: and yet there's been nothing done to prepare for what
Speaker 10: replaces that, Who or what will be providing security in
Speaker 10: that context. So the Israelis are not going to pull
Speaker 10: out if they don't have a reliable partner on the
Speaker 10: other side of the fence, which is not Hamas and
Speaker 10: not the Palestinian authority. The Arabs have said, well, we
Speaker 10: can do it, but only if that Nyahoo commits to
Speaker 10: a two state solution for the Palestinians. And there's no
Speaker 10: consensus in Israel for something like that. So Phase two
Speaker 10: is in serious jeopardy, not because of what President Trump said,
Speaker 10: but because of the realities of these differences.
Speaker 3: So even if you don't see a break in the
Speaker 3: ceasefire on Saturday, when this forty two day period is expired,
Speaker 3: you don't see a likelihood that it's extended beyond that.
Speaker 3: If Phase two is the requirement for that.
Speaker 10: I think it's very fragile and very unlikely to happen
Speaker 10: in my opinion. I hope I'm wrong, but it would
Speaker 10: require certain the changes to the agreement or compromises on
Speaker 10: the part of Israel that in the current psychological climate
Speaker 10: I think are extremely unlikely to happen.
Speaker 2: I want to ask you about a story that broke
Speaker 2: a short time before you joined us here. The Kremlin
Speaker 2: has freed Mark Fogel, a man who has your former job.
Speaker 2: Actually Steve Whitkoff put him on his private plane. Is
Speaker 2: they are apparently on their way back outside of Russian airspace,
Speaker 2: so we can now talk about this. Mike Waltz made
Speaker 2: this clear. This is the first time that a senior
Speaker 2: US official has touched down like this in Moscow since
Speaker 2: the former CIA director Burns touchdown to try to head
Speaker 2: off a war in Ukraine. To what extent does this
Speaker 2: development help to pave the road for a deal over Ukraine?
Speaker 10: Well, he was my predecessor, but I didn't have a
Speaker 10: private plane to bring into the equation. Look, my experience
Speaker 10: with President Trump and his first administration was he cares
Speaker 10: passionately about the fate of American citizens for being detained
Speaker 10: unlawfully overseas by governments or terrorist groups. So I think
Speaker 10: this is a plus. What we don't know, of course,
Speaker 10: is what the conversation was and what if any trade
Speaker 10: was made in exchange for the release of this man.
Speaker 10: We just we don't know that, but undoubtedly it'll become
Speaker 10: a parent soon.
Speaker 3: Well, what does it say that the Middle East envoy
Speaker 3: is the one who was sent to Russia to do this.
Speaker 10: Yeah, I don't know how to make what to make
Speaker 10: of that, except that I also believe he's a close
Speaker 10: president friend of the president, so it may be on
Speaker 10: a personal basis that they all felt that he had
Speaker 10: what it took to get the deal done.
Speaker 2: Does it give you hope on the relationship or at
Speaker 2: least the ability to negotiate with Moscow? When you hear
Speaker 2: a development like this, usually this doesn't happen in a vacuum.
Speaker 10: That's right, and so in that sense it's positive. But
Speaker 10: we don't know what it is that Putin got in return,
Speaker 10: so I would want to know that before I've made
Speaker 10: any further judgment.
Speaker 3: Well, and we also have to consider the relationship that
Speaker 3: these conflicts have with one another. We're talking about the
Speaker 3: war in Ukraine and Russia, which obviously has ties to Iran.
Speaker 3: China is involved in this as well, as often described
Speaker 3: to us on this program as a new axis of
Speaker 3: ev Well, how do these puzzle pieces fit together in
Speaker 3: your mind? If Russia is going to the negotiating table
Speaker 3: on Ukraine, does it have implications for the behavior of Iran?
Speaker 3: For what role does China play in this?
Speaker 7: For example?
Speaker 10: Yeah, I mean everyone's watching everyone and Iran has developed
Speaker 10: an alliance at least of convenience with Russia and China,
Speaker 10: so that's a factor as well. But I think Russia
Speaker 10: is definitely on the defensive in the Middle East with
Speaker 10: the collapse of their ally in Syria, So I'm not
Speaker 10: sure that has any immediate implications. But for the United States,
Speaker 10: what we do in one theater of operations and one
Speaker 10: set of problems that definitely influences attitudes towards us in
Speaker 10: coping with other problems. So the idea that we're going
Speaker 10: to assert strength, you know, peace through strength actually works,
Speaker 10: and that is I think a foundation of Trump's approach.
Speaker 3: What about the idea that we could just go in
Speaker 3: and take over Gaza. What might that signal to China
Speaker 3: about Taiwan.
Speaker 2: It's a good question.
Speaker 10: I don't have an answer to it, but I accept
Speaker 10: that I don't really believe it's going to happen.
Speaker 2: Well, I'll tell you what, when you start to pull
Speaker 2: out the lens here and look what's happening in the region.
Speaker 2: We recall a visit by Benjaminett, yeah who to the
Speaker 2: White House last week, and people were musing openly here
Speaker 2: in Washington about a preemptive attack against Iran. That that
Speaker 2: is what Beebe was trying to talk to Donald Trump
Speaker 2: about Iran on its heels go after the nuclear facilities. Now,
Speaker 2: is that something in the realm of possibility for you
Speaker 2: or is that talk at a cocktail party in Washington?
Speaker 9: Oh?
Speaker 10: I think it's very much in the realm of the possible.
Speaker 10: And it was a theme for many conversations between President
Speaker 10: Obama when I was Middle East Envoy and Prime Schmid
Speaker 10: you know who he was in office then, and that
Speaker 10: was part of the incentive and motivation for us to
Speaker 10: get the nuclear deal that was flawed deeply, but something
Speaker 10: that we got. So I'm sure it was discussed, and
Speaker 10: I'm sure King Bell is very interested in knowing what
Speaker 10: exactly is.
Speaker 2: You think that's something that they're discussing today as well.
Speaker 10: I hope so, and the King will be very happy
Speaker 10: if we're going to keep the pressure on Iran, but
Speaker 10: we want to know how and to be ready for it.
Speaker 10: The fact is Roun his air defenses I think are
Speaker 10: apparently gone, and so this is a good time to
Speaker 10: think about how we can really eliminate this threat.
Speaker 3: All right, Ambassador, thank you so much for joining us
Speaker 3: here in our studios. In Washington, DC. David Hale, as
Speaker 3: we mentioned, former ambassador to Jordan as well as Pakistan
Speaker 3: and Lebanon, now Global fellow with the Wilson Center.
Speaker 2: Thanks for listening to the Balance of Power podcast. Make
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