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Speaker 2: The clock has started now on a sixty day ceasefire
Speaker 2: agreement between Israel and Hesbela in Lebanon. The deal, of course,
Speaker 2: was reached yesterday, and it required weeks of shuttle diplomacy
Speaker 2: from those in the Biden administration. Obviously, this is a
Speaker 2: big deal and important news for those who have been
Speaker 2: affected by this conflict, as many can now return to
Speaker 2: their homes. But it's a big deal for President Biden
Speaker 2: as well, who has been pushing for this very hard,
Speaker 2: pushing for a ceasefire in Gaza as well, and he
Speaker 2: actually announced this from the Rose Garden at the White
Speaker 2: House yesterday just after the Israeli Prime Minister Bibi net
Speaker 2: and Yahoo spoke in Israel.
Speaker 3: This is designed to be a permanent cessation of hostilities.
Speaker 3: What is left of Hesbalah and another terrorist organization will
Speaker 3: not be allowed, well, our emphasize, will not be allowed
Speaker 3: to threaten the security visual again. Over the next sixty days,
Speaker 3: a Lebanese army and State security force will deploy and
Speaker 3: take control of their own territory once again.
Speaker 4: I am determined to do whatever it takes to prevent
Speaker 4: Iran from attaining nuclear weapons.
Speaker 5: I'm mult people.
Speaker 4: I have said many times that a good agreement is
Speaker 4: an agreement that is enforced, and we will enforce it.
Speaker 2: So for more on this agreement and what it means
Speaker 2: for the region more largely, we turned to Jonathan Panicoff.
Speaker 2: He is Atlantic Council Director of the Scowcroft Middle East
Speaker 2: Security Initiative. Welcome back to balance and power Jonathan to
Speaker 2: seize on the words of President Biden. There, he suggested,
Speaker 2: this is a path to something permanent, but ceasefires often
Speaker 2: are temporary in nature. In this initial period is only
Speaker 2: sixty days. What will it take to make this a
Speaker 2: permanent cessation of hostilities?
Speaker 5: Good afternoon, Thanks so much for having me back.
Speaker 6: Look, I think it is true that it is a
Speaker 6: sixty day cease fire, but it's supposed to be sixty days,
Speaker 6: and if all the parties implement the required steps, then
Speaker 6: it will become permanent. In other words, it's not sixty days,
Speaker 6: and then Israel at the end of that is supposed
Speaker 6: to the Israeli forces is supposed to go back to Israel.
Speaker 6: It's sixty days, and step by step, as the Lebanese
Speaker 6: Armed Forces redeployed to the south of Lebanon, then Israeli
Speaker 6: forces will move out. And the goal is that at
Speaker 6: the end of sixty days, you'll have no more Israeli
Speaker 6: forces in Lebanon. You'll have only the Lebanese Armed Forces
Speaker 6: undertaking the security that frankly, they were supposed to have
Speaker 6: been undertaking back in two thousand and six when you
Speaker 6: and Resolution seventeen oh one was implemented.
Speaker 5: The hope is that this will actually.
Speaker 6: Be different this time because of the parties involved in
Speaker 6: the structure, and that it will lead to obviously a.
Speaker 5: More permanent ceasefire.
Speaker 6: Whether that's true, we'll obviously have to wait and see.
Speaker 6: Both sides are going to be inclined to say there's violations.
Speaker 6: The goal will be for the US and France, who
Speaker 6: are now more involved, to be able to say, look,
Speaker 6: we have to move forward.
Speaker 5: The violations we can be dealt with.
Speaker 6: We need to ensure that we retain the ceasefire that
Speaker 6: we've sought to establish.
Speaker 2: Well, how able what haslet even be at this point
Speaker 2: to violate this in a materially threatening way, Jonathan, considering,
Speaker 2: we understand that the reason this was able to come
Speaker 2: together is in part because Israel has so materially weakened
Speaker 2: hasbi laed by decapitating its most senior leadership, by taking
Speaker 2: out a lot of its military capability.
Speaker 5: That's certainly right.
Speaker 6: Look, I think about probably sixty to seventy percent of
Speaker 6: Isabella's missile inventory, on his rocket inventory, it's drone inventory
Speaker 6: has probably been destroyed by Israel over the last four
Speaker 6: months or so. And obviously Hesbela's command and control is
Speaker 6: incredibly weak right now. Israel has taken out and killed
Speaker 6: not only the most senior leaders of Hezbala, but even
Speaker 6: the second and third level commanders, and that's incredibly weak
Speaker 6: in the organization. But Isbela still does retain a significant
Speaker 6: amount of rockets of shorter range weapons that can reach
Speaker 6: northern Israel. At the end of the day, the fundamental
Speaker 6: goal for Israel. Israel was to be able to ensure
Speaker 6: that the tens of thousands of Israelis who have been
Speaker 6: displaced from their homes for over a year now could
Speaker 6: return to that if Hezbala is able to start refiring
Speaker 6: the rockets that has remaining in inventory, that obviously would
Speaker 6: create a challenge for the ceasefire.
Speaker 5: But clearly they are fully weakened.
Speaker 6: And in a much weaker position than they were even
Speaker 6: four months ago.
Speaker 2: Well, and arguably, Jonathan, the same thing could be said
Speaker 2: of Hamas after more than a year of fighting with
Speaker 2: Israel in Gaza. There was much conversation yesterday about whether
Speaker 2: or not this ceasefire agreement with Hesbola would be a
Speaker 2: step toward reaching another ceasefire agreement with Hamas. Obviously, these
Speaker 2: are fundamentally different conflicts in many ways. There's a massive
Speaker 2: question about what the day after would look like if
Speaker 2: an agreement is come to you between Israel and Hamas.
Speaker 2: So give us a reality check here. How much closer
Speaker 2: are we to a resolution there now that this currency
Speaker 2: is fire and Lebanon is in place.
Speaker 5: I think we're probably a little bit closer, but not much,
Speaker 5: to be honest. Look, the Biden.
Speaker 6: Administration has put a lot of emphasis that if you
Speaker 6: could create a situation in terms of resolving the conflict
Speaker 6: with Hesbela, it would cut the link between Hesbela and
Speaker 6: Hamas and might create an opening for a new negotiation between.
Speaker 5: Hamas and Israel. That is possible.
Speaker 6: There was enough official just today who went to the
Speaker 6: cutteries US and Egypt and said we were ready to
Speaker 6: negotiate under serious terms.
Speaker 5: The difference is the circumstances.
Speaker 6: Haven't significantly changed when it comes to Israel's position or
Speaker 6: Hamas's position. The reality is that is degraded as Hamas is,
Speaker 6: they still hold a significant amount of leverage because they're
Speaker 6: still holding one hundred and one hostages. And even though
Speaker 6: we know most or at least some of those hostages
Speaker 6: are probably no longer alive, that still means that there's
Speaker 6: dozens of them remaining. I think that creates a different
Speaker 6: impediment to getting to a ceasefire deal than you had
Speaker 6: with Hesbaalah. For example, Hamas is going to want a
Speaker 6: much higher cost in Israel without a day after planning,
Speaker 6: as you mentioned, isn't quite ready to give it.
Speaker 2: I wouldn't think well, And I wonder if that's also
Speaker 2: in part because Israel knows a new US president is
Speaker 2: coming fifty four days from now. It will be Ronald
Speaker 2: Trump that is the commander in chief, and is helping
Speaker 2: to dictate or dictating entirely foreign policy. So I do
Speaker 2: wonder your sense of the timing here that yes, maybe
Speaker 2: this ceasefire in Lebanon was able to be accomplished under
Speaker 2: this administration, but all of these parties all throughout the
Speaker 2: Middle East and other allies involved in this, no when
Speaker 2: new administration's coming in.
Speaker 6: I think that certainly play into plays into it from
Speaker 6: Prime Minister Netyak, whose perspective. Look, I don't think it's
Speaker 6: any secret that Prime Minister net Yak, who was strongly
Speaker 6: preferring that President Trump president elect Trump win the election
Speaker 6: earlier this month.
Speaker 5: At the same time, the President.
Speaker 6: Elect has actually been very very clear this may be
Speaker 6: one of the few areas that he and the Bide
Speaker 6: administration are on the same page, that he wants to
Speaker 6: see the conflict ended before, if not very very soon
Speaker 6: after his inauguration. It's hard to believe that you'll see
Speaker 6: has significant change and circumstances on the ground that would
Speaker 6: really change the totality of what the parties are negotiating
Speaker 6: over between now and Trump's inauguration. And so I think, look,
Speaker 6: it is true that I think President Trump will probably
Speaker 6: have a little bit more leverage a new administration and
Speaker 6: an ability to control Net and Yahoo in a way
Speaker 6: that I think President Biden has struggled to do. But
Speaker 6: ultimately it's still going to be a fundamental challenge, and
Speaker 6: without the circumstances on the ground changing, I'm not sure
Speaker 6: that it's going to make a huge difference in the end.
Speaker 2: Well, we know that there are some common denominators in
Speaker 2: terms of what the incoming Trump administration would like to
Speaker 2: see accomplished in the Middle East and what the Biden
Speaker 2: administration has been pushing for, inclusive of a normalization in
Speaker 2: the Saudi Israel relationship. Jonathan and our final moment here,
Speaker 2: what needs to happen is a prerequisite to that normalization.
Speaker 6: It's a great question because over the last year the
Speaker 6: Saudis have moved consistently in terms of their demands.
Speaker 5: When it comes to the Palestinians.
Speaker 6: It started quite quietly that they just wanted to see
Speaker 6: a ceasefire, and then it became a question of a
Speaker 6: clear path through Tuesday solution, and earlier this month you
Speaker 6: saw the Crown Prince of Saudi Arabia, Muhammed Ben Salomon,
Speaker 6: come out and say no, there needs to be an
Speaker 6: actual Palestinian state.
Speaker 5: Look, it's gonna be hard to move back from that.
Speaker 5: In a multi polar world.
Speaker 6: The Saudis see themselves not only as the key pole
Speaker 6: in the Middle East, but they see themselves as the
Speaker 6: voice not just for the Saudi population but the Pan
Speaker 6: Arab population. That doesn't mean that it can't happen, but
Speaker 6: I think in order to get there, you're really going
Speaker 6: to need a heavy push by the Trump administration and
Speaker 6: a broader deal that includes not just the Saudis and
Speaker 6: the Israelis and the Palestinians, but probably more of the
Speaker 6: region as well.
Speaker 2: All Right, Jonathan Panakoff of the Atlantic Council, thank you
Speaker 2: so much as always for joining me here on Balance
Speaker 2: of Power, and we'll have more ahead on the book.
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Speaker 2: So as we consider motorists, especially as many of them
Speaker 2: take to the roads for this Thanksgiving, they are paying
Speaker 2: some of the lowest prices of the year at the pump.
Speaker 2: Right now, the triple A average for a gallon of
Speaker 2: gas is three dollars and seven cents. But how quickly
Speaker 2: could that ultimately change? That is a question I now
Speaker 2: post to Patrick de'han he is head of a petroleum
Speaker 2: analysis at GUS Buddy joining me here on balance of power. Patrick,
Speaker 2: welcome back to the program. If we could start firstly
Speaker 2: with what the actual translation of a tariff like this
Speaker 2: would be to the cost that consumers see at the
Speaker 2: gas pump, you know, post it on the board at
Speaker 2: the station. If it's a twenty five percent tariff, what
Speaker 2: does that translate to in terms of sense per gallot?
Speaker 7: Well, yeah, well, you know, as Bob had said, I mean,
Speaker 7: this is going to be a significant impact. And a
Speaker 7: lot of these refineries in the Great Lakes, the Midwest,
Speaker 7: the Rockies processed Canadian heavy oil almost exclusively. So right
Speaker 7: now Western Canadian Select, which is one of the benchmarks
Speaker 7: at about sixty dollars a barrow, that twenty five percent
Speaker 7: tariff would amount about fourteen or fifteen dollars, which break
Speaker 7: it down to a gallon of gasoline, and the raw
Speaker 7: input would be about a thirty three to thirty four
Speaker 7: cent a gallon.
Speaker 5: Impact, and so this is not nothing.
Speaker 7: I mean, this is an over ten percent impact, and
Speaker 7: this is the baseline, would be about thirty five cents.
Speaker 7: Keep in mind twenty five percent tariff. If oil prices rally,
Speaker 7: you're going to see that tariff go up and up
Speaker 7: and up, and it's going to be more of a
Speaker 7: squeeze as that happens, especially into the summer months.
Speaker 2: Well, that's a very good point. Of course, this kind
Speaker 2: of policy can't actually be implemented until at least January twentieth,
Speaker 2: when Trump takes office, which is just over a month.
Speaker 2: And I guess two months from now, just a little
Speaker 2: bit less than two months, where are we going to
Speaker 2: be into terms of gas prices by then? Patrick, considering
Speaker 2: the trajectory we are currently on, which has been pretty
Speaker 2: steadily lower.
Speaker 7: Well, I think most consumers are going to feel that
Speaker 7: bite very significantly, because over the next couple of months
Speaker 7: we should see gas prices saying it relatively low levels.
Speaker 5: We still should have half.
Speaker 7: Of the country, if not more, seeing average gas prices
Speaker 7: below three dollars for comparison's sake, gas But he counts
Speaker 7: about thirty states today below three dollars a gallon, and
Speaker 7: though there may be some volatility and prices depending on
Speaker 7: the balance of global supply and demand, depending on Russia
Speaker 7: and Ukraine and the Middle East, there may be some
Speaker 7: minor fluctuations, but the seasonal low should stick around right
Speaker 7: through inauguration debt, and if we see that tariff implemented,
Speaker 7: it's going to be a rather abrupt pinch of the
Speaker 7: pump for those areas that are going to be affected.
Speaker 2: Would that theoretically, and I understand we're playing in hypotheticals here,
Speaker 2: but would that lead to a just as abrupt drop
Speaker 2: off in demand, Well, it probably would.
Speaker 5: To such a drop off.
Speaker 7: I mean, Americans only really have their car to drive,
Speaker 7: whether it's an EV, then they're insulated completely from this.
Speaker 7: But for those that are still driving around an internal
Speaker 7: combustion engine vehicle, there's not a whole lot of alternatives here.
Speaker 7: Nor are there really alternatives for the refineries that have
Speaker 7: for decades been relying on Canadian crude oil. This is
Speaker 7: upsetting the status quo that's been established really for probably
Speaker 7: the better part of one hundred years. These refineries that
Speaker 7: process Canadian oil almost exclusively, and they're going to be
Speaker 7: the ones impacted the most, and they really have no alternatives.
Speaker 7: As Bob has said, these inland areas Illinois, Michigan, Ohio
Speaker 7: refineries in this region just really don't have alternatives.
Speaker 2: Well, so explain that to those who might say, hey,
Speaker 2: Donald Trump has promised to deregulate American energy to make
Speaker 2: it easier for them to build that new infrastructure to
Speaker 2: increase their production capacity. That's going to mean we produce
Speaker 2: more and potentially that means prices go lower. Why is
Speaker 2: that not true when we think about the need to
Speaker 2: potentially directly replace some of these imports.
Speaker 7: Yeah, I mean absolutely. I mean you're talking about a
Speaker 7: huge change in the status quo. I mean a president
Speaker 7: that would potentially on day one levy massive tariffs is
Speaker 7: not something we're used to a president seeing. And so
Speaker 7: you know, I've heard folks say, well, how can the
Speaker 7: president have such a vast impact? Well, because presidents typically
Speaker 7: don't upset the status quo in such a huge way.
Speaker 7: And you know, these refineries have long, for as I mentioned, decades,
Speaker 7: been set up. They've been configured specifically to process more
Speaker 7: of this heavy Canadian oil, to have additionally units coking units, desulfurization.
Speaker 7: I mean, they have decades of experience processing Canadian oil
Speaker 7: and specifically designing their refineries around this type of oil.
Speaker 7: Keep in mind, the largest refinery in the Midwest four
Speaker 7: hundred and thirty five thousand barrels a day down in Whiting, Indiana,
Speaker 7: that's Northwest Indiana in two thousand nates that three and
Speaker 7: a half billion dollars, essentially making itself more reliant on
Speaker 7: processing more Canadian crude oil. So, I mean, that's just
Speaker 7: how reliant these refineries are. There's been a SETI supply
Speaker 7: of Canadian oil and increasing amount for decades and decades.
Speaker 7: We're now receiving four million barrels of Canadian oil a day.
Speaker 7: So this is a drastic and sudden potential chef.
Speaker 2: Well, so when we consider the refiners, obviously we have
Speaker 2: to take into account refining margins here and as we
Speaker 2: consider tariffs especially, we have heard this notion propagated by
Speaker 2: Trump and those who think similarly to him, this idea
Speaker 2: that not all tariffs are necessarily a direct cost that
Speaker 2: the consumer will pay. Companies could eat some of this.
Speaker 2: For example, could we see instead of it being passed
Speaker 2: on to the end consumer at the gas pump just
Speaker 2: a shrinking of refining margins, or are they likely to
Speaker 2: want to pass all of that additional cost on well.
Speaker 7: Refinery margins are already at some of the worst levels
Speaker 7: we've seen in multiple years. I mean, refineries probably in
Speaker 7: this region are only clearing a few dollars a barrel,
Speaker 7: So you know, can they absorb some of it, maybe,
Speaker 7: you know, in iota of it, But for now refining margins,
Speaker 7: I mean, this is the time of year that they
Speaker 7: are very much challenged. And keep in mind the irony
Speaker 7: here is the only way that these refineries have been
Speaker 7: profitable is because Western Canadian crude oil generally comes to
Speaker 7: the US at a pretty big discount because of its
Speaker 7: landlocked status. Now, the interesting dynamic here that few people
Speaker 7: are talking about is at the same time these terrafts
Speaker 7: could be implemented, Trump may again greenlight the Keystone XL pipeline,
Speaker 7: which ironically could give Canada exactly what it wants is
Speaker 7: it wants another market besides the US refiners, and so
Speaker 7: if the Keystone XL is suddenly greenlit, that could essentially
Speaker 7: give a huge win to Canada, allowing a lot more
Speaker 7: of that Canadian heavy crude ol to be exupported, and
Speaker 7: it could further inflict more pain on refineries down in
Speaker 7: the US which are already dealing with razor than margins.
Speaker 2: It's really valuable information as we consider what could come
Speaker 2: in this second Trump administration. Before we get there, though,
Speaker 2: I do want to ask you quickly about what's happening
Speaker 2: this week, which is of course the Thanksgiving holiday tomorrow
Speaker 2: and hence a lot of people taking to the roads.
Speaker 2: For those who are on road trips, where in the
Speaker 2: country can they find the cheapest gas.
Speaker 5: Well, you can see that map behind me.
Speaker 7: Generally the South, the Gulf Coast, the areas with low
Speaker 7: gas leade taxes and with proximity to large refiners are
Speaker 7: those that are benefiting the most. Areas like Oklahoma City,
Speaker 7: some stations down to two ten or two twenty a gallon.
Speaker 7: But you know, Texas, Oklahoma, Arkansas, Louisiana, the Deep South
Speaker 7: generally the place to be when it comes to lower prices,
Speaker 7: whereas the West Coast the place not to be. California
Speaker 7: is still struggling with prices that are well over four
Speaker 7: dollars a gallon, although many of California's neighbors are quite
Speaker 7: a bit lower than that, so we still have quite
Speaker 7: the extremes. You have the lowest price state averaging two
Speaker 7: forty a gallon, and you have the highest price state
Speaker 7: averaging two dollars a gallon more in California, where prices
Speaker 7: are four forty four, so a massive spread for those
Speaker 7: especially traveling for Thanksgiving, crossing those state lines is still
Speaker 7: a danger zone for seeing a big fluctuation in prices.
Speaker 2: All right, Patrick Dehan, head of petroleum analysis at gas Buddy,
Speaker 2: thank you so much for joining me, and a very
Speaker 2: happy Thanksgiving to you and yours.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
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Speaker 2: Here in Washington. Over the course of the last three
Speaker 2: weeks since the election, we've talked at length about the
Speaker 2: speed of this Trump transition. He has wasted no time
Speaker 2: at all in naming names to his second administration, including
Speaker 2: two new ones last night, Kevin Hassett and Jamison Greer,
Speaker 2: to serve key economic roles. But what has moved a
Speaker 2: lot slower is the paperwork part of this transition, the
Speaker 2: signing of pledges around ethics and transparency that help facilitate
Speaker 2: the existing government agencies and the handover to the incoming administration.
Speaker 2: The delay has actually been unprecedented, but at least for
Speaker 2: part of it, the delay is now over, the incoming
Speaker 2: Chief of Staff for Donald Trump, Susie Wiles, announcing yesterday
Speaker 2: that they have signed memorandums of understanding with the Biden administration,
Speaker 2: so that will clear the way for this flow of
Speaker 2: information between those who have been appointed to lead these
Speaker 2: agencies be involved in them, and the existing people inside
Speaker 2: the agencies to be sharing information. It's an important step
Speaker 2: and when we want to reflect on with our signature
Speaker 2: political panel Rick Davis Stonecourt, Capital Partner and Republican Strategists
Speaker 2: alongside Democratic analyst Ghini Schanzeno, who of course is senior
Speaker 2: Democracy Fellow at the Center for the Study of the
Speaker 2: Presidency and Congress. Rick, first to you, it took a
Speaker 2: while for this to happen, much longer than usual. Now
Speaker 2: that it has, is there enough time for everything that
Speaker 2: needs to happen over the course in the next fifty
Speaker 2: four days happen?
Speaker 5: Yeah, I think so.
Speaker 8: You're right, it did delay itself. These agreements should have
Speaker 8: been executed back in early October, so it took a
Speaker 8: couple of months to get this done. But it's not
Speaker 8: like they haven't been pumping out announcements on cabinet members
Speaker 8: and sub cabinet members of their administration. There were affiliate
Speaker 8: organizations like the Heritage Foundation and America First Policy Institute
Speaker 8: that have been working on transition ideas for a year.
Speaker 8: So it's not like they aren't going to be prepared
Speaker 8: to run the government when they come on board. It's
Speaker 8: the activity now that they will be able to get
Speaker 8: non public information from their counterparts in these agencies directly
Speaker 8: and get a feel for what the current issues are
Speaker 8: that are going to meet them when they come into office.
Speaker 8: So the landing teams now will be given access to
Speaker 8: the agencies and the employees of government and that will
Speaker 8: smooth things and plenty of time to make all that work.
Speaker 9: Well.
Speaker 2: What they still aren't doing, though, is accepting funding an
Speaker 2: office space from the General Services Administration. They're relying instead,
Speaker 2: Genie on private donated dollars. Susie Wilds did say yesterday
Speaker 2: that they will be publicly disclosing those donors. But that
Speaker 2: does that give you concern?
Speaker 10: Still, it does?
Speaker 11: You know, I think it's very important that they signed
Speaker 11: the MoU with the White House, and as Rick was
Speaker 11: talking about, those landing teams got to love the D
Speaker 11: Day reference can now embed.
Speaker 10: With those agencies and begin.
Speaker 11: To shape them to reflect Donald Trump and what he
Speaker 11: hopes to achieve there and the facts that they get
Speaker 11: some of the non public information.
Speaker 10: But it is deeply concerning.
Speaker 11: That they have not ceded to these FBI background checks.
Speaker 11: And it's concerning and should be concerning to all Americans
Speaker 11: because this becomes an issue of national security. Transition times
Speaker 11: are important and they are also a moment of great
Speaker 11: vulnerability for the country.
Speaker 10: That is why.
Speaker 11: Congress has stepped in and taken a role in trying
Speaker 11: to smooth the transition process.
Speaker 10: And so they are not, at least at.
Speaker 11: This point, going to allow the FBI to do those
Speaker 11: background checks. And so any sort of idea in terms
Speaker 11: of who's being appointed that the FBI would be able
Speaker 11: to flag somebody who may be vulnerable can create a
Speaker 11: kind of national security risk for all of us.
Speaker 10: And then of course there's the ethics component of this.
Speaker 11: Who is contributing to this transition and how much. And
Speaker 11: it is concerning to many of us that while they
Speaker 11: say they're going to release this, they haven't.
Speaker 10: Yet and what is the hold up on that?
Speaker 11: So I think action by Congress to require this transparency,
Speaker 11: I think going forward would be important, but as of
Speaker 11: now we have to just wait for them if they
Speaker 11: choose to release it.
Speaker 2: Well, I want to talk about another security risk that
Speaker 2: the FBI is actively looking into now. They're investigating bomb
Speaker 2: threats and swatting incidents that have targeted Trump administration nominees.
Speaker 2: We got a statement earlier today from Caroline Levett, the
Speaker 2: spokesperson for the transition team, that said, in part last
Speaker 2: night in this morning, several of Trump's cabinet nominees and
Speaker 2: administration appointees were targeted in violent, Unamerican threats to their
Speaker 2: lives and those who live with them. These attacks ranged
Speaker 2: from bomb threats to swatting rick figures. High profile political
Speaker 2: figures have unfortunately not become or have become a bit
Speaker 2: used to swatting in this American political era. These threats
Speaker 2: are actually troublingly frequent, and I wonder your reaction here
Speaker 2: and how concerned we should be about the security risks
Speaker 2: to those who are about to take very high level
Speaker 2: roles in this government.
Speaker 12: Yeah.
Speaker 8: Look, I mean this is pretty pernicious behavior by people
Speaker 8: who have an ax to grind. We saw a lot
Speaker 8: of this spike at the end of the twenty twenty
Speaker 8: elections when Republicans were saying that the election was stolen
Speaker 8: and this was happening to election workers and people who
Speaker 8: oversee the certification of the elections. It hasn't gone away
Speaker 8: since then. Look, I mean, I think we got to
Speaker 8: create a standard in our country. And I think it
Speaker 8: starts with the White House, not just the incoming White House,
Speaker 8: but the current White House, to talk about how disruptive
Speaker 8: this behavior is. It puts the law enforcement officials in
Speaker 8: a difficult position, It endangers the lives of people who
Speaker 8: are affected by these kinds of swatting episodes, and minimizes
Speaker 8: the use of the police.
Speaker 12: And fire for people who really need it.
Speaker 8: So I think, I think that this is the kind
Speaker 8: of thing we want our elected officials to set a
Speaker 8: standard on. And I think the more of them come
Speaker 8: out and say, look, this is unacceptable behavior. People who
Speaker 8: do it are gonna be punished for it. And and
Speaker 8: and as a society, you know, we we expect more
Speaker 8: of our people than to play these kind of games
Speaker 8: that could put people in harm's way.
Speaker 2: Well, so, Genie, to that point, I know President Biden
Speaker 2: is currently on Thanksgiving vacation in Nantucket, but do we
Speaker 2: need to hear from him on this?
Speaker 10: You know, I don't think so.
Speaker 11: I think that the FBI and law enforcement officials can
Speaker 11: absolutely handle this, and by all account from Levitt's statement,
Speaker 11: that has happened, and the transition team expressed gratitude to
Speaker 11: the FBI and public officials. In my mind, it brings
Speaker 11: up a frustrating reality of the rhetoric coming out of
Speaker 11: Donald Trump and the Trump transition team.
Speaker 10: You know, I understand his longstanding.
Speaker 11: Distrust of the FBI and officials.
Speaker 10: That is what.
Speaker 11: Fuels this type of behavior in part, and of course
Speaker 11: you have to be very careful about that kind of rhetoric.
Speaker 10: And so we were just talking about the transition.
Speaker 11: We're not going to get proper FBI vetting because of
Speaker 11: that distrust. We are seeing these kinds of unacceptable to
Speaker 11: Rick's point, points of aggression and all this, you know,
Speaker 11: threats to people who are trying to act as public
Speaker 11: officials coming into the new administration, and we rely on
Speaker 11: law enforcement and we have to trust them to do
Speaker 11: their jobs. And you know, this lack of trust in
Speaker 11: these institutions has been in part fueled by Trump and
Speaker 11: this team, and so to me, I think I hope
Speaker 11: that as they get into office themselves, they take a
Speaker 11: second look at that and are grateful to our great
Speaker 11: law enforcement officials for keeping us safe and doing their jobs.
Speaker 2: Of course, a lot of the rhetoric surrounding the election,
Speaker 2: just the general political environment is circulated on social media,
Speaker 2: on platforms like X of course controlled by Elon Musk,
Speaker 2: who is getting set to take this role in the
Speaker 2: Department of Government Efficiency or DOGE. I do want to
Speaker 2: mention something that Musk posted on X about today. He
Speaker 2: suggests that we should quote delete the Consumer Financial Protection
Speaker 2: Bureau because he says there are quote too many deplicative
Speaker 2: regulatory agencies. Maybe this is part of trying to cut
Speaker 2: down the price tag in the government in terms of
Speaker 2: the budget. Rick, we know that the Consumer Financial Protection
Speaker 2: Bureau has not been popular in many ways since its
Speaker 2: inceptions after the financial crisis, certainly with Republicans. Should we
Speaker 2: be surprised by this, Rick, and what are the odds
Speaker 2: that a deleting quote unquote could really happen.
Speaker 12: Yeah.
Speaker 8: Look, I mean this was one of the agencies that
Speaker 8: sprung out, as you said, of the two thousand and
Speaker 8: eight financial crisis, in order to protect people from predatory
Speaker 8: lending habits and other things like that. And look, I
Speaker 8: mean you really have to question whether or not these
Speaker 8: agencies are worth the price that taxpayers pay for them.
Speaker 8: And I have no doubt that that's the kind of
Speaker 8: thing that Elon Musk and vi Vek Ramaswami and the
Speaker 8: DOGE team are going to be going after. Some of
Speaker 8: these things are based in statutory laws. The creation of
Speaker 8: agencies are usually done, you know, with laws passed by Congress,
Speaker 8: and which means the only way you get rid of
Speaker 8: them is by passing another law that says we're going
Speaker 8: to take them out. And really, I mean it's a
Speaker 8: very difficult position to put members of Congress in to say, hey,
Speaker 8: we're going to get rid of an agency that protects
Speaker 8: people from predatory lending. I mean, that's a I don't
Speaker 8: know what politics you might be thinking about, Elon Musk,
Speaker 8: but that's a hard sell to a member of Congress
Speaker 8: has got to get re elected next year. In two years.
Speaker 8: So yeah, it's worth the debate.
Speaker 12: It's worth talking about the efficacy of government.
Speaker 5: Its efficiency should be top.
Speaker 8: Of mind for people right now. The meteoric rise in
Speaker 8: government post financial crisis, post COVID needs to be cut
Speaker 8: back and everything should be under the scrutiny of the
Speaker 8: DOGE team to take a look at where we can
Speaker 8: do that effectively.
Speaker 2: All right, Rick Davis and Jeanie Shanzino our signature of
Speaker 2: political panel here with me on Balance of Power. Thank
Speaker 2: you so much.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
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Speaker 2: We're just over sixteen hours into what is going to
Speaker 2: be at least a sixty day cease fire as agreed
Speaker 2: between Israel and Hesbela in Lebanon. This, of course, a
Speaker 2: deal that was just reached yesterday or approved yesterday by
Speaker 2: the parties and announced at the White House by President
Speaker 2: Joe Biden, as well as spoken about by the Israeli
Speaker 2: Prime Minister Benjamin Netanyahu.
Speaker 3: This is designed to be a permanent cessation of hostilities.
Speaker 3: What is left of Hesbalah and another terrorist organization will
Speaker 3: not be allowed well, I emphasized, will not be allowed
Speaker 3: to threaten security visual again. Over the next sixty days,
Speaker 3: the Lebanese Army and State Security Force will deploy and
Speaker 3: take control of their own territory once again.
Speaker 4: I am determined to do whatever it takes to prevent
Speaker 4: Ron from attaining nuclear weapons. I multiple I have said
Speaker 4: many times that a good agreement is an agreement that
Speaker 4: is enforced, and we will enforce it.
Speaker 2: So as we consider this agreement and how far into
Speaker 2: the future it will be able to extend, we bring
Speaker 2: in Jane Harmon, chair of the Commission on the National
Speaker 2: Defense Strategy, and President am Emerita of the Woodrow Wilson Center,
Speaker 2: former Democratic Congressman from California, as well here on.
Speaker 12: Balance of Power.
Speaker 2: Jane, welcome back to the program. Thanks for being with
Speaker 2: us here on Bloomberg TV and Radio. Obviously, much needs
Speaker 2: to happen in this sixty day span in order for
Speaker 2: this to lead to a permanent ceasefire. What is your
Speaker 2: degree of optimism that it will.
Speaker 9: Well, it's a very good start and several things are
Speaker 9: going to happen in the sixty days. That give me optimism.
Speaker 9: One is civilians will start coming back into southern Lebanon
Speaker 9: and northern Israel, so the stakes are going to be
Speaker 9: higher as this resumes. Two is that Hezbollah has been
Speaker 9: seriously degraded. They're the ones, I think now who pushed
Speaker 9: for this more than than even than the Israelis did
Speaker 9: UH and that's good news. That's the most potent of
Speaker 9: Iran's UH terror proxy groups. Third is Levanon has a
Speaker 9: chance to form again a really serious solid UH democratic government,
Speaker 9: which it had in the olden days. I mean, they
Speaker 9: root was the Paris of the Middle East, or maybe
Speaker 9: Paris was the bay Root of Europe, but it was
Speaker 9: a beautiful city destroyed now by all of this uh
Speaker 9: UH terror and and and collapse of government.
Speaker 12: And finally Iran is hemmed in more.
Speaker 9: They're threatening to advance their nuclear capacity, but their their
Speaker 9: biggest weapon, which was these terror groups are losing ground,
Speaker 9: including UH fortunately in Gaza, which I hope will be
Speaker 9: next on the list for a ceasefire, return of hostages
Speaker 9: and passed towards state solution.
Speaker 2: Well that's exactly what I wanted to ask you about,
Speaker 2: Jane Obviously, there has been a lot of expression of
Speaker 2: that hope that a ceasefire with Hesbela could pave the
Speaker 2: way for a ceasefire with Hamas. Considering it's becoming more
Speaker 2: and more clear that neither Hesbela or Iron really is
Speaker 2: going to be coming to the aid of Hamas at
Speaker 2: this stage of the conflict. So how much closer has
Speaker 2: this agreement drawn us to that potential?
Speaker 7: One?
Speaker 2: Do you think this is still something that could be
Speaker 2: accomplished while President Biden is in office?
Speaker 12: I don't know.
Speaker 9: Certainly, kudos to his team for four years of working
Speaker 9: on all this and one plus year of working on
Speaker 9: Gaza since the illegal invasion by Hamas. One major factor
Speaker 9: is who would govern Gaza. That is unclear. The palestinating
Speaker 9: authority at the moment is not in charge of Gaza
Speaker 9: and is a weak and a corrupt government. I mean,
Speaker 9: there has to be something stronger there. Secondly, just maybe Biden,
Speaker 9: building on an accomplishment of the Trump one administration, can
Speaker 9: revive this deal among Sunny States and Israel, which must
Speaker 9: include a path to two states, and that could help
Speaker 9: push some competent government into Gaza and generate some interest
Speaker 9: in rebuilding Gaza. I mean, that's the other thing. It's
Speaker 9: essentially destroyed. So I think there are a lot of IFFs.
Speaker 9: I think Biden deserves a lot of credit. And as
Speaker 9: I said, it was Trump who started with the Abraham Accords,
Speaker 9: this notion of a not just a truce, but an
Speaker 9: economic arrangement among Sunny governments and Israel. And if that
Speaker 9: can be developed starting now and continuing now and then
Speaker 9: continuing into the Trump administration, that's good news.
Speaker 2: Well, Gane, as you give Biden a lot of credit
Speaker 2: for this. The question is, as he is preparing to
Speaker 2: leave the White House just a few weeks from now,
Speaker 2: how much credit historians will give him. How important was
Speaker 2: reaching this ceasefire agreement in Lebanon to the shaping of
Speaker 2: his ultimate legacy.
Speaker 12: Well, it's important.
Speaker 9: But the unknown unknown, I guess, is where are we
Speaker 9: going with Ukraine? I would say he is was late
Speaker 9: to permit the transfer of very lethal weapons into Ukraine,
Speaker 9: and sadly very late to give the Ukrainians permission to
Speaker 9: use them on Russian soil against military installations and against
Speaker 9: the influx of North Korean troops. Fortunately this has happened.
Speaker 9: He's also pushing another appropriation of twenty plus billion dollars
Speaker 9: before he leaves.
Speaker 12: But what I worry about is not.
Speaker 9: To change in mission, but the way we left Afghanistan
Speaker 9: on Biden's watch and the way we may leave Ukraine
Speaker 9: will seriously erode US leadership in the future. I don't
Speaker 9: blame it all on Joe Biden. It was Russia that
Speaker 9: invaded Ukraine. And certainly Biden has restored and revived enhanced
Speaker 9: NATO and the NATO Alliance, and he leaves that behind too.
Speaker 12: I hope Trump won't degrade that again.
Speaker 9: But you know, legacies take a while to form, and
Speaker 9: it would be great if this leads to a ceasefire
Speaker 9: in Gaza and it leads to a real serious advance
Speaker 9: by Ukraine against Russian forces before he leaves.
Speaker 2: Well, if we could just continue this discussion on Ukraine.
Speaker 2: We learned about an hour ago Jane that Donald Trump
Speaker 2: has nominated retire General Keith Kellogg to be a special
Speaker 2: Envoy for Russia and Ukraine. Kellogg had written for the
Speaker 2: America First Policy Institute that in order for people to
Speaker 2: come to the peace table, if you will, the US
Speaker 2: should make it clear, as well as other NATO allies,
Speaker 2: that they are willing to put off Ukraine joining the alliance,
Speaker 2: and then that may be a key component for Russia
Speaker 2: to come to any kind of agreement. I wonder what
Speaker 2: your thoughts are on a that idea, but be the
Speaker 2: role is ultimately going to play well.
Speaker 9: Note that he's a special envoy, he's not nominated as ambassador.
Speaker 9: That's again to avoid confirmation by Congress. But note two
Speaker 9: that Marco Rubio and Mitch McConnell, who is the outgoing
Speaker 9: Senate leader, are strong proponents of aid to Ukraine.
Speaker 12: So let's see how this plays out.
Speaker 9: I worry about taking joining NATO off the table because
Speaker 9: what is the insurance policy against Russia agreeing to some
Speaker 9: form of settlement and then advancing in the future. Let's
Speaker 9: understand that in nineteen ninety four Russia agreed that Ukraine
Speaker 9: was a sovereign state before Ukraine gave up its nuclear weapons.
Speaker 9: And let's understand that Russia is a charter member of
Speaker 9: the UN, where every member is supposed to respect the
Speaker 9: sovereignty of every other member, And there were other agreements
Speaker 9: along the.
Speaker 12: Way, all of which Russia violated.
Speaker 9: So I'm still worried that with that NATO without NATO
Speaker 9: membership as an insurance policy, that Russia might feel emboldened
Speaker 9: to move against Ukraine soon and to move into Europe.
Speaker 9: And again to remind the Trump administration, we are a
Speaker 9: member of NATO. Article five guarantees would put us in
Speaker 9: a war if that should happen.
Speaker 2: Jane, as you chair the Commission on the National Defense Strategy,
Speaker 2: I want to turn to something that happened last week
Speaker 2: that I don't think got very much attention. But it
Speaker 2: was a speech that the incoming Senate Majority leader John
Speaker 2: Thune gave on the Senate floor in which he quoted
Speaker 2: directly from the commission's final report, specifically the line that
Speaker 2: says the Commission finds the US military lacks both the
Speaker 2: capabilities and the capacity required to be confident and can
Speaker 2: deter and prevail in combat. He went on to say
Speaker 2: that as a pretty damning statement. He was using this
Speaker 2: as a way to reinforce the idea that the National
Speaker 2: Defense Authorization Act, the NDAA does need to pass. That's
Speaker 2: something on there to do list before the year is out, Jane.
Speaker 2: But as he gets ready to take control of the
Speaker 2: Senate majority, Mike Johnson of course going to have continued
Speaker 2: control we assume over the House. In Donald Trump, the presidency.
Speaker 2: How do they need to be considering the US defense position.
Speaker 9: Well, let's start with the fact that this commission, which
Speaker 9: I was fortunate to chair, composed of four Democrats and
Speaker 9: four Republicans, was unanimous, bipartisan, and unanimous.
Speaker 12: In the conclusions we reach, one of which.
Speaker 9: You just cited, and we think that the world is
Speaker 9: more dangerous and more complex than any time since World
Speaker 9: War Two, and we are under prepared. Yes, soon is
Speaker 9: right to add to make sure that the National Defense
Speaker 9: Authorization Act passes before Congress adjourns. It's already late. It's
Speaker 9: always late. It's been late every year since at least
Speaker 9: twenty eleven. But this is crucial to protect the US
Speaker 9: against threats around the world, not just threats from one
Speaker 9: location like China.
Speaker 12: At any rate, I hope that happens.
Speaker 9: What we've also urged, though, is maybe language that says,
Speaker 9: before the next National Defense strategy is prepared, that the
Speaker 9: National Security Strategy, the overlying document, directs all these smaller
Speaker 9: strategies to focus outward, because we think in order for
Speaker 9: the US to deter threats against US in the future
Speaker 9: and prevent wars, which is what everybody would like, we
Speaker 9: need to use all elements of national power, not just
Speaker 9: DoD DD does need reforms, but I would urge that
Speaker 9: if if it's decapitated and the top level of military
Speaker 9: leaders is taken out, it will really undermine God's authority.
Speaker 9: And if it's misused for purposes that are inconsistent with
Speaker 9: the posse commatatis policy, that's another way that d D
Speaker 9: will not perform better than it has been and as
Speaker 9: well as it needs to be.
Speaker 2: So a final note on this Jane, as we get
Speaker 2: ready for just the NDAA authorization but also the funding
Speaker 2: battle Congress still needs to sort out before they have
Speaker 2: more funding battles in the new year and try to
Speaker 2: reign in spending. What is this ultimately going to mean
Speaker 2: for what the defense budget needs to be, especially as
Speaker 2: you have the likes of Elon Musk and Vivek Ramaswami
Speaker 2: saying they want to cut two trillion dollars in federal
Speaker 2: spending and just by basic math, that would have to
Speaker 2: include at least a portion of defense.
Speaker 9: Well, we say in our report that some legacy systems
Speaker 9: should be canceled and that would free up some funds
Speaker 9: to spend on the right assets. We said that building
Speaker 9: hardware only is not a good strategy given what the
Speaker 9: weapons systems are that are veered against us that can
Speaker 9: take that out.
Speaker 12: And more software based, iterative tech based.
Speaker 9: Weapons are the future. Think Ukraine. Ukraine's making those itself
Speaker 9: and using them effectively on the battles like drones. But
Speaker 9: at any rate, that's that's what we said, those things
Speaker 9: are less expensive.
Speaker 12: On the other hand, we.
Speaker 9: Pointed out that the Defense Department is way below targets
Speaker 9: set years ago, and that we do need to increase
Speaker 9: defense spending on the right things. And it's not a
Speaker 9: zero sum game. We shouldn't increase the Pentagon budget and
Speaker 9: decrease the State Department budget because robust soft power is
Speaker 9: a huge part of all elements and national power.
Speaker 12: So let's see what they do.
Speaker 9: But we call for raising revenues to cover any increases
Speaker 9: in defense and reforming entitlements, which is a place they
Speaker 9: will maybe go. And certainly I've been in favor of
Speaker 9: that all my years in Congress and now, and I
Speaker 9: was there, you know, one hundred years ago in nineteen
Speaker 9: ninety seven, when members of Congress on a bipartisan basis
Speaker 9: voted successfully to balance the federal budget.
Speaker 2: All right, Former Congressman Jane Harmon, now Chair of the
Speaker 2: Commission on the National Defense Strategy, joining us here on
Speaker 2: Balance of Power on this Thanksgiving Eve. Gene, thank you
Speaker 2: so much and a very happy Thanksgiving to you and yours.
Speaker 7: Thanks for listening to the Balance of Power podcast. Make
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