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Speaker 2: If you've been paying any attention, the shutdown talk seems
Speaker 2: to be getting louder every day, and we don't even
Speaker 2: have all the lawmakers in town yet. The House doesn't
Speaker 2: show up until next week. But that's more than enough
Speaker 2: for speculation to run wild. And instead of speculating here,
Speaker 2: we're actually going to talk details with Libby Cantrill from
Speaker 2: Pimco about what a shutdown would actually look like. This time.
Speaker 2: She's got a very compelling note out to clients. It's
Speaker 2: a little bit concerning, actually, warning that the ingredients in
Speaker 2: place for this shutdown are much more potent than what
Speaker 2: we have seen in recent memory. You start thinking a
Speaker 2: bad shutdown, that's just a weekend. We'll get back to
Speaker 2: it on Monday, and it could be a little more
Speaker 2: complicated than that. We also expect to hear from President
Speaker 2: Biden this hour. He'll be speaking a bit later about
Speaker 2: a labor deal on the West Coast. Think West Coast
Speaker 2: Ports but of course it's against the backdrop of a
Speaker 2: very difficult conversation about the potential labor strike in Detroit,
Speaker 2: the UAW and the Big Three. And that's where we
Speaker 2: start with Gregory Cordy, who's with us table here at Washington.
Speaker 2: Great to see Gregory. The President is going to deliver
Speaker 2: what he hopes to be a good message today. But
Speaker 2: it's hard to start taking a victory lap when we
Speaker 2: could have a massive auto strike coming within less than
Speaker 2: two weeks, isn't it.
Speaker 3: Yeah, he really wants to use this event as, as
Speaker 3: you say, a victory lap, a little bit of a
Speaker 3: pep rally after this agreement with the West Coast Ports
Speaker 3: and the dock workers to get an agreement. And if
Speaker 3: you remember just a couple of years ago, over what
Speaker 3: we've seen post pandemic, with these huge lines outside of
Speaker 3: ports and the supply chain shortages we had and all
Speaker 3: this this was very important to the Biden administration get done.
Speaker 3: A prolonged supply chain shock like a labor strike at
Speaker 3: ports would have exacerbated the inflation we've already seen. But
Speaker 3: now we've got to turn the page to the next thing,
Speaker 3: which is this looming strike deadline by the UAW next week.
Speaker 3: That looks like, you know, it's getting a little dicey
Speaker 3: that the union's demands are pretty ambitious. At the big
Speaker 3: three auto makers seem to be digging in the heels
Speaker 3: and the issues, interestingly, are an interesting cauldron of Bidenomics,
Speaker 3: where President Biden claims to be the most union friendly
Speaker 3: president this nation's ever seen, but it's some of his policies,
Speaker 3: especially around electric vehicles, that are the issues at stake
Speaker 3: in these negotiations.
Speaker 2: Really fascinating to think of the scenario that we're in here.
Speaker 2: If it were not for the ev incentives and some
Speaker 2: of the stuff that you're referring to in the Inflation
Speaker 2: Reduction Act, for instance, would.
Speaker 4: We be having the same conversation. I think we would
Speaker 4: be having some kind of conversation. Well, there's still a
Speaker 4: lot of resentments that have been bubbling over since for
Speaker 4: more than a decade because the unions took a bath
Speaker 4: during the Great Recession. Remember all these automaker bailouts that
Speaker 4: we had, and their contracts worker tailed. They had to
Speaker 4: take get rid of their traditional defined benefit pensions in
Speaker 4: favor of something along the lines of a defined contribution plan,
Speaker 4: and punted a lot of these bigger issues down the road,
Speaker 4: and now they're back at the table and saying, this
Speaker 4: is our chance. We've seen record automaker profits, but we
Speaker 4: also see these threats from electric vehicles and new technologies
Speaker 4: similar to the writer's strike and the actors strike that
Speaker 4: we're seeing in this summer of strikes where they're worried
Speaker 4: about AI similar kinds of issues at play, where all
Speaker 4: these workers are looking to the future and worried about
Speaker 4: their job security as their potential of their jobs being
Speaker 4: replaced by less labor and cheaper labor.
Speaker 2: Yeah, maybe that goes for all of us at some
Speaker 2: point here, Gregy, Does this hot labor summer have any
Speaker 2: impact on the budget negotiations about to I guess restart
Speaker 2: is the best way to put it here in Washington.
Speaker 3: Good question, and I'm not sure exactly what that connection is,
Speaker 3: but it's it's all sort of in the mix. Certainly
Speaker 3: with the budget negotiations. You have a little bit of
Speaker 3: a hangover from that debt deal that we talked so
Speaker 3: much about a few months ago, where.
Speaker 2: It doesn't feel like such a deal at this point.
Speaker 3: Well, there's a little bit of buyer's remorse, especially on
Speaker 3: the part of Republicans who feel like maybe you know,
Speaker 3: they got taken for a ride on this and now
Speaker 3: want to see some some more austerity, and and now's
Speaker 3: the time to do it. That the the deadlines are
Speaker 3: I think to the extent that this kind of goes
Speaker 3: with the labor deals they're looking at, not wanting to
Speaker 3: punt this down the road any further, not put it
Speaker 3: into Christmas. That's that's usually what happens where there's a
Speaker 3: short term continuing resolution, right, they buy a few months,
Speaker 3: but then after that we get into an election year
Speaker 3: and nobody wants to be nobody wins in a shutdown
Speaker 3: an election year. And so I think, yeah, that all
Speaker 3: the ingredients are there for some real serious deal making
Speaker 3: that has to get done by the end of this
Speaker 3: month to save the government shutdowns.
Speaker 2: Right, we're going to talk about those ingredients now with
Speaker 2: Libby Cantrell. Gregory Thank you as always, great to see you,
Speaker 2: Bloomberg reporter Gregorycording with us since studio here, and you
Speaker 2: know Libby Cantrell, the managing director head of Public Policy
Speaker 2: at PIMCO, who has been watching this and Libby, you're
Speaker 2: out with a client note here that's specific to these ingredients,
Speaker 2: writing that they are more potent than what we have
Speaker 2: seen in recent memory. What is it that makes this
Speaker 2: shut down a little bit scarier than usual?
Speaker 5: Yeah, well, good, good afternoon. Well, so I think there
Speaker 5: are a few things. One is just the fact that
Speaker 5: there's a very skinny House majority. Republicans only have a
Speaker 5: five seat majority. That means that they practically really can't
Speaker 5: lose many votes in order to get that two eighteen
Speaker 5: member that they need in order to pass a bill.
Speaker 5: And then I think it, just as Gregory just mentioned,
Speaker 5: there is buyer's remorse for this debt deal that you know,
Speaker 5: we should note that about two thirds of the Republican
Speaker 5: conference and the House actually voted for so they did support,
Speaker 5: you know, raising the debt ceiling. And of course in
Speaker 5: that deal there were sort of top line spending limits
Speaker 5: for next year, for the next fiscal year, and for
Speaker 5: a fiscal year twenty twenty five. But this is the
Speaker 5: important butt. Some of those folks do have buyers remorse.
Speaker 5: They feel like, especially with the Fitch downgrade of the
Speaker 5: US debt credit quality, that this is the time is
Speaker 5: now in order to sort of push for these austerity measures.
Speaker 5: Folks don't want to have this cr this short term
Speaker 5: kind of stopgap that we've seen before. And as a result, again,
Speaker 5: even though these spending levels were sort of already agreed
Speaker 5: to in the June debt ceialing deal, a lot of
Speaker 5: folks are walking back and sort of threatening a shutdown.
Speaker 5: And again, I think what you know we're telling clients
Speaker 5: is this is more than just an empty threat. We
Speaker 5: do think there is a faction of folks in their
Speaker 5: House Republican Caucus, who are you ready and willing to
Speaker 5: shut down the government at least for a period of time.
Speaker 2: That means something. When Libby Cantrell says it, you go
Speaker 2: further though, and throwing a little history at us here, Libby.
Speaker 2: Since nineteen seventy six, there have been twenty funding gaps,
Speaker 2: as we call them, but there have been only four
Speaker 2: times in which the government has formally shut down in
Speaker 2: recent memory as well, twenty thirteen, we remember eighteen nineteen.
Speaker 2: This time around, you see a full shutdown being more likely?
Speaker 2: How common? And can you describe to our viewers and
Speaker 2: listeners the difference?
Speaker 5: Yeah, And I think this is a distinction with the
Speaker 5: difference and an important one. And when I don't think
Speaker 5: actually the markets are really paying attention to you. Previously
Speaker 5: in twenty eighteen twenty nineteen, we saw a thirty five
Speaker 5: day shutdown of the government, but Joe, importantly, that was
Speaker 5: only a partial shutdown. It was only part of the government,
Speaker 5: and that has implications both for economic growth, meaning that
Speaker 5: the economic impact of a partial shutdown is really less
Speaker 5: significant than a full shot down, but then also for
Speaker 5: economic data, and this is really important, especially when you're
Speaker 5: thinking about the will they or won't they in terms
Speaker 5: of the FED moving particularly in November.
Speaker 6: If the full.
Speaker 5: Government shuts down, that means practically that we do not
Speaker 5: have economic data. We don't have sorry unemployment data, we
Speaker 5: don't have CPI data, we don't have GDP data, and
Speaker 5: very hard to imagine a FED raising rates in that environment.
Speaker 5: So that is sort of the implication of a full
Speaker 5: government shutdown versus a partial one, which we saw again
Speaker 5: most recently in the twenty eighteen twenty nineteen timeframe. This
Speaker 5: one looks like if the government were to shut down,
Speaker 5: it would be the full enchilada, so to speak, it
Speaker 5: would be the entire government and as a result, again
Speaker 5: would have reverberations for economic growth in the short term.
Speaker 5: But then also importantly in terms of access for that
Speaker 5: economic data. And I think that's actually quite crucial from
Speaker 5: a market's perspective.
Speaker 2: You write that Social Security and Medicare would not be
Speaker 2: disrupted at least checks to recipients would not be disrupted,
Speaker 2: but the SNAP program for instance, food stamps Libby would be.
Speaker 2: This is important to talk about because we do hear
Speaker 2: some members in Congress say, hey, go ahead, shut it
Speaker 2: down and make a difference anyway, but it would for
Speaker 2: millions of.
Speaker 6: People, it would.
Speaker 5: And you know, again, so practically for folks who are
Speaker 5: on those food security programs, for people who are going
Speaker 5: through the airports TSA, most of those employees will be
Speaker 5: deemed as potential employees, meaning that they will still work,
Speaker 5: but they won't receive a paycheck. And we all know
Speaker 5: how cheerful people are. They're not They're having to go
Speaker 5: to work and not receiving a paycheck. And so we
Speaker 5: could actually see there are disruptions and that national parks
Speaker 5: will be shut down. So again, and this is not
Speaker 5: not to be hyperbolic here, but I do we do
Speaker 5: think that the chances of a broader full government shutdown
Speaker 5: are really much higher than they have been in recent memory.
Speaker 5: And again this has sort of coming and coinciding with
Speaker 5: a period of time from an economic perspective, where there
Speaker 5: are there are already a lot of physical headwinds that
Speaker 5: are likely going to take hold, whether it's the student
Speaker 5: loan repayments, whether it's tax collection for those California taxpayers
Speaker 5: who haven't had to pay because of the national disaster
Speaker 5: zones or what have you, that their tax bill comes
Speaker 5: due in October. There's some childcare benefits that are rolling
Speaker 5: off at the end of September. So we see this
Speaker 5: as sort of a we're calling it a window of
Speaker 5: weakness from a physical perspective this fall, and that again
Speaker 5: could just be exacerbated should we see fitful government shutdown.
Speaker 5: So we don't want to talk about you know, we
Speaker 5: don't want again hyperbolic, but we do think this is
Speaker 5: sort of important. It could be an important kind of
Speaker 5: macro factor going into the fall.
Speaker 2: This strikes me as far from hyperbolic. We've got to
Speaker 2: talk about reality here if this happens, especially if everybody
Speaker 2: in Washington thinks it's going to happen. This is the
Speaker 2: first real conversation that I've heard that details actually what
Speaker 2: the impact would be and when we consider the impact
Speaker 2: potentially on the financial market. Here what Wall Street might
Speaker 2: think about it. Libby, you just pointed out something really
Speaker 2: interesting here that some folks might not consider. No economic
Speaker 2: data released, How does the market live in that world?
Speaker 2: If this did become a prolonged shutdown, what's the impact there?
Speaker 5: Yeah, and so I think that that is that again,
Speaker 5: I think we would say outside of kind of the
Speaker 5: growth impact, And you know, some of these estimates are
Speaker 5: you know, twenty basic points of shaving off growth a week. Now,
Speaker 5: a lot of the the employees who would not be
Speaker 5: paid during a shutdown do get back pay. But Joe,
Speaker 5: this is also an important nuance that we're talking about
Speaker 5: with our clients is that federal contractors don't necessarily receive
Speaker 5: that back pay. And they're about a four million federal contractors.
Speaker 5: So again, if this goes on for a prolonged period
Speaker 5: of time, from a growth perspective, the you know, the
Speaker 5: growth in pack could be a little bit more severe
Speaker 5: than I think a lot of economists sort of have said.
Speaker 5: And then again just the fact that there won't be
Speaker 5: access to you know, payrolls, to jolts, to CPI to
Speaker 5: GDP growth, now that all that stuff will come out eventually,
Speaker 5: but the folks who are actually doing that data collection,
Speaker 5: who are calculating those figures, oftentimes are not deemed as
Speaker 5: essential workers, and so they are not doing that in
Speaker 5: real time, and as a result, there'll be a delay there.
Speaker 5: So again, I think from a market's perspective, the fault
Speaker 5: already looks like it could potentially be more uncertain because
Speaker 5: of some of these headwinds that are going to be
Speaker 5: facing consumers. And again we just say that that's the
Speaker 5: sort of government shutdown, especially if it's a prolonged government shutdown.
Speaker 5: The last thing I'll say on that is that there
Speaker 5: is if the government does shut down in October, so
Speaker 5: September thirtieth, it's a deadline. If Congress doesn't come to
Speaker 5: a resolution before then, you know, I guess my worry is,
Speaker 5: what is the catalyst for there to actually, you know,
Speaker 5: be a bargain. I'm not sure politically if there is
Speaker 5: one that's really short term or really in the immediate future,
Speaker 5: And as a result, you could be looking at a
Speaker 5: bit more of an extended government shutdown. And we haven't
Speaker 5: had that full government shutdown longer than sixteen days is ever,
Speaker 5: so we actually don't really know what the economic impact
Speaker 5: of that would of that would be.
Speaker 2: God, we're not looking to make history.
Speaker 5: We're always fearful.
Speaker 2: Well, but so what are you hearing though from investors?
Speaker 2: Does does the investment community expect to shut down? Or
Speaker 2: is Wall Street given this a whole hum right now
Speaker 2: and there's going to be a big freak out when
Speaker 2: it happens.
Speaker 5: I think this is honestly more of a whe hum.
Speaker 5: I've we've been sort of surprised a talking to some folks,
Speaker 5: peopleth at our clients, but even you know, other market participants,
Speaker 5: and this is really whether you know, sometimes for some
Speaker 5: folks is on their radar screen, but they just really
Speaker 5: don't think it's a big issue. And for others they
Speaker 5: don't even they're not even paying attention because I do
Speaker 5: think there's been so much noise out of Washington and
Speaker 5: there you know, I wrote this in the note that
Speaker 5: there answered this expectation that even though Congress often doesn't
Speaker 5: turn their homework in until the last possible moment, they
Speaker 5: usually do get their homework done. I guess you know, again,
Speaker 5: our concern is is politically right now, the stars really
Speaker 5: don't seem to be aligned in order for there to
Speaker 5: be you know, a recond you know, compromise before the
Speaker 5: September thirty day.
Speaker 2: Boy, some real talk, straight talk with Libby Kantri. Libby,
Speaker 2: thank you for your take. This is important. If this happens,
Speaker 2: people need to know what's coming, and it's great, as
Speaker 2: always to share your expertise.
Speaker 1: You're listening to The Bloomberg Sound On podcast. Catch the
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Speaker 2: It's a tough headline anyway you cut it. US deficit
Speaker 2: explodes even as economy grows. That's what Washington woke up
Speaker 2: to on Sunday morning. It's pretty hard to refute what
Speaker 2: we're looking at here, a deficit that balloons to two
Speaker 2: trillion dollars by the end of this fiscal year, right
Speaker 2: around the time the government might shut down. That would
Speaker 2: be the end of this month. Let's reassemble our panel now.
Speaker 2: Genie Shanzano joins, Democratic Analyst and of course, Bloomberg Politics contributor,
Speaker 2: joined today by Chape and Fay, Republican strategist Actum. It's
Speaker 2: great to have you both here. Chapin, Look, this isn't new.
Speaker 2: It's the worst kept secret in Washington that this is
Speaker 2: likely going to happen. It's just really a question of when,
Speaker 2: and a question of Speaker Kevin McCarthy's authority, credibility, and
Speaker 2: control over his very thin Republican majority in the House.
Speaker 2: Matt Gates is speaking up now. I gave you a
Speaker 2: taste of that a little bit earlier this hour in
Speaker 2: an interview talking about the potential of firing Kevin McCarthy
Speaker 2: if he doesn't like the way this goes when the
Speaker 2: House returns next week. Here he is.
Speaker 7: When we get back to Washington in the coming weeks,
Speaker 7: we have got to seize the initiative. That means forcing
Speaker 7: bots on impeachment. And if Kevin McCarthy stands in our way,
Speaker 7: he may not have the job long. So let's hope
Speaker 7: that he works with us, not against us.
Speaker 2: What do you think, Chapin, Will he have the job
Speaker 2: for long?
Speaker 8: Well, listen, he's speaking. McCarthy's got one of the hardest
Speaker 8: jobs a pop. He's right wrangling a very unruly, uh
Speaker 8: caucus of Republicans. But but but Republicans like me Gates
Speaker 8: and a lot of the Conservatives felt that they were
Speaker 8: elected and sent to Washington advocate for some of these issues.
Speaker 8: So I do think the Speaker is going to have
Speaker 8: to capitulate to some, uh to some of these ideas.
Speaker 8: And you know, the government shut down is going to
Speaker 8: be a blame game, and Republicans have to be clear
Speaker 8: and concise and break down exactly how their agenda affects uh,
Speaker 8: everyday Americans, because that's that's what's important. Right If you
Speaker 8: just talk about a ballooning deficit, hard to hard to
Speaker 8: tire THATU how that affects positive or negative? And an
Speaker 8: average Americans like but as they see billions of dollars
Speaker 8: going to Ukraine, as they see how much money how
Speaker 8: much you know, local municipalities are understrained because.
Speaker 2: Of the migrant situation.
Speaker 8: Uh, you know, it's going to be a very difficult
Speaker 8: case to make against a Republican caucus who may shut
Speaker 8: down the government for tax breaks trying to put money
Speaker 8: back into people's pockets. So on the message front, I
Speaker 8: think Republicans have the better message and the better policy.
Speaker 8: You know proposal, some of them like tax breaks. I'm
Speaker 8: putting more money into americans pockets. But it's you know,
Speaker 8: a little early to tell. Speaker McCarthy has a very
Speaker 8: unruly caucus that he's going to have to not necessarily
Speaker 8: keep in line, but try and act as a unified force.
Speaker 2: It would be very difficult.
Speaker 8: But as of right now, I think, you know, I
Speaker 8: think they will have an edge in this, in this
Speaker 8: upcoming battle.
Speaker 2: We do have to be specific about Republicans, right, Genie,
Speaker 2: because it sure sounds like Mitch McConnell and Senate Republicans
Speaker 2: are on a very different island from those in the House.
Speaker 2: The White House and the Senate appear to be in
Speaker 2: step here. Kevin McCarthy might be the one out of step.
Speaker 2: Is that the case?
Speaker 6: It is the case.
Speaker 9: I mean, this is a Republican versus Republican battle, and
Speaker 9: specifically Republicans in the House versus Republicans in the Senate.
Speaker 9: In fact, on that press conference the other day, when
Speaker 9: Mitch McConnell came out and we talk so much about
Speaker 9: him freezing that press conference, he intended to come out
Speaker 9: and send a clear message to Kevin McCarthy, and that
Speaker 9: message has been very clear throughout. He said it in
Speaker 9: the speech before. They need a short term bill to
Speaker 9: get them into the holidays, and of course Kevin McCarthy
Speaker 9: has been very clear he's not going to do that.
Speaker 9: But when you look and you listen to what people
Speaker 9: are Wi Matt Gates are saying, they are just not
Speaker 9: dealing in reality. House Republicans control one sixth of the
Speaker 9: government and they are trying to push through policies, push
Speaker 9: through ideas that they simply don't have the support for.
Speaker 9: And so that is what Kevin McCarthy has been contending with.
Speaker 9: He was able to heard those cats earlier, but very
Speaker 9: much like Paul Ryan and John Bayner before him, he
Speaker 9: over promised to this very small group of people on
Speaker 9: the far right of his own caucus about spending and
Speaker 9: other things, and they are going to hold him to
Speaker 9: delivering on that, and that is going to put him
Speaker 9: in a very difficult position because he will need Democrats
Speaker 9: and have to concede to Democrats to get a short
Speaker 9: term spending bill or there's a shutdown, and that hurts
Speaker 9: Republicans at a very bad time. So, you know, I
Speaker 9: agree with Chapin, he has the hardest job in DC
Speaker 9: right now, and it's going to be, you know, fascinating
Speaker 9: to see if he can maneuver it. His predecessors were
Speaker 9: unable to and both ultimately left, and I would not
Speaker 9: be surprised if that is Kevin McCarthy's fate at some
Speaker 9: point in this process down the road.
Speaker 2: Illustrating the contrast here, Mitch McConnell, of course, the Republican
Speaker 2: leader in the Senate earlier today on the floor talking
Speaker 2: about this supplemental request to fund the war effort in Ukraine,
Speaker 2: not to mention the debate over Pentagon spending in the
Speaker 2: broader budget.
Speaker 10: Since put in t escalation in Ukraine, President Biden has
Speaker 10: not been as decisive as many of us would have preferred.
Speaker 10: But this is both excuse or Congress to compound his
Speaker 10: administration failures with figures of our own, with.
Speaker 2: A jab at Joe Biden while he was at it,
Speaker 2: Chape and Fay, Mitch McConnell and the Republican establishment, kind
Speaker 2: of the old school Republicans seem to be very much
Speaker 2: on the same page as Joe Biden when it comes
Speaker 2: to Ukraine spending. Is this where the fallout will happen
Speaker 2: in the House.
Speaker 8: I think it's one area where fall it will happen.
Speaker 8: I think we are you know, you know, And and
Speaker 8: the rise of populism is an issue in the Conservative
Speaker 8: Party because I.
Speaker 6: Think we're living in an era where.
Speaker 8: Our elected officials, the gap between our electives, what our
Speaker 8: elected officials are doing, and what the voters want has
Speaker 8: never been wider. Which is what is driving these Republican
Speaker 8: members of the caucust because they again I feel they
Speaker 8: have been sent there to achieve some of these conservative ideas. Again,
Speaker 8: some of them are like Jeanie said, not living, not
Speaker 8: in reality, but some of them, you know, tax cut,
Speaker 8: some of these fiscal policies. This is what the Republican
Speaker 8: hawkas was elected.
Speaker 1: To get done.
Speaker 8: And I think it's a problem for established Republicans like
Speaker 8: Senator McConnell, like you know, Leader mcconough, like, you know,
Speaker 8: I have utmost respect for him. You know, the Supreme
Speaker 8: Court wouldn't be as conservative as it is without you know,
Speaker 8: Leader McConnell's backbone over the past several years. But I
Speaker 8: do think he is out of.
Speaker 7: Touch with what the republic, what Republican.
Speaker 8: Voters currently want. I think he is out of touch.
Speaker 8: And of course there's going to be that inter Republican
Speaker 8: battle between the House and the Senate. And as a
Speaker 8: quick aside, I once saw this might be a little
Speaker 8: morbid these days in context, but I once saw a
Speaker 8: speech by Leader McConnell where he said the Senate is
Speaker 8: where things go to die, meaning you know, that's the
Speaker 8: point of the Senate to cool things off from bills
Speaker 8: that come to the House.
Speaker 2: A little bit morbid in today's condex with some of.
Speaker 8: Our aging leaders. So there's always going to be that
Speaker 8: tension with Senate Republicans and House Republicans, but they're just
Speaker 8: going to have to come to some agreements. And you know,
Speaker 8: this is a multi level negotiation, and we're in the
Speaker 8: first phase right where people like Congressan Gates are trying
Speaker 8: to get his points out in the media.
Speaker 5: Right.
Speaker 8: That's a negotiating this position and tactic, and these are
Speaker 8: the things that he is asking for. Is he going to,
Speaker 8: you know, with this colleague, shut down the government if
Speaker 8: he doesn't get one hundred percent of what he's asking for.
Speaker 8: I'm not so sure. But they're going to have to
Speaker 8: get something big in order to go along with Speaker McCarthy,
Speaker 8: which again is his bigger problem over the next couple
Speaker 8: of weeks.
Speaker 2: Yeah, and you wonder what there is to negotiate at
Speaker 2: this point, Genie, I still go back a couple of months.
Speaker 2: We thought we had a deal, this debt ceiling deal
Speaker 2: that brought us to the verge of default. It was
Speaker 2: going to be the end of the world, the fiscal cliff.
Speaker 2: They actually averted that, and yet we're still going to
Speaker 2: go through the motions here as if it never happened.
Speaker 9: That's right, deal, shmil Joe Matthew, what do we know
Speaker 9: about that?
Speaker 2: You know, it's.
Speaker 9: That's basically you know, I was just I'm just thinking
Speaker 9: the same thing.
Speaker 7: You know.
Speaker 9: It's there was a deal, we all celebrated it, we
Speaker 9: averted the fiscal cliff, and it was as if it
Speaker 9: never happened, and they're renegotiated that. And you know, Marca
Speaker 9: just said this earlier to you, you know, untelling Unless
Speaker 9: that deal will hold, we are going to be in an.
Speaker 6: Awfully chaotic system.
Speaker 9: And the reality is is that if this is how
Speaker 9: Republican voters feel, then they need to elect more legislators
Speaker 9: to get the majority they need to push through these policies,
Speaker 9: you know, to suggest that they can push through these
Speaker 9: policies without having those people in place. By just threatening
Speaker 9: to shut down the government, well, that is something that
Speaker 9: hurts all of us. And you know one thing we
Speaker 9: keep hearing is shutdowns don't matter. They don't hurt anybody.
Speaker 6: But they do.
Speaker 9: Let's remember why Fitch downgraded us, because we are in
Speaker 9: a politically chaotic system that cannot work in the most
Speaker 9: basic way to keep our government running.
Speaker 6: That's a problem for all of us.
Speaker 9: So shutting down is not an option and should not
Speaker 9: be an option to get your policy perc descriptions passed a.
Speaker 2: Lot of things to remind ourselves of there was a deal.
Speaker 2: I just know it. I was there, I saw it.
Speaker 2: Oh in that downgrade, both of those did happen. That's
Speaker 2: the backdrop for this debate that we continue to hash
Speaker 2: out here on Bloomberg Radio. Genie and shape and stay
Speaker 2: with us as Mike Pence delivers what's being built as
Speaker 2: a major speech today in New Hampshire to draw the
Speaker 2: line between himself and his former boss.
Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch us
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Speaker 2: So did you hear it? Not the new Rolling Stones
Speaker 2: record The Sirens Song of Populism, as noted by the
Speaker 2: former Vice President Mike Pence delivering what his campaign is
Speaker 2: billing as a major speech today in New Hampshire Politics
Speaker 2: and Eggs Saint Anselm, this is when it happens, a
Speaker 2: major speech about conservatism versus populism. A reference, of course,
Speaker 2: to his former boss, Donald Trump. We don't even expect
Speaker 2: to hear his name, but everyone knows who the Vice
Speaker 2: President will be talking about.
Speaker 11: In his request that I reject or return votes unilaterally,
Speaker 11: power that no vice president American history had ever exercised
Speaker 11: or taken. He asked me to put him over the Constitution,
Speaker 11: and I chose the Constitution and I always will.
Speaker 2: Mike Pence from the Republican Debate, you might hear a
Speaker 2: line like that today is actually going to equate what
Speaker 2: he sees as the fringe left in the populous right
Speaker 2: together driving the country down the road to ruin. Let's
Speaker 2: reassemble our panel and get their take on it. Geenie
Speaker 2: Shanzano is with us, along with Chape and Fay. It's
Speaker 2: great to have you both here to weigh in on this, genie.
Speaker 2: I wonder where we should start here if you're not
Speaker 2: going to name Donald Trump, because it did look like
Speaker 2: Mike Pence was going to go there. But based on
Speaker 2: excerpts that we've seen, is a quote unquote major address
Speaker 2: like this going to make a vent at his campaign?
Speaker 9: You know, I am so glad you started there, Joe,
Speaker 9: because this is exactly what I was thinking. Apparently, his
Speaker 9: advisors told reporters on a call that the speech is
Speaker 9: directed not at one candidate in particular, and to your point,
Speaker 9: hence will not name Trump. Well, so what is he doing.
Speaker 9: Is he making a speech for posterity's sake? Is he
Speaker 9: some kind of political commentator or scholar that he is
Speaker 9: talking about the future of the GOP?
Speaker 6: Because if you're not going.
Speaker 9: To name Trump and you are forty to fifty points
Speaker 9: behind him right now, why are you running? You know,
Speaker 9: all of these people that are opposing Trump have the
Speaker 9: same problem. They look at the polls and I guess
Speaker 9: they listen to their advisors who say, don't take him on. Well,
Speaker 9: then this race is over unless Trump's self implodes because
Speaker 9: of legal or health reasons.
Speaker 6: So to me, this is going to be, you.
Speaker 9: Know, a nothing burger from the perspective of does Pence
Speaker 9: really want to beat Trump? Because to beat the guy,
Speaker 9: you have to run the race, which means you have
Speaker 9: to say you're taking him on. And this is why
Speaker 9: otherwise step back, do your commentary, But you're not going
Speaker 9: to make any headway when the Wall Street Journal and
Speaker 9: the CNN and the NRC say you're forty to fifty
Speaker 9: points behind, and we are looking at a couple months
Speaker 9: until the caucus, and we are in September after Labor Day.
Speaker 2: What would you tell him to do here, Chapin, Because
Speaker 2: Genie's right, You've got Donald Trump and aggregate of fifty percent,
Speaker 2: Mike Pence at five on a pretty good day. I
Speaker 2: know that he's going to be on the stage, likely
Speaker 2: for the second debate. I guess maybe I shouldn't assume that,
Speaker 2: but it looks like he will. But how do you
Speaker 2: make a dent in a forty five point spread like
Speaker 2: this if you're not going to name the front runner?
Speaker 8: Well, look, campaigns are math problems, right, and the former
Speaker 8: vice president has a very hard math problem to solve
Speaker 8: at five percent. The other problem is the Republican The
Speaker 8: numbers clearly show that the Republican Party in twenty twenty
Speaker 8: three and moving into twenty twenty four is solidly behind
Speaker 8: the foreign president Donald Trump. So the other candidates have
Speaker 8: this bind.
Speaker 3: Where do you attack the president?
Speaker 8: Does that hurt your numbers? How do you differentiate yourself
Speaker 8: from someone who is so far ahead and has such
Speaker 8: a strong level of support within the base of the
Speaker 8: Republican Party for a vice president, And each candidate has
Speaker 8: a different matrix that they have a different problem that
Speaker 8: they have to solve. For the vice president, he's already
Speaker 8: sort of in the on the never Trump side, so
Speaker 8: he's got to lean into this. The problem for him
Speaker 8: is that this is just not where the Republican primary
Speaker 8: voters are. Whether you like it or you don't, that's
Speaker 8: just not where the Republican voters are. And again he's
Speaker 8: trying to thread that needle by not naming the name.
Speaker 8: But we all know Republican voters are not stupid, you know,
Speaker 8: we all know what he's talking about and who he's
Speaker 8: talking about. So I think he's taking a little bit
Speaker 8: of a chance. But this is really the only path
Speaker 8: for certain candidates, the santas Uh and Pence in particular.
Speaker 8: The other ones you know, can can say nice things,
Speaker 8: are not engaging directly and try and and and and
Speaker 8: get those uh you know, get voters that way. But
Speaker 8: they're all they're all after the same votes. They're all
Speaker 8: after the Republican voters who refuse to vote for Trump,
Speaker 8: which is just not as many as the He's got
Speaker 8: more than fifty percent. So even it was one on one,
Speaker 8: Trump would still be leading.
Speaker 2: I want to ask Eugenie about Joe Biden and this
Speaker 2: same issue. He's not afraid to mention Donald Trump. But
Speaker 2: listen to the way he got to this in his
Speaker 2: Labor Day speech. I mean, typically we hear him refer
Speaker 2: to Donald Trump, not that often, but now we keep
Speaker 2: hearing about the former guy, the last guy.
Speaker 12: When the last guy was here, you were shipping jobs
Speaker 12: at China. Now we're bringing jobs home from China. When
Speaker 12: the last guy was here. From the last guy was there,
Speaker 12: your pensions were a risk. We helped save millions of
Speaker 12: pensions with your help.
Speaker 6: Was here.
Speaker 12: He looked at the world from Park Avenue. I look
Speaker 12: at it from scrant Pennsylvania. I look at it from Climont, Delaware.
Speaker 2: Not a joke, is he well, no, maybe not a joke. Jeanie.
Speaker 2: But what's he getting at here? Why not actually say
Speaker 2: his name?
Speaker 7: You know.
Speaker 9: I think that's Joe Biden's way of speaking. I mean,
Speaker 9: that's how Joe Biden has always spoken. There's only one
Speaker 9: previous guy who was there, you know. And the reality
Speaker 9: is is Donald Trump hasn't wrapped up the nomination yet,
Speaker 9: he is not the primary opponent yet, so maybe we
Speaker 9: hear more of that from Joe Biden. But the truth
Speaker 9: is the Biden campaign feels, and rightly so, that the
Speaker 9: more Trump they.
Speaker 6: Can talk about, the better.
Speaker 9: So if I was advising him, I would say, go
Speaker 9: ahead and say it. You may want to be folksy
Speaker 9: and say the previous guy, but go ahead and say Trump,
Speaker 9: because for them, the more Trump the better. There is
Speaker 9: very little path at this point for Donald Trump to
Speaker 9: win in the general. The Republicans are facing a very,
Speaker 9: very difficult time and we have seen that as we've
Speaker 9: seen the special elections roll out. And that's not because
Speaker 9: Joe Biden presents such a formidable challenge, because the head
Speaker 9: to heads aren't great for Joe Biden, but because as
Speaker 9: we look at the issue of abortion, as we look
Speaker 9: at the issue of democracy, as if we look at
Speaker 9: Donald Trump.
Speaker 6: It still looks.
Speaker 9: Like Joe Biden will be able to repeat potentially what
Speaker 9: he was able to do in twenty So for him,
Speaker 9: Trump is okay to say. And I would advise him
Speaker 9: to get over the folks seed the previous guy and
Speaker 9: just go out and say it. If not now, as
Speaker 9: soon as he wraps up the nomination.
Speaker 2: Say his name. According to Janie and Shape, and I
Speaker 2: think everyone agrees on this, whether it's Mike Pencer, Joe Biden,
Speaker 2: COVID back at the White House will talk about it
Speaker 2: next with the panel. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch the
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Speaker 2: The headline by the Associated Press kind of says it
Speaker 2: all here, and it's not good for the White House
Speaker 2: to mask or not to mask, is the headline. Biden
Speaker 2: goes both ways. This is not a Fox News headline,
Speaker 2: this is the Associated Press. Remembering of course that the
Speaker 2: first Lady came down with COVID last weekend. That means
Speaker 2: all new rules for Joe Biden coming off of the
Speaker 2: Labor Day weekend. He was masking yesterday at the White House.
Speaker 2: Most of the time.
Speaker 13: He will be masking while indoors and around people, in
Speaker 13: alignment with CDC guidance, and as as has been the
Speaker 13: practice in the past, the President will remove his mask
Speaker 13: when sufficiently distanced from others indoors and while outside as well.
Speaker 2: All right, so that would be consistent with past policy
Speaker 2: at the White House, but that's not really the way
Speaker 2: it worked. Yesterday, the President, as we told you, held
Speaker 2: an important event on the East Rooms to award the
Speaker 2: Medal of Honor Vietnam War veteran. No mask. A lot
Speaker 2: of people in the room, they were all shaking hands.
Speaker 2: We reassembled our panel for some final thoughts here Genie,
Speaker 2: Shanzino and Chape and Fay. I just wonder, now that
Speaker 2: we're out of the pandemic here, Chapin, how careful, how
Speaker 2: deliberate does Joe Biden does the White House need to
Speaker 2: be to avoid mixing messages and to open himself up
Speaker 2: to Republican criticism on the campaign?
Speaker 8: Very I mean, the misinformation over all things COVID has
Speaker 8: been really you know, I think a disaster, and I'm
Speaker 8: not blaming any one side. I think it comes from
Speaker 8: both sides. But it is critically important for the President
Speaker 8: of the United States to be consistent. And that's what's
Speaker 8: been missing from the Trumpet administration to the Biden administration.
Speaker 8: There has not been a consistent message. You know, should
Speaker 8: we mask, should we not mask? You know, the does
Speaker 8: the vaccine help against the new strains? We don't know,
Speaker 8: but you should ge vaccinated anyway. That just doesn't sound
Speaker 8: very scientific to me. I think everyone needs to get
Speaker 8: their act together in the federal government.
Speaker 2: This was suggested be a winning issue for the Biden administration. Genie,
Speaker 2: does he mask up or move on?
Speaker 1: You know?
Speaker 9: I think they have to follow the protocol and when
Speaker 9: anytime there's a breach from that, which we saw yesterday,
Speaker 9: it's a problem. So they do have to be clear
Speaker 9: on the protocol. They have to follow it. I don't
Speaker 9: relish wearing a mask again, so I'm empathetic to this.
Speaker 2: Genie and japin great conversation. This is Bloomberg. Thanks for
Speaker 2: listening to the sound On podcast. Make sure to subscribe
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