Speaker 1: Now from our nation's capital. This is Bloomberg Sound On.
Speaker 1: This bill will reduce inflationary pressures on economy, just the opposite.
Speaker 1: It's an inflation enhancement. I was a know last week.
Speaker 1: I was a no last night, and I'll be the
Speaker 1: first no on the board later today. Bloomberg Sound On Politics,
Speaker 1: Policy and Perspective from DC's top names. The motion is adopted.
Speaker 1: It's a big victory for what I call the Purple Tents. Yeah,
Speaker 1: I think you know this is all about the Green Party,
Speaker 1: the money. Bloomberg Sound On with Joe Matthew on Bloomberg Radio.
Speaker 1: The economy contracts for a second straight quarter, just as
Speaker 1: Democrats resurrects President Biden's climate and tax agenda. Welcome to
Speaker 1: the fastest hour in politics on a swirling day in Washington.
Speaker 1: Will be joined momentarily by White House Adviser Gene Spirling
Speaker 1: to talk about the argument over recession and what impact
Speaker 1: this new legislation will have. We'll get another view on
Speaker 1: this from our gold Wine of the Committee for a
Speaker 1: Responsible Budget later this hour, and from our signature panel.
Speaker 1: Bloomberg Politics contributors Rick Davis and Jeanie Chanzano with us.
Speaker 1: They've been focused, of course, on the President's agenda, since
Speaker 1: it was called Build Back Better. You heard the news
Speaker 1: break right here at this time yesterday. The Schumer Mansion Deal,
Speaker 1: now called the Inflation Reduction Act of comes together three
Speaker 1: major components climate, health, deficit reduction that please to President Biden,
Speaker 1: spoke today from the White House. Experts, even some experts
Speaker 1: who have criticized my administration of the past, agree that
Speaker 1: this bill. This bill will reduce inflationary pressures on the economy.
Speaker 1: It'll be paid for with a fiftcent minimum corporate tax,
Speaker 1: along with enforcement of tax cheats, and an end carried interests,
Speaker 1: leaving enough behind to lower the deficit, which the White
Speaker 1: House says, in turn will help to cool inflation in itself.
Speaker 1: Deficit reduction. Of course, you've also got lower drug prices.
Speaker 1: Now assume in this passes to be negotiated with the government.
Speaker 1: Republicans say, though it'll do the opposite, it will make
Speaker 1: inflation worse, and they were quick to pounce on today's
Speaker 1: GDP report showing a second consecutive quarter of contraction. Now,
Speaker 1: if you've listened to this program the past week or so,
Speaker 1: you know Republicans are accusing the White House of trying
Speaker 1: to redefine recession. And we've been around the circle a
Speaker 1: couple of times. On this year's House Minority Leader Kevin McCarthy.
Speaker 1: Einstein once said, and we all know it, the definition
Speaker 1: of insanity is doing the same thing over and over
Speaker 1: and expecting a different result. So what you really should
Speaker 1: do just go with changing the definition. Maybe people won't
Speaker 1: here you are understanding there it is. But as we've
Speaker 1: heard from our own economics reporters at Bloomberg here from
Speaker 1: Mark Zany two days ago, it's just not that simple.
Speaker 1: And that's where we start our conversation with Gene Sperling,
Speaker 1: White House American Rescue Plan Coordinator, Senior Adviser to the President. Janus.
Speaker 1: Great to have you back on Bloomberg. Thanks for coming in.
Speaker 1: I'm not going to ask you if we're in a recession.
Speaker 1: I'm not gonna do it. Are you worried that we
Speaker 1: will have to experience one to get inflation under control? Um? Well, listen,
Speaker 1: all we are trying to do is make sure there's
Speaker 1: a balance and I think correct view of the state
Speaker 1: of the economy now. And you know, we certainly understand
Speaker 1: that the global inflation UH in our country UH in
Speaker 1: the world is hitting the United States, and it's a
Speaker 1: little comfort to American families going through the gas line
Speaker 1: or the grocery line that this is a global problem.
Speaker 1: They're getting hit with higher prices and that's definitely affecting
Speaker 1: people's you know, sentiments about the economy. And you know,
Speaker 1: we fully understand that even with the good news the
Speaker 1: gas prices are down almost sev cents now, um. But
Speaker 1: I think I think the things we're talking about today
Speaker 1: offer a more balance view of the resilience that we're
Speaker 1: also seen in the economy, even in the face of
Speaker 1: the higher interest rates that are independent, FED is instituting.
Speaker 1: And you know, one of the things you heard from
Speaker 1: Chairman Paul, you hear from from us is that this
Speaker 1: job market is still very strong. I mean, you know,
Speaker 1: I was just looking two point seven million jobs over
Speaker 1: the last seven months other than last year. That's the
Speaker 1: most jobs ever created in the first six months of
Speaker 1: the year ever in the history of our country. And
Speaker 1: that's why, Powell, that's why we well, no, that's not
Speaker 1: consistent with the notion of a contraction or a downtream.
Speaker 1: If you looked at the GDP today, you also saw
Speaker 1: that people that that spending in services actually contributed to
Speaker 1: uh to growth and that you saw with the bank
Speaker 1: earnings from City Group JP Morgan, they're saying they're not
Speaker 1: seeing signs of recession among their vast number of con rumors.
Speaker 1: Does that mean you know, we should take a rosy view. No,
Speaker 1: but I do think that there is another our word
Speaker 1: out there, and that's resilience. And I think you're seeing
Speaker 1: resilience that we we can at least hope can help
Speaker 1: us get from UH this red hot economy of to
Speaker 1: a more stable growth with lower prices as we go forward.
Speaker 1: Just to ask you more about the labor market, because
Speaker 1: that has been the refrain from the White House and
Speaker 1: from others, from economists saying, look, this this is not
Speaker 1: going to end up being a recession. We're not in
Speaker 1: one now when you have three point six percent unemployment.
Speaker 1: The President has said that Senator John Kennedy, Republican from
Speaker 1: Louisiana was was talking about this on Fox and he
Speaker 1: replied to what the President was saying, I'd love to
Speaker 1: get your response to that. Here's what he said. He says, yes,
Speaker 1: but unemployment is low. On employment is low, Well, there's
Speaker 1: a reason for that. People aren't working. Um, you don't
Speaker 1: look at the unemployment now when you look at the
Speaker 1: labor force participation, right, And we've had a lot of
Speaker 1: people retire, and we had a lot of people who
Speaker 1: refused to go back to work, and they're now riding
Speaker 1: in the wagon and everybody else has got to pull
Speaker 1: the wagon. And the bottom line is the economy sucks
Speaker 1: and it's not gonna get any better. It's got a
Speaker 1: way of words, Jeane Spurling. But I wonder where is
Speaker 1: he wrong there? No, he is wrong, um, because if
Speaker 1: you look at what the kind of core core labor force,
Speaker 1: which is twenty five to fifty four year old, it
Speaker 1: is now fully returned. It's actually stronger was prior to uh,
Speaker 1: the pandemic. Um. There is true that there, you know,
Speaker 1: we could there were still a little bit behind in
Speaker 1: getting everybody, uh some of the older Americans back, but
Speaker 1: you've actually seen the greatest increase in labor force participation
Speaker 1: over this period of time. And again uh for the
Speaker 1: four year olds, the core workers. It's actually it's actually wronger.
Speaker 1: So I really don't like that notion because it's it's
Speaker 1: it's somehow blaming that there are people out there for
Speaker 1: not uh you know, pulling their load when you're really
Speaker 1: seeing people coming back worst using American Rescue Plan forty
Speaker 1: billion dollars of it to get more people back in
Speaker 1: the economy. I do think that there are some with
Speaker 1: COVID and childcare that may be inhibiting some people. But
Speaker 1: I think overall, the games have been strong, and that's
Speaker 1: certainly does not you know, uh negate. The very very
Speaker 1: strong job market and the unemployment rate reflects that it's
Speaker 1: not creating a deceptive picture in any way. Janet Yellen
Speaker 1: was asked today in her news conference how much the
Speaker 1: labor market would have to cool or contract, if that's
Speaker 1: a better word, to bring inflation down. We didn't get
Speaker 1: a very clear answer on that because maybe it's not
Speaker 1: knowable or I don't know, Gene, maybe you're not allowed
Speaker 1: to answer that from from the White House. Do you
Speaker 1: what's your thought? Well, I think there are some questions
Speaker 1: that are kind of back ways of getting the administration
Speaker 1: to do what I'm not supposed to do, which is
Speaker 1: common on the independent Monetary Policy of the Federal Reserve.
Speaker 1: But I think what I would say is that UM
Speaker 1: is that I think there is a lot of evidence
Speaker 1: that uh the things that were in the American Rescue
Speaker 1: Plan have created a bit more resilience in places in
Speaker 1: the economy that often have led to contraction in the past,
Speaker 1: state and local governments contracting right now, they're actually adding
Speaker 1: to growth a bit. And you know, it's interesting when
Speaker 1: JP Morgan did their earnings, they said they didn't see
Speaker 1: signs of and in fact, they were seeing consumers spending
Speaker 1: more than they were at at this time last year.
Speaker 1: So I think what I think the hope is is
Speaker 1: that we have such a strong labor market instead of
Speaker 1: being a sign uh, instead of looking at that as
Speaker 1: just a sign of is that their potential overheating, uh,
Speaker 1: you can look at it also as a sign of
Speaker 1: resilience that people are working, they're pulling in a paycheck,
Speaker 1: they still have some savings, and that that actually, uh
Speaker 1: can put us in a better position to make that
Speaker 1: transition to more stable growth with lower prices. Uh. You know,
Speaker 1: in a way that does back all the games we've
Speaker 1: we've seen in the labor market. If one of the
Speaker 1: big complaints are one of the big knocks on the
Speaker 1: administration with regard to the economy genus is messaging, why
Speaker 1: not take victory to the point that you were just
Speaker 1: making for recovering all the jobs lost in COVID, you
Speaker 1: should how about put a big neon sign up over
Speaker 1: the White House. I mean, why get bogged down in
Speaker 1: an argument over what's a recession? Look, this is challenging,
Speaker 1: but I think the truth is is that you have
Speaker 1: to recognize that that even with record job creation, even
Speaker 1: with low unemployment, even with lots of better jobs and
Speaker 1: getting ages. You know what, when people go through the
Speaker 1: grocery line or the or the gas pump and they
Speaker 1: feel higher prices, you know, that hits them hard, and
Speaker 1: even if they've gotten a raised, they feel like they're
Speaker 1: giving some of it back. And I think it's important
Speaker 1: for us to offer a bank to recognize that degree
Speaker 1: of paying people are feeling at the grocery store or
Speaker 1: the gas pump. But then at the same also to say, wow,
Speaker 1: look at this actually recovered all the private sex jobs
Speaker 1: already that were lost during the pandemic. Unemployment for all Americans,
Speaker 1: but for Black Americans are back to where they were
Speaker 1: after just a little over a year. It took six
Speaker 1: years for us to do this. Maybe you could buy
Speaker 1: a plane with one of those banners, fly it over
Speaker 1: Capitol Hill that well, you know, I think though, if
Speaker 1: you just do that in people nice feel that you're
Speaker 1: not recognizing I understand they're feeling. So really, you know,
Speaker 1: I know people know the Republicans are trying to say
Speaker 1: that we're spending this or that way. But I really
Speaker 1: think I hope somebody listening to me now realizes we're
Speaker 1: trying to recognize the squeeze people are feeling, but also
Speaker 1: giving them an accurate, more balanced view of the of
Speaker 1: the point of resilience and strengthen the economy as well. Gene,
Speaker 1: thanks for being with us on a busy day. Jean Spurling,
Speaker 1: Senior Adviser to the President with us on g d
Speaker 1: P Day and Big Deal Day. We'll assemble our panel next.
Speaker 1: Rick and Jennie are coming in. This is Bloomberg. This
Speaker 1: is Bloomberg, So No with Joe Matthew on Bloomberg Radio
Speaker 1: three to one, eight seven. Yeah, that means twenty four
Speaker 1: Republicans defied Kevin McCarthy to vote for the Chip Act
Speaker 1: or whatever we call it, Chip Act. The Chips and
Speaker 1: Science Sacked. That's it. The Chips and Science Act passes
Speaker 1: on this vote. The Yas are two hundred and forty three.
Speaker 1: The names are one hundred and eight seven one member
Speaker 1: voting present. The motion is adopted, Madam Speaker. There it is.
Speaker 1: It's gone on the way to the President, who's of
Speaker 1: course got the pen ready. But there was a last
Speaker 1: minute effort to sink this puppy. After Republicans heard about
Speaker 1: this Schumer Mansion deal on the Reconciliation Deal, Kevin McCarthy
Speaker 1: started whipping against it last night. I'm a no on
Speaker 1: the Senate Chips bill that will come to the floor today.
Speaker 1: I was a no last week. I was a no
Speaker 1: last night, and I'll be the first no on the
Speaker 1: board later today the first let's assemble the panel. Gosh
Speaker 1: got a lot to talk about with Rick Davis and
Speaker 1: Jeannie Sheanzano Blueberg Politics contributors. Uh, Rick, I'm not sure
Speaker 1: where to begin here. GDP not good to consecutive quarters
Speaker 1: of contraction, but a big news deal for Democrats. Here
Speaker 1: is this a wash today for Joe Biden? I can't
Speaker 1: figure out where we are. I think it's a good
Speaker 1: day for Joe Biden. He didn't get hammered the way
Speaker 1: most presidents would have with this GDP number. They did
Speaker 1: an amazing job of putting everybody out that could speak
Speaker 1: in front of a camera worked for the last two
Speaker 1: days to say, oh no, don't believe what you're reading
Speaker 1: and uh and I think part of that worked, but
Speaker 1: the key thing was overlaid on top of that was
Speaker 1: the big mansion news yesterday and the passage of the
Speaker 1: chip sacked today. This is a great day for Joe
Speaker 1: Biden when it comes to his legislative agenda, and so
Speaker 1: you know, take some edge off of that by having
Speaker 1: bad economic news. Um. I mean, you just heard Gene spirling.
Speaker 1: You'd have thought we were in a great boom cycle
Speaker 1: in our economy. So the talking heads are doing their job,
Speaker 1: and I think they're keeping us a float. But look
Speaker 1: that that bill is gonna come. Most of the people
Speaker 1: who are being talked about is saying it's not a
Speaker 1: recession are also saying we will likely be in a recession.
Speaker 1: And so this may feel good today, but the closer
Speaker 1: we get to the fall, Um, the last thing this
Speaker 1: administration wants to do is find those same people are saying,
Speaker 1: now we are in a recession, right, and that could happen. Gennie,
Speaker 1: you might remember kind of an unexpected remark from Joe Biden,
Speaker 1: we could go back and find it. This is for
Speaker 1: maybe a month or so ago. He said, No, we're
Speaker 1: not going into recession, though a lot of people think
Speaker 1: we will next year. This is still a big risk.
Speaker 1: Jenny Ellen talked about it today. There's a war in
Speaker 1: Ukraine that's not going away yet. There are supply chain
Speaker 1: problems that despite the Chips Act, not going away yet.
Speaker 1: We've got a pandemic that still is shutting down areas
Speaker 1: in China. How careful should the White House be if
Speaker 1: we're about to step into a real recession. Yeah, I
Speaker 1: think they have to be careful with this semantic game.
Speaker 1: You know, they did win, and I agree with Rick
Speaker 1: the day, and they won because the headlines people adopted this,
Speaker 1: this idea that despite you know, since the nineteen forties
Speaker 1: defining recession colloquially one way, technically it's another, and people
Speaker 1: are now saying things like we're moving towards the recession. Well,
Speaker 1: this has you know, is dangerous for the president because
Speaker 1: he did the same thing with inflation. Right, it's transitory,
Speaker 1: it's not here and then all of a sudden it's here.
Speaker 1: So you know, this I think can be a dangerous
Speaker 1: game for them. Because politically they're right. Economically, but politically,
Speaker 1: if people are feeling pain, they really don't care how
Speaker 1: you define a recession. And they do think that the
Speaker 1: president seems out of touch, and that's why his poll
Speaker 1: numbers are down. That aside, what a great day for
Speaker 1: the administration in terms of chips and moving towards reconciliation.
Speaker 1: So who said that two out of three ain't bad?
Speaker 1: That's pretty good Rogers number. I think that's but you're right.
Speaker 1: I'm sorry, it's okay, Rick, I don't I don't know
Speaker 1: how you square this uh in administration that's trying to
Speaker 1: put a good shine on on on what Senator John
Speaker 1: Kennedy referred to as an economy that sucks. Is it
Speaker 1: a messaging problem or is there more involved here? No,
Speaker 1: I think it was more involved here. I think that um,
Speaker 1: part of it is demographics, right, we were actually transitioning
Speaker 1: out of a group of people, you know, and certainly
Speaker 1: I'm in that category who you know, have been a
Speaker 1: major driver of the economy for the last you know,
Speaker 1: thirty years and we're aging out and and I think,
Speaker 1: you know, part of what the senator was talking about was,
Speaker 1: you know, people over sixty five people over fifty five,
Speaker 1: they're just not going back to work. Um and uh
Speaker 1: and and that wouldn't be you know, uh, that big
Speaker 1: a deal if it wasn't such a large portion of
Speaker 1: the population. It needs to be a much louder conversation
Speaker 1: about that because that, I mean that that's big stuff.
Speaker 1: That those are big, long term trends that that we
Speaker 1: haven't gotten our arms around. Uh. You know. Janet Yellen
Speaker 1: was asked in her news conference Genie about the inflationary
Speaker 1: impact of this reconciliation bill. She was asked, I believe
Speaker 1: by the Wall Street Journal if she could quantify it,
Speaker 1: and she could not. Does this White House also need
Speaker 1: to be a little bit careful on the impact this
Speaker 1: could have. I mean, they're they're talking about having an
Speaker 1: impact on people's household budgets the minute he signs it. Yeah,
Speaker 1: that's right. And this is the argument, you know, the
Speaker 1: conservatives are out there saying we're in an you know,
Speaker 1: it's an inflationary period. Weren't nine percent and you're putting
Speaker 1: in one day four hundred billion dollars potentially into the economy,
Speaker 1: and that is going to be inflationary. On the other hand,
Speaker 1: a lot of smart people argue, this is deflationary. You're
Speaker 1: bringing down the cost of you know, you're bringing down
Speaker 1: the deficit, you're drinking down the cost of prescription drugs,
Speaker 1: and that's all very very helpful to the economy. Well,
Speaker 1: we haven't figured it out yet, but maybe we will
Speaker 1: by the end of this hour. We've got Mark Oldwine
Speaker 1: coming in next from the Committee for a Responsible Budget.
Speaker 1: His view on this, the report today and where the
Speaker 1: economy is going, by the way, two very different takes
Speaker 1: you're about to hear as we try to learn more
Speaker 1: about this on the fastest hour in politics. This is Bloomberg.
Speaker 1: The headline on the terminal says it all. Biden encounters
Speaker 1: g OP recession talk by touting job gains. Will that's
Speaker 1: certainly been the case, the President talking up low unemployment
Speaker 1: as the sign that we are not in a recession.
Speaker 1: Along with his story, it's including Gene Sperling, who was
Speaker 1: with us short time ago. But after this morning's g
Speaker 1: d P report showing a second consecutive quarter of contraction,
Speaker 1: Kevin McCarthy, the minority leader in the House, sees things
Speaker 1: a bit differently. This news is a Graham milestone that
Speaker 1: points towards more hardship, more suffering, and more pain for
Speaker 1: the American people. Okay, so, as usual, the American people
Speaker 1: are caught between these two extreme talking points, neither of
Speaker 1: which fully reflecting where we are. That's why we wanted
Speaker 1: to talk to Mark Oldwine. Uh Senior Policy Director is
Speaker 1: the title at the Committee for a Responsible Budget Markets.
Speaker 1: Great to have you back. I'm not sure if I
Speaker 1: should start with the recession or the legislation, but let's
Speaker 1: just go in order here. I mentioned the GDP report already,
Speaker 1: your concerns about this, the administrations bending over backwards to
Speaker 1: convince us we are not in a recession, and most
Speaker 1: economists say, well, we don't know yet, but how worried
Speaker 1: are we about sliding into one? Based on what you
Speaker 1: see under the hood here? Yeah, I don't think we're
Speaker 1: in a recession when you look at the labor market,
Speaker 1: look at strunk consumption. I think what we're in right
Speaker 1: now is an inflation crisis and the risk is that
Speaker 1: going forwards, that could turn into a recession as we
Speaker 1: as we try to fight down inflation. Yeah, so that
Speaker 1: becomes a story next year or late this year. Yeah, Well,
Speaker 1: it may happen late this year, but not be a
Speaker 1: story untill next year. I think the timing is really uncertain.
Speaker 1: But here's the trade off. To fight inflation, the Federal
Speaker 1: Reserve needs to raise interest rates. And the more than
Speaker 1: the Federal Reserve raise interest rates, the bigger the risk
Speaker 1: that they throw us into a recession. We've talked about
Speaker 1: the chances of you know, sticking landing here and soft
Speaker 1: landing to be exact park and the odds are not
Speaker 1: with the Fed. They have a history that policy makers
Speaker 1: have a history of overshooting, starting too late in overshooting.
Speaker 1: Uh does that mean they need to start or at least,
Speaker 1: you know, stop hiking or even start cutting sooner than
Speaker 1: the Fed appears to be prepared for. I don't think so.
Speaker 1: I think the bigger risk here is persistent inflation. If
Speaker 1: inflation gets baked in, it becomes a lot harder to fight.
Speaker 1: So they may very well overshoot. They should try their
Speaker 1: best not to. But I don't think now is the
Speaker 1: time to pull back. So let's talk about this deal. Mansion,
Speaker 1: Schumer now Biden is behind it. They say it will
Speaker 1: lower inflation. Larry Summers was apparently the party to convince
Speaker 1: Joe Mansion. I was fascinated by this. This back room
Speaker 1: talk that that that this in fact would lower prices,
Speaker 1: that this would not be inflationary, and that's what got
Speaker 1: him back on board in talks with Chuck Schumer. What
Speaker 1: is the Committee for a Responsible Budget? See Frankly, I
Speaker 1: don't think Center Mansion needs convincing UM that on what
Speaker 1: will and won't lower inflation. He's talk to me that
Speaker 1: while now, Um, this this bill is going to reduce
Speaker 1: the prices that households of businesses pay, and it's probably
Speaker 1: gonna reduce the macroeconomic inflation, but takes some money out
Speaker 1: of the economy. It's not going to solve inflation on
Speaker 1: its own, but it's going to be rowing in the
Speaker 1: same direction the said, making their inflation fighting job easier. Okay,
Speaker 1: so you see, uh, you see the White House Uh
Speaker 1: telling the right story here in terms of deficit reduction
Speaker 1: as well. Is it possible to quantify that when it
Speaker 1: comes to inflation or are we going to have to
Speaker 1: give this some time? I think we're going this some
Speaker 1: time because of the nature of how this phases in. UM.
Speaker 1: I think that the most obvious inflationary impacts are going
Speaker 1: to be very hard to measure in the near term,
Speaker 1: and it's gonna be more the intangible stuff that matters quicker.
Speaker 1: How much is lower prices and lower expectations helping with
Speaker 1: this wage price spiral. That what this is really going
Speaker 1: to do is provide some insurance against inflation remaining too
Speaker 1: high for for several years, and it may just allow
Speaker 1: the Fed to raise rates a little bit less, which
Speaker 1: reduces our inflation excuse me, our recession risk as well. Okay,
Speaker 1: that sounds pretty good to me. Mark that there's been
Speaker 1: more argument over the Chip Act in whether in fact
Speaker 1: that would help to lower inflation. Realizing that, you know,
Speaker 1: Democrats and Republicans agree that it's needed, and there's a
Speaker 1: national security aspect to it. This is a supply chain aspect.
Speaker 1: Can you actually connect the dots directly to inflation? Though? Yeah,
Speaker 1: I'm I'm skeptical. Frankly, there's certainly reasons to do more investment,
Speaker 1: but more more spending of that magnitude is going to
Speaker 1: increase demand faster than it's going to increase supply. So
Speaker 1: while it may be good for our long term growth,
Speaker 1: I'm skeptical the Chips Act is going to help much
Speaker 1: with inflation even in the long term. Uh, And I
Speaker 1: realized It's impossible to predict, but we're talking about a
Speaker 1: pretty big change in that industry. In the long term,
Speaker 1: it may result in stronger economic growth. I still have
Speaker 1: faith in the Federal Reserve. Over a long period of time,
Speaker 1: we are gonna get inflation under control recrdless. So it
Speaker 1: may on that be a good bill, but I'm very
Speaker 1: skeptical it's going to help us with our current inflation challenges.
Speaker 1: We heard earlier from Senator John Kennedy was playing a
Speaker 1: remark that he made on Fox talking about the White
Speaker 1: House really misunderstanding the economy, which he described I believe
Speaker 1: as one that sucks. Uh. I realized that's not a
Speaker 1: scientific term here, Mark, But how would you describe it? Yeah,
Speaker 1: it's not great. Look, there's some parts of the economy
Speaker 1: they are actually quite strong. We have a good labor
Speaker 1: market right now with good consumption. But inflation is killing us.
Speaker 1: It's it's eating away all of our wage games, all
Speaker 1: of our economic growth. And so I described this as
Speaker 1: an economy in inflation crisis, and that's that should be
Speaker 1: the number one priority in terms of what we need
Speaker 1: to get under control. Mark old One is Senior Policy Director,
Speaker 1: Committee for a Responsible Budget. Great to have you back, Mark,
Speaker 1: and thank you for the insights. As I mentioned, Janet
Speaker 1: Yell in the Treasury Secretary. She held a news conference
Speaker 1: today and was asked about the inflationary impact here, just
Speaker 1: like we discussed with Mark, what would this actually do
Speaker 1: in terms of data? Secretary, I don't have numerical estimates
Speaker 1: for you, but UM I see that as making a
Speaker 1: very important contribution to lowering the cost of prescription drugs,
Speaker 1: which is um for many households of very severe burden
Speaker 1: on their household budgets. This is something that UM policy
Speaker 1: makers and members of Congress have sought to accomplish for many,
Speaker 1: many years, and it's a great achievement if it can
Speaker 1: become law, and will certainly help if it can become law.
Speaker 1: We've still got some things to figure out here. How
Speaker 1: easy or difficult will this be for Chuck Schumer to
Speaker 1: get across the finish line. We'll turn it back to
Speaker 1: the panel next. Rick Davis and Genie Chanzano with us
Speaker 1: for the hour. Their insights, I'm Joe Matthew and Washington
Speaker 1: did you joined us on the fastest hour in politics?
Speaker 1: Will check traffic and markets for you on the way
Speaker 1: as well, and if you're just showing up. Subscribe to
Speaker 1: the podcast if you haven't already, Why haven't you already?
Speaker 1: This is Bloomberg, This is Bloomberg. So long with Joe
Speaker 1: Matthew on Bloomberg Radio. The bill is being scrubbed right now,
Speaker 1: as they say, by the Senate Parliamentary And what did
Speaker 1: I see? Seven hundred pages. It's gonna be some good
Speaker 1: Sunday reading for a lot of lawmakers who say they
Speaker 1: need to see the text first. Of course, I wonder
Speaker 1: how many will pour through seven hundred plus pages as
Speaker 1: I read on the terminal, they will be doing so, uh,
Speaker 1: as they set up a vote for next week. That's
Speaker 1: at least the hope for Chuck Schumer, who says that
Speaker 1: he's been in touch with the progressive wing of the
Speaker 1: Democratic Party. If you were with A yesterday, you know
Speaker 1: there are concerns about this build back better. This is not,
Speaker 1: but it does appear that progressives are on board. Here's
Speaker 1: Chuck Schumer. Well, I talked to this progression the CPC today. UH.
Speaker 1: Congresswoman Jiapaul was very loudatory of the agreement, as was
Speaker 1: just about everybody on the phone. Everyone real. Speaker Pelosi
Speaker 1: said it best. She said, when you look at this agreement,
Speaker 1: you don't look at what's not in it. All of
Speaker 1: us would have wanted more in it. If you look
Speaker 1: at what's in it, and what's in it is dramatic, significant,
Speaker 1: and we'll move America forward a great deal. Sam of
Speaker 1: the panel to talk about the way forward here with
Speaker 1: Rick Davis and Jeannie Chanzano Bloomberg Politics contributors. Uh, do
Speaker 1: you take him at his word there? First of all, Genie,
Speaker 1: when it comes to progressive Democrats, do they have any
Speaker 1: choice but to vote yes for this? They have a choice.
Speaker 1: I think they should vote yes for it. I obviously
Speaker 1: they're not, you know, completely happy with what's in there,
Speaker 1: but to his point, or what's not in there? But
Speaker 1: to his point, there's a lot in there that they
Speaker 1: can like. But you know, there is a danger always
Speaker 1: they dig into the details. You know. I've heard people
Speaker 1: talk about things like drilling on federal lands that can
Speaker 1: be something that raises red flags. So there's always things
Speaker 1: a pipeline, there's always things that can frustrate progressives and
Speaker 1: frustrate other people. That said, Democrats would be wise to
Speaker 1: move this forward as quickly as possible. This would be
Speaker 1: foolish for a Democrat to vote against I'm assuming, Rick,
Speaker 1: what's your view, whether it's progressives concerned about what is
Speaker 1: not in the bill or moderates concerned about what's not
Speaker 1: in the bill, I e. Salt. Do they have to
Speaker 1: just drop those worries and go vote? Oh yeah, that's
Speaker 1: the only choice they have. There's not gonna be any
Speaker 1: amendments to this bill. They couldn't get anything done on that.
Speaker 1: And and look, I mean, progressive wanted that child tax
Speaker 1: credit is a fundamental aspect of what they were after,
Speaker 1: you know, in the original bill back better plan, as
Speaker 1: you point out, you know, uh, you know, big states
Speaker 1: like California, New Jersey, New York wanted that salt. Uh,
Speaker 1: people are going to come out with a half a loaf.
Speaker 1: But the half off they got is a lot more
Speaker 1: than they were about to get. I mean, the timing
Speaker 1: of this is really what's key, which is, this is
Speaker 1: the only shot you've got left this year. There won't
Speaker 1: be another reconciliation bill. You're gonna be lucky to have this.
Speaker 1: If you can get this done, Uh, you'll have a
Speaker 1: talking point in the fall, you know, for the elections,
Speaker 1: and and and so you yes, or no. And look
Speaker 1: they unlike today's vote with the chip back in the House,
Speaker 1: you've got twenty four Republicans, You're not gonna get any
Speaker 1: Republicans on this one. So the Democrats have their backup
Speaker 1: against the wall. They can only bleed four votes and
Speaker 1: and everyone's gonna have to hold hands and say, regardless
Speaker 1: of whether we got what we wanted, we're gonna say
Speaker 1: yes to this. Keeping in mind this includes the biggest
Speaker 1: tax hiking ears. It keeps much of the Trump tax
Speaker 1: cuts in place. But listen to the president with regard
Speaker 1: to how it will be paid for. Now, I know
Speaker 1: you've never heard me say this before, will come as
Speaker 1: a shock to you, but fifty for the Fortune five
Speaker 1: companies paid no federal income tax. And you only heard
Speaker 1: me say that about ten thousand times. But the fact
Speaker 1: is they paid no taxes on an income collective income
Speaker 1: over forty billion dollars. Well, guess what this bill ends there.
Speaker 1: It's they're gonna have to pay a minimum of fift tax. Okay.
Speaker 1: Kirsten Cinema as an allergy to tacks hikes, Rick, does
Speaker 1: that keep her hesitant to vote yes for this or
Speaker 1: are you confident that she's on board. I'm not confident
Speaker 1: she's on board. If this had been a revision of
Speaker 1: the Trump tax cuts from his administration, I could tell
Speaker 1: you with some confidence that she would have been opposed
Speaker 1: to the changes. There the fact that this is strictly
Speaker 1: limited to a corporate tax uh and really a tax
Speaker 1: on Wall Street. UM. You know, maybe there's a window
Speaker 1: to get her support, But as you point out, she
Speaker 1: has been vehement about not wanting to slow the economy
Speaker 1: because of you know, the UM, the pursuit of revenue
Speaker 1: through taxation and UM. And I've not heard her put
Speaker 1: out a statement yet on this bill. We got a
Speaker 1: statement from Representative Sarah Jacobs of California that was the
Speaker 1: present vote voted president on the Chips Act, and we've
Speaker 1: been in touch with her. Bloomberg Radio reached out and
Speaker 1: they just returned a statement saying that the package a
Speaker 1: big win for the country, especially the San Diego region. UH.
Speaker 1: After consulting with the House Ethics Committee, get this Congresswoman
Speaker 1: Jacob's voted president in order to maintain transparency, ethical standards,
Speaker 1: and to prevent a personal conflict of interest regarding the
Speaker 1: contents of that bill. I guess that's a good thing. Genie.
Speaker 1: But but what does that mean? You know, it means
Speaker 1: that she's decided that for personal reasons, it would be
Speaker 1: a conflict for her vote either way, for against it.
Speaker 1: She would have probably been for it if it wasn't
Speaker 1: for this person kind of the industry, Do we know, Matt,
Speaker 1: I'm just talking to producer match Earl us in touch
Speaker 1: with their office. We'll find out for you and let
Speaker 1: you know. That's the kind of thing that voters probably appreciate.
Speaker 1: To be honest with you, as we spend time with
Speaker 1: our panel, Rick and Genie with us on Bloomberg Sound On,
Speaker 1: I want to talk about something that no one is
Speaker 1: talking about today, and that's a different piece of legislation,
Speaker 1: the Pact Act. I think this is on your radar, Rick,
Speaker 1: it probably is yours as well, Gennie. For those of
Speaker 1: you who haven't heard about it. This is the vote
Speaker 1: that would provide healthcare coverage for millions of veterans who
Speaker 1: were exposed to toxic burn pits uh in in Vietnam
Speaker 1: era veterans exposed to agent orange. It It is being
Speaker 1: held up in the Senate now in a move that
Speaker 1: some people think is retribution for this deal coming together.
Speaker 1: They had to whip against something, so they chose this.
Speaker 1: Senator Pat Toomey says, it's it includes budgetary gimmicks. Democrats
Speaker 1: are outraged. And even John Stewart came to town today.
Speaker 1: He took part in a news conference with the Speaker
Speaker 1: of the House outside the US Capital, and he was
Speaker 1: lit up over this. America's here rows fought nor wars outside,
Speaker 1: sweating their asses off with oxygen, battling all kinds of ailments. Well,
Speaker 1: these mothers sit in the air conditioning, walled off from
Speaker 1: any of it. They don't have to hear it, they
Speaker 1: don't have to see it. They don't have to understand
Speaker 1: that these are human beings. Do you get it yet?
Speaker 1: Do we see that these are these aren't heroes? Pretty
Speaker 1: tough talk here, Rick. We saw the impact that John
Speaker 1: Stewart had on the the effort to help firefighters who
Speaker 1: got cancer from the toxins from the towers falling on
Speaker 1: nine eleven. Do you think he can make a difference here,
Speaker 1: Well he has. I mean he's been going at this
Speaker 1: for quite some time. Even just to get a vote
Speaker 1: in the Senate was pretty big accomplishment for Jon Stewart.
Speaker 1: And and you know, look, he's rightly upset, and my
Speaker 1: my framing the obstruction correctly on this. You know, look,
Speaker 1: I don't know how much of this is a retribution
Speaker 1: to uh, you know, to sort of getting hoodwinked on
Speaker 1: the on the reconciliation bill. Um. I'm a little surprised
Speaker 1: Pat Toomey has taken the position he's taken because he
Speaker 1: has been supportive of veterans issues in the past. And uh,
Speaker 1: and and he's not running for reelection. And I mean
Speaker 1: this was kind of a an easy yes. Um. So
Speaker 1: the bill felt five votes short. Uh, it didn't get
Speaker 1: the sixty votes it needed to get to the next
Speaker 1: stage of the legislative process. And U and I have
Speaker 1: absolutely no doubt that John Stewart will be back up
Speaker 1: in the fall trying to get another bill up to
Speaker 1: see if he can get it past. Does this see
Speaker 1: the lead to day again? Jeannie, Well, the goal John
Speaker 1: Stuart said today was to not let the Senate recess
Speaker 1: until this is done. And so you know, he's, yeah,
Speaker 1: that's unlikely, but that's that's what he publicly stated. And
Speaker 1: you know it just um, I think an enormous miss
Speaker 1: on the part of the Republicans. They voted for this
Speaker 1: ill on June six to fourteen, to come back today
Speaker 1: on a procedural issue and to vote against it. You know,
Speaker 1: it's really unconscionable when you think about it. These are
Speaker 1: people dying horrifically of cancer and other diseases who desperately
Speaker 1: need this bill passed. And so you know, I think
Speaker 1: they should stay in the idea, they'd go home for
Speaker 1: recess and leave this hanging. And let's not forget it
Speaker 1: past the House by you know, overwhelmingly three eighty or something,
Speaker 1: uh by partisan So you know, and it's it's a
Speaker 1: procedural issue, and that's where it's unconscionable. Well, you know,
Speaker 1: it's interesting the President talked about this is the state
Speaker 1: of the Union, Rick Um, why not make some noise
Speaker 1: about this while Republicans are hammering him on inflation. Why
Speaker 1: don't why don't you make this a cause for the administration?
Speaker 1: You know, look, I think that um, you know, the
Speaker 1: administration probably has in the past spoken out on on
Speaker 1: this issue. I think that um, you know, they're having,
Speaker 1: as we talked earlier in the show, a really good day,
Speaker 1: you know, to take your eye off of the sort
Speaker 1: of seminal um a legislative work that's being done here,
Speaker 1: you know, around the Reconciliation Package and the Chip Act.
Speaker 1: To talk to talk about something that actually didn't work. Um,
Speaker 1: you know, I mean I'd be sitting in a White
Speaker 1: House going wow, you know, like we'll get around to
Speaker 1: that in a minute. You know, let's not let's not digress.
Speaker 1: You know, he needs a president needs a victory lap
Speaker 1: like nobody does. And the fact that it comes on
Speaker 1: a day when John Stewart got punched in the face
Speaker 1: by the Republicans in the Senate, you know, is you know,
Speaker 1: it doesn't mean that the president doesn't sort of feel
Speaker 1: the pain with John Stewart. But um, you know, live
Speaker 1: to fight another day. Why doesn't John Stewart run for
Speaker 1: governor New York? Genie? Would you get on that campaign? Hey,
Speaker 1: I'd work for I'd work for him, and I think,
Speaker 1: you know, but I think he likes to be out there.
Speaker 1: I think he likes to be pushing clauses he cares about,
Speaker 1: you know, and being governor that's awfully hard. That's an
Speaker 1: actual job. You gotta actually do some work there. Rick
Speaker 1: and Genie, thank you so much. Our signature panel for
Speaker 1: a reason, the best in the business boy, did we
Speaker 1: get a lot done today and it's not over yet.
Speaker 1: I'll meet you back here tomorrow. On the fastest hour
Speaker 1: in politics, we call it Sound On. I'm Joe Matthew
Speaker 1: in Washington. Will take care of you on the way home.
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