1 00:00:01,680 --> 00:00:05,200 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 2 00:00:05,280 --> 00:00:08,319 Speaker 1: us live weekdays at noon Eastern on Applecarplay and then 3 00:00:08,440 --> 00:00:11,879 Speaker 1: Roudoto with the Bloomberg Business App. Listen on demand wherever 4 00:00:11,920 --> 00:00:16,960 Speaker 1: you get your podcasts, or watch us live on YouTube. 5 00:00:17,560 --> 00:00:21,440 Speaker 2: Welcome to the Thursday edition of Bloomberg's Balance of Power. 6 00:00:21,480 --> 00:00:24,360 Speaker 2: I'm Joe Matthew in Washington. Welcome to Little Friday. We've 7 00:00:24,360 --> 00:00:28,080 Speaker 2: got news, and it doesn't appear to be encouraging. Just 8 00:00:28,280 --> 00:00:32,320 Speaker 2: as Kirsten Cinema tweets new hope for a border deal, 9 00:00:32,960 --> 00:00:35,839 Speaker 2: this just a couple of moments ago. For months, she 10 00:00:35,920 --> 00:00:40,600 Speaker 2: writes on X. Lead negotiators Chris Murphy, Senator to Langford 11 00:00:40,640 --> 00:00:42,800 Speaker 2: and I have been working in good faith with DHS, 12 00:00:42,840 --> 00:00:45,600 Speaker 2: the White House, and party leaders on a bipartisan border 13 00:00:45,720 --> 00:00:49,600 Speaker 2: security package, remembering, of course, this is what is supposed 14 00:00:49,600 --> 00:00:54,400 Speaker 2: to hinge Ukrainian funding on here. We're really close, she writes, 15 00:00:54,480 --> 00:00:58,000 Speaker 2: and we're working carefully to get this right. But Mitch 16 00:00:58,040 --> 00:01:00,440 Speaker 2: McConnell appears to be caving to Donald Trump on this 17 00:01:00,960 --> 00:01:05,720 Speaker 2: remarkable reporting from inside a closed door meeting of Senate 18 00:01:05,760 --> 00:01:10,319 Speaker 2: Republicans yesterday, as he told members, politics on this have 19 00:01:10,560 --> 00:01:14,199 Speaker 2: changed and time may already have run out for a deal. 20 00:01:14,520 --> 00:01:18,920 Speaker 2: The line that is resonating today in Washington. We do 21 00:01:19,040 --> 00:01:25,039 Speaker 2: not want to do anything to undermine him. Now. This 22 00:01:25,120 --> 00:01:28,760 Speaker 2: happens as the tax deal we've been talking optimistically about 23 00:01:28,800 --> 00:01:32,959 Speaker 2: for days bipartisan by Cameral, appears to also be on 24 00:01:33,440 --> 00:01:35,960 Speaker 2: the rocks here as members of the Senate Finance Committee 25 00:01:35,959 --> 00:01:39,320 Speaker 2: demand a markup that could slow or kill the deal. 26 00:01:41,200 --> 00:01:43,679 Speaker 2: All this without a budget, heading for a government shut 27 00:01:43,720 --> 00:01:47,920 Speaker 2: down now the first of March, and a Republican conference 28 00:01:47,920 --> 00:01:49,560 Speaker 2: in the House that does not want to play along 29 00:01:49,640 --> 00:01:55,000 Speaker 2: with Speaker Johnson's ideas here for another potential continuing resolution? 30 00:01:55,720 --> 00:01:58,480 Speaker 2: How about that for a menu to start our meal today? 31 00:01:58,880 --> 00:02:02,200 Speaker 2: With Jack Fitzpatrick reporting for Bloomberg Government Live from the Capital, 32 00:02:02,240 --> 00:02:04,080 Speaker 2: he is with us right now, Jack, How am I 33 00:02:04,120 --> 00:02:06,360 Speaker 2: doing on this cub Have having trouble finding any good news? 34 00:02:07,800 --> 00:02:10,680 Speaker 3: Yeah, it's hard to find great news, but I have 35 00:02:10,760 --> 00:02:13,160 Speaker 3: to be honest. We have to go basically minute by 36 00:02:13,200 --> 00:02:16,080 Speaker 3: minute on the latest on the border deal. There is 37 00:02:16,120 --> 00:02:19,080 Speaker 3: so much happening behind the scenes in closed door meetings, 38 00:02:19,560 --> 00:02:22,160 Speaker 3: and we are trying to get as much information from 39 00:02:22,200 --> 00:02:26,480 Speaker 3: that as we possibly can. If Senator Cinema says they 40 00:02:26,480 --> 00:02:29,400 Speaker 3: are really close. That is good news for the negotiators. 41 00:02:29,720 --> 00:02:33,040 Speaker 3: There have been some mixed reports out of a meeting 42 00:02:33,160 --> 00:02:38,240 Speaker 3: yesterday in which Senator McConnell certainly at least acknowledged the 43 00:02:38,520 --> 00:02:43,720 Speaker 3: political tension of Donald Trump, now pretty much the presumptive 44 00:02:43,720 --> 00:02:48,960 Speaker 3: Republican nominee running on immigration and border measures while Republican 45 00:02:49,160 --> 00:02:54,720 Speaker 3: lawmakers negotiate something to fix some of those issues. Just 46 00:02:54,840 --> 00:02:58,720 Speaker 3: speaking this morning to Mike Round's senator or Republican who 47 00:02:58,840 --> 00:03:02,360 Speaker 3: is in the meeting, he's a Republican leadership has not 48 00:03:02,480 --> 00:03:05,919 Speaker 3: backed away from the deal. It would be an overstatement 49 00:03:05,960 --> 00:03:09,200 Speaker 3: to say that this is dead or that they are 50 00:03:09,240 --> 00:03:12,359 Speaker 3: turning away from it. McConnell is still very supportive. There 51 00:03:12,440 --> 00:03:16,280 Speaker 3: just has been an acknowledgment of the tension between Trump's 52 00:03:16,320 --> 00:03:20,760 Speaker 3: politics and the current negotiations, and that could be a 53 00:03:20,760 --> 00:03:23,400 Speaker 3: bad thing when you turn to the House where the 54 00:03:23,520 --> 00:03:25,480 Speaker 3: conservative wing really is in charge. 55 00:03:26,560 --> 00:03:28,440 Speaker 2: Also sounds like a senator who doesn't want to be 56 00:03:29,080 --> 00:03:31,760 Speaker 2: on the wrong side of Donald Trump today. Everybody speaking 57 00:03:31,880 --> 00:03:33,760 Speaker 2: very carefully here, Jack. The fact of the matter is 58 00:03:33,800 --> 00:03:36,320 Speaker 2: Mitch McConnell apparently in this meeting referred to Trump as 59 00:03:36,400 --> 00:03:40,200 Speaker 2: the nominee is that the baseline now on Capitol Hill. 60 00:03:41,360 --> 00:03:45,000 Speaker 3: He certainly has been treated almost as if he is 61 00:03:45,160 --> 00:03:49,120 Speaker 3: the nominee already. When Trump says I'm against this piece 62 00:03:49,120 --> 00:03:53,600 Speaker 3: of legislation, it's a major, a major stance that ripples 63 00:03:53,640 --> 00:03:57,680 Speaker 3: through Capitol Hill. There's no one else with that kind 64 00:03:57,720 --> 00:04:01,840 Speaker 3: of position. If Nicky Hayley tried to hit the brakes 65 00:04:01,920 --> 00:04:04,680 Speaker 3: on negotiations, they would not have this kind of effect. 66 00:04:04,840 --> 00:04:07,560 Speaker 3: The fact that they're talking this much about Trump pretty 67 00:04:07,600 --> 00:04:09,560 Speaker 3: much tells you what you need to know. So, yes, 68 00:04:09,640 --> 00:04:12,200 Speaker 3: his position matters very much on Capitol Hill. 69 00:04:13,920 --> 00:04:17,160 Speaker 2: So what now for Cinema? Langford and Murphy? Will they 70 00:04:17,200 --> 00:04:21,159 Speaker 2: continue to hammer away even if this might be DOA 71 00:04:21,320 --> 00:04:24,200 Speaker 2: I'm not trying to rhyme here, Jack, but this is 72 00:04:24,200 --> 00:04:24,720 Speaker 2: where we are. 73 00:04:25,680 --> 00:04:28,720 Speaker 3: Yes, they are still working on it. A lot of 74 00:04:28,760 --> 00:04:32,360 Speaker 3: the issues have been hammered out in terms of the 75 00:04:32,360 --> 00:04:35,240 Speaker 3: broad policy. Then they hand it over to the members 76 00:04:35,279 --> 00:04:38,120 Speaker 3: of the Appropriations Committee who figure out how much it's 77 00:04:38,120 --> 00:04:41,839 Speaker 3: going to cost to enforce any legal changes. So they're 78 00:04:41,920 --> 00:04:47,320 Speaker 3: sort of moving from a broad framework agreement into the technicalities. 79 00:04:47,560 --> 00:04:49,880 Speaker 3: That's not easy. They still have plenty of work to 80 00:04:49,960 --> 00:04:53,159 Speaker 3: do there, but they are still moving forward. That's the 81 00:04:53,160 --> 00:04:56,120 Speaker 3: part of the process they're in. It would be easier 82 00:04:56,200 --> 00:04:59,160 Speaker 3: to get a lot of Senate Republicans on board than 83 00:04:59,240 --> 00:05:02,520 Speaker 3: House Republicans. There's just more skepticism in the House. So 84 00:05:02,560 --> 00:05:05,920 Speaker 3: it may not be doa in the Senate, even if 85 00:05:05,920 --> 00:05:08,160 Speaker 3: there are still challenges going on. But they certainly are 86 00:05:08,200 --> 00:05:09,000 Speaker 3: still working on this. 87 00:05:10,080 --> 00:05:12,600 Speaker 2: Boy, this doesn't sound terribly hopeful. But I'll have to 88 00:05:12,640 --> 00:05:15,880 Speaker 2: ask you too about this tax deal. As members Republicans 89 00:05:15,920 --> 00:05:19,120 Speaker 2: and Democrats, by the way of the Senate Finance Committee, 90 00:05:19,680 --> 00:05:21,960 Speaker 2: asked for a markup on something that was supposed to 91 00:05:22,040 --> 00:05:24,760 Speaker 2: move quickly. The authors of this bill, of the negotiators, 92 00:05:24,800 --> 00:05:28,200 Speaker 2: the chairs of Senate Finance, House, Ways and Means, said 93 00:05:28,200 --> 00:05:31,359 Speaker 2: it had to be passed by early February to avoid 94 00:05:31,400 --> 00:05:34,960 Speaker 2: trouble with the tax filing season. This would slow things 95 00:05:35,000 --> 00:05:37,520 Speaker 2: down beyond that. Likely, Jack, you've been covering the hill 96 00:05:37,560 --> 00:05:40,000 Speaker 2: for a minute. When you hear members say they want 97 00:05:40,000 --> 00:05:41,720 Speaker 2: a mark up on something like this, what does that 98 00:05:41,760 --> 00:05:42,080 Speaker 2: tell you? 99 00:05:43,400 --> 00:05:46,800 Speaker 3: That's difficult because scheduling the markup and then opening the 100 00:05:46,839 --> 00:05:51,800 Speaker 3: door to however many changes pivotal senators may want via amendments, 101 00:05:52,440 --> 00:05:55,960 Speaker 3: is not the quickest process. It's also tough to just 102 00:05:56,080 --> 00:05:58,200 Speaker 3: point to early February and say you want to get 103 00:05:58,200 --> 00:06:01,360 Speaker 3: it done. Then if they could attack this to another vehicle, 104 00:06:01,440 --> 00:06:03,559 Speaker 3: that would be great. But the next vehicle isn't until 105 00:06:03,680 --> 00:06:05,479 Speaker 3: early March when they have to fund the government, so 106 00:06:05,520 --> 00:06:07,000 Speaker 3: it is a significant challenge. 107 00:06:08,600 --> 00:06:11,240 Speaker 2: He's the best at what he does. Jack Fitzpatrick, Bloomberg Government. 108 00:06:11,320 --> 00:06:13,359 Speaker 2: Great to see you, Jack, and thank you for the 109 00:06:13,440 --> 00:06:15,839 Speaker 2: update here as we add the voice of Mark Goldwine, 110 00:06:16,200 --> 00:06:18,640 Speaker 2: and I can only imagine Mark's thoughts on this tax deal, 111 00:06:19,040 --> 00:06:21,560 Speaker 2: where there was hope now apparently turning to smoke. I 112 00:06:21,600 --> 00:06:24,400 Speaker 2: don't know. He's with the Committee for a Responsible Federal Budget, 113 00:06:24,839 --> 00:06:27,560 Speaker 2: Senior VP. Mark. Great to see you. I haven't seen 114 00:06:27,600 --> 00:06:29,400 Speaker 2: you yet this year, and I'm wondering where your head 115 00:06:29,440 --> 00:06:32,520 Speaker 2: is and what appears to be I don't know. It's 116 00:06:32,600 --> 00:06:35,320 Speaker 2: like we're being gas lit again by lawmakers. You think 117 00:06:35,320 --> 00:06:36,960 Speaker 2: you're on the verge of something and then you wake 118 00:06:37,040 --> 00:06:39,719 Speaker 2: up the headlines like this today. It's starting to feel 119 00:06:39,720 --> 00:06:42,240 Speaker 2: like this the shop is closed. Were you hopeful or 120 00:06:42,279 --> 00:06:45,640 Speaker 2: are you still for this tax deal to bring an 121 00:06:45,680 --> 00:06:51,359 Speaker 2: expanded child tax credit and more business friendly taxes to corporations? 122 00:06:51,839 --> 00:06:52,039 Speaker 4: Yeah? 123 00:06:52,080 --> 00:06:53,520 Speaker 5: Well, happy New year, Joe. 124 00:06:53,560 --> 00:06:56,320 Speaker 2: First of all, there we are I think about. 125 00:06:56,040 --> 00:06:58,000 Speaker 5: Fifty to fifty in this tax deal, and that's where 126 00:06:58,000 --> 00:07:02,080 Speaker 5: I remain. Yeah, there's some push back over a few elements, 127 00:07:02,160 --> 00:07:04,960 Speaker 5: the look back provision and some other things like that, 128 00:07:05,560 --> 00:07:07,720 Speaker 5: but I do think there's a lot of momentum behind it. 129 00:07:07,800 --> 00:07:11,160 Speaker 5: And while I certainly have a lot of criticisms of 130 00:07:11,160 --> 00:07:13,680 Speaker 5: the tax deal, something they did really great and really 131 00:07:13,720 --> 00:07:16,240 Speaker 5: important is they fully paid for it. They cut out 132 00:07:16,320 --> 00:07:21,000 Speaker 5: this excessive payments on employee retention credit. You've probably gotten 133 00:07:21,000 --> 00:07:23,080 Speaker 5: text messages and emails and calls on it I have. 134 00:07:23,600 --> 00:07:25,520 Speaker 5: You know, there's these scam artists out here trying to 135 00:07:25,560 --> 00:07:28,440 Speaker 5: basically sak hundreds of billions of dollars out of the 136 00:07:28,440 --> 00:07:31,720 Speaker 5: federal government, and they're going to close that loophole in 137 00:07:31,760 --> 00:07:33,640 Speaker 5: order to pay for this tax bill. 138 00:07:35,760 --> 00:07:38,800 Speaker 2: Well, you know, we've had conversations about raising revenue before, 139 00:07:38,840 --> 00:07:41,520 Speaker 2: and that sounds kind of like a joke at this point. 140 00:07:41,560 --> 00:07:44,240 Speaker 2: Here are you expecting before I get into the other 141 00:07:44,280 --> 00:07:48,400 Speaker 2: stuff beyond tax deal? Are you worried about a shutdown 142 00:07:48,400 --> 00:07:52,360 Speaker 2: coming in March? Because this is becoming a more difficult 143 00:07:52,400 --> 00:07:54,320 Speaker 2: task for the Speaker every day, and we have a 144 00:07:54,400 --> 00:07:59,840 Speaker 2: laddered cr that starts shutting down March first. Nobody's even 145 00:08:00,000 --> 00:08:02,560 Speaker 2: talking about details beyond top line spending on a budget. 146 00:08:03,720 --> 00:08:03,920 Speaker 3: Yeah. 147 00:08:03,920 --> 00:08:05,840 Speaker 5: I mean, I'm always a little worried about shutdown, but 148 00:08:06,960 --> 00:08:09,880 Speaker 5: usually we find a way at least by the last minute. 149 00:08:10,000 --> 00:08:11,920 Speaker 5: And this time, I think behind the scenes they actually 150 00:08:11,920 --> 00:08:14,680 Speaker 5: are making some progress and appropriations. I don't know if 151 00:08:14,680 --> 00:08:16,560 Speaker 5: they'll get there in time. There's not a lot of 152 00:08:16,640 --> 00:08:19,760 Speaker 5: legislative weeks, but I do think they're making some forward progress. 153 00:08:19,840 --> 00:08:23,200 Speaker 5: So overall, I would say I'm optimistic that we're going 154 00:08:23,240 --> 00:08:24,520 Speaker 5: to keep the government open this year. 155 00:08:25,880 --> 00:08:29,040 Speaker 2: Will we find money for the President in his supplemental 156 00:08:29,080 --> 00:08:33,560 Speaker 2: budget request for Ukraine, Israel, and Taiwan? And I'm asking 157 00:08:33,600 --> 00:08:36,440 Speaker 2: you that with news today that this border deal is 158 00:08:37,080 --> 00:08:40,440 Speaker 2: looking ever more elusive, as Mitch McConnell starts to acknowledge 159 00:08:40,440 --> 00:08:42,400 Speaker 2: the presence of Donald Trump, who of course does not 160 00:08:42,480 --> 00:08:44,080 Speaker 2: want a deal on the border. 161 00:08:45,640 --> 00:08:48,560 Speaker 5: Yeah, I mean that's the one hundred billion dollar question, right. 162 00:08:49,760 --> 00:08:52,600 Speaker 5: Republicans kind of kept switching what is their ask for 163 00:08:52,920 --> 00:08:55,559 Speaker 5: Ukraine and it was border And now we heard yesterday 164 00:08:55,559 --> 00:08:57,880 Speaker 5: maybe border's stock going to work. At the end of 165 00:08:57,920 --> 00:09:00,400 Speaker 5: the day, I still expect we're probably going to get 166 00:09:00,440 --> 00:09:04,240 Speaker 5: some money for Ukraine, and somebody for Israel, some aid 167 00:09:04,360 --> 00:09:09,280 Speaker 5: for Gaza the border. I don't know forty sixty, but 168 00:09:10,000 --> 00:09:12,160 Speaker 5: it's it's not dead, and it's not over till it's over. 169 00:09:13,840 --> 00:09:16,240 Speaker 2: You sound optimistic. A lot of people are walking around 170 00:09:16,280 --> 00:09:18,480 Speaker 2: town today saying the store is closed. How the heck 171 00:09:18,520 --> 00:09:21,080 Speaker 2: are you going to get anything through this Congress? 172 00:09:21,120 --> 00:09:22,000 Speaker 5: Well, well you have to understand. 173 00:09:22,040 --> 00:09:23,920 Speaker 2: I guess you don't know it. You start creeping up 174 00:09:23,920 --> 00:09:25,840 Speaker 2: on deadlines, go ahead. 175 00:09:25,960 --> 00:09:28,600 Speaker 5: What sounds like optimism is actually pessimism from my point, 176 00:09:28,640 --> 00:09:30,360 Speaker 5: because it's all adding more and more to the to 177 00:09:30,720 --> 00:09:32,679 Speaker 5: the debt. So when I think they're going to get 178 00:09:32,720 --> 00:09:35,800 Speaker 5: something done, I think they're going to make the deficit worse. 179 00:09:37,200 --> 00:09:39,880 Speaker 2: Oh god, So you're in the gridlock is good camp? 180 00:09:39,960 --> 00:09:41,320 Speaker 2: You want them to shut it down the rest of 181 00:09:41,320 --> 00:09:41,600 Speaker 2: the year. 182 00:09:43,000 --> 00:09:45,679 Speaker 5: No, gridlock's not good. Look, we have an unsustainable underlying 183 00:09:45,720 --> 00:09:49,600 Speaker 5: fiscal situation. Gridlock means you don't save Social Security, means 184 00:09:49,600 --> 00:09:51,920 Speaker 5: you don't save Medicare, means you never do anything to 185 00:09:51,960 --> 00:09:56,800 Speaker 5: reform government. So gridlock's not good. But too often bipartisanship 186 00:09:56,840 --> 00:09:59,439 Speaker 5: is an excuse to make things worse rather than make 187 00:09:59,480 --> 00:09:59,959 Speaker 5: things better. 188 00:10:01,840 --> 00:10:04,079 Speaker 2: Well, let's start talking about some of the possibilities. Then 189 00:10:04,120 --> 00:10:06,199 Speaker 2: they've even floated the idea of a year long CR. 190 00:10:06,280 --> 00:10:07,840 Speaker 2: What are we halfway through there? By the time we 191 00:10:07,880 --> 00:10:09,679 Speaker 2: get there, halfway through the fiscal year, this is kind 192 00:10:09,720 --> 00:10:11,720 Speaker 2: of ridiculous that it's time to present a new budget. 193 00:10:12,200 --> 00:10:15,320 Speaker 2: We're talking about State of the Union season here, Mark, 194 00:10:15,960 --> 00:10:18,120 Speaker 2: this speaker could get fired for doing it. But how 195 00:10:18,120 --> 00:10:20,240 Speaker 2: would the committee feel about a year long CR that 196 00:10:20,280 --> 00:10:23,400 Speaker 2: would include that across the board sequester that would take 197 00:10:23,440 --> 00:10:27,080 Speaker 2: effect in April, so you would be cutting spending. 198 00:10:28,040 --> 00:10:31,680 Speaker 5: Yeah, well, that sequester is actually really complicated, probably too 199 00:10:31,760 --> 00:10:34,400 Speaker 5: much for us to discuss here. But I don't think 200 00:10:34,440 --> 00:10:36,880 Speaker 5: they'll do a full year long CR. It may be 201 00:10:37,040 --> 00:10:40,200 Speaker 5: that they agree on some of the appropriations like Defense, 202 00:10:40,640 --> 00:10:43,120 Speaker 5: and they don't agree on others like homeland Security, and 203 00:10:43,160 --> 00:10:45,240 Speaker 5: so they see are the ones they don't agree on, 204 00:10:45,520 --> 00:10:47,600 Speaker 5: But I think it's unlikely they'll see r the whole thing. 205 00:10:48,320 --> 00:10:50,080 Speaker 5: And if they do, it actually raises a lot of 206 00:10:50,120 --> 00:10:54,800 Speaker 5: complicating questions about how that sequester would work, and they're 207 00:10:54,800 --> 00:10:56,640 Speaker 5: going to have to make adjustments to make sure that 208 00:10:57,559 --> 00:10:58,720 Speaker 5: it works as expected. 209 00:11:00,160 --> 00:11:02,839 Speaker 2: Just imagine all the supplementals if that were to happen, right, 210 00:11:02,880 --> 00:11:06,319 Speaker 2: you do the year long cr speaker makes the Freedom 211 00:11:06,360 --> 00:11:09,920 Speaker 2: Caucus go insane. But then Lindsey Graham and everyone shows up. 212 00:11:09,960 --> 00:11:12,840 Speaker 2: The budget hawks show up, chairs of the Armed Services 213 00:11:12,840 --> 00:11:16,280 Speaker 2: Committee committees say we need more money for the Pentagon. 214 00:11:16,960 --> 00:11:18,520 Speaker 2: You can write the story already, can't you. 215 00:11:20,280 --> 00:11:23,160 Speaker 5: And look, if we can't even do basic budgeting, can't 216 00:11:23,160 --> 00:11:25,880 Speaker 5: even pass the government appropriations on time, how are we 217 00:11:25,920 --> 00:11:28,360 Speaker 5: going to solve the bigger problems? I mean, Washington is 218 00:11:28,440 --> 00:11:32,199 Speaker 5: just so broken, and the few times that show signs 219 00:11:32,200 --> 00:11:34,960 Speaker 5: of not being program, it's generally going to make things worse. 220 00:11:38,120 --> 00:11:39,440 Speaker 2: You know, I'll tell you what. This has been an 221 00:11:39,520 --> 00:11:42,040 Speaker 2: uplifting program last couple of days. Let's talk about what 222 00:11:42,080 --> 00:11:44,280 Speaker 2: we learned in New Hampshire and Iowa. Mark, We've been 223 00:11:44,280 --> 00:11:47,000 Speaker 2: on the road and we're just back. This talk of 224 00:11:47,160 --> 00:11:53,320 Speaker 2: a Trump nomination and Trump as a fiscal conservative is 225 00:11:53,559 --> 00:11:57,040 Speaker 2: interesting here his rivals now only one left, Nikki Haley, 226 00:11:57,280 --> 00:11:59,000 Speaker 2: trying to make the point that he added a lot 227 00:11:59,040 --> 00:12:02,599 Speaker 2: to the deficit, in fact, some seven trillion dollars. Is 228 00:12:02,640 --> 00:12:04,559 Speaker 2: the committee worried that we're about to do this all 229 00:12:04,559 --> 00:12:05,079 Speaker 2: over again. 230 00:12:06,440 --> 00:12:08,800 Speaker 5: Well, we actually estimate that President Trump had an eight 231 00:12:08,840 --> 00:12:11,839 Speaker 5: point four trillion dollars to the debt. That's how much 232 00:12:11,840 --> 00:12:14,960 Speaker 5: he signed it to law eight point four. That's tax cuts, 233 00:12:14,960 --> 00:12:17,800 Speaker 5: that spending increases. A good part of that is COVID, 234 00:12:18,120 --> 00:12:20,520 Speaker 5: but even without the COVID it's almost COVID relief. It's 235 00:12:20,520 --> 00:12:23,760 Speaker 5: almost five trillion. So that's not to say that he's 236 00:12:23,760 --> 00:12:25,720 Speaker 5: going to add another eight point four if he takes 237 00:12:25,760 --> 00:12:30,160 Speaker 5: office again. But his record on fiscal responsibility isn't exactly strong. 238 00:12:32,440 --> 00:12:35,880 Speaker 2: Nikki Haley has been talking about Social Security, the one 239 00:12:35,920 --> 00:12:38,440 Speaker 2: candidate to open the lock box? 240 00:12:38,880 --> 00:12:39,280 Speaker 1: Is that a. 241 00:12:39,240 --> 00:12:41,720 Speaker 2: Conversation that you encourage. I'm assuming that's a yes. 242 00:12:42,640 --> 00:12:45,000 Speaker 5: Oh, we have to have it. Social Security is nine 243 00:12:45,080 --> 00:12:49,600 Speaker 5: years from insolvency. Nine years. That means today's fifty three 244 00:12:49,679 --> 00:12:52,599 Speaker 5: year olds will be eligible and their benefits will be 245 00:12:52,679 --> 00:12:56,760 Speaker 5: cut across the board for a typical couple, seventeen thousand 246 00:12:56,800 --> 00:12:59,520 Speaker 5: dollars cut in twenty thirty three. We should have been 247 00:12:59,520 --> 00:13:02,760 Speaker 5: talking about this twenty years ago. We need to be 248 00:13:02,800 --> 00:13:06,720 Speaker 5: talking about this today, and Ambassador Haley certainly gets credit 249 00:13:06,760 --> 00:13:09,800 Speaker 5: in my book for at least starting that conversation. 250 00:13:10,520 --> 00:13:13,040 Speaker 2: Just getting killed for it. On TV up in New Hampshire, 251 00:13:13,040 --> 00:13:15,199 Speaker 2: there running ads every five minutes or they were now 252 00:13:15,200 --> 00:13:19,360 Speaker 2: it's on to South Carolina, and I'm fascinated Mark that 253 00:13:19,800 --> 00:13:22,080 Speaker 2: whether it's Donald Trump or a couple of weeks ago 254 00:13:22,200 --> 00:13:26,199 Speaker 2: Ronda Santis have chosen this as the issue to really 255 00:13:26,280 --> 00:13:28,880 Speaker 2: hit home on. When it comes to Nicki Haley, she 256 00:13:28,880 --> 00:13:31,599 Speaker 2: didn't even really articulate a policy. She just said, you know, 257 00:13:31,720 --> 00:13:34,600 Speaker 2: got to move the age to some extent for people 258 00:13:34,600 --> 00:13:38,720 Speaker 2: who are just buying into the system. Here. That means 259 00:13:38,760 --> 00:13:40,920 Speaker 2: we're never getting to this right. If we can't have 260 00:13:40,960 --> 00:13:43,400 Speaker 2: that conversation in a presidential election, when are we going. 261 00:13:43,400 --> 00:13:43,760 Speaker 1: To do it. 262 00:13:44,760 --> 00:13:47,520 Speaker 5: This is so shameful, and it comes from Republicans and 263 00:13:47,559 --> 00:13:51,360 Speaker 5: it comes from Democrats, you know, the do nothing plan, 264 00:13:51,440 --> 00:13:55,000 Speaker 5: attacking any kind of solution. But here's the reality. If 265 00:13:55,040 --> 00:13:58,080 Speaker 5: you're saying, don't touch social Security, you are endorsing a 266 00:13:58,160 --> 00:14:01,040 Speaker 5: seventeen thousand dollars a year cut for a new couple 267 00:14:01,080 --> 00:14:03,680 Speaker 5: in just nine years. That's the consequence of an action. 268 00:14:04,000 --> 00:14:07,040 Speaker 5: The law says we cannot pay benefits beyond what is 269 00:14:07,160 --> 00:14:10,440 Speaker 5: what's being brought in a seventeen thousand dollars cut, and 270 00:14:10,520 --> 00:14:13,600 Speaker 5: so they can run their ads, but it's exactly backwards. 271 00:14:13,600 --> 00:14:16,079 Speaker 5: If we don't talk about Social Security, we are doing 272 00:14:16,080 --> 00:14:18,720 Speaker 5: a lot of seniors to a pretty deep cut in 273 00:14:18,760 --> 00:14:20,760 Speaker 5: their standard of living, and. 274 00:14:20,760 --> 00:14:22,600 Speaker 2: You've got these are the people who actually go out 275 00:14:22,640 --> 00:14:24,200 Speaker 2: and vote, which is fascinating. 276 00:14:24,240 --> 00:14:24,600 Speaker 1: I just it. 277 00:14:25,320 --> 00:14:29,360 Speaker 2: It's confounding why we don't have this conversation in the 278 00:14:29,360 --> 00:14:31,880 Speaker 2: throes of a contest like this, the throes of a debate. 279 00:14:33,440 --> 00:14:35,840 Speaker 2: Maybe that's what's leading to the sense of inevitability with 280 00:14:35,880 --> 00:14:38,680 Speaker 2: Donald Trump. Mark either way, if this is Joe Biden's 281 00:14:38,720 --> 00:14:40,800 Speaker 2: last term, and I am not projecting that, we're talking 282 00:14:40,800 --> 00:14:43,800 Speaker 2: about what might happen if either become president here, what 283 00:14:43,840 --> 00:14:46,440 Speaker 2: would be his record on deficits. He likes to take 284 00:14:46,440 --> 00:14:49,480 Speaker 2: credit for being the only president in recent history to 285 00:14:49,520 --> 00:14:50,479 Speaker 2: lower them. 286 00:14:51,080 --> 00:14:54,600 Speaker 5: Yeah, no, that's silly. We haven't tallied President Biden on 287 00:14:54,640 --> 00:14:57,960 Speaker 5: a updated basis, but he's probably added about four trillion 288 00:14:58,000 --> 00:15:00,480 Speaker 5: dollars to the debt, So that's not as much President 289 00:15:00,520 --> 00:15:02,840 Speaker 5: Trump's eight point four to tray again, but it's still 290 00:15:02,840 --> 00:15:05,160 Speaker 5: a lot. He didn't reduce debt. What happened is he 291 00:15:05,200 --> 00:15:07,200 Speaker 5: came in in twenty twenty one and we were still 292 00:15:07,240 --> 00:15:09,600 Speaker 5: a miss COVID, right, and he actually added to the 293 00:15:09,600 --> 00:15:11,760 Speaker 5: debt more in twenty twenty one, but in twenty twenty two, 294 00:15:11,800 --> 00:15:14,560 Speaker 5: things came back to normal. They've since gone back up. 295 00:15:15,440 --> 00:15:19,400 Speaker 5: He's added substantially to the debt. Debt is accumulated substantially 296 00:15:19,400 --> 00:15:22,840 Speaker 5: over his presidency. What he didn't do is repeat the 297 00:15:22,840 --> 00:15:25,840 Speaker 5: three trigon dollar deficits of twenty and twenty and twenty 298 00:15:25,840 --> 00:15:27,120 Speaker 5: twenty one over and. 299 00:15:27,040 --> 00:15:31,320 Speaker 2: Over again, which appears to be worth celebrating to somebody. Mark, 300 00:15:31,360 --> 00:15:33,600 Speaker 2: it's good to see you. Thank you for bringing your 301 00:15:33,640 --> 00:15:35,720 Speaker 2: research to us here. As always in your point of 302 00:15:35,800 --> 00:15:38,120 Speaker 2: view on Bloomberg, Mark Goldwine from the Committee for a 303 00:15:38,160 --> 00:15:41,880 Speaker 2: Responsible Federal Budget, remember this conversation when you hear these 304 00:15:41,920 --> 00:15:45,680 Speaker 2: claims from both sides of the aisle, We're still looking 305 00:15:45,720 --> 00:15:50,120 Speaker 2: for someone to reduce the debt and deficit. I'm Jore, Matthew, 306 00:15:50,120 --> 00:15:52,240 Speaker 2: and Washington will carry on here in the fastest show 307 00:15:52,240 --> 00:15:54,920 Speaker 2: in politics with us on the radio, on the satellite, 308 00:15:54,920 --> 00:15:58,040 Speaker 2: and on YouTube. This is Bloomberg. 309 00:16:01,240 --> 00:16:04,600 Speaker 1: You're listening to the Bloomberg Balance of Power podcast kens 310 00:16:04,720 --> 00:16:08,080 Speaker 1: just live weekdays at noon Eastern on Applecarplay and enroud 311 00:16:08,080 --> 00:16:10,800 Speaker 1: Otto with the Bloomberg Business app. You can also listen 312 00:16:10,920 --> 00:16:14,000 Speaker 1: live on Amazon Alexa from our flagship New York station, 313 00:16:14,400 --> 00:16:18,440 Speaker 1: Just Say Alexa Play Bloomberg eleven thirty. 314 00:16:19,320 --> 00:16:21,840 Speaker 6: Meanwhile here on Pennsylvania Avenue, both ends of it, it's 315 00:16:21,880 --> 00:16:24,680 Speaker 6: a little confusing what's going on in terms of negotiating 316 00:16:24,760 --> 00:16:27,800 Speaker 6: Joe on a border deal. The latest ex post from 317 00:16:27,800 --> 00:16:31,080 Speaker 6: Senator Cinema, who of course is involved in this along 318 00:16:31,080 --> 00:16:35,800 Speaker 6: with Sendor Lankford and Murphy Republican Independent Democrat, all involved, 319 00:16:36,320 --> 00:16:38,840 Speaker 6: posted today that they've been working in good faith, which 320 00:16:39,080 --> 00:16:41,240 Speaker 6: with DHS, the White House, and party leaders on a 321 00:16:41,280 --> 00:16:45,240 Speaker 6: bipartisan border security package. She says, we're really close and 322 00:16:45,280 --> 00:16:49,000 Speaker 6: we're working carefully to get this right. But what's a 323 00:16:49,080 --> 00:16:53,800 Speaker 6: deal worth if even Mitch McConnell doesn't seem like it's 324 00:16:53,840 --> 00:16:54,560 Speaker 6: worth voting on. 325 00:16:55,040 --> 00:16:57,360 Speaker 2: Yeah, I don't. The timing of this is interesting because 326 00:16:57,400 --> 00:16:59,720 Speaker 2: it follows this meeting yesterday. I'm assuming that one of 327 00:16:59,720 --> 00:17:02,560 Speaker 2: these folks, Jim Langford, was in that meeting, right, It 328 00:17:02,680 --> 00:17:06,520 Speaker 2: was a Republican Senate membership meeting behind closed doors, and 329 00:17:06,560 --> 00:17:08,880 Speaker 2: it was like, hey, reality set in after New Hampshire. 330 00:17:09,680 --> 00:17:11,600 Speaker 2: What was the line, We don't want to do anything 331 00:17:11,680 --> 00:17:15,119 Speaker 2: to undermine him, Mitch McConnell, referring to him as the 332 00:17:15,160 --> 00:17:18,879 Speaker 2: nominee because Donald Trump wants to run a campaign on immigration, 333 00:17:19,400 --> 00:17:21,439 Speaker 2: and boy, if you've been listening to this broadcast, you 334 00:17:21,480 --> 00:17:24,600 Speaker 2: saw it coming. We've been asking about this for weeks, 335 00:17:24,640 --> 00:17:28,639 Speaker 2: the impact that Donald Trump might have in potentially squashing 336 00:17:28,640 --> 00:17:31,200 Speaker 2: a deal that could make Democrats look good. We're already here, 337 00:17:31,800 --> 00:17:33,800 Speaker 2: and so the cinema sweet is interesting. They're going to 338 00:17:33,920 --> 00:17:36,280 Speaker 2: keep at this, I guess until there's a deal. But 339 00:17:36,480 --> 00:17:38,040 Speaker 2: it just might not matter, right. 340 00:17:38,080 --> 00:17:41,040 Speaker 6: It might be a deal that gets done but actually 341 00:17:41,080 --> 00:17:43,280 Speaker 6: doesn't get turned into a lot. Let's try to get 342 00:17:43,280 --> 00:17:45,000 Speaker 6: more on this now. I'm pleased to say, joining us 343 00:17:45,040 --> 00:17:48,320 Speaker 6: from Bloomberg Government who reports on Congress four bigup is 344 00:17:48,400 --> 00:17:52,960 Speaker 6: Zach Cohen. So, Zach, is this still happening but not 345 00:17:53,119 --> 00:17:56,360 Speaker 6: really happening? How should we be thinking about the prospects 346 00:17:56,760 --> 00:17:58,800 Speaker 6: for something on the border passing through Congress? 347 00:17:58,840 --> 00:18:00,159 Speaker 4: Now? 348 00:18:00,680 --> 00:18:02,919 Speaker 7: This is a really critical juncture for this package of 349 00:18:03,280 --> 00:18:06,560 Speaker 7: border security legislation that's been tied for the last couple 350 00:18:06,560 --> 00:18:09,320 Speaker 7: of weeks now to aid not just for Ukraine but 351 00:18:09,440 --> 00:18:12,720 Speaker 7: as well as Israel and Taiwan. There were a number 352 00:18:12,720 --> 00:18:15,520 Speaker 7: of meetings amongst Senate Republicans this week trying to get 353 00:18:15,520 --> 00:18:17,679 Speaker 7: a better sense of what's actually in this deal. Our 354 00:18:17,720 --> 00:18:19,879 Speaker 7: understanding is about ninety percent of it has been written 355 00:18:20,160 --> 00:18:23,240 Speaker 7: in negotiations with not just Senators James Langford, Kirst Cinema, 356 00:18:23,320 --> 00:18:26,680 Speaker 7: Chris Murphy, but as well as representatives from the White House. 357 00:18:27,040 --> 00:18:28,960 Speaker 7: But I think the reality is set again that if 358 00:18:29,040 --> 00:18:31,720 Speaker 7: you have a foreign president Trump, who just won the 359 00:18:31,720 --> 00:18:34,880 Speaker 7: New Hampshire primary in the Iocuoxus before that, railing against 360 00:18:35,119 --> 00:18:38,080 Speaker 7: any potential deal that is going to win Democratic support, 361 00:18:38,119 --> 00:18:40,879 Speaker 7: that they should just wait until he comes back into office. Now, 362 00:18:40,920 --> 00:18:43,440 Speaker 7: Republican leadership has said they still want to get a deal. 363 00:18:43,920 --> 00:18:47,679 Speaker 7: McConnell himself told our colleague Eric Wasson that they're still negotiating. 364 00:18:47,720 --> 00:18:50,600 Speaker 7: They're hoping to get something done, in part because Ukraine 365 00:18:50,600 --> 00:18:52,200 Speaker 7: AID is going to be really hard to move through 366 00:18:52,200 --> 00:18:54,480 Speaker 7: both the Senate and the House without some sort of 367 00:18:54,640 --> 00:18:57,440 Speaker 7: enticement for Republican senators who are critical of Ukraine Aid 368 00:18:57,800 --> 00:19:00,920 Speaker 7: to get that job done as well. And so we'll 369 00:19:00,920 --> 00:19:03,000 Speaker 7: have to wait and see how this text finally comes out. 370 00:19:03,040 --> 00:19:05,399 Speaker 7: There's certainly going to be some skeptics of it in 371 00:19:05,440 --> 00:19:08,240 Speaker 7: the Senate Republican conference and certainly some Democrats as well, 372 00:19:08,720 --> 00:19:10,800 Speaker 7: But as far as we know, certainly Trump's comments have 373 00:19:10,840 --> 00:19:12,520 Speaker 7: made it harder. But that a deal is still on 374 00:19:12,560 --> 00:19:12,960 Speaker 7: the table. 375 00:19:14,240 --> 00:19:17,080 Speaker 2: So is Donald Trump now essentially the Speaker of the 376 00:19:17,119 --> 00:19:19,199 Speaker 2: House and the Republican leader in the Senate. 377 00:19:20,560 --> 00:19:22,840 Speaker 7: I think it's undeniable. He has a lot of influence here. 378 00:19:23,160 --> 00:19:25,640 Speaker 7: Republicans will will certainly tell you that. I think McConnell 379 00:19:25,640 --> 00:19:30,040 Speaker 7: may have alluded to that yesterday in talks. But Republican 380 00:19:30,119 --> 00:19:32,399 Speaker 7: leadership is still pretty insistent that this is the best 381 00:19:33,320 --> 00:19:35,960 Speaker 7: opportunity they have to really get a border deal to 382 00:19:36,000 --> 00:19:38,200 Speaker 7: on some you know this is they've gotten more concension 383 00:19:38,400 --> 00:19:41,359 Speaker 7: concessions from Democrats in the last couple of weeks than 384 00:19:41,359 --> 00:19:43,480 Speaker 7: they ever got during the Trump administration on any sort 385 00:19:43,480 --> 00:19:47,320 Speaker 7: of border package. And so certainly Trump saying, you know, 386 00:19:47,440 --> 00:19:49,320 Speaker 7: leave this to me to deal with when we get there, 387 00:19:49,960 --> 00:19:52,360 Speaker 7: falling on deaf ears even among some hard right Republicans 388 00:19:52,359 --> 00:19:55,720 Speaker 7: who have said because the border crisis is such a 389 00:19:55,720 --> 00:19:58,400 Speaker 7: clear impressent danger, as said de Ron Johnson, the Republican 390 00:19:58,480 --> 00:20:01,200 Speaker 7: Wisconsin told me, they want to see something get done. 391 00:20:01,320 --> 00:20:03,760 Speaker 7: The question is doesn't survive the House to Speaker of 392 00:20:03,800 --> 00:20:06,080 Speaker 7: Mike Johnson, put this on the floor, probably on a 393 00:20:06,080 --> 00:20:09,560 Speaker 7: suspension vote that would require bipartisan support, even if he 394 00:20:09,640 --> 00:20:13,000 Speaker 7: ends up losing harder Republicans who if your Congressman margin 395 00:20:13,040 --> 00:20:15,159 Speaker 7: Tayla Green has talked about actually housting him from that 396 00:20:15,320 --> 00:20:18,359 Speaker 7: job if it included aid for Ukraine. So there's a 397 00:20:18,480 --> 00:20:20,960 Speaker 7: narrow path for this deal still to happen, and certainly 398 00:20:21,000 --> 00:20:24,000 Speaker 7: the power players actually crafting it are still at the table. 399 00:20:25,400 --> 00:20:27,720 Speaker 6: Okay, So that's one deal, Zach. We also have another 400 00:20:27,920 --> 00:20:30,280 Speaker 6: deal that actually has already been made and marked up, 401 00:20:30,280 --> 00:20:34,440 Speaker 6: that tax deal bipartisan between the Senate of Finance Leader 402 00:20:34,440 --> 00:20:37,119 Speaker 6: Senator Wryden and the Chair of the House Ways and 403 00:20:37,119 --> 00:20:39,520 Speaker 6: Means Committee, Jason Smith. They had the deal, they marked 404 00:20:39,520 --> 00:20:42,200 Speaker 6: it up. Now it seems like we're running into issues. 405 00:20:42,280 --> 00:20:44,520 Speaker 6: Is this too something that just isn't going to be 406 00:20:44,520 --> 00:20:45,679 Speaker 6: able to get adequate support? 407 00:20:46,960 --> 00:20:48,840 Speaker 7: Certainly it's not going to make that January twenty ninth 408 00:20:48,840 --> 00:20:51,600 Speaker 7: deadline that Finance Chairman Ron Wyden had positive for the 409 00:20:51,600 --> 00:20:55,200 Speaker 7: beginning of tax filings season. Any sort of tax package 410 00:20:55,359 --> 00:20:57,439 Speaker 7: was going to be difficult to certainly in an election year. 411 00:20:57,480 --> 00:21:00,360 Speaker 7: As we've been discussing, sometimes lawmaker would prefer to leave 412 00:21:00,400 --> 00:21:02,840 Speaker 7: something to after the twenty twenty four elections, when maybe 413 00:21:02,880 --> 00:21:06,320 Speaker 7: a different configuration of power would lead to a better deal. 414 00:21:06,720 --> 00:21:08,359 Speaker 7: It did get marked up out of the House ways 415 00:21:08,359 --> 00:21:10,600 Speaker 7: and means to be the Tax Writing Panel on a 416 00:21:10,600 --> 00:21:13,240 Speaker 7: pretty substantial bipartisan vote, I think forty to three if 417 00:21:13,240 --> 00:21:16,080 Speaker 7: remembering correctly, and it should be going to the House 418 00:21:16,119 --> 00:21:19,120 Speaker 7: floor as soon as next week, maybe later than that. 419 00:21:19,200 --> 00:21:20,600 Speaker 7: If that comes out of the House with a really 420 00:21:20,600 --> 00:21:23,080 Speaker 7: strong bipartisan vote, it would go over to the Senate, 421 00:21:23,440 --> 00:21:26,680 Speaker 7: where Mike Crapo, the top Republican on the Finance Committee, 422 00:21:26,840 --> 00:21:29,480 Speaker 7: told me yesterday they expect an opportunity to amend that 423 00:21:29,560 --> 00:21:31,640 Speaker 7: bill on the floor of the Senate. What that means 424 00:21:31,640 --> 00:21:34,000 Speaker 7: for its prospects of actually passing the Senate going back 425 00:21:34,040 --> 00:21:36,440 Speaker 7: to the House, that's a whole other issue. 426 00:21:37,320 --> 00:21:41,600 Speaker 2: All right, So this is getting silly. We're done here, right, 427 00:21:41,760 --> 00:21:44,800 Speaker 2: I mean, come on, maybe I'm just not in a 428 00:21:44,840 --> 00:21:50,159 Speaker 2: great move, but this is not a functioning operation here, guys. 429 00:21:50,240 --> 00:21:52,800 Speaker 2: We can't figure out even how to get beyond top 430 00:21:52,840 --> 00:21:56,320 Speaker 2: line figures for a budget. It's bordered deals smoking right now. 431 00:21:56,359 --> 00:21:59,040 Speaker 2: They're now we're going to mark up the tax deal. 432 00:22:00,520 --> 00:22:02,560 Speaker 2: Got to bring in Denver Riggleman. He's got to be 433 00:22:02,640 --> 00:22:05,720 Speaker 2: rolling his eyes somewhere in the heart of Virginia. Former 434 00:22:06,200 --> 00:22:10,840 Speaker 2: Republican congressman is with us here on Bloomberg Balance of Power, 435 00:22:10,920 --> 00:22:13,760 Speaker 2: Denver is the store closed for the rest of the. 436 00:22:13,760 --> 00:22:16,320 Speaker 4: Year, don't knows it? Just mean, yeah, I don't think 437 00:22:16,320 --> 00:22:17,960 Speaker 4: your mood's going to get any better when I'm done. 438 00:22:18,800 --> 00:22:21,919 Speaker 4: I think, I just I think there's a lot of 439 00:22:21,960 --> 00:22:25,080 Speaker 4: legislators that are caused playing right now through twenty twenty 440 00:22:25,080 --> 00:22:28,080 Speaker 4: four when you're looking at these deals, and I think 441 00:22:28,119 --> 00:22:29,800 Speaker 4: what they're doing is they're just trying to keep people 442 00:22:29,800 --> 00:22:31,840 Speaker 4: interested in waiting for Trump to make a decision. And 443 00:22:31,880 --> 00:22:34,800 Speaker 4: I think what you saw McConnell's say really is no 444 00:22:34,880 --> 00:22:37,560 Speaker 4: different than what Desandas and Tim Scott did this week. 445 00:22:37,960 --> 00:22:39,960 Speaker 4: Right well, they're almost like, you know, Rocky Balbo and 446 00:22:40,000 --> 00:22:44,159 Speaker 4: Apollo Creed embracing in the water in their trip Tomorrow Lago. 447 00:22:44,960 --> 00:22:47,000 Speaker 4: I mean, that's really what we got, is everybody's rolling 448 00:22:47,040 --> 00:22:50,240 Speaker 4: over and showing their bellies right now for Trump. And 449 00:22:50,280 --> 00:22:53,040 Speaker 4: if you think of and if you think about McConnell's statements, sir, 450 00:22:53,119 --> 00:22:55,000 Speaker 4: you're telling me we have to wait for Trump. We 451 00:22:55,000 --> 00:22:57,840 Speaker 4: don't want to go sideways on him. The American people 452 00:22:57,880 --> 00:23:00,720 Speaker 4: be damned. And I think that's the crazy part about 453 00:23:00,720 --> 00:23:03,480 Speaker 4: the two party system, especially when one party's inn hold 454 00:23:03,560 --> 00:23:06,000 Speaker 4: my beer moment, you can't get anything done because they're 455 00:23:06,000 --> 00:23:09,160 Speaker 4: waiting on one person, you know, one demagogue to tell 456 00:23:09,200 --> 00:23:11,200 Speaker 4: them what's okay and what's not okay. And I think 457 00:23:11,280 --> 00:23:13,280 Speaker 4: that's why your mood is probably not that great. 458 00:23:14,840 --> 00:23:16,399 Speaker 6: Okay, So what do you make of the idea that 459 00:23:16,480 --> 00:23:19,240 Speaker 6: if they wait until the election decide to try to 460 00:23:19,320 --> 00:23:23,440 Speaker 6: tackle border security under potentially a future second Trump administration, 461 00:23:24,000 --> 00:23:26,440 Speaker 6: is there any real chance that would get done then? 462 00:23:26,600 --> 00:23:28,879 Speaker 6: Because you need sixty votes in the Senate. And then 463 00:23:29,040 --> 00:23:31,800 Speaker 6: if Democrats couldn't pass it under Biden, why would they 464 00:23:31,840 --> 00:23:33,440 Speaker 6: allow it passed under Trump? 465 00:23:34,280 --> 00:23:36,960 Speaker 4: Especially if the Democrats hold the House. It's a fantastic question. 466 00:23:37,359 --> 00:23:40,600 Speaker 4: And by the way, and again not to be another moodkiller, 467 00:23:41,000 --> 00:23:42,680 Speaker 4: but if you have the far right and some of 468 00:23:42,720 --> 00:23:44,960 Speaker 4: the people that I do know talking about now, by 469 00:23:45,000 --> 00:23:46,560 Speaker 4: the way, I want to say there are issues at 470 00:23:46,600 --> 00:23:48,480 Speaker 4: the border, I would be the first to say that. 471 00:23:48,960 --> 00:23:51,080 Speaker 4: But the far right is talking about the imminent danger 472 00:23:51,160 --> 00:23:53,280 Speaker 4: of hamas crossing the border. But we're going to wait 473 00:23:53,359 --> 00:23:55,600 Speaker 4: for Donald you know, dere at mar A Lago to 474 00:23:55,680 --> 00:23:59,160 Speaker 4: give give us the go ahead in order to protect 475 00:23:59,160 --> 00:24:01,359 Speaker 4: the American Republic when we're we've been screaming about this 476 00:24:01,480 --> 00:24:04,200 Speaker 4: for the last couple of weeks. It's absolutely hypocritical. And 477 00:24:04,320 --> 00:24:06,639 Speaker 4: again when I talk about these legislator's cause playing, it 478 00:24:06,680 --> 00:24:09,720 Speaker 4: doesn't really change going into twenty twenty five if Trump 479 00:24:09,760 --> 00:24:11,640 Speaker 4: were to win the election, because more than likely you're 480 00:24:11,640 --> 00:24:14,160 Speaker 4: going to have a Democratic controlled house. Who knows what's 481 00:24:14,160 --> 00:24:16,760 Speaker 4: going to happen in the Senate. So let's be real 482 00:24:17,000 --> 00:24:19,040 Speaker 4: right right now, this is just a big slow roll 483 00:24:19,119 --> 00:24:21,800 Speaker 4: with one person while they're waiting for him to actually 484 00:24:21,840 --> 00:24:23,680 Speaker 4: be blessed as a nominee. And that's really what's going 485 00:24:23,680 --> 00:24:24,000 Speaker 4: on here. 486 00:24:25,080 --> 00:24:29,480 Speaker 2: Well, just to reset, Denver, do you agree there'll be 487 00:24:29,560 --> 00:24:33,520 Speaker 2: no budget for this fiscal year CRS to the horizon, 488 00:24:33,640 --> 00:24:36,480 Speaker 2: there will be no border deal, Ukraine will get no 489 00:24:36,640 --> 00:24:40,399 Speaker 2: money and will be abandoned, and they'll be probably no 490 00:24:40,560 --> 00:24:41,960 Speaker 2: tax deal to crow about either. 491 00:24:42,720 --> 00:24:45,719 Speaker 4: Yeah, I mean McConnell hooking the border deal to Ukraine 492 00:24:45,760 --> 00:24:48,119 Speaker 4: AID is a pretty much a red flag I think 493 00:24:48,200 --> 00:24:50,360 Speaker 4: for anybody who's looking at what's going over in Ukraine. 494 00:24:50,880 --> 00:24:53,960 Speaker 4: You know, there's a great intelligence officer that trained me 495 00:24:54,480 --> 00:24:56,360 Speaker 4: twenty years ago, and he said, Denver, the only way 496 00:24:56,359 --> 00:24:59,320 Speaker 4: to tell the futures after it happens. It's the same 497 00:24:59,359 --> 00:25:01,960 Speaker 4: way with Cock and what's going on right now in 498 00:25:02,000 --> 00:25:03,920 Speaker 4: the Senate, in the House. But I see, I think 499 00:25:03,920 --> 00:25:06,040 Speaker 4: it's going to be very hard to get a budget through, 500 00:25:06,200 --> 00:25:07,800 Speaker 4: and I think it's going to be very difficult to 501 00:25:07,840 --> 00:25:10,560 Speaker 4: do anything with Ukraine. You know. Again, while we have 502 00:25:10,680 --> 00:25:13,399 Speaker 4: Trump sort of being the party leader, you know, not 503 00:25:13,440 --> 00:25:15,879 Speaker 4: only the Senate lead, but also you know, acting as 504 00:25:16,400 --> 00:25:20,080 Speaker 4: you know, Mike Johnson's inner voice. I just I think 505 00:25:20,119 --> 00:25:22,840 Speaker 4: it's almost impossible, and it's just it will be a 506 00:25:22,880 --> 00:25:24,920 Speaker 4: surprise to me if it happens. Never say never, I 507 00:25:25,040 --> 00:25:26,800 Speaker 4: never try to do that, you know. Sometimes I've been 508 00:25:26,800 --> 00:25:29,880 Speaker 4: wrong in my predictions because Congress is such a chaotic 509 00:25:30,440 --> 00:25:33,479 Speaker 4: hellhole right now. But you never know. But I think 510 00:25:33,560 --> 00:25:35,080 Speaker 4: I think it's going to be very difficult. Sorry, that 511 00:25:35,119 --> 00:25:36,760 Speaker 4: was pretty blunt. Hell whole is a word I like 512 00:25:36,800 --> 00:25:39,879 Speaker 4: to use a lot of technicals lately, technical. 513 00:25:39,560 --> 00:25:40,320 Speaker 2: Term that rights. 514 00:25:41,800 --> 00:25:41,960 Speaker 3: Well. 515 00:25:42,000 --> 00:25:44,880 Speaker 6: Of course, one of the examples of dysfunction in Congress 516 00:25:44,920 --> 00:25:48,240 Speaker 6: has been that a speaker was outsted, and that's why 517 00:25:48,280 --> 00:25:50,199 Speaker 6: Mike Johnson got the job in the first place. At 518 00:25:50,200 --> 00:25:52,440 Speaker 6: the very least, if none of these things are even 519 00:25:52,680 --> 00:25:55,600 Speaker 6: going to come to the floor. Does it at least 520 00:25:55,640 --> 00:25:58,159 Speaker 6: save him the speaker's gavel because he's not going to 521 00:25:58,240 --> 00:26:00,680 Speaker 6: have to try to navigate the different priority of his 522 00:26:00,840 --> 00:26:05,280 Speaker 6: hard right flank and say, trying to actually do some legislating. 523 00:26:06,119 --> 00:26:08,640 Speaker 4: Yeah, it's interesting. It's a great question that an individual 524 00:26:08,680 --> 00:26:11,000 Speaker 4: who wants to keep power does as little as possible, 525 00:26:11,200 --> 00:26:13,479 Speaker 4: you know, which seems like that's what Congress is right now. 526 00:26:13,520 --> 00:26:15,880 Speaker 4: And I think that's really what you have I do think, 527 00:26:15,960 --> 00:26:18,639 Speaker 4: and based on your question, I think the same. I 528 00:26:18,680 --> 00:26:21,600 Speaker 4: think they're really missing Kevin McCarthy right now, and think 529 00:26:21,640 --> 00:26:25,320 Speaker 4: about that, right after ousting him and having Mike Johnson, 530 00:26:25,400 --> 00:26:28,320 Speaker 4: you know, installed a speaker. I think the saying even 531 00:26:28,359 --> 00:26:31,040 Speaker 4: though they weren't happy with McCarthy in many many ways, 532 00:26:31,080 --> 00:26:33,840 Speaker 4: and McCarthy was also rolling over a bit himself, I 533 00:26:33,920 --> 00:26:36,520 Speaker 4: think they're looking back at fondness and the chaos of 534 00:26:36,560 --> 00:26:39,000 Speaker 4: the McCarthy you know era, when you're looking at what's 535 00:26:39,000 --> 00:26:41,240 Speaker 4: going on with Mike Johnson. And yeah, I think the 536 00:26:41,400 --> 00:26:44,640 Speaker 4: less that he does to further any type of bipartisan deal, 537 00:26:44,760 --> 00:26:47,680 Speaker 4: the stronger he is a speaker. Based on the way 538 00:26:47,720 --> 00:26:50,800 Speaker 4: that the House is structured right now, I want. 539 00:26:50,680 --> 00:26:53,280 Speaker 2: To remind our viewers and listeners of your involvement in 540 00:26:53,400 --> 00:26:57,760 Speaker 2: the January sixth committee. Denver in your book, Denver is 541 00:26:58,080 --> 00:27:01,280 Speaker 2: author co author of the brief The Untold Story of 542 00:27:01,359 --> 00:27:05,119 Speaker 2: the Investigation into January sixth. Last hour, we received a 543 00:27:05,160 --> 00:27:10,040 Speaker 2: headline that Peter Navarro has been sentenced to four months 544 00:27:10,240 --> 00:27:16,080 Speaker 2: in prison here on two contempt of Congress charges related 545 00:27:16,240 --> 00:27:20,200 Speaker 2: to the January sixth investigation into the twenty twenty elections. 546 00:27:20,800 --> 00:27:24,480 Speaker 2: What does that mean when you finally hear resolution like this. 547 00:27:24,640 --> 00:27:26,320 Speaker 2: I'm sure he'll appeal it, but what does it mean 548 00:27:26,400 --> 00:27:29,480 Speaker 2: for the others who buy? Yeah, I mean they're sub poenas. 549 00:27:29,560 --> 00:27:29,720 Speaker 1: Yeah. 550 00:27:30,320 --> 00:27:32,480 Speaker 4: Yeah, Bannon is still waiting. You know, he's still an 551 00:27:32,520 --> 00:27:34,879 Speaker 4: appeal right now for his four month sentence. But I 552 00:27:34,920 --> 00:27:36,800 Speaker 4: don't with Peter Navarro. I don't think it could happen 553 00:27:36,840 --> 00:27:39,040 Speaker 4: to a better fruit loop. I think, you know, you're 554 00:27:39,040 --> 00:27:41,520 Speaker 4: talking about somebody who wrote The Immaculate Deception, which is 555 00:27:41,560 --> 00:27:43,960 Speaker 4: one of the most nutty. I would say, stop the 556 00:27:44,000 --> 00:27:46,920 Speaker 4: steal publications you could ever write. I think Genny Thomas 557 00:27:47,080 --> 00:27:49,360 Speaker 4: used that, you know, to help with her text messages. 558 00:27:49,720 --> 00:27:51,320 Speaker 4: He's also the person who came up with the Green 559 00:27:51,400 --> 00:27:53,320 Speaker 4: Bay sweep or he said he did. I mean obviously 560 00:27:53,359 --> 00:27:55,679 Speaker 4: stopped the steal was started by Rogerstone in twenty sixteen. 561 00:27:55,760 --> 00:27:58,560 Speaker 4: Let's not fool ourselves. Number is going to take credit 562 00:27:58,600 --> 00:28:01,160 Speaker 4: for anything. But you have really an election denier who 563 00:28:01,200 --> 00:28:04,040 Speaker 4: did stand up Congress, who did ignore subpoena, and somebody 564 00:28:04,080 --> 00:28:06,320 Speaker 4: who got what he deserved. But listen, you can't give 565 00:28:06,400 --> 00:28:09,040 Speaker 4: jail time for being insane or he get life, but 566 00:28:09,200 --> 00:28:11,119 Speaker 4: you can give jail time for contempt of Congress. And 567 00:28:11,160 --> 00:28:13,399 Speaker 4: that's why I got the four months. And you know 568 00:28:13,440 --> 00:28:15,320 Speaker 4: a lot of people really listen to what he was saying. 569 00:28:15,359 --> 00:28:17,560 Speaker 4: And really, Peter Navarro again, couldn't happen to a better 570 00:28:17,600 --> 00:28:18,080 Speaker 4: fruit loop? 571 00:28:19,880 --> 00:28:22,280 Speaker 6: Well talk about election denying. Of course, Joe and I 572 00:28:22,440 --> 00:28:25,679 Speaker 6: just returned from New Hampshire where at his victory party 573 00:28:25,960 --> 00:28:29,880 Speaker 6: in New Hampshire, Trump's falsely claimed that he won New 574 00:28:29,880 --> 00:28:33,160 Speaker 6: Hampshire in the twenty twenty election. He has continually reiterated 575 00:28:33,320 --> 00:28:35,720 Speaker 6: this kind of thing, and yet he is the presumptive 576 00:28:35,760 --> 00:28:39,280 Speaker 6: at this point Republican nominee with more than fifty percent 577 00:28:39,480 --> 00:28:43,680 Speaker 6: support in both Iowa and New Hampshire. What does that 578 00:28:43,960 --> 00:28:46,800 Speaker 6: say about how these next nine and a half months 579 00:28:46,880 --> 00:28:49,360 Speaker 6: until the general election are going to go. Does it 580 00:28:49,840 --> 00:28:51,560 Speaker 6: Does it even matter his language? 581 00:28:52,520 --> 00:28:56,280 Speaker 4: No? No, I think that's what should bother so many 582 00:28:56,320 --> 00:28:59,240 Speaker 4: Americans that his language really doesn't matter. I mean, you're 583 00:28:59,240 --> 00:29:04,680 Speaker 4: talking about somebody who's either you know, lying, stupid or both. 584 00:29:05,520 --> 00:29:05,800 Speaker 1: That's it. 585 00:29:06,080 --> 00:29:08,800 Speaker 4: There's really no other way to go. And that's but 586 00:29:09,000 --> 00:29:12,440 Speaker 4: again his supporters don't care because it all goes back 587 00:29:12,480 --> 00:29:16,680 Speaker 4: into this narrative of deep state of globalists, of the 588 00:29:16,720 --> 00:29:19,640 Speaker 4: election being stolen, all the conspiracy theories you can think 589 00:29:19,680 --> 00:29:21,720 Speaker 4: of surrounding stop to steal. And if you think the 590 00:29:21,760 --> 00:29:24,360 Speaker 4: people that are supporting that where they're polling saying that 591 00:29:24,400 --> 00:29:26,280 Speaker 4: the election was still stolen, you know, these are people 592 00:29:26,280 --> 00:29:29,320 Speaker 4: who actually believe that Italian satellites, you know, actually changed 593 00:29:29,400 --> 00:29:33,600 Speaker 4: votes for the Hugo Shavas Venezuelan government, actually broke the algorithm, 594 00:29:34,080 --> 00:29:36,360 Speaker 4: or that there's you know, let's be honest, that there's 595 00:29:36,400 --> 00:29:39,160 Speaker 4: crazy people burning ballots in a yard. So no, the 596 00:29:39,280 --> 00:29:40,120 Speaker 4: language doesn't matter. 597 00:29:41,640 --> 00:29:44,640 Speaker 2: Denver Riggleman, never one to mince words. 598 00:29:44,680 --> 00:29:45,160 Speaker 1: We thank you. 599 00:29:45,320 --> 00:29:50,280 Speaker 2: It's Denver, unchained, former Republican congressman, the founder of Rigged Security. 600 00:29:50,640 --> 00:29:55,080 Speaker 2: I'm Joe Matthew alongside Kaylee Lines in Washington This is Bloomberg. 601 00:29:58,640 --> 00:30:02,160 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 602 00:30:02,280 --> 00:30:05,320 Speaker 1: Just Live weekdays at noon Eastern on Apocarplay and then 603 00:30:05,360 --> 00:30:08,800 Speaker 1: Prouno with the Bloomberg Business App. Listen on demand wherever 604 00:30:08,880 --> 00:30:12,440 Speaker 1: you get your podcasts, or watch us live on YouTube. 605 00:30:15,000 --> 00:30:16,920 Speaker 6: Running us through the market action on this day when 606 00:30:16,920 --> 00:30:19,560 Speaker 6: we got a boatload of economic data. Welcome back to 607 00:30:19,640 --> 00:30:22,680 Speaker 6: Balance of Power on both Bloomberg Television and radio, where 608 00:30:22,720 --> 00:30:25,200 Speaker 6: Joe We've talked extensively about the issue of the border 609 00:30:25,280 --> 00:30:27,040 Speaker 6: on this program because we know that is top of 610 00:30:27,120 --> 00:30:29,800 Speaker 6: mind for voters, but so too is the health of 611 00:30:29,840 --> 00:30:32,280 Speaker 6: the US economy. And if you look at today's data, 612 00:30:32,640 --> 00:30:36,040 Speaker 6: it's looking pretty healthy, that's for sure. Advanced read of 613 00:30:36,160 --> 00:30:39,480 Speaker 6: GDP for the fourth quarter three point three percent. The 614 00:30:39,520 --> 00:30:42,280 Speaker 6: average economists forecast was down at two percent. 615 00:30:42,680 --> 00:30:43,720 Speaker 1: So not a recession. 616 00:30:44,320 --> 00:30:45,480 Speaker 6: Doesn't look like one. 617 00:30:45,400 --> 00:30:48,200 Speaker 2: Okay, because we keep hearing that we're about to have 618 00:30:48,240 --> 00:30:51,400 Speaker 2: a recession, and I've been hearing that for well two 619 00:30:51,480 --> 00:30:56,040 Speaker 2: years now, that's right, and the data still topping expectations. 620 00:30:56,440 --> 00:30:57,800 Speaker 2: White House got to be happy about this. 621 00:30:58,200 --> 00:30:58,320 Speaker 4: Well. 622 00:30:58,360 --> 00:31:00,800 Speaker 6: They put out a statement that would suggest that yes, 623 00:31:00,920 --> 00:31:02,120 Speaker 6: they did flexing. 624 00:31:01,800 --> 00:31:03,760 Speaker 2: That growth is still up at a timed email and 625 00:31:03,880 --> 00:31:08,200 Speaker 2: inflation is down three point three Pretty remarkable. Here you 626 00:31:08,240 --> 00:31:10,959 Speaker 2: can add more. You said there was other data here 627 00:31:11,000 --> 00:31:13,760 Speaker 2: add personal spending. This is interesting now, So if infla, 628 00:31:13,840 --> 00:31:16,640 Speaker 2: are we in a world now we're inflation cools and 629 00:31:16,720 --> 00:31:19,840 Speaker 2: it actually stokes growth because people can afford more. 630 00:31:20,360 --> 00:31:23,080 Speaker 6: Well, looking at the data, that is kind of an 631 00:31:23,080 --> 00:31:24,720 Speaker 6: assumption you could make, because when you look at the 632 00:31:24,880 --> 00:31:28,920 Speaker 6: GDB Price Index, which essentially is an indicator of price pressures, 633 00:31:29,040 --> 00:31:32,280 Speaker 6: that was lower than expected one point five percent on 634 00:31:32,320 --> 00:31:35,280 Speaker 6: the headline quarter on quarter, two percent, you know, two 635 00:31:35,360 --> 00:31:37,480 Speaker 6: percents the target, right, ooh, a. 636 00:31:37,480 --> 00:31:39,440 Speaker 2: Little alarm bell just went off. I just think it's 637 00:31:39,480 --> 00:31:42,240 Speaker 2: interesting though, because the conventional wisdom also is, hey, you 638 00:31:42,360 --> 00:31:45,120 Speaker 2: might want interest rate cuts, but once that starts happening, 639 00:31:45,200 --> 00:31:47,840 Speaker 2: that's because we're slowing, and maybe we're in a world 640 00:31:47,840 --> 00:31:48,520 Speaker 2: where we get both. 641 00:31:49,080 --> 00:31:51,440 Speaker 6: Maybe let's put that question now to barat Rama Murti, 642 00:31:51,480 --> 00:31:53,360 Speaker 6: who was joining us. He, of course, was former Deputy 643 00:31:53,440 --> 00:31:56,160 Speaker 6: Director of the National Economic Council and now is Senior 644 00:31:56,200 --> 00:31:59,920 Speaker 6: Advisor for Economic Strategy at the American Economic Liberties Project. 645 00:32:00,280 --> 00:32:00,560 Speaker 3: BROT. 646 00:32:00,600 --> 00:32:02,400 Speaker 6: Great to see you. You're here in studio with US 647 00:32:02,400 --> 00:32:05,880 Speaker 6: which is super exciting. What does this data signal to you? 648 00:32:06,920 --> 00:32:09,720 Speaker 6: Is it ever going to cool down the US economy? 649 00:32:10,360 --> 00:32:12,920 Speaker 8: Look, there's no real science of slowing down in any 650 00:32:12,960 --> 00:32:15,280 Speaker 8: of the data. You look not only at the incredibly 651 00:32:15,320 --> 00:32:18,120 Speaker 8: strong GDP number today, which is really a blockbuster number. 652 00:32:18,520 --> 00:32:22,200 Speaker 8: You look at recent data on retail sales, on consumer spending, 653 00:32:22,760 --> 00:32:25,320 Speaker 8: data on business investment. All of it is painting a 654 00:32:25,520 --> 00:32:28,560 Speaker 8: very rosy picture of the strength and the economy. There 655 00:32:28,600 --> 00:32:31,920 Speaker 8: really isn't a lot of weakness, As you noted. The 656 00:32:32,040 --> 00:32:34,240 Speaker 8: key question now, I think, is how is the FAD 657 00:32:34,320 --> 00:32:37,160 Speaker 8: going to respond to all of this? To me, at least, 658 00:32:37,760 --> 00:32:40,400 Speaker 8: there's a pretty clear case for starting cuts in March. 659 00:32:40,880 --> 00:32:43,960 Speaker 8: I think that right now the balance between inflation and 660 00:32:44,200 --> 00:32:48,280 Speaker 8: unemployment is pretty finely balanced. There are some minor signs 661 00:32:48,320 --> 00:32:50,280 Speaker 8: of weakening in the labor market. If you look at 662 00:32:51,000 --> 00:32:53,080 Speaker 8: the hiring rate, that's starting to slow down a little bit. 663 00:32:53,680 --> 00:32:57,480 Speaker 8: Initial unemployment claims today came in slightly above what we 664 00:32:57,560 --> 00:33:00,960 Speaker 8: were anticipating, So nothing to panic about yet. But again, 665 00:33:01,120 --> 00:33:03,920 Speaker 8: given that monetary policy operates with a lag and the 666 00:33:04,000 --> 00:33:06,760 Speaker 8: FED is already projecting several cuts this year, in my view, 667 00:33:06,840 --> 00:33:08,040 Speaker 8: it's best to get on with it and. 668 00:33:08,080 --> 00:33:08,680 Speaker 4: Start in March. 669 00:33:09,880 --> 00:33:13,360 Speaker 2: It just seems like forecasting is broken. I don't know 670 00:33:13,440 --> 00:33:15,920 Speaker 2: if when you were helping to run the National Economic Council, 671 00:33:15,960 --> 00:33:18,720 Speaker 2: if you had better internal data and you look at 672 00:33:18,760 --> 00:33:21,800 Speaker 2: wall straight and laugh when they'd be wrong every month 673 00:33:21,920 --> 00:33:25,480 Speaker 2: or quarter. But is that a post COVID phenomenon? Is 674 00:33:25,520 --> 00:33:27,360 Speaker 2: that as simple as what it is? How come nobody 675 00:33:27,400 --> 00:33:30,040 Speaker 2: can get their arms around what's about to happen? 676 00:33:30,560 --> 00:33:30,959 Speaker 1: Yeah? I think. 677 00:33:31,000 --> 00:33:34,480 Speaker 8: Look, there is a lot of reliance on economic modeling, 678 00:33:34,520 --> 00:33:37,000 Speaker 8: which makes sense, but we should all be relatively humble 679 00:33:37,040 --> 00:33:39,400 Speaker 8: about it in the sense that we're not drawing on 680 00:33:39,440 --> 00:33:41,440 Speaker 8: a whole lot of data. We're not drawing on a 681 00:33:41,480 --> 00:33:44,600 Speaker 8: whole very large sample size. When we're looking at recessions. 682 00:33:44,640 --> 00:33:46,600 Speaker 8: There's only been a few dozen of them in the 683 00:33:46,760 --> 00:33:49,920 Speaker 8: entire recorded history of the United States. And it's important 684 00:33:49,960 --> 00:33:53,120 Speaker 8: to remember that the underlying cause of this particular recession, 685 00:33:53,520 --> 00:33:55,640 Speaker 8: it wasn't like the financial crisis in two thousand and eight. 686 00:33:55,680 --> 00:33:58,960 Speaker 8: It was a once in a three generation pandemic. And 687 00:33:59,080 --> 00:34:01,280 Speaker 8: I think in many ways is if you look at 688 00:34:01,320 --> 00:34:04,000 Speaker 8: the way that the economy responded after the Spanish Flu 689 00:34:04,480 --> 00:34:06,600 Speaker 8: about one hundred years ago. If you even go back 690 00:34:06,640 --> 00:34:08,480 Speaker 8: and look at some data about what happened after the 691 00:34:08,520 --> 00:34:12,480 Speaker 8: Great Plague hundreds of years ago. There's really interesting analysis 692 00:34:12,520 --> 00:34:15,480 Speaker 8: about how this type of recovery that we're seeing is 693 00:34:15,520 --> 00:34:17,400 Speaker 8: what you would anticipate. So you actually have to go 694 00:34:17,480 --> 00:34:20,239 Speaker 8: back to these historical models that are more telling than 695 00:34:20,280 --> 00:34:21,000 Speaker 8: your standard meta. 696 00:34:21,080 --> 00:34:23,680 Speaker 2: Are you guys sitting down with spreadsheets across the floor 697 00:34:23,760 --> 00:34:24,279 Speaker 2: looking at. 698 00:34:24,200 --> 00:34:26,520 Speaker 8: That, Yeah, we would look. There was a lot of 699 00:34:26,680 --> 00:34:30,399 Speaker 8: underlying belief that, given the fact that COVID was such 700 00:34:30,440 --> 00:34:33,320 Speaker 8: a disruption to the supply side of the economy, and 701 00:34:33,400 --> 00:34:36,440 Speaker 8: that we had these clear evidence of supply chain issues, 702 00:34:36,560 --> 00:34:39,560 Speaker 8: clear evidence of supply restrictions, that as long as we 703 00:34:39,640 --> 00:34:43,640 Speaker 8: stabilized consumer demand, that supply would come back to match 704 00:34:43,680 --> 00:34:45,760 Speaker 8: the level of demand and we could see a reduction 705 00:34:45,840 --> 00:34:49,000 Speaker 8: in inflation without a massive increase in unemployment. The President 706 00:34:49,080 --> 00:34:51,640 Speaker 8: was saying that Secretary Yellen was making that claim that 707 00:34:51,760 --> 00:34:54,040 Speaker 8: I think given the data we've seen over the last year, 708 00:34:54,120 --> 00:34:55,280 Speaker 8: they were very clearly correct. 709 00:34:55,840 --> 00:34:57,759 Speaker 6: Well, when we talk about consumer demand and what can 710 00:34:57,840 --> 00:35:00,680 Speaker 6: catalyze consumer demand, what do you often hear from those 711 00:35:00,719 --> 00:35:02,239 Speaker 6: on the Republican side. We heard a lot of this 712 00:35:02,360 --> 00:35:04,200 Speaker 6: in Iowa and New Hampshire over the course of the 713 00:35:04,280 --> 00:35:06,680 Speaker 6: last several weeks, as there's been too much spending, too 714 00:35:06,800 --> 00:35:08,640 Speaker 6: much of a fiscal impulse, and that is what has 715 00:35:08,760 --> 00:35:12,359 Speaker 6: led to these inflationary forces that have been so hard 716 00:35:12,440 --> 00:35:15,959 Speaker 6: to rein back in this economy. That argument isn't fundamentally wrong, 717 00:35:16,080 --> 00:35:18,800 Speaker 6: is it, especially as we're heading into a new spending 718 00:35:18,880 --> 00:35:20,520 Speaker 6: battle right now as we speak. 719 00:35:20,960 --> 00:35:22,880 Speaker 8: I mean, look, to me, it's very instructive to look 720 00:35:22,880 --> 00:35:25,279 Speaker 8: at what happened in other countries because we ran a 721 00:35:25,320 --> 00:35:29,320 Speaker 8: controlled experiment. Other countries, whether it was the UK, the EU, 722 00:35:29,800 --> 00:35:32,600 Speaker 8: they didn't far less fiscal stimulus than the United States did. 723 00:35:33,000 --> 00:35:35,520 Speaker 8: They got equal to or as much or more inflation 724 00:35:35,680 --> 00:35:37,759 Speaker 8: than the United States did, but they got a whole 725 00:35:37,800 --> 00:35:40,640 Speaker 8: heck of a lot less growth. They had much worse 726 00:35:40,680 --> 00:35:43,360 Speaker 8: performance on wages, And the bottom line was that the 727 00:35:43,440 --> 00:35:46,600 Speaker 8: residents of those places came out further behind because they 728 00:35:46,640 --> 00:35:49,520 Speaker 8: didn't see wages rise to meet the global inflation that 729 00:35:49,560 --> 00:35:51,799 Speaker 8: we had coming out of the pandemic. If you look 730 00:35:51,840 --> 00:35:55,920 Speaker 8: at analyses of how much additional inflation the US fiscal 731 00:35:56,000 --> 00:35:58,719 Speaker 8: response caused, it was fairly marginal. It was maybe a 732 00:35:58,760 --> 00:36:01,359 Speaker 8: percentage point or two, and so instead of nine percent 733 00:36:01,400 --> 00:36:04,799 Speaker 8: inflation let's say we had seven percent inflation. The flip 734 00:36:04,880 --> 00:36:06,600 Speaker 8: side of that is that we would have had far less, 735 00:36:07,400 --> 00:36:10,520 Speaker 8: far less employment, far less growth, far less wage growth, 736 00:36:10,560 --> 00:36:12,759 Speaker 8: and I think the American people would have come out 737 00:36:13,560 --> 00:36:15,120 Speaker 8: on the negative side of that equation. 738 00:36:15,680 --> 00:36:17,960 Speaker 6: On the subject of wage growth, that also has to 739 00:36:18,320 --> 00:36:22,400 Speaker 6: tie into labor in the labor movement of which President 740 00:36:22,480 --> 00:36:24,640 Speaker 6: Biden has been very supportive. In fact, just yesterday he 741 00:36:24,719 --> 00:36:28,080 Speaker 6: finally secured the endorsement of the United Auto Workers after 742 00:36:28,280 --> 00:36:31,680 Speaker 6: really pushing for those pretty high wage demands that those 743 00:36:31,719 --> 00:36:34,279 Speaker 6: workers had. Do you see any risk at all that 744 00:36:34,520 --> 00:36:38,080 Speaker 6: what has been unleashed by that could continue? Because we 745 00:36:38,200 --> 00:36:40,320 Speaker 6: know that the Fed shore is watching, you know, the 746 00:36:40,680 --> 00:36:42,719 Speaker 6: PCEE data and all of that stuff. Sorry that was 747 00:36:42,719 --> 00:36:45,320 Speaker 6: a loud clap for everyone listening on radio. But is 748 00:36:45,360 --> 00:36:47,600 Speaker 6: there a risk of the kind of that wage price 749 00:36:47,640 --> 00:36:48,840 Speaker 6: spiral that could still kick in? 750 00:36:49,560 --> 00:36:51,359 Speaker 8: I don't think there's a very high risk. I mean, look, 751 00:36:51,440 --> 00:36:53,680 Speaker 8: there is a lot of capacity in this economy for 752 00:36:53,760 --> 00:36:57,040 Speaker 8: higher wages. And one of the great things about what 753 00:36:57,160 --> 00:36:59,640 Speaker 8: happened with the UAW in their fight for a fair 754 00:36:59,719 --> 00:37:03,760 Speaker 8: wage package is that after the unionized workforce saw wage gains, 755 00:37:04,040 --> 00:37:06,520 Speaker 8: you saw all these non unionized places at Toyota and 756 00:37:06,600 --> 00:37:09,920 Speaker 8: elsewhere respond by having to raise their wages too. And look, 757 00:37:10,000 --> 00:37:12,239 Speaker 8: this is an administration I know for a fact that's 758 00:37:12,320 --> 00:37:15,600 Speaker 8: never going to look down at wage gains. They believe 759 00:37:15,680 --> 00:37:18,439 Speaker 8: that it is important that workers get a fair share. 760 00:37:18,760 --> 00:37:21,640 Speaker 8: And there's plenty of profits to draw on for people 761 00:37:21,680 --> 00:37:23,920 Speaker 8: to get paid fairly and for companies to do well too. 762 00:37:24,160 --> 00:37:27,400 Speaker 8: I mean, what we have right now is an economy 763 00:37:27,480 --> 00:37:29,400 Speaker 8: that's not only growing at the top line, but a 764 00:37:29,520 --> 00:37:32,719 Speaker 8: key factor here is that productivity is growing very quickly too. 765 00:37:32,760 --> 00:37:35,320 Speaker 8: And productivity is really the silver bullet here, because you 766 00:37:35,440 --> 00:37:38,279 Speaker 8: can have high wage gains and high growth and low 767 00:37:38,360 --> 00:37:40,960 Speaker 8: inflation as long as productivity continues to grow at a 768 00:37:41,080 --> 00:37:42,839 Speaker 8: rapid rate. And that's what we've seen over the last 769 00:37:42,880 --> 00:37:43,399 Speaker 8: several months. 770 00:37:43,880 --> 00:37:46,400 Speaker 2: Fascinating conversation and great to have you back with us, 771 00:37:46,400 --> 00:37:50,960 Speaker 2: brought Ramamready, let's stay in touch as we apparently walk 772 00:37:51,000 --> 00:37:53,120 Speaker 2: our way through a year without a recession. I mean, 773 00:37:53,160 --> 00:37:55,879 Speaker 2: if we're not talking about this yet, Kaylee, you wonder 774 00:37:55,920 --> 00:37:56,960 Speaker 2: what would bring it well. 775 00:37:57,200 --> 00:38:01,200 Speaker 6: It is only January the general electionist nine and a 776 00:38:01,239 --> 00:38:01,919 Speaker 6: half months away. 777 00:38:02,120 --> 00:38:04,040 Speaker 2: We're closing things down a little early. All the way, 778 00:38:04,080 --> 00:38:07,080 Speaker 2: across rock. Great to see you. Welcome back as always 779 00:38:07,280 --> 00:38:11,360 Speaker 2: to Bloomberg Balance of Power. I'm Joe Matthew alongside Kaylee Lions. 780 00:38:12,239 --> 00:38:15,440 Speaker 2: Thanks for listening to the Balance of Power podcast. Make 781 00:38:15,480 --> 00:38:18,440 Speaker 2: sure to subscribe if you haven't already an Apple, Spotify, 782 00:38:18,520 --> 00:38:21,120 Speaker 2: or wherever you get your podcasts, and you can find 783 00:38:21,200 --> 00:38:24,400 Speaker 2: us live every weekday from Washington, DC at noontime Eastern 784 00:38:24,760 --> 00:38:25,920 Speaker 2: at Bloomberg dot com.