Congress Nears 2025 Finish, Zelenskiy Hints At US Guarantees

Summary

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Balance of Power – Congress Nears 2025 Finish, Zelenskiy Hints At US Guarantees

Podcast: Bloomberg’s Balance of Power
Hosts: Joe Mathieu, Kailey Leinz
Date: December 15, 2025

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Episode Overview

This episode focuses on the high-stakes conclusion of the 2025 Congressional calendar, with lawmakers facing critical decisions amid time constraints. The discussion centers on two core topics:

• The potentially catastrophic expiration of enhanced Obamacare subsidies ("the cliff"), partisan divisions over health care reform, and legislative maneuvers in Congress;
• The shifting prospects for peace in Ukraine, including President Zelensky's signals on NATO, US and European roles in security guarantees, and the geopolitical repercussions of current negotiations.

The show features insight from Bloomberg’s congressional reporting, expert commentary from Heather Conley (American Enterprise Institute), and political analysis by Rick Davis and Jeannie Shan Zaino.

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Key Discussion Points & Insights

1. The Looming Obamacare Subsidy "Cliff" (00:56–07:18, 18:03–29:21)

Legislative Deadlock and Congressional Maneuvers

• Congress has only five working days left in 2025, with the expiration of enhanced Obamacare subsidies at month’s end (00:56).
• Despite efforts, a deal to extend the subsidies is highly unlikely before year’s end. Lawmakers expect premiums to rise and coverage loss for some Americans due to this lapse (03:20–04:25).
• House moderates may push for a bipartisan plan or a "discharge petition"—a procedural move to bring a bill to the floor without Speaker support (04:25).
• The National Defense Authorization Act (NDAA) will pass the Senate, and a large slate of Trump White House nominations are likely to be confirmed, but health care remains unresolved.

Quote:

"My bet would be that, you know, the pretty sure bet it will not be extended before the end of the year."
— Eric Watson, Bloomberg Congressional Reporter (03:59)

Discharge Petition Dynamics

• Discharge petitions have gained prominence as a mechanism for circumventing leadership deadlock. These have succeeded (e.g., federal worker rights, Epstein file release), though it’s a rare affront to the Speaker’s authority (04:48–05:30).

Policy and Premiums—Nuances and Implications

• Republican Rep. Troy Downing (MT) argues subsidy extension may not stop rate hikes, as premium increases are already in place for 2026 due to insurance filing timelines (19:18–22:20).
• He questions the efficacy of retroactive extensions, outlining the administrative chaos and market confusion it could unleash (20:23).
• Downing and panelists acknowledge that rising health care costs, not just subsidy lapses, drive premium increases and market churn.

Quote:

"If the enhanced premium tax credits, if the Obamacare tax credits expire, rates have gone up. If they get extended, rates have gone up, it's the same thing no matter what."
— Troy Downing, Congressman (19:58)

• HSAs (Health Savings Accounts) are discussed as a longer-term, pro-consumer solution, but are not part of this year’s legislative effort (23:28).

Political Panel: Pessimism and Policy Gridlock

• Rick Davis notes the fractious Republican approach, with multiple, uncoordinated bills and little hope for a major fix (28:13–29:21).
• Jeannie Shan Zaino highlights the stunning political inertia, even as health care affordability tops voter concerns.

Quote:

"Yeah, I believe he said we've already gone off the cliff. It's too late. There's nothing can be done. The costs are going up."
— Jeannie Shan Zaino (29:32)

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2. Ukraine Peace Talks – Concessions, Guarantees, and the Role of the US (07:18–17:15, 31:05–43:17)

US and European Security Guarantees

• President Zelensky hints at abandoning Ukraine’s immediate bid to join NATO, a significant concession, in exchange for “NATO-like Article 5 security guarantees” from the US and Europe (08:54–10:14).
• Rumors suggest the US may propose formalizing guarantees through Senate ratification, but European cooperation and enforcement doubts persist.
• Main sticking points:
  • The nature and enforceability of US/EU security guarantees
  • Territorial concessions (especially in Donbas), with suggestions Zelensky may allow a local referendum (11:11)

Quote:

"What Ukrainians are asking for is NATO like Article 5 security guarantees. And that is one of the main sticking points for these conversations."
— Heather Conley (08:54)

• However, ambiguity remains about what would trigger military intervention and how hybrid warfare might bypass these guarantees (10:58).

Risks, Russian Position, and Strategic Realities

• Russia’s constitutional claim to occupied Ukrainian territory makes concession especially difficult (11:29).
• A demilitarized zone is floated as a hypothetical—but past monitoring efforts have shown limited effectiveness (12:03).
• As talks conclude, panelists caution that without Russian reciprocity, peace remains elusive; potential Ukrainian territorial concessions would require constitutional changes and a national referendum (12:35–13:54).

Quote:

"So you cave, you capitulate to the Russian position and that has... it's absolutely..."
— Heather Conley (14:00)

• The US national security strategy, critiqued for omitting clear adversary identification, signals a reluctance to confront Russia directly (14:55).

Geopolitical Implications and US Leadership

• Discussion turns to China’s lessons from the US-Ukraine approach, with the argument that economic stability appears to trump deterrence—potentially emboldening aggression elsewhere (15:41).
• Both panelists and guests note Trump’s focus on economic normalization with Russia, suggesting transactional priorities over traditional alliance-building and deterrence (16:05, 39:41).

Political Panel: Realism, Reservations and Fractured Alliances

• Both Rick Davis and Jeannie Shan Zaino express skepticism about an imminent peace—despite more talks, Russia’s demands remain maximalist, and Ukraine’s willingness to concede stems from battlefield losses (33:08–36:25).
• The bilateral Article 5-style guarantee approach is seen as a poor substitute for NATO, leaving Ukraine with "multiple caveats" and no clear path to durable security (33:08–34:26).

Quote:

"It's really hard to imagine a scenario that they get peace without giving everything that Vladimir Putin wants to Russia. And I don't see anybody at the position now of saying yes to that deal."
— Rick Davis (37:26)

• Critique of the Trump administration’s pivot from Europe toward Latin America, and a preference to let regional powers manage their own conflicts, leaves European allies isolated and less capable (37:56–41:54).

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Notable Quotes & Memorable Moments

• On Congressional gridlock:
  "We're like Thelma and Louise. We're going off the cliff together." — Joe Mathieu (30:03)

• On the future of the Ukraine conflict:
  "Is that sustainable? If you're framed as capitulating, it's not sustainable." — Joe Mathieu (14:05)

• On Western resolve:
  "We are closing our eyes to this. And if in fact, the United States provides security guarantees, we are inserting ourselves in this. So this is a moment, for clarity, of knowing who the aggressor is, who is challenging the United States and our European partners and preparing for potential conflict." — Heather Conley (14:55)

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Timestamps for Key Segments

• 00:56–02:28: Congressional calendar crunch, “the cliff” on Obamacare subsidies explained.
• 03:20–04:25: No deal likely this year; possibility of January extensions and the role of discharge petitions.
• 05:30–06:53: War powers debate; NDAA implications for Venezuela and outbound investment to China and Russia.
• 07:18–13:54: Ukraine peace talks update with Heather Conley—security guarantees, territorial concessions, realism about Russian aims.
• 18:03–23:28: Rep. Troy Downing on premiums, the mechanics of extending tax credits, and how ACA market issues fuel rising costs.
• 28:13–30:03: Political panel on fractured Republican strategy, likely failure of new legislation, and lack of leadership.
• 31:05–41:54: Ukraine peace prospects revisited—panelists dissect Zelensky’s concessions, Russian intransigence, EU/US relations, and the risk of US disengagement.

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Conclusion

The episode underscores the bitterly divided state of Washington as Congress limps toward year-end, with critical health care coverage hanging in the balance and little hope for last-minute breakthroughs. Simultaneously, US foreign policy faces a turning point, as Ukraine’s precarious position and the evolving role of American and European security guarantees reveal deep geopolitical rifts and strategic drift.

Through expert voices and candid debate, "Balance of Power" clarifies just how much is at stake for both domestic policy and global order as 2025 draws to a close.

Transcript

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[Joe Matthew]

With a very short schedule left on Capitol Hill. And that's where we're going to start our conversation as we prepare to look abroad on peace talks involving Ukraine as well. We'll do that with Heather Conley in just a moment. She's with us in studio today from the American Enterprise Institute. Only 5 working days left this year, though, if you're a member of Congress. And of course, there's something that's being called a cliff at the end of this month. That's when Obamacare enhanced Obamacare subsidies put in place during COVID are set to expire. The very matter that led to the longest shutdown in government history has still not been resolved. They are set to expire at the end of this month. And if you talk to anybody who knows what's happening in Washington, they will tell you we're going over the cliff. That will not, however, stop lawmakers from taking a couple of swings at the ball. There will be voting this week, more realistic voting when it comes to the ndaa, the National Defense Authorization Act. It's passed the House already and all 3,000 pages are set to pass the Senate at some point this week. Senate will also clear a package of about 100 nominees and might do some individual voting on some of the other nominations coming from the Trump White House. It's what's happening in the House of Representatives that's going to be interesting here because remember, Speaker Johnson promised to vote on a Republican health care package. It emerged on Friday night as we were all heading home for a very chilly weekend. There may also be a separate vote on a bipartisan plan that would help to extend the Obamacare subsidies. Speaker Johnson speaking about this at the end of last week.

[Rick Davis]

Listen, when the Democrats talk about health.

[Jeannie Shan Zaino]

Care affordability, okay, this catchphrase that they have.

[Rick Davis]

They are talking about one thing and one thing only. They are talking about continuing handouts to big insurance companies. They do not want to. They do not want. They have no ideas. They have no desire to fix the.

[Jeannie Shan Zaino]

Broken system they created. They just want to subsidize it. And subsidy is a big word.

[Rick Davis]

It means they are taking taxpayer dollars.

[Jeannie Shan Zaino]

And funding a broken system.

[Joe Matthew]

I guess subsidy is a big word even here at Bloomberg, at least the weight that it carries. Ask Eric Watson. He's been covering this on the Daily since before the government shut down, having had the same conversation every day and without a solution in sight. We bring him in now. Bloomberg Congressional Reporter live from Capitol Hill. Eric, is there any chance at lawmakers saving this or the cliff? Is the cliff and we're going over it, right?

[Eric Watson]

I don't think we'll see Obamacare subsidies extended before the end of the year. There's still a small chance on monitoring that something comes together in January. What we're watching is House moderate Republicans who are trying to get this amendment vote on their sort of bipartisan plan to extend Obamacare either one or two years, depending on the version that we see. We have yet to see that version. If they don't get a vote, if that vote fails, there's still the option for them to sign on to a discharge petition. This is a way of forcing a vote on the House floor put forward by Democrats. Democrats only need a handful of signatories and then that can start a clock where we come back in January and see a vote. Now, as you notice already, people will have seen their Obamacare premiums go up. But there's a chance that, you know, that same bill could extend the open enrollment period. You'll still see people drop off or lose their insurance. But there is potentially a chance, you know, the Senate is going to look to go out of town on Thursday. This Runway is already greased for them to, to leave. And as you mentioned, the national defense bill is on the, on the docket. So I just don't see this. My bet would be that, you know, the pretty sure bet it will not be extended before the end of the year.

[Joe Matthew]

Now, this is what the end of the year looks like on Capitol Hill, Eric. Not a lot, it seems, will get done here, but I'm compelled by what you just mentioned because if this Republican plan in the House does not pass with the support of moderates, will this will the moderates then turn to that Democratic discharge petition? It's got 214 signatures on it Eric, it wouldn't take that many to force this to the floor.

[Eric Watson]

That's right. And discharge position is a really good gain steam. This is a very rare, you know, it's an affront of the authority of the speaker, but we've seen them really gain steam here in the House in the last couple of months. That's what, you know, forced this vote basically on the Epstein file release. We are facing a Friday deadline to see all of those Epstein files. You know, there are other discharge positions active on stopping members from trading stocks. For example, one actually succeeded in protecting federal worker union rights. And the House passed that bill on an overwhelming basis. It's just kind of sitting in the Senate, but still is a very symbolic move in front of the Speaker. So there's a chance that that could actually happen and Democrats would be able to get a vote on that in January.

[Joe Matthew]

Just curious about war powers, Eric, while you're with us, we talked last week with Jim McGovern. He's got a War Powers act that's supposed to ripen this week. Now we see Senator Ruben Gallego offering a war powers resolution, all with their eyes, of course, on what's happening in Venezuela. Are any of these going anywhere?

[Eric Watson]

I think the real deciding factor there will be if we give a land invasion. Trump has many times said that there's going to be land activity in Venezuel and potentially even Colombia somewhere. If that happens, Schumer is ready to launch a real effort to, to do a war powers rating of the President. I think it would get some support. I think there's not a lot of appetite in either party for a land war in Venezuela. We'll see if the President can make his case. But interestingly, the NDA, the National Defense Bill, does repeal authorizations that have lingered since the Iraq war and before that have been used to justify these sorts of activities. So that would sort of create an interesting legal limbo for anyone going in. You know, the NDA is a very interesting bill. There's an outbound investment provision in there that really affects, you know, US Investors trying to invest into China. It expands to Russia, other countries. You know, when this bill, which is likely going to pass before the end of the week of the Senate, comes into law, there's a different landscape for those investors, as well as some changes to pharmaceutical supply chains. The Biosecure act is in there. So this is something that, you know, normally just think about it in terms of defense contractors. This will be an important bill for the wider investor community. If this gets into law.

[Joe Matthew]

Well, that's really important and it never gets enough coverage, Eric. Friday's it, right? We're going to hear a lot of references to fly out day and jet fumes this week. Everybody's gone on Friday no matter what happens with these bills.

[Eric Watson]

That's what I'm thinking. You know, the House added Friday as a vote day when they were getting heavy criticism from their own party for keeping away from D.C. for three weeks. They may even leave before Friday if things are looking too tumultuous for the Speaker.

[Joe Matthew]

I'm so not surprised to hear that, Eric. Thank you. I hope that means your weekend starts earlier. ERIC watson I don't, by the way, think it works that way. Bloomberg Congressional Reporter there's your live update. So we're starting this week, we got five days without exactly knowing what in the world is going to happen. Yet everyone seems to know that everything we just talked about is going to fail. So 2025 in Washington, by the way, that NDAA, the National Defense Authorization act has $400 million in it earmarked for Ukraine. No one's talking about that either. But there would be some at least tacit support, whether that comes in the form of intelligence or military support coming from the United States, even with this passing here today and peace talks underway that we want to talk about now with Heather Connelly. This was day two in Berlin, right? President Zelensky at the table, Jared Kushner, the President's son in law, Special Envoy Steve Witkoff trying to advance the ball here and what the President would love to call a Christmas peace deal. Not a lot of people think that will happen, but there has been a bit more optimism surrounding this most recent stage than we have heard recently. Heather Connelly is non resident senior fellow at the American Enterprise Institute, former Deputy Assistant Secretary of State for the Bureau of European and Eurasian Eurasian Affairs. Heather, it's great to have you back. As part of our conversation on Bloomberg. Pretty remarkable headlines coming out of Berlin now. President Zelensky says I'll give up on the quest to join NATO as well. We haven't seen really a single concession by the Russian sides. Would something like this though get the gears turning toward peace?

[Heather Conley]

Well, Joe, I think you're right that we are seeing real progress coming out of these two days of talks in Berlin. There have been Ukrainian concessions, but I would put them in quotation marks. NATO membership was something that was always going to be a very long term prospect. But what Ukrainians are asking for is NATO like Article 5 security guarantees. And that is one of the main sticking points for these conversations, what security guarantees can the United States and Europe give to Ukraine when Russia violates this peace deal? That, and, of course, territorial concessions. Will the Ukrainians approve of turning over land that they currently defend in the Donbas? Those are really the two key sticking.

[Joe Matthew]

Points, and I guess three, when you add Naito. So let's pick through them to your point. Naito was an ambition that was not something that was about to happen and wouldn't be unlocked by a peace deal. So let's focus on the other two here, because I guess Zelensky is kind of warming up to the idea of maybe joining the EU if not Naito. But without Naito, there's still an Article 5 type of guarantee here that's being talked about. And that came as well from Witkoff and Kushner. Right. This wasn't just Zelensky putting this forward. The United States suggested this without the involvement of Europe. But it would require European troops, would it not?

[Heather Conley]

Yeah, I mean, I think certainly the US Would have to have those security guarantees. There's some rumors coming out of Berlin that the administration would submit these security guarantees for Senate ratification, almost like a treaty, like we would do to amend the NATO treaty. That would be important. But, yes, Europe has to be part of this as well. And the Ukrainians have negotiated bilateral security guarantees with those countries. But the question, Joe, is when they're tested, will we apply military power against Russian forces again when they violate this peace deal? And that is the question.

[Joe Matthew]

I think that was framed as in the event of a sustained attack in the initial language we saw. So a cruise missile into an apartment building wouldn't qualify.

[Heather Conley]

Right. But again, the sustainment may be through hybrid activities, meaning that they would seize the territory. It wouldn't be through military means, but they would do it through hybrid warfare. That wouldn't trigger it. So huge question marks.

[Joe Matthew]

All right, well, let's talk territory then, because you freeze the lines on the Donbas. And I think Zelensky suggested maybe that he puts this to a vote. Right. Let's actually have the people who live there vote on this. I'm guessing that based on his. His history of behavior, Vladimir Putin wouldn't care either way, would he?

[Heather Conley]

Yeah, this is where I actually do think Vladimir Putin does care, because it's now in the Russian constitution that these four Ukrainian territories are Russia, the motherland. Exactly. And this is the restoration of Russia's historic lands. But this would be Ukraine giving up territory it currently defends. And this territory is part of its. So called Fortress Belt, which is its defensive line. So without those lines, Ukraine is going to have a very hard time being able to reinforce its military across its border. So in some ways it would render it in part, defenseless.

[Joe Matthew]

This is why we were talking about a potential demilitarized zone in that area. Right. Is that a more realistic approach?

[Heather Conley]

Well, again, it gets back to the who. Who protects this demiller demilitarized zone. Again, it's important to remember we've been to this movie before. When the first annexation and incursion into Ukraine, there was an OSC monitoring force and that cease fire was violated repeatedly even though it was monitored. And this is where again, Russian hybrid tactics really were trying to change the status on the ground.

[Joe Matthew]

Really interesting. So we've talked through some of the particulars that are at the table here, and I guess they have concluded this is a three hour session today in Berlin. It was about five hours yesterday. I'm assuming everybody flies home now. And President Zelensky sure would love an invitation here to the US but we've still left the Europeans out of this conversation as well. The Russians haven't given much in the way of encouraging remarks about this. So are we just spinning our wheels until everyone's in the same room?

[Heather Conley]

Well, I think the Europeans are feeling better. The fact that these conversations were held in Berlin and that they actually were at the table. Now, the incredible visual is the US Is on one side, Europe and the Ukrainians on the other side, that we are negotiating with our European partners, I think. Exactly. I think this plan now, whatever comes out is going to have to be briefed to the Russians. I assume that special envoy Woodcoff has already been keeping the Russians pretty well informed. They may not accept some of these changes. And you're absolutely right. If the Ukrainian government does decide to make some territorial concessions, have to change their constitution to remove NATO. You're talking about a referendum, you're talking about an election that President Zelensky did just say over the weekend that potentially could happen in 60 to 90 days after a peace deal. So it could be a lot of changes or we could be quite stalled.

[Joe Matthew]

Is there a single Russian concession that you could see coming out of this?

[Jeannie Shan Zaino]

No.

[Joe Matthew]

Well, my God, how do you find peace in that world?

[Heather Conley]

So you cave, you capitulate to the Russian position and that has. It's absolutely.

[Joe Matthew]

Is that sustainable? If you're framed as capitulating, it's not sustainable.

[Heather Conley]

It's not.

[Joe Matthew]

You ready to fight another war in Ukraine?

[Heather Conley]

It's not sustainable in Europe? It's not sustainable for the United States and our security interests. This is why the British head of MI6 just came out with a devastating speech saying we're already in war with Russia. The hybrid activity. NATO Secretary General Ruta last week said, in five years, there will be war. So you hear us preparing for this, yet we're talking about appeasing the aggressor. It is extraordinary. It does feel like 1938.

[Joe Matthew]

Well, that's a heck of a statement here. Will it feel like 1938 for the next three years and two months? To what extent is the administration keeping this Russian dream alive?

[Heather Conley]

So it is.

[Joe Matthew]

Or maybe a Putin dream is a better way to put it.

[Heather Conley]

Well, again, this is where the last week's national security strategy did not articulate who our adversaries are. Russia, China, North Korea, Iran. It spoke about a focus on the Western Hemisphere. It talked about securing economic and strategic stability. We are closing our eyes to this. And if in fact, the United States provides security guarantees, we are inserting ourselves in this. So this is a moment, for clarity, of knowing who the aggressor is, who is challenging the United States and our European partners and preparing for potential conflict.

[Joe Matthew]

Just a minute to go here, Heather. What is China learning as it watches the way we work with Ukraine, keeping Taiwan in mind?

[Heather Conley]

I think it is learning that we will appease for some sort of magical economic stability that you have, you know, you don't have that stability. It is emboldening those who believe that they can snatch territory and that if there's economic disturbance, that they will negotiate and get that stability. It's a terrible message to America's adversaries.

[Joe Matthew]

It really is that because you think that Donald Trump is more interested in normalizing economic ties with Russia. When you talk about that economic stability, imaginary or not, how does he find it here?

[Heather Conley]

Well, I think what. What is elusive is that there is no momentary deal that will stick. And I think this is what the White House is learning. With all the deals that have been negotiated, they're starting to fall apart, because it's not just that moment. It's creating the structure to deter aggression, to be strong and send a clear message to our adversaries. We are strong with our allies, and partners don't violate international law.

[Joe Matthew]

This is a very delicate moment that we're in. Heather, I'm really glad that you could join us to talk about it once again. That's Heather Connolly from the American Enterprise Institute. Last time she joined us, we said we need to get her back. And this is why I'm Joe Matthew in Washington. We'll keep keep the bead on the effort to find peace in Ukraine as we wait for a readout from the White House. We've not seen one on an official piece of paper or on Truth Social, and that might emerge a bit later today. Republican Congressman Troy Downing of Montana joins us next as we turn back to health care on Bloomberg. Stay with us on Balance of Power. We'll have much more coming up after this.

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[Podcast Host]

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[Joe Matthew]

Play Bloomberg 11:30 here on the Monday edition of Balance of Power on Bloomberg TV and Radio. We thank you for joining us here with big questions about what could be accomplished this week on Capitol Hill with five working days left. Yeah, we're almost there at the end of the year. In fact, it's just a couple of weeks until the enhanced Obamacare subsidies from the COVID era are going to expire. And we've been talking about this on the Daily it looks like there could be some really interesting maneuvers on Capitol Hill directed toward your health care in the coming days, whether it's through discharge petition or otherwise. We're going to get down to some voting. As we mentioned, the NDAA in the Senate, that was likely just in the next couple of days and that'll pass. That's the must pass bill. Health care is another matter. And glad to be joined by Troy Downing. The Republican Congressman from Montana 2nd district is with us here in studio today on Bloomberg TV and Radio. It's kind of you to come by and I appreciate it very much because there are a lot of questions about what's going to get done here and you probably have some of these questions too. It could be the Republican led bill that was released late last week will get a vote. There also could be other votes though in terms of a discharge petition. There was Another extension to the ACA that at one point was promised to bring to a floor vote. Now it might not happen. Do you have a clear view of what this week will look like?

[Jeannie Shan Zaino]

Well, here's the thing with those discharge positions. Actually, let's just take a step back on these enhanced premium tax credits because a lot of the lot of the rhetoric that we see on social media from headlines from people pushing back is we have to do something or premiums are going up. Premiums already went up. The open enrollment period is over. I mean, that's already baked in. For those who don't understand how this works, the payers, the insurance companies, they file with their states months before the open enrollment period. It gets approved, it gets filed with cms, the center for Medicare and Medicaid Services, and then comes the open enrollment period where you pick your policy for the next policy year starting January 1st. That's over. And so this whole argument about if we don't do something by the 31st, then suddenly premiums are going to go up. Well, I'm going to tell you, if the enhanced premium tax credits, if the Obamacare tax credits expire, rates have gone up. If they get extended, rates have gone up, it's the same thing no matter what. But here's the thing the folks aren't talking about is the chaos.

[Joe Matthew]

So they wouldn't, just to be clear before you go on, they wouldn't come back down through some sort of retroactive language and legislation.

[Jeannie Shan Zaino]

Well, so let's just think about what would happen to have happen. What would have to happen mechanically.

[Joe Matthew]

Yes.

[Jeannie Shan Zaino]

Is first of all, you'd have to have the payers, the insurance companies, refile their rates. So let's say we get into that by February. So those get reviewed, those get filed. So then you have to have another open enrollment period. And that's going to create confusion in the marketplace because people who pay a portion of their small group or large group that are their employers are going to think, well, hey, I'm going to get a discount too. But no, this only affects the individual market. So it's a small percentage. So then you have to have an open enrollment period, let's say that's March or April or whenever they can do that. So then do you make it ex post facto going back to January 1st? Do you have it going forward? But it creates confusion in the market. And I'm not exactly sure how we would deal with that mechanically. But then let's look at what happens if we just extend the tax credits. Let's say we extend them for two years. Well, then everybody refiles. Next spring, we have another open enrollment period, November, December, and that goes into the 2027 policy year, which you know, will probably still be a little bit of an increase. Because here's one thing that the Republicans and the Democrats all agree on right now is aca, the Affordable Care Act. Obamacare has been a complete failure and rates have gone up independent of these tax credits. They're going up no matter what because the cost of health care has gone up. And what's happened as the cost of health care goes up? Of course the cost of health insurance goes up. And when that happens, people start coming off and they find alternatives. Either they go uninsured or they find an alternative like a health sharing ministry or some other thing. And it's not the healthy people. I mean, it's not the sick people that come off, it's the healthy people. So the younger, healthier people come off, and that creates this phenomenon called adverse selection. So then you've concentrated the risk, losses go higher and the next premium year premiums go higher. And that creates cycles.

[Joe Matthew]

The cycle is brutal. And our audience should know you were state auditor overseeing the matter in the state of Montana. So you have a unique understanding of all of this stuff. KFF says the expiration would more than double on average, what people are paying annually. President Trump would say, keying off of what you just described then, so send people the money instead of the insurance companies. But don't people lose power by having essentially an individual barter with this massive insurance company? How does that keep?

[Jeannie Shan Zaino]

Well, first of all, let's just correct the record on one thing is the actual rates that have gone up in just the individual market. So just a small fraction of the overall market on average? Well, in Montana, on average is about 22%. And the enhanced premium tax credit, the overall Obamacare tax bracket, that's single digits of that. So it does have an effect, but the rates are going up with or without that. So first of all, just make sure that the people understand that. And then in terms of the health care savings accounts that the president's talking about, personally, I think there's meat on the bone there.

[Joe Matthew]

But they're not going to be in this bill.

[Jeannie Shan Zaino]

They're not going to be in this bill, unfortunately. But this is something that we need to.

[Joe Matthew]

That's like a Cassidy, the Bill Cassidy plan is something that you would warm up.

[Jeannie Shan Zaino]

Well, I think there's meat on the the bone here for a very simple reason. One of the issues that we have is we've created so much distance between the doctor and the patient. There's so much in between there. And what an HSA does is you've got a finite amount of money for paying for your out of pocket expenses, for your medical expenses, and it can only be used for that. And so now you're saying, I've got $5,000 in there, or however much that money is. And you're talking to your doctor and you're saying, well, how much does this test cost? Well, do I really need that? Or the other thing is right now nobody is incentivized to look for actual pricing. So if I talk to Dr. 1 and I say this is going to cost 500 bucks, and Dr. 2 says 1,000 bucks, it starts to put that in there because the problem right now is somebody else is going to pay for it. So there's no incentive for somebody to look at what the actual cost they're being charged is because you know that your insurance company is going to pay.

[Joe Matthew]

It and that would be the individual doing that job.

[Jeannie Shan Zaino]

So the hsa, with the hsa, you, it puts more power, if we start to expand that, it puts more power into the patient in having that conversation with their doctor and actually asking, you know, because now it affects them directly, asking what the prices are, what the tests should be, what the expenses of those. So it brings that in. I just think about, you know, when I was growing up, lived in a single income family, worked in a grocery store, so not, you know, not a family of high means. And when I'd come out of the doctor, my mom would go up to the front desk and she'd get out her checkbook and write a check. And that's how we did it. Because there was that doctor patient relationship. And I think we've come so far away from that and put so much money into the system that we've seen the underlying care cost of health care going up. Economics 101. You put money into a system, things get more expensive. And we've seen that. And that creates that vicious cycle that we talked about with adverse selection.

[Joe Matthew]

Well, you know, a conversation like this gives somebody a popsicle headache because it's complicated stuff. It is trying to figure out, well, what part of this policy is going to help me.

[Jeannie Shan Zaino]

And that's what makes it hard politically.

[Joe Matthew]

Because it is hard because you have to communicate this.

[Jeannie Shan Zaino]

It is hard to explain.

[Joe Matthew]

So let's say, all right, so the messaging system breaks down here and we're looking at a government funding deadline at the End of January. I'm not even going to ask you, are you worried?

[Jeannie Shan Zaino]

You know, I think, you know, when we had the shutdown, that 43 day shutdown, it was horrible. Nobody wins, everybody. Well, which side won? Did the Republicans win?

[Joe Matthew]

Short memories.

[Jeannie Shan Zaino]

Nobody wins in a shutdown. And but here's one thing that I will say is, at least on my side of the aisle, the Republican conference really stuck together and said, okay, we're not going to negotiate this craziness. They're bringing in all these red herring when this is really a simple short term extension of current policy so that we can get through the appropriations process.

[Joe Matthew]

Is the scar tissue from that experience enough to keep us from doing it again?

[Jeannie Shan Zaino]

You know, I can be hopeful. I really think it is. I think that's going to come into play when I know that the resolve on the Republican side is pretty strong. And I think that the Democrats learn that that is not a winning prospect. So I'm hoping that calmer heads come to the table and prevail and we start to get more of these appropriations bills through. So obviously we just had the National Defense Authorization act, so that's going to the Senate. Hopefully that moves through. So we're slowly ticking away at these. We'd all be happier if it went faster. But the frustrating thing for me is that when these appropriations bills come out of committee, you got the four corners. They start out bipartisan. It came out of committee with the ranking member and the chair, you know, both the Senate and the House side. So you've already got a bipartisan spending bill. And it's just frustrating that we can't all rally around this, get back, as Speaker Johnson says, the muscle memory of actually appropriating and going through that process rather than continuing CRs and omnibus spending bills. And I think there's a huge desire to get back to that. And I am, I am so hopeful that we can get back to that. And it may not be this cycle, maybe the next cycle, but, but, but soon. Because the American people want that. The people that voted us into office want that. We all want to get back to that and get back to actually doing our job of regular order.

[Joe Matthew]

Well, when we get to regular order, come back, we'll do a special together.

[Jeannie Shan Zaino]

Exactly.

[Joe Matthew]

I would love to be back with us, it's Troy Downey, Republican from Montana on a very important week here on Capitol Hill. We thank you, Congressman, for the insights as we assemble our political panel. Bloomberg Politics contributors Rick Davis and Jeannie Shan Zaino join us now with their insights on everything we just talked about. And it's hard to get away from the health care story. So we'll start right there. Rick, Republicans have a very interesting looking schedule here in the House. Over the course of the week, will we see voting on, on all the various forms of legislation that we just talked about? And will this come down to a discharge petition?

[Rick Davis]

Well, if it comes down to a discharge petition, it just depends upon which discharge petition they're going to carry because all of these are slightly different, including the House bills. I mean, part of the biggest problem we have is the Republican Party has not focused on a solution set that they can get on board with as, as, as a party. And so we have four different bills right now in the House of Representatives to, to fix the system. Right. And, and yet none of them are a comprehensive fix. And I think the Congressman was right saying, like, there are huge advantages to hsa, but they don't really fix the whole problem. And so are you going to tinker with it and try to make it a little bit better while at the same time tightening your belt on things like these subsidies? I'd be surprised, because Congress by nature doesn't like to tighten its belt. It is a spending machine. It hasn't gotten smaller. Government has gotten bigger with this Republican Congress. And so the fact that they're going to pass something that actually makes it smaller would be, I think, great, but unlikely.

[Joe Matthew]

So we're going over the cliff, Jeannie, is what it sounds like. And based on what the Congressman just said, don't wait around for a life raft. Is that how you see it?

[Podcast Host]

Yeah, I believe he said we've already gone off the cliff. It's too late. There's nothing can be done. The costs are going up. You know, there's so many stunning things about this, but I would say one of the most stunning things is that affordability is the biggest issue domestically right now. Donald Trump is talking over the weekend in an interview where he's saying he may lose Republicans, may lose the House next year, and yet they are doing nothing about health care because the president would have to lead that charge. And he's absolutely awol.

[Joe Matthew]

Incredible stuff. Jeannie Shan Zaino and Rick Davis, we're like Thelma and Louise. We're going off the cliff together. Stay with us. On balance of power. We'll have much more coming up after this.

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Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa.

[Joe Matthew]

Play Bloomberg 11:30 the peace process continues involving Ukraine. Good friend of mine said this morning, you know it's colder in Ukraine than it is here. Remembering that Vladimir Putin is very skilled and experienced at using cold as a weapon as we enter the winter season. That may be in the back of President Zelenskyy's mind or the front as peace talks enter day two in Berlin because it has been a story of concessions for President Zelensky and now one of the big ones, giving up Ukraine's bid to join NATO in return for security guarantees. Enter Steve Witkoff and Jared Kushner once again back on a plane. We were asking last weekend, is it possible Trump and it looked like he wasn't going to go, could he send his lieutenants to BER to take part in these talks? The word from the Oval was no, not without some sort of guarantee or a deal in advance. But sure enough, the President's son in law and his chief envoy, Steve Witkoff, are indeed as taking part in a second day of negotiations with Volodymyr Zelenskyy in the German capital. And it's where we start our conversation with our political panel. Rick Davis and Jeannie Shanzano have been watching this march to peace, frequently favoring the Russian side here and there. With us now, a Bloomberg Politics contributor, Rick Davis, Republican strategist partner at Stone Court Capital, and Jeannie Shan Zaino, our Democratic analyst democracy Visiting Fellow at Harvard Kennedy School's Ash Center. First it was Zelensky accepting the idea of maybe freezing borders where they are, Rick Then he said he was prepared to accept presidential elections, which is something that the President Trump in this case had been asking for. Now giving up the bid to join NATO. Are we at a point where it's just a matter of when and not how we get to peace in Ukraine?

[Rick Davis]

I'm not sure I'm exactly that enthusiastic for peace at this stage. Remember, these are all news items coming out of BERLIN between the EU and and Zelensky and the U.S. the Russians are involved in this discussion at all. And the Russians put out a statement this morning that said that the territorial concessions are a must, that we're not putting up with anything that isn't, you know, our deal. And the territorial concessions really aren't easy for the Ukrainians because their borders are meshed in their constitution. As you point out, Zelenskyy had offered to have a referendum, but part of the referendum is we've got to have a cease fire. Russia doesn't want to agree to a cease fire because then they can reconstitute on the Ukrainian side their armed forces. I mean, each one of these deals has a caveat. And this caveat with, you know, not joining NATO is a bilateral agreement with the US saying, you'll give me kind of Article 5 type protection and a bilateral agreement with the Europeans to do the same. So it isn't great for Ukraine. They got to go shopping if the Russians come across the border again. But it certainly, you know, tries to stem the issue of joining Naito.

[Joe Matthew]

You know, the president was hoping for a Christmas peace deal, Jeannie, should he be more or less optimistic about that idea?

[Podcast Host]

I don't think much has changed. I have to say, I agree with Rick on this. I am not feeling, I heard some reports where we're hearing a lot of optimism. I am not feeling as optimistic. You know, one of the unconfirmed reports is that the US Delegation is still pushing, and this is just one example, Ukraine to give up the eastern Donbass where they have defensive lines and are reluctant to give it up after everything. And you gave the list, Joe, of things they had said that they are willing to negotiate on from holding elections to, you know, foregoing joining NATO. The reality is we're hearing the one side of Ukraine's willingness to give up so many things, to concede so much. And nothing from Russia except for today saying, you know, we will still take the Donbass region by force if it is not given to us. So I'm not so certain that we're going to be facing imminent peace here. And the reality is, why are we seeing Ukraine give up so much? Because they are losing on the battlefield and it is a really, really difficult situation for them. They are constrict, conscripting people over the age of 40, sending them to the front lines with absolutely no training. They're outmaneuvered and outmanned, not just in terms of the number of people they have, but also in terms of things now like firepower so that's why they're forced to concede. And their reliance, of course, is on Europe, and their reliance is on the US and the US has been very clear under Donald Trump that they are sort of turning this whole thing over to Europe. So I am not feeling as optimistic as some people are that we are on the brink of a peace here.

[Joe Matthew]

Yeah, well, it doesn't sound like either of you are feeling the optimism of Steve Witkoff today or the President of Finland. Rick, how about Alexander Stuart on X? We're probably closer to a peace agreement than we have been at any time during these four years. What's he responding to?

[Rick Davis]

Why, I think that's actually a good line. Right. It doesn't mean he's close to a peace agreement. He's just further along that he's been since the war started. And that may be true. That is, I would concede that, that more they talk, the more they come up with some of these parameters. The more they talk, the more they come up with some of these ideas around, you know, how to bridge the gap between the Russians and the Ukrainians. But at the end of the day, you're dealing with a counterparty in Vladimir Putin who is not honest, he's not honorable. He's cut peace deals in the past that he's thrown in the garbage. He's running a horrific campaign of annihilation with his own soldiers, not to mention what he's doing with the Ukrainian civilians. So it's, it's really hard to imagine a scenario that they get peace without giving everything that Vladimir Putin wants to Russia. And I don't see anybody at the position now of saying yes to that deal.

[Joe Matthew]

Jeannie, has Vladimir Putin made a single concession as the invading force in this war? Have we seen anything that looks like a concession in these talks?

[Podcast Host]

You know, if you sort of wave your hand before your eyes, this whole idea of, well, we'd be open to them joining the eu, but of course, the EU is a security, is, is not a security coalition. It is an economic coalition. So that hardly does anything to protect Ukraine from another potential Russian invasion in the future. And, you know, this is not just about the Ukraine. It is about Europe, and it is about the United States relationship with Europe. You know, I was struck in that Politico interview Donald Trump did the other day when he was asked about Europe. He said things like, European nations are decaying, they are weak. And, of course, this is reflected by some of the commentary we've heard from people in the administration and Donald Trump since He took office. Then you also look at this national security document they put out last week and it is got a lot of very, very harsh things to say about Europe, much less so about Russia, you know. So I think Donald Trump would like nothing more than to turn his focus to the Western Hemisphere, particularly the South America, Latin America, allow Russia to control its area, Asia to control its area, and make nice with deals he can make with Vladimir Putin. He is far less committed to, you know, this, this sort of old style European relationship we've long had, at least since World War II. And so I think it is very problematic for Europe and they are being sidelined. They met five hours yesterday and three hours today. The US And Ukraine who wasn't there, European leaders who have just arrived in Berlin now and may not even get a face to face with the U.S.

[Joe Matthew]

Rick, do you think that Donald Trump's interest in economic ties, normalizing economic ties and investment with Russia is enough for him to not lose interest and patience here? When things aren't going well, he tends to say, well, you know what? Then you guys fight it out and we'll just walk away. And at some point that might happen. Unless, of course, there's the idea of the doing business with Moscow. What do you think?

[Rick Davis]

Yeah, I think the twin pillars are that Russia is an immense and vast country with very few people and lots of natural resources. And I think Donald Trump sees the opportunity there too. I think he thinks that the only route at this stage to getting a Nobel Peace Prize is through Kiev. And so he's, he's divided, right? How do I get my Peace Prize and tackle all these incredible resources that might be available to me in a deal with Russia? So it's a conflict for him. And I do agree. I said we've seen him lose interest in this a couple of times in the course of one year. And when he loses interest, then there's no interest at all because there's, it's pretty clear the Europeans on their own can't conceive of and implement a peace plan. So I do think that's what got, that's what's got everybody worried is that it comes a point in time where the United States says, you know what had it can't really get either side to move the way we want them to. I've invested a lot of time in my, my, my efforts to do it. So I'm just going to walk away and let you guys, you know, bang each other's heads in. And, and of course that violates the number One thing that he says all the time about being a peacemaking president is that people are killing themselves. And, you know, he doesn't want that to happen. So it's really hard to see the future under Donald Trump when it comes to something like this big geopolitical fight.

[Joe Matthew]

Even though we've got hundreds of millions of dollars in Ukraine assistance money in the ndaa. Right, Jeannie, if that gets through, the United States is going to have a pretty long road ahead with regard to this war.

[Podcast Host]

Yeah, they will. I mean, you know, you focus just on Donald Trump and the Trump administration. Of course, their interest is no longer giving money. They would be willing to certainly have Europe pay for anything they hand over. They don't want to hand over that money. And that's very much in keeping with what the president has said very vocally. I mean, I can't stress enough. I don't think we have seen a time in recent American history when relations between the U.S. the U.S. president and the European leaders have been as fraught as they are. You know, publicly they will at least sometimes say nice things about each other, but privately, there is no love lost between these folks. And, you know, you listen to Macron. I was listening to him just the other day, and he's saying things like, oh, you know, we don't want to deal with this plan Trump has, and, you know, we have something else in store. And Europe, the United States and Ukraine can beat Russia. And you feel like shaking them by the shoulders and say, but Macron, like Donald Trump, has checked out of this entire endeavor with you. This is now Europe and Ukraine, and Europe's economy is not what it was in 2022 to move forward like this. So I think the European leaders have a tough time ahead until and unless the United States gets a new leader with a very different view on the this war.

[Joe Matthew]

Jeannie Shan Zaino and Rick Davis, thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already at Apple, Spotify or wherever you get your podcasts. And you can find us live every weekday from Washington, D.C. at Noontime [e-mail].

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[Jeannie Shan Zaino]

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