DOJ Drops Fed Investigation, Smoothing Path for Fed Chair Nominee Kevin Warsh

Summary

Podcast Summary: Balance of Power

Episode: DOJ Drops Fed Investigation, Smoothing Path for Fed Chair Nominee Kevin Warsh
Date: April 24, 2026
Hosts: Bloomberg Washington Correspondents Joe Mathieu and Kailey Leinz
Special Guests: Michael McKee (Bloomberg), Rep. Susan DelBene (D-OR), Lester Munson (BGR Group), Adam Hodge (Bully Pulpit International), Michael Herzog (former Israeli Ambassador to US)

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Overview

This episode of "Balance of Power" addresses two major topics:

1. The Department of Justice (DOJ) dropping its criminal probe of outgoing Federal Reserve Chair Jay Powell, clearing the path for nominee Kevin Warsh, and the implications for upcoming Senate confirmation.
2. Shifting U.S. electoral maps, funding battles in Congress over Homeland Security, and international negotiations with Iran, including Israel's views on Middle East diplomatic developments.
   Throughout, expert analysis and direct insights from political and diplomatic leaders paint a complex picture of D.C. power dynamics.

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1. The DOJ Drops Investigation: Fed Chair Succession Turmoil

Segment begins ~ [00:55]

Key Discussion Points:

• Sen. Tim Scott's statement demands accountability on Federal Reserve cost overruns and ongoing IG review, but no date yet for Kevin Warsh’s confirmation vote.
• Michael McKee notes the political maneuvering: the dropped investigation paves the way for Warsh but raises questions about outgoing Chair Powell’s next steps, especially with legal threats still pending.
• The Supreme Court is expected to rule on Fed Governor Lisa Cook's future, which could impact Fed leadership and presidential powers.

Notable Quotes:

• "The American people deserve answers about the unacceptable cost overruns at the Federal Reserve...The Fed should be focused on price stability, not costly mismanagement." – Chairman Tim Scott [00:55]
• "If Tillis is satisfied ... then Kevin Warsh will be most likely the chair at the June Fed meeting and probably take over as chairman shortly after Jay Powell leaves." – Michael McKee [02:06]
• "What we don't know is what [Jay Powell] thinks or what his lawyers think of the fact that Jeanine Pirro is promising that she could come back and file charges again." – Michael McKee [02:27]

Timestamps & Segments:

• [00:55] Statement from Sen. Tim Scott
• [02:06] McKee on pathway for Warsh and the risks for Powell
• [03:23] Supreme Court decision’s potential impact on Fed Board

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2. Electoral Landscape and Congressional Power Struggles

Segment begins ~ [04:13]

Redistricting and Political Control

Congresswoman Susan DelBene Interview [05:20]:

• Virginia’s new map likely secures Democratic dominance and, according to Rep. DelBene, reflects the “will of the people.”
• Across the country, battles over gerrymandering have ironically created potential opportunities for Democrats, even in previously “safe” GOP districts.

Memorable Moments:

• "Unlike what you've seen with Republican redistricting in places like Texas...the people have not had an opportunity to have their voices heard. ... people are tired of Republicans trying to rig the system." – Rep. DelBene [05:20]
• "Be careful what you ask for. We are going to fight back with everything we have, because the American people hate this." – Rep. DelBene [06:39]

Swing District Strategy and Fundraising

• Despite Republican financial advantages, DelBene claims DCCC is focused on message strength and local fundraising.
• "They don't have a message. They don't have the candidates. ... we will take back seats all across the country." – Rep. DelBene [09:59]

Homeland Security: ICE, CBP, and DHS Shutdown

Congressional Budget Fights [10:48]:

• Republican budget plans may reopen agencies but leave Democrats without the ICE/CBP reforms they sought.
• DelBene argues Republican disunity caused the shutdown and emphasizes continued advocacy for reform.

Key Quote:

• "I don't know if Republicans know what the heck they're doing. ... they've created a shutdown, including on places where there was bipartisan agreement" – Rep. DelBene [11:19]

Timestamps & Segments:

• [05:20] Redistricting and court battles (DelBene interview)
• [08:08] Decline of swing districts and Democrat response
• [09:36] Campaign cash wars and messaging
• [10:48] Budget reconciliation, agency shutdowns, and ICE/CBP reform

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3. Political Panel: What Does "Dropping the Probe" Mean for the Fed?

Segment begins ~ [13:16]

Republican and Democratic Strategist Perspectives

• Lester Munson (BGR Group): Sees the DOJ’s move as a calculated “Friday news dump,” intentionally low-profile. Suggests that Warsh’s confirmation is now all but certain, with the Senate likely to act after some deliberation.
• Adam Hodge (Bully Pulpit International): Expresses skepticism of the administration’s motives and warns of ongoing political threats to Fed independence. Argues Democrats have shifted immigration politics effectively.

Notable Quotes:

• "If you wanted to get Warsh confirmed, something like this was going to have to happen. ... I expect it'll die a quiet death." – Lester Munson [13:57]
• "He has used the Department of Justice to go after his perceived enemies...that is always the threat that is out there from the White House." – Adam Hodge [15:05]
• "Senator Tillis took a hostage, right? He took this nomination as a hostage. He wrote a ransom note. That ransom note's been answered." – Munson [16:28]

Timestamps & Segments:

• [13:16] What the dropped probe means for Warsh and Powell
• [15:02] White House motives and Senate politics
• [16:28] On Senator Tillis and nomination strategy

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4. House & Senate Turbulence: DHS Funding, FISA, and Immigration

Segment begins ~ [17:14]

Budget Battles and Procedural Chaos

• Ongoing shutdown/budget limbo for DHS, with House and Senate Republicans at odds and Speaker Johnson facing internal party chaos.
• "It's not hurting cats, it's hurting mountain lions. And God bless him for showing up every day and trying to do that." – Lester Munson [18:18]

Immigration and ICE

• Adam Hodge highlights Democratic success reframing the politics of immigration, even if actual reforms are elusive.
• "We have fundamentally changed the politics of immigration over the last several months since this shutdown has happened." – Adam Hodge [19:50]

FISA 702 Renewal Crisis

• FISA Section 702’s imminent expiration pressures both parties to find consensus; bipartisan deals are possible but not guaranteed.

• "There's a kind of ocean under the surface here of bipartisanship...If the speaker can tap into that, he might be able to do this next week." – Lester Munson [20:52]

Timestamps & Segments:

• [17:14] Dysfunction around DHS & Congressional dealmaking
• [18:18] On Speaker Johnson’s challenges
• [19:50] Messaging shift on immigration and ICE
• [20:26] Prospects for FISA Section 702 renewal
• [22:08] Democratic approach to a possible FISA deal

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5. International Focus: Israel, Iran, and Middle East Diplomacy

Segment begins ~ [23:39]

Interview with Ambassador Michael Herzog

• U.S. and Iranian officials resume diplomacy in Islamabad, with Israel excluded but consulted.
• Israel’s bottom line: strict limitations on Iran's ballistic missile program are essential. Without them, war could resume in a few years.
• Doubts about Iranian leadership’s unity—uncertain whether any deal will stick amid regime turmoil.
• Israel has heavily depleted munitions stockpiles fighting on multiple fronts; is urgently boosting defense production.
• Despite a temporary ceasefire in Lebanon, Hezbollah remains aggressive; ultimate aim is to disarm Hezbollah and strengthen Lebanon's military.

Notable Quotes:

• "The fact that the parties are going back to Islamabad to negotiate indicates that they have an interest in diplomacy and don't want to go back to war." – Michael Herzog [24:13]
• "If the deal does not include limitations on the numbers and on the range of Iranian ballistic missiles, they will rebuild their capabilities and we'll have to find ourselves fighting another war." – Herzog [24:57]
• "Hezbollah has not abided by the ceasefire...The ultimate goal is...normalization between Israel and Lebanon." – Herzog [30:22]

Timestamps & Segments:

• [23:39] U.S.-Iran negotiations and Israel’s perspective
• [24:57] Ballistic missile limitations as deal-breaker
• [26:52] Can Iran keep a deal?
• [29:12] Munitions depletion and Israeli defense needs
• [30:22] Hezbollah, Lebanon ceasefire, and path to normalization

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Memorable Quotes at a Glance

• "He took a tough line on the Fed and now we all, again, we all knew this was going to happen. If you wanted to get Warsh confirmed, you had this, something like this was going to have to happen." – Lester Munson [13:57]
• "We have 44 districts across the country where we're on offense and we have great candidates running. And we only need three more seats to net three more seats to take back the gavels, which we will in November." – Rep. DelBene [08:39]
• "It's not hurting cats, it's hurting mountain lions. And God bless him for, for showing up every day and trying to do that." – Lester Munson on Speaker Johnson [18:18]
• "Diplomacy is not dictated by political interests...ultimately it is for the United States to determine the outcome." – Michael Herzog [25:57]

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Summary Table of Key Segments and Timestamps

| Segment | Time | |------------------------------------------------|-----------| | Fed Probe Dropped, Warsh Nomination | 00:55–04:13 | | Congressional Redistricting & Dem Strategy | 05:20–12:18 | | Political Panel on DOJ/Fed Politics | 13:16–17:13 | | Congress: DHS, FISA, Immigration | 17:14–22:37 | | Herzog on Israel, Iran, and Regional Security | 23:39–31:45 |

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Tone and Takeaways

The episode is fast-paced, analytical, and appropriately skeptical about political maneuvering in D.C.—the hosts and guests emphasize the murky, transactional, and sometimes chaotic nature of power and policymaking, both domestic and international. Emerging themes include the fragility of bipartisan deals, the high stakes of redistricting, and the challenges of safeguarding institutions like the Fed and alliances in the Middle East in a deeply polarized environment.

The panelists and interviewees openly speculate about motives, outcomes, and the "games" being played, offering listeners an insider’s perspective on the realpolitik behind the headlines.

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For further details, tune in to the full episode of "Balance of Power" on Bloomberg.

Transcript

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[Podcast Host/Announcer]

Bloomberg Audio Studios Podcasts Radio news You're listening to the 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. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Bloomberg Host/Interviewer]

We do have a statement now from Tim Scott, which just dropped into our email boxes here. As I've said from the beginning, this is of course the chair Senate Banking Committee this is the body that would vote to confirm the next Fed chair. The American people deserve answers about the unacceptable cost overruns at the Federal Reserve. These serious concerns warrant scrutiny, he writes, and I am pleased this matter is continuing to receive it. I welcome the inspector general's review and expect a full accounting of how these costs spiraled out of control. The Senate Banking Committee will continue conducting aggressive oversight to ensure taxpayers get the transparency and accountability they deserve, and I am inviting the inspector general to brief the committee within the next 90 days on its findings. The Federal Reserve should be focused on price stability, not costly mismanagement, said Chairman Scott. I don't see a date here for a confirmation vote, and we want to bring Michael McKee into this conversation. Bloomberg's International Economics and policy correspondent, of course, spends a lot of time in Washington with us because he covers the Fed for us. Mike, what do you make of this statement, and does it allow for Kevin Warsh to potentially be the chair at the next Fed meeting?

[Michael McKee]

It does. The question is, is it going to be enough for Thom Tillis to let the vote go forward? If Tillis is satisfied with what they have compromised on, then Kevin Warsh will be most likely the chair at the June Fed meeting and probably take over as chairman shortly after Jay Powell leaves on May 15. The other question, though, is whether Powell leaves the Board of Governors and whether this is enough for him. And what we don't know is what he thinks or what his lawyers think of the fact that Jeanine Pirro is promising that she could come back and file charges again, depending on what the inspector general's report says. And of course, if the report doesn't necessarily say that there's criminal activity. Remember what Judge Boasberg said the initial complaint that they put out in their subpoenas was pretextual. So she could easily do that again just to harass the Fed chair when he's out of office and when Warsh is already chair. So a lot of questions left unsaid, left unanswered.

[Bloomberg Host/Interviewer]

Well, including as well left unanswered is the question around Fed Governor Lisa Cook, which it wasn't addressed in this Piro statement, Mike. So how should we be reading into that?

[Michael McKee]

Well, there's not much Tim Scott can say about a decision the Supreme Court has to make that they haven't handed down yet. That could come at any time, although our court watchers at Bloomberg News say maybe a little bit longer, we have to wait for that. But if the court allows the firing to go ahead while they take the rest of Cook's case through courts, which they haven't even started the process of, then they in theory could do the same with Jay Powell. And if he doesn't leave as a member of the Board of Governors, you have to expect that the president might try to fire him. But there's not much point in the president doing that now if the court's going to rule in favor of Lisa Cook. So we are going to have to wait on that and see what the impact is.

[Congresswoman Susan Del Bene]

All right.

[Bloomberg Host/Interviewer]

Bloomberg's Mike McKee, thank you so much covering this breaking news for us all day long here on Bloomberg TV and radio. And as we consider cases that are currently sitting in court, the Supreme Court of the United States itself, of course, still has yet to make a ruling pertaining to the Voting Rights act that could affect House district maps, especially in the South. And the Virginia State Supreme Court is now going to be dealing with the Virginia redistricting that did pass in a special vote just this past Tuesday. Virginia voters allowing a redrawing of the map that would make it a 1010 to 1 split, 10 Democrats, one Republican seat likely in its congressional map ahead of the midterms. So we'll see how these courts decide and how it will impact ultimately the various parties as they chart their their way forward into November. And of course, the woman in charge of doing that for the Democrats is Congresswoman Susan Del Bene of Washington, who is the chair of the Democratic Congressional Campaign Committee, and she is joining us now here on Bloomberg TV and radio. Congresswoman, it's always great to have you. First, if we could begin with Virginia, what is your degree of confidence that in the state Supreme Court, this map that so favors the Democrats will be upheld.

[Congresswoman Susan Del Bene]

I think it's going to be upheld because the court is going to uphold the will of the people. The people had a vote. And unlike what you've seen with Republican redistricting in places like Texas, what they're looking at doing in Florida, that has not gone to the people. The people have not had an opportunity to have their voices heard. But in California, the people were clear, and in Virginia, the people's voice was clear, too. So I think the court is going to uphold the will of the people, and these maps will stand. And because people are tired of Republicans trying to rig the system, they want to elect their representatives, not have politicians pick their voters.

[Bloomberg Host/Interviewer]

So what's your feeling about this, Congresswoman? After months and months of hand wringing and court cases and a lot of fear initially among Democrats, when President Trump got this whole ball rolling in Texas, we're now in a world in which I don't know what will happen in Florida and how Ron DeSantis might get his arms around this, but we could be in a world where it's either awash or Democrats end up with at least one extra seat than Republicans. So, I mean, are you guys laughing about this behind the scenes? Is this a big eye roll? Because it sure seemed to be a waste of time.

[Congresswoman Susan Del Bene]

Well, we were clear from the very beginning, be careful what you ask for. We are going to fight back with everything we have, because the American people hate this. The people of Texas hated it. They did get a say. The people of California were very clear and responded strongly that they want to fight for fair elections. If Republicans were winning in the hearts and minds of the American people, they knew that voters were on their side. They wouldn't be going down this path. They're going down this path because people have soured on the Republican agenda. They know they're losing. Instead of listening to people and understand the damage their policies are having on working families across the country, they decided that they're going to instead try to rig the system in their favor. And people have responded strongly all across the country. I mean, Missouri, another state that they're trying to change the maps. There are signatures to take it to a referendum, take it to the voters. And Republicans are doing everything they can to prevent that. Florida has a law in place, and yet Governor DeSantis is trying to go around once again, amendment voted on by the people of Florida that would tell them not to do redistricting. They're going to try to do it anyway. So every time we have gone to the voters they've decided. And I think that's the message across the board. People are tired of the games Republicans are playing and they want folks who are going to stand up for them.

[Bloomberg Host/Interviewer]

Well, when we consider the game that is being played and the precedent it is now setting, Congresswoman, are you concerned at all that what we're seeing happen is, and we were talking about this with former Obama campaign manager Jim Messina on this show just yesterday, that you're seeing more solidly Republican and more solid Democratic districts and very few swing districts as a result of this. Swing districts are your focus. I think you're targeting more than 40 of them in this election cycle. What happens if there's not going to be as many flippable seats going forward?

[Congresswoman Susan Del Bene]

Well, I think that's what Republicans have done. Even in their their gerrymandering in Texas. They ended up thinking they were creating safe seats. And we have opportunities to pick up seats in Texas because we've been, you know, people have soured on their Republican agenda. They have struggled with rising costs, with the instability and uncertainty in the economy that has been brought on by Trump and Republicans in Congress. And so we've seen huge overperformance in special elections across the country by Democrats because people are speaking out. So those districts that you might have at one point said were kind of safe districts, lots of those districts are in Play. We have 44 districts across the country where we're on offense and we have great candidates running. And we only need three more seats to net three more seats to take back the gavels, which we will in November.

[Bloomberg Host/Interviewer]

We'd like to talk to you, Congresswoman, about the money and the messaging. And I'll start with the money. Do you care at this point about these numbers? The RNC alone has 109 million on hand versus the DNC, which is looking at debt. And the NRC, too, has a cash advantage over the DCCC. Does that matter if you think you're winning on the message?

[Congresswoman Susan Del Bene]

We are. We have been working incredibly hard to make sure that we are getting our message out. And we are. Our candidates and our incumbents in swing districts have been strong fundraisers. They have an advantage over their opponents across the board. We are in a strong position. And yes, they have a lot of money. You see Trump raising money into his own super pac. We are going to have the resources that we need to get our message out across the country. And we have incredible candidates. They don't have a message. They don't have the candidates. And the American people want folks who are going to stand up for them. So I think we are absolutely in a strong position across the board and we will take back seats all across the country.

[Bloomberg Host/Interviewer]

Well, as you talk about standing up for the American people on these various issues, Congresswoman, of course Democrats tried to take a stand when it comes to the funding of ICE and cbp. We have seen the Department of Homeland Security shut down for what, 70 days as a result of that. But now the Republicans are moving forward with a budget reconciliation package to fund those very agencies for the next three and a half years. And Democrats don't have many reforms to ICE enforcement to show for it. Congresswoman, is that going to be disappointing to the electoral people across the board

[Congresswoman Susan Del Bene]

want there to be reforms. They've seen the violence in communities across the country and we're going to stand up for those reforms. I don't know if Republicans know what the heck they're doing. They don't even agree with each other. They have created a shutdown, including on places where there was bipartisan agreement to make sure there was funding for Coast Guard, for fema, for tsa. And yet Republicans were incapable of even opening up those parts of dhs. So they're continuing to fumble in some direction. We'll see what they do. But we're going to continue to stand up. We should be making sure that the government is open and we should be making sure that we have an agency following the law that is making sure that they are not creating violence in our communities across the country. That's what we're standing up for and that's what the American people want to see.

[Bloomberg Host/Interviewer]

It's good to have you back. Congresswoman Susan Delbene, Democrat from Washington, chairs the Democratic Congressional Campaign Committee. Madam Chair, thank you as always for the insights.

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[Podcast Host/Announcer]

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay. Play an Android auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Bloomberg Host/Interviewer]

Joining us now here on balance of power is today's political panel. Lester Munson is with us, Republican strategist and head principal of the international practice at BGR Group alongside Bloomberg Politics contributor Adam Hodge, Democratic strategist and partner, managing partner at Bully Pulpit International. Great to have you both here. Lester, if we could just start with you on what we were discussing with David a moment ago. The dropping of the probe, the criminal probe, at least into Chairman Powell. The White House is characterizing this as a probe just being moved over. Are you surprised we haven't heard from President Trump himself on this, given how vocally critical he has been of Chairman Powell and how outspoken he has been on his concerns over cost overruns in this renovation?

[Lester Munson]

Haley, correct me if I'm wrong, but today is Friday and this seems a little bit like a Friday news dump to me. And I think it's something the president doesn't particularly want to talk about. He's happy to let this thing kind of slide into oblivion if that's indeed what happens. He's he took a tough line on the Fed and now we all, again, we all knew this was going to happen. If you wanted to get warsh confirmed, you had this, something like this was going to have to happen. Here we are. It's happening. Judge Pirro seems to have come up with kind of a interesting deflection to send it over to the IG where I expect it'll die a quiet death. And here we are.

[Bloomberg Host/Interviewer]

Do you feel the same way, Adam? This dies a quiet death, or does Jay Powell finally step down, go into retirement and be charged by Judge Jeanine?

[Adam Hodge]

I mean, I can't believe that Carolyn Levitt would just take the win, take the w. It's on the table. To create more murkiness is just going to cause Thom Tillis to pause potentially

[Bloomberg Host/Interviewer]

even longer by allowing for this investigation to continue.

[Adam Hodge]

Potentially to continue.

[Bloomberg Host/Interviewer]

It's not ending. It's moving. Is that what you're referring to?

[Adam Hodge]

Potentially. But look, let's not lose sight of what has happened happened since Donald Trump came back to the White House. He has used the Department of Justice to go after his perceived enemies, whether they agree with him or oppose his policies or he has some past personal grievances like Jim Comey. Right. That has been the pattern. And so I think there's a real risk here that like that is always the threat that is out there and from the White House. The thing you want is Jay Powell to retire, to go off into the sunset, as you mentioned, to join the dad is going to I think it's less likely that he does that if this threat hangs out there and if the independence of the Fed truly does continue to be a problem. So I think I would if I was in the White House, tell them just pump the brakes, let it go off into Friday. It won't be quiet here at Bloomberg, but let it let it die and let you get get your people on the Fed.

[Bloomberg Host/Interviewer]

Well, I guess maybe there could be some voices inside the White House that are pushing for this. But as we all know, President Trump tends to make his own decisions and send his own messages. Again, we haven't heard directly from the president about this yet, not even anything on True Social. We also haven't heard from Republican Senator Thom Tillis. And I wonder, Lester, if we should be reading into that, that this wasn't as soon as Jeanine Pirro made this announcement, sudden statement coming out from the senator's office saying, great, let's move forward on Kevin Worsh. Does the silence speak volumes here?

[Lester Munson]

Well, I don't know that I go there yet, Kayleigh, if it's a few more days, maybe. But the, you know, senators are elected to deliberate. They're not elected to react quickly to things. They kind of specialize in let a little bit. But the other thing going on here, you know, Tillis, Senator Tillis took a hostage, right. He took this nomination as a hostage. He wrote a ransom note. That ransom note's been answered. I fully expect him to release the hostage here. This is that's standard Senate procedure. He doesn't have to do it immediately. He can wait a few days to do it, you know, with a little bit of elegance perhaps. But that's what I expect to happen. And if it doesn't, then I think we're, you know, then we really are kind of off the textbook and into into into kind of wild territory here.

[Michael Herzog]

All right.

[Bloomberg Host/Interviewer]

Well, I don't know how quickly we could actually see a confirmation vote. I think we've made pretty clear that the story isn't as simple as that. And knowing how difficult so much has been coming on Capitol Hill, I'd love to just hear from both of you on what's taken place in the last just even 24 to 48 hours we sat here with Senator Bill Haggerty, who was going to fall asleep in the soup the whole they voted at 3:30 in the morning, as you well know, gentlemen, on what will be likely a framework for a reconciliation plan, the budget blueprint that now Speaker Johnson House Republican leadership plan to unveil their framework next week Bring us inside the House, Lester, because this has not been coming very easily. The Senate gets something done. The House rejects it because the Freedom Caucus doesn't like it. And Speaker Johnson can't even guarantee that he can get a vote on that Senate passed plan. DHS has been shut down for over 60 days. How do we get out of this?

[Lester Munson]

Well, it's shut down, but it isn't shut down. It's funded, but it's not funded. This is. This has been one of the most nuanced, awkward government shutdowns we've ever had. Yes, it's lasted a long time, but the practical impacts are certainly not what they used to be. Joe. So there are some interesting politics here between the House and the Senate, of course, very different bodies, even though they're both controlled by Republicans with a. With a very thin margin for error here in both bodies. Mike Johnson has, I think, at the end of the day, the hardest job in Washington, which is keeping that, whatever it is, 217 Republican votes at this point together so that he can pass things on the floor. He can afford to lose a couple of them maybe. And then he's. And then he's got a real problem. That is, it's not hurting cats, it's hurting mountain lions. And God bless him for, for showing up, showing up every day and trying to do that.

[Adam Hodge]

One guy who has been able to herd lions has been Hakeem Jeffries. And what I heard from their office, it just in the last 24, 48 hours, is that DHS already got a lot of funding in the last reconciliation bill.

[Michael Herzog]

Right.

[Adam Hodge]

They have more than enough money to do this. This does not need to be done. You will get zero Democrats, I bet, to pass this legislation.

[Bloomberg Host/Interviewer]

Well, speaking of getting zero, are Democrats not going to kind of have zero to show for their fight, shutting down this agency in the first place to get reforms to ice? If Republicans are able to fund this thing via reconciliation or otherwise, with no reforms, Democrats asked for, included, is this not a loss?

[Adam Hodge]

I don't think of it that way. I think it a little bit more asymmetrically. We have fundamentally changed the politics of immigration over the last several months since this shutdown has happened. By calling for and being very clear about what they want, masks, judicial warrants, and being very. And repeating that over and over and over again. We do not want ICE agents and other agents to be killing Americans on the streets. It's a very simple message and it has flipped the script on immigration. The president is underwater on immigration now. In a way, he Never was before. If Democrats played a neutral or positive on immigration, that gives us a real good chance of winning in the midterms.

[Bloomberg Host/Interviewer]

Well, while we're hurting mountain lions here, Lester, what do we do with FISA? Because FISA section 702 needs to be authorized within days, I believe six days from now. The reauthorization bill could get a vote next week, but Speaker Johnson can't seem to get that over the finish line either. Will he see an extension with the help of his Freedom Caucus?

[Lester Munson]

Well, and. And maybe he can even do a kind of a drug deal with Hakeem Jeffries here and get some Democrats to come over and help him if. If he does something for them later down the road. This is a fraught vote. It's been a fraught vote for decades, really, a couple of decades. This has always been tough. They always find a way to do it. At the end of the day, I would say, yes, things are very partisan right now, and each party's kind of looking to the advantage in the election. But let's recall just a couple of months ago, Congress passed almost every single appropriations bill but one, the one for DHS with bipartisan majorities. So there is a. There's a kind of an ocean under the surface here of bipartisanship on the way forward on some things that, you know, we tend to ignore because we're focused on the fight or we want to see the headline or the chiron of who's taken on who. But there is some interest in this Congress in doing things in a bipartisan way. If the speaker can tap into that, if he can talk to Democrats across the aisle or his Freedom Caucus or both in a way that. That reflects that phenomenon from a couple months ago, he might be able to do this next week.

[Bloomberg Host/Interviewer]

Just quickly, Adam, will Jefferies be able to get the votes on FISA if it's necessary to not let the program go dark?

[Adam Hodge]

I mean, I think if they can find some amendment to get it across the finish line, possibly. But let's not forget, when Democrats passed this last time on the Biden administration, we got some important reforms to the program. So I think there have been important changes that have been made. It's. Can you find and work in a bipartisan way to make the program even stronger? If they can, the votes are there. Mike Johnson has not been proven to be very capable of bridging that difference in his own caucus or with a Democrat. So we'll see.

[Bloomberg Host/Interviewer]

We brought our panel into overtime. We had so much to talk about, and we thank you both. Lester Munson, BGR Group, and of course, Adam Hodge, Bloomberg Politics contributor, Bully Pulpit International. Many thanks, gentlemen, and have a great weekend.

[IBM Representative]

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[Podcast Host/Announcer]

You're listening to the 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 play Bloomberg 11:30.

[Bloomberg Host/Interviewer]

We turn to the former Israeli ambassador to the United States. Michael Herzog is joining us live on Bloomberg TV and Radio. Ambassador, thank you for being here to pick up where we just left off with Dan. The notion that in talks in Islamabad this weekend being led on the US Side by Steve Witkoff and Jared Kushner, Israel will not have a formal seat at the table as they try the US Side tries to make progress in a deal with Iran. Is anything that they are willing to agree to at this point acceptable to Israel? Are there minimum conditions for the Israelis that must be met here?

[Michael Herzog]

Well, first, I believe that the fact that the parties are going back to Islamabad to negotiate indicates that they have an interest in diplomacy and don't want to go back to war. As far as Israel is concerned, I believe Israel will go along with whatever diplomatic outcome the US Goes for. As was mentioned, we are not at the table and it's for the US Administration to determine the outcome. However, there are close consultations between the Israeli and the US Governments where Israel indicates its interest. And one area I would emphasize, I think it was mentioned by your reporter, is the issue of the ballistic missiles. That was one of the main reasons Israel decided to launch the war against Iran, because the way they built their ballistic missile program constituted a serious strategic threat to the state of Israel. And there's concern in Israel that if the deal does not include limitations on the numbers and on the range of Iranian ballistic missiles, they will rebuild their capabilities and we'll have to find ourselves fighting another war in a few years. So it remains to be seen if and to what extent this is included in the negotiations.

[Bloomberg Host/Interviewer]

From your experience as a peace negotiator. Ambassador, how much confidence does Israel have in Jared Kushner and Steve Witkoff at the negotiating table?

[Michael Herzog]

Well, I know them personally. I think they are very capable negotiators and they are the ones that brought about a deal in Gaza that released all of Israel's hostages. But ultimately, you know, diplomacy is not dictated by political interests. As far as while we were fighting Iran together, shoulder to shoulder, Israel and the United States were almost fully aligned. When diplomacy speaks, I do see some gaps. But as I said, ultimately it is for the United States to determine the outcome. And you have a very challenging Iranian negotiator. And I'm not sure if Iranians are capable of taking decisions right now given the turmoil inside Iran in the decision making process.

[Bloomberg Host/Interviewer]

Well, to that exact point, Ambassador, that's also what President Trump cited when he extended the ceasefire indefinitely, what he called a fracture in Iran's leadership. You obviously have the new Supreme Leader, who no one hears from very frequently, the IRGC and then the political leadership. Can any of them credibly be agreeing to a long term deal at this point? Is it something that even if it can be reached and negotiated out, is likely to hold when it's, when we're seeing such fractures?

[Michael Herzog]

That's an excellent question. I do see some major gaps in the positions of the between the United States and Iran on the major issues, on the nuclear issue, on hormones, on other issues as well. And I'm not sure there are people in Iran who are capable of bridging those gaps and taking the necessary decisions. So either diplomacy will fail or the parties might go for a very limited diplomatic outcome which will allow for extending the cease power, possibly opening the strait of foremost, because without that I don't see any deal and some kind of an arrangement regarding the high enriched uranium which the United States for good reason wants to be shipped out of Iran. There are several possible solutions and possibly other issues will just be postponed or kicked down the road.

[Bloomberg Host/Interviewer]

Ambassador, there's a lot of reporting about the munitions stockpiles here in the United States that need to be replenished. The number of missiles and interceptors that have been fired already in the course of this war. The New York Times today in Fact says the US has burned through 1100 long range stealth cruise missiles built for a war with China, firing off more than a thousand Tomahawk cruise missiles, 10 times the number we buy each year. And the Pentagon has used more than 1200 Patriot interceptor missiles in the war, something that Israel knows quite a bit about. To what extent is Israel facing a similar need to replenish stockpiles in this conflict?

[Michael Herzog]

Well, there's no doubt that Israel burnt a lot of munitions during this war. And we have to remember we are at war since October 7, 2023 and we've been fighting on numerous fronts in Gaza, in Lebanon, against the Houthis, against Iran, in Syria and elsewhere. So definitely a lot was burned. And this is a challenge. Israel's government, recently our Ministry of Defense just signed some contracts to accelerate the production of the necessary munitions because war may not be over. So that is definitely something that our government is to going giving a lot of thought to.

[Bloomberg Host/Interviewer]

You mentioned Lebanon, Ambassador. President Trump did announce the extension by three weeks of the current ceasefire between Israel and Lebanon, but Hezbollah obviously remains a factor separate to the Lebanese government. What is your degree of confidence that Hezbollah is willing to abide and cooperate in some kind of longer term fashion?

[Michael Herzog]

Well, the fact is that since the first ceasefire was was announced in Lebanon, Hezbollah has not abided by the ceasefire. They've been firing every day, mostly at Israeli forces in southern Lebanon, but also send some drones trying to infiltrate Israel's territory. They do not see themselves bound by this ceasefire. But ultimately I think the announcement of the extension of the ceasefire is important in that it gives space to the governments of Israel and Lebanon. Both of them aligned in the goal of disarming Hezbollah, so it gives them space to start negotiations. The ultimate goal is of course, peace, deal and normalization between Israel and Lebanon. But before that, we have to reach a security arrangement that will enable the Lebanese government and Lembin's armed forces to disarm Hezbollah. The challenge was always the balance of power between them. The Lebanese army did not feel strong enough facing Hezbollah. So the key point here is to change that balance, to weaken Hezbollah on the one hand and to strengthen the Lebanese government on the other hand. And that is the goal of the process.

[Bloomberg Host/Interviewer]

All right, Ambassador, I'm afraid we're out of time. Michael Herzog, thank you so much for sharing your insights. 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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