Loading summary
Transcript142 lines
- [00:00]
A
Introducing the all new Adobe Acrobat studio, now with AI powered PDF spaces. Do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into 5 insights with a click. Do that with Acrobat. Need templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. Learn more@adobe.com do that with Acrobat.
- [00:34]
Bloomberg Audio Studios Podcasts Radio news.
- [00:40]
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.
- [00:57]
B
Thank you for joining us on the Tuesday edition on Bloomb TV and radio streaming live now on YouTube as well and on Bloomberg Originals. If you're in the car, find US on Sirius XM channel 121 as the President prepares to leave the bubble. Yes, a little bit later on today. He's got a couple hours still. They'll gas up the jet and the President will fly to Pennsylvania. This may sound familiar to talk affordability. It's almost like we're back in the Biden administration at this moment as the administration tries to frame its economic plans in a way that not everyone seems to be feeling or is borne out in the data. President Trump sat for an extended interview with Politico and was asked by Dasha Burns about the issue. Here's how that went.
- [01:41]
C
I do want to talk about the economy, sir, here at home and I wonder what grade you would give.
- [01:46]
D
A plus.
- [01:47]
C
A plus.
- [01:48]
D
Yeah, A plus plus plus plus plus the word affordability. I inherited a mess. I inherited a total mess. Prices were at an all time high when I came in.
- [01:58]
B
Prices are coming down substantially to our count. That was five pluses as the President rates his economy at the end of year one. Now on his way to Mount Pocono, Pennsylvania, he'll be speaking after the bell to a crowd of supporters. And of course we've seen the President outperform on the stump and he tends to do better in polling when he is out in front of people. So it's on now. This is going to be the beginning of a bit of a RO show. And that's where we start our conversation with Bloomberg Washington correspondent Tyler Kendall's with me here at the desk in our Washington bureau. Tyler, this is straight out of the Biden playbook, even going back to knock around near his old hometown in Pennsylvania.
- [02:38]
C
Right, Exactly. And this idea that officials have to thread the needle between saying that the economy is doing well when polling in data is showing us that Americans don't feel that way. And there's two statistics that I pulled for our conversation today that I think put it into context. One is our Harris Poll conducted for Bloomberg News back in October that found that 55% of employed Americans are concerned that they're going to lose their job. And then pair that with the most recent consumer sentiment reading, which is improving Friday's numbers from the University of Michigan showing that it rose for the first time in five months. It's still hovering near those record lows. So we know that the White House really wants to try to recapture this narrative when it comes to higher prices, any signs of a slowing labor market. And this marks the first big domestic policy speech that we've seen from President Trump since November, when Republicans really were handed that slew of election losses over the issue of affordability, which is now front and center of these conversations.
- [03:35]
B
And it's an issue that the president likes to call a Democrat con job or a Democrat hoax. Even the term affordability, he says, is something that was invented by Democratic operatives. So are you hearing anything from the White House on the contents of this speech and what type of rhetoric we're going to hear tonight?
- [03:52]
C
So we did get sort of a preview from the White House press secretary Caroline Levitt in an interview earlier today, really expecting President Trump to actually tout some of the more recent policies. I mean, we've spoken so many times on this program about all of the different policies we've seen come out in really just the past few weeks. Right. Over the weekend, President Trump signing that executive order directing the Department of Justice and Federal Trade Commission to look into alleged price gouging and unfair trade practices, also reminiscent of the last remember that to administration in a bid to try to bring down grocery prices, look into the food supply chain. Other things, such as the recent relief we've seen for American farmers. You had we played the sound from the Politico interview where President Trump didn't mention those exemptions for some agricultural tariff products. He didn't rule out additional carve outs. But then it will be interesting to see how he frames some of the things that haven't quite come to fruition, such as his idea for tariff rebate revenue checks, which is something that we know that he's really put.
- [04:51]
B
Is that real, Tyler, or are we Just talking about it.
- [04:53]
C
Well, we know that it's something that very likely is going to need Congress's approval. Right. Power of the hearse. We've heard some administration officials. I was in an event last month with the deputy White House chief of staff who said that they would look into potentially a way to do this without Congress. But that seems to be a little bit of a stretch at the moment. But I'll bring up Congress, Joe, because as you've been following, of course, the affordability issue that could really come to a head for this president as we head into the end of the year is going to be health care. And at the moment that is squarely on Capitol Hill shoulders. And we haven't really seen Republicans coalesce around a plan for those expiring Affordable Care act.
- [05:30]
B
And coming to a head or a cliff, as Democrats would tell you. The president continuing his refrain in this interview, just send the money to people, let them go to the insurance companies. But there's no evidence that that would help to lower premiums, is there?
- [05:42]
C
Right. So it seems like President Trump is coalescing around a plan that we've really said that we had our eyes on for a while here, likely from Senator Bill Cassidy, Republican from Louisiana, leads the HELP committee. He wants to see more money going into health savings accounts. This would be a bid to encourage Americans to try to get into plans that have lower premiums but higher deductibles with the idea that if they have more money in their HSAs and they can afford higher out of pocket costs. But as you're saying, we really have to see how this actually threads the needle to lower prices for Americans down the line. And really the deadline is coming up in a matter of days that millions of Americans could see their costs spike related to health care if at least an extension doesn't get done. So Republicans could potentially hammer out a different sort of deal again. In that Politico interview, President Trump didn't rule out out an extension on these ACA tax credits, but it's very clear that he wants to see a different plan.
- [06:37]
B
Yeah. So it's interesting to see Bill Cassidy teaming up with Mike Crapo here, Finance Committee chair, because John Thu needs to pick something. Right. They're going to vote on Thursday on a Democratic plan. The question is, will there be a Republican answer?
- [06:49]
C
Right. And he seemed to lend his support to this, to this idea. I mean, as you're mentioning, this is the vote that Democrats wanted to see. This is how we reopened the government. You're going to get deja vu all over again. But it doesn't really feel like there's any sense that that plan, it's a three year so called clean extension. They're not going to put into effect any sort of structural changes like income caps or anti fraud provisions that Republicans want to see. That that's really going to ultimately get over the finish line. So then that leaves with the ball really in Republicans courts. On, on what's going to happen though, worth mentioning. There are some Republicans we have our eyes on like Josh Hawley who's hasn't said that he would support the Democrats plan but says that he wants to support something. It's not a good look for Republicans, he says if they don't put something a little bit more concrete on the table.
- [07:38]
B
Tyler, thank you so much reporting here in Washington. Our Washington correspondent, Bloomberg's Tyler Kendall with the latest from the White House and from Capitol Hill, both ends of Pennsylvania Avenue trying to manage this health care issue as we speak, not to mention what is happening in Ukraine and throughout Europe right now. President Trump has been speaking quite a bit about this recently with a new security plan and a new peace proposal for Ukraine. We find the headline on the terminal before we spend some time with the foreign minister of Slovenia, Trump gives Zelensky days to respond to a peace proposal. This is the plan that has been hashed out with Steve Witkoff, Jared Kushner and to a lesser extent the Secretary of state, Marco Rubio. Over the past couple of weeks, Trump's envoys, according to the Financial Times, have given Zelensky only days to respond to a proposed peace deal. The president saying just on Sunday evening at the Kennedy center that he was disappointed President Zelensky hadn't even read the proposal yet because there are great concerns that this proposal favors Russia and would force Ukraine to give up part of its sovereign territory. Bigger questions about President Trump's view of our allies in Europe. He was asked about this in his sit down interview with Politico. Listen, I think they're weak, but I.
- [08:58]
D
Also think that they want to be so politically correct. I think they don't know what to do. Europe doesn't know what to do. They don't know what to do on trade either. I mean, I look at a lot of the trade, you know, situation that's going on over there. It's a little bit dangerous.
- [09:16]
B
That's where we start our conversation with the minister of Foreign and European affairs, the Republic of Slovenia, Tanya Fayon with us live from world headquarters in New York. Minister, welcome to Bloomberg TV and Radio. It's great to have you with us as part of our conversation. We'll start broadly here in the president's remarks about Europe. Is he missing something that you wish he knew?
- [09:41]
E
First, thank you for inviting me. We just had a very good discussion in the Security Council on Ukraine, which was that points quite emotional and rightly so. We are observing the fourth year of brutal Russian aggression in Ukraine with a lot of civilian deaths, a lot of children, that's destroyed energy infrastructure, and severe violations of international law and the UN Charter. So everyone, including Ukrainians, want to see just and lasting peace. And everyone in the Security Council, 14 countries are permanently calling for an immediate and unconditional cease fire. So I think it is very clear that is Russia, we want to see peace and we want to see just lasting peace. That means that the peace is also acceptable for Ukraine.
- [10:34]
B
Yeah. Well, we should note, and I appreciate your answer, that Slovenia currently holds the presidency at the UN Security Council. So your views are important here. Do you worry that this policy plan on the table now favors Russia and would hurt Ukraine and therefore the rest of Europe?
- [10:51]
E
I mean, the negotiations are ongoing. And I, of course, commend the US Administration, Trump and everyone involved, because it is good that there is a time also for diplomacy, for searching for political solution instead of a military one. Of course, first is, as I said before, immediate and urgent cease fire needed and then meaningful negotiations. Ukraine has to be at the table. Europe has to be at the table. We are discussing about strong security guarantees for the countries that something like similar wouldn't happen again in the future. And it's also about accountability. It is a brutal war that is ongoing. We see really horrible acts. I was traveling myself not long ago in Ukraine, in several parts of the country. When you see young people, children being amputated, without legs, without arms, I mean, these are worse victims. So we do have to all do more. And I encourage diplomacy to work and I encourage all sides to be equally engaged, especially Ukraine, because Ukraine is deciding about its own future. We speak about territorial sovereignty and integrity. No one by force can change the internationally recognized borders.
- [12:12]
B
Hmm. You know, when you consider the idea of this peace plan being accepted within days, the FTSE is reporting that that timeline is keying off President Trump's hope to have a peace deal in place, a deal agreed to by Christmas. Minister, is that possible?
- [12:31]
E
I mean, I wish to see that it is possible. I think we all wish to see just and lasting peaceful Ukraine and a peace agreement. But this is a question mostly for those that are Sitting at the table. I speak mostly here about President Zelensky. He's speaking about the state and about the future of his state. That's why I say it's very important that everyone is at the table, that the dialogue is ongoing. But still, as long as there are bombings every day, I don't see it's a, it's a good way to find a meaningful negotiation. So, yes, I do commend the efforts of Trump and administration because we start talking and Europeans. But it is clear how these talks should be conducted meaningful way and based on an international law and a UN Charter.
- [13:27]
B
Minister Fayon, President Trump sat for an extended interview with Politico and was asked about these negotiations. I'd like you to hear what he said and we'll have you respond.
- [13:35]
A
Listen, which country right now is in.
- [13:38]
C
The stronger negotiating position?
- [13:41]
D
Well, there can be no question about it. It's Russia. It's a much bigger country.
- [13:46]
A
Zelensky rejects this deal.
- [13:48]
C
Is there a timeline, is there a.
- [13:50]
A
Point at which you say, well, he's.
- [13:53]
B
Going to have to get on the.
- [13:54]
D
Ball and start accepting things. You know, when you're losing because you're losing.
- [13:59]
C
Do Ukraine has, do you think Ukraine has lost this war?
- [14:03]
D
Well, they've lost territory. Long before I got here. They lost a whole strip of seafront, big seafront.
- [14:12]
B
Minister Fayon, I'll ask you the same question. Do you believe Ukraine is losing this war?
- [14:17]
E
I think Ukraine has high morale and it's see quite an inspiration to see people fighting for their own territory in the country. As I said before, no one, and I will repeat it, no one can by force simply take your land away. We had our own history, former Yugoslavia. And that is why I say it's all about territorial sovereignty and integrity. If there is meaningful negotiations after the cease fire, it has to be respected and negotiated. So I do hope that the President, Putin, Zelensky, Trump will, will sit down and find a solution that is acceptable for peace, for security and for the future of Ukraine.
- [15:00]
B
Well, you remind us Europeans have long memories and I wonder, even if we have a peace deal with signatures on the table and a security guarantee, does history suggest you can trust Vladimir Putin with a deal?
- [15:16]
E
I mean, we are this year in 80s year of anniversary of United Nations. 80 years ago, our leaders committed to values of securing collective peace and security for our citizens around the world. I think this is a good moment to reflect ourselves, where is our responsibility and maybe to recommit to these values. I think we live in times of this terrible geopolitical turbulence. With too many armed conflicts in the west and we need to protect civilians. I think this is our really moral, if nothing else, responsibility.
- [15:54]
B
If Vladimir Zelinsky gives up the Donbas, gives up territorial gains that Russia has made minister in our remaining moment, what will that mean for the rest of Europe?
- [16:04]
E
You don't expect that I will prejudge the negotiations and the end result? I think this is a to President Zelensky for the talks about what is acceptable and negotiable for Ukraine that is clearly the victim of this war.
- [16:22]
B
I'm really glad you could join us today and I appreciate your coming to see us at our headquarters in New York. Minister thank you. Tanya Fayon, Minister of Foreign and European affairs, the Republic of Slovenia, in a conversation you will not hear anywhere else today. Stay with us on balance of Power. We'll have much more more coming up after this.
- [16:41]
F
Running a business is hard enough, so why make it harder? With a dozen different apps that don't talk to each other, one for sales, another for inventory, a separate one for accounting. Before you know it, you are drowning in software. Instead of growing your business, this is where Odoo comes in. Odoo is the only business software you'll ever need. It's an all in one fully integrated platform that handles everything CRM, accounting, inventory, E commerce, HR and more. No more app overload, no more juggling logins. Just one seamless system that makes work easier. And the best part? Odoo replaces multiple expensive platforms for a fraction of the cost. It's built to grow with your business whether you are just starting out or already scaling up. Plus, it's easy to use, customizable and designed to streamline every process so you can focus on what really matters and running your business. Thousands of businesses have made the switch, so why not you try Odoo for free@odoo.com that's o d o o.com.
- [17:44]
A
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 tube.
- [18:00]
B
All these stories converge eventually, particularly in the conversation we're about to have with Steve Ellis at Taxpayers for Common Sense. I'm assuming that Steve's head exploded when he heard the President talking at the Cabinet meeting a couple of days back. Remember, this was a couple of hours long conversation and we went through a lot of topics and everyone was really focused that day on what we all now call the double tap strike on the Venezuelan boat September 2nd. That was the talker, right? Pete Hegseth sitting right next to President Trump. But as I say, a lot of different things were said over the course of two hours, some of them striking, including this idea. And the president's gone here before.
- [18:47]
Imagine.
- [18:50]
If the whole country was Florida. I stole that from CeCe in New York. A world with no income tax in America with no income tax, thanks to proceeds from the tariffs. Here's Donald Trump in the Cabinet Room.
- [19:04]
D
Listen, so we're going to be making a dividend to the people, and additionally, we're going to be able to reduce debt. And as time goes by over the next two, three, four years, those numbers are going to go up. And I believe that at some point in the not too distant future, you won't even have income tax to pay because the money would take it in is so great, it's so enormous that you're not going to have income tax to pay.
- [19:31]
F
Wow.
- [19:32]
B
So Steve Ellis can retire. You know, he founded Taxpayers for Common Sense many years ago. He's still the president, still on the job every day in Washington. And I don't know, Steve, welcome back to Bloomberg. He says two, three, four years. Imagine a world with no income tax. Is that what you're preparing for?
- [19:52]
G
Certainly not, Joe. I mean, there's no remote possibility that we could raise enough tariff revenue without totally crashing the economy to get to the $2.66 trillion that the income tax raised in 2025.
- [20:09]
B
That's a good number. Okay, a little perspective from Steve. $2.66 trillion. It's unclear how much money has been gathered from tariffs. Steve, we can get abstract on this real quick because the question is still being asked, who pays tariffs? And I realize that that might be a bit of a moving target, but as more retailers and more manufacturers suggest that they're going to have to start passing along tariffs in the next couple of months, in the next year.
- [20:39]
Aren't we already taxing the consumer? Are we just moving the tax in that world?
- [20:46]
G
Well, absolutely. So. So, Joe, so far this year, we raised to $230 billion in tariffs. So a far cry from that 2.6 trillion I was just talking about. And certainly Costco, who is trying to sue to get the tariff revenue back, certainly thinks that it's costing them and their consumers.
- [21:04]
B
Okay, so this doesn't sound like 2, 3, 4 years be enough time or ever for that matter, when you consider the impact of tariffs, Steve, and people must ask you about this at every cocktail party in Washington. There are a lot of, a lot of holiday parties going on right now. Who is paying the tariffs? The administration would tell you that it's mainly the exporting countries and to a lesser extent the importers who are swallowing some of this cost and then maybe a smaller share going to consumers. Do you have a breakdown on that?
- [21:39]
G
There isn't really a breakdown because it's every importer making their own decisions. But at some point it's got to give because they have to make a profit or they're going to stop importing that particular good and those prices are going to go up for consumers. And so certainly it gets passed along and it is effectively a tax on all our consumers and it's a very inefficient tax as well. And so this is something where if you could actually really raise tariffs to the level that President Trump is talking about to eliminate the federal income tax, it would be far beyond what we saw in the 1930s and it would crash the economy.
- [22:16]
B
So enter the idea of a farmer bailout. You can't really talk about tariffs without mentioning this $12 billion president put pen to paper yesterday on this in the form of an eo. The farmers, according to the analysts at Bloomberg Intelligence, say they want trade, not aid. What do you think?
- [22:39]
G
Certainly they're in the business to grow products. They don't want to just get handouts of cash. And so they want to be able to export these commodities, the soybeans, the cotton, these particular commodities. And they're being a major export market was China who, guess what, we slapped with a whole bunch of tariffs and then they reciprocal tariffs on us. And so it's not just hurting China, it's hurting our farmers. Plus China's going to Brazil to buy these soybeans. So essentially they're making, they're managing this much better. And so then we're trying to dole out cash. And we saw this exact same movie before, Joe. We saw it in the first Trump administration where they doled out cash from the Secretary of Agriculture slush fund that.
- [23:22]
B
Will, and it look, it sounds to me like more will be needed. Do you see another bailout like this next year?
- [23:30]
G
Well, unfortunately, Joe, we've seen a series of agriculture bailouts over time. And certainly we seem to hand out money, you know, hand over fist to agriculture and agriculture businesses and through crop insurance and a whole variety of sort of safety net programs. But this is a self inflicted wound. This is something where the administration's policies are harming farmers and to try to assuage them to try to keep them in his tent. They're just helicoptering cash over farmland.
- [23:57]
B
Well, Steve, it's good to have you back. He's the president, Taxpayers for Common Sense. Steve Ellis with us live on Bloomberg as we add the voice of Republican strategist Ashley Davis, of course partner at S3 Group and a regular presence in our conversation here every day. On balance of power. Ashley, it's great to have you. What does Congress think about the farmer bailout? We talked to a lot of members last evening, for instance, from Kansas with a lot of constituents who are counting on this. Is $12 billion enough? And does Congress like the fact that we're helicoptering this money, as Steve Ellis just put it?
- [24:31]
A
I think you'll have first of all, hi, Joe, nice to see you as always. But I think that you'll have both sides of the argument here. I mean, if you look at how this is being paid for the $12 billion subsidies, it's going to be paid for by the tariff revenue. So there's not going to be any budget issues as in the past in regards to subsidies or tax credits or anything else that the farmers have received over the years. So the budget hawks, the people that want to get rid of the deficit, especially on the right, the more conservative members and the left as well, will be happy that this isn't any type of new appropriations money, so to speak. But just as your, your last guest said, as Steve said, is these subsidies have been happening or the bailouts have been happening in different forms to the farmers as long as I've been in Washington, which is almost 25 years, I do think that obviously the farmers are the bread and butter of our country. We want to make sure to support them. But I don't think that adding them to the year over year budgets are the way to do it as well. I actually personally like that this comes from Tyler tariff money. This is kind of a bridge, so to speak, hopefully to get us back on track. But I don't know if I do agree that this is just because of the tariffs, that this is happening because I mean, for again, 20, 25 years that I've been here, there's always been issues around that's the different funding that our farmers need. So I don't there's a bigger problem than just our tariffs.
- [26:07]
Sure enough.
- [26:07]
B
I mean, it has a lot to do with China and soybeans and uncertainty when it comes to imports. Right. But you're suggesting it goes deeper than that.
- [26:18]
A
Well, yeah, but I mean, yes, I mean, obviously Times have changed. I mean a lot of our country was built on the farming industry. A lot of our exports were the farming industry. Exactly. Not just China, but other places throughout the world. It's just, I mean it's just the natural times of change that have changed the industry. However, I don't think there's anybody on the Republican side and the Democrat side, no matter if it's Biden or, or President Trump would ever want our farmers to go under. So I think that everyone does do their best way of supporting them. I mean talk to Chuck Grassley, obviously every day, talk to the Kansas senators. That, that is the number one issue for them, the end. And even in Kentucky or Virginia in regards to tobacco, I mean there's all types of farmers, not just food. So. But we either have to support them through subsidies, we need to support them through one time payments, but it can't continue to eat at our bottom line of the deficit in my opinion.
- [27:20]
B
Jerry Moran from Kansas was with us just last evening talking about it. If you're with us on YouTube, just a reminder, CC's got the best farm footage in the business. Big vote Thursday. Ashley, I've been dying to ask you about this because nobody's closer tied to the Senate than you. What are you hearing? There's, there's going to be a Democratic health care proposal that gets a vote. Do we know what it will include? Have we settled on something and will Republicans have an answer? Because I know there are about 45 plans that they're looking at right now.
- [27:48]
A
Well, I'm just going to say if I, if I knew I would probably have a lot of money right now. But I do think, you know, there's a big lunch happening shortly with Senate Republicans to try to decide a path forward. I don't think that there's not going to be an alternative from the Republicans that will be presented to the three year extension that the Democrats will get a vote on on Thursday. It's obviously Republicans are not going to support that. I don't think anyone's going to be surprised about that. But we have all different. We have a new bill with the Cassidy bill that is coming out today and prepo. So those are two committee chair that have jurisdiction. We have the Moreno Collins bill that also has different. So I'm assuming it's going to be some combination or. Well, let's just put that aside. We also have the House that has like Brian Fitzpatrick, the moderate bills that are trying to, I mean people are trying very hard to come to some solution. The issue. I'm not a big believer that this needs to happen by the end of the year. I think the deadline's more January 30th, but I think something, I think Republicans at least in the Senate this week need to show something. And, and getting around one, one answer is going to be very difficult over the next 48 hours.
- [29:05]
B
Yeah. Well, you remember the talking points. We're going to get into this with our panel coming up around the government shutdown. Speaker Johnson, pretty much every Republican said no. You're conflating two unrelated issues.
- [29:18]
Funding is a now issue. Health care is something we get to figure out at the end of the year. Democrats said no, this is Capitol Hill and we'll never get it done unless we start now. Ashley, were Democrats right?
- [29:31]
A
All of these deadlines are a little bit fungible, as you know. I mean, I think that obviously the subsidiary, subsidiary subsidiaries leave expire at the end of the year. But I do really think that we can backtrack in regards to pain from some of them probably through the first quarter of next year. The problem is, is you need a cliff is exactly what Democrats are saying. But we were, we meaning Republicans, were never going to move off of the shutdown connection to the subsidies. It just wasn't something that politically was going to work. But there is, there is going to be something significant that has to happen in the next three months.
- [30:11]
B
All right, you got it from Ashley Davis. It's great to see Ashley. She'll be back on the late edition of Balance of power. Partner at S3 Group, Republican strategist. Great to see you. Stay with us on Balance of Power. We'll have much more coming up after this.
- [30:28]
F
Running a business is hard enough, so why make it harder? With a dozen different apps that don't talk to each other, one for sales, another for inventory, a separate one for accounting. Before you know it, you are drowning in software instead of growing your business. This is where Odoo comes in. Odoo is the only business software you'll ever need. It's an all in one fully integrated platform that handles everything. CRM, accounting, inventory, E commerce, HR and more. No more app overload, no more juggling logins. Just one seamless system that makes work easier. And the best part, Odoo replaces multiple expensive platforms for a fraction of the cost. It's built to grow with your business whether you are just starting out or already scaling up. Plus, it's easy to use, customizable and designed to streamline every process so you can focus on what really matters. Running your business. Thousands of businesses have made the switch, so why not you try Odoo for free@odoo.com that's o d o o dot com.
- [31:29]
A
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 Big.
- [31:49]
B
Questions about what's going to happen as we make our way through the week, but we're actually asking questions about what will happen later today, even as the president leaves the White House for Pennsylvania. And this will likely sound familiar if you watch Joe Biden go through the affordability crisis and the heights of inflation. In the last administration, it was typically Pennsylvania, where he would travel, if not to Scranton itself in his hometown to get down to kitchen table issues and talk about, yes, affordability, a term and a concept the president likes to call a Democrat con job. So squaring these two ideas could be interesting when he stands before thousands. Later on making his way to Mount Pocono after a Christmas party at the vice president's residence, President was asked just yesterday about this idea of affordability as a hoax or a con job when he sat down to talk about a farmer bailout in the Cabinet Room at the White House.
- [32:45]
D
Listen, you can call it affordability or anything you want, but the Democrats caused the affordability problem. I think the prices are going to.
- [32:54]
B
Be going down already.
- [32:55]
D
I mean, the prices are way down. We brought prices way down from what it was. We inherited high prices, prices. Inflation is essentially gone. We haven't normalized and it'll go down even a little bit further.
- [33:09]
B
But of course, the data we talk about on the regular, at least when the government is open, would, would not confirm that prices are down, in fact flat in some cases and even higher in others. The president likes to reach toward gas prices, which have been trending lower. And some of the deals that he's made when it comes, for instance, to pharmaceutical prices. But people haven't felt those yet. And we could be in a world where health care premiums are about to skyrocket, at least if something isn't solved on Capitol Hill. So let's assemble our political panel for more on affordability and how the president is going to approach this today. What is the strategy that could work that maybe Joe Biden did not enjoy? Rick Davis and Jeannie Shan Zaino, as you can see, are with us Bloomberg Politics contributors. Rick is our Republican Strategist partner at Stone Court Capital. And Jeannie is democracy visiting fellow at the Harvard Kennedy School Ash Center. Great to have both of you with us. Rick, this is a tough order for President Trump. President Biden was never able to close this deal. What should be the approach today as he tells people that they may not be feeling what he is seeing?
- [34:15]
H
Well, Biden, who did oversee one of the largest inflation spikes in our nation's history.
- [34:23]
Was running for reelection. We didn't realize that he wouldn't make.
- [34:26]
G
It all the way.
- [34:27]
H
But at the time, he was trying to be empathetic. He was trying to show the kindler, gentler, Joe, uncle Joe side I feel your pain kind of approach. And that was a disaster because at the same time, he too was vaunting all the positive things his administration was doing to bring these prices down and consumers weren't buying it. Right. Nobody bought that line. Donald Trump is not running for re election. So he has more options on the table. A little truth to power might be a good approach, a forecast for how we're going to deal with it methodically over the course of the next two years. But then that takes away his optionality. And Donald Trump loves optionality above everything else. He loves to be able to turn on a dime. What's working today? If it's not working, we'll try something else tomorrow. So honestly, he talks about this is a great economy. It's an economy A plus plus plus. And, and I think this is one strategist talking that if he goes into this conversation in Pennsylvania and tries to convince people that they aren't feeling good enough because the economy is so great, that's going to backfire on him.
- [35:39]
B
How about just give me a minute, Jeannie, a little bit of honesty. You know, we've got a big plan. He likes to say, I inherited a mess, so give me a minute. Short term pain, like he said with the tariffs, long term gain. Do people buy that?
- [35:52]
I
Well, that's what J.D. vance has been trying to say. That's what Scott Bessant has been trying to say. They are following the directives coming out of the politics arm of the White House. But of course, they are much better at staying on message than Donald Trump, who famously does not want to listen to people who tell him that he's got to say, give us more time. The politics strategy folks are also telling him, stop blaming Joe Biden. Start contrasting your plans with those of Democrats in Congress. He's not interested in that. So it's going to be very curious today to See how he threads this needle? Because of course, he wants to say what he said in that interview to Dasha Burns yesterday, which is that I get an A plus plus plus plus plus. And of course, the problem for the President is we don't grade ourselves. You know, it would be nice in life if we were grading ourselves, but that's not the way this works. Somebody else grades us, and in this case, it's the American voter. And, you know, Rick's right. He's not running again. But, you know who are all of his Republican counterparts that are running in Congress. And if he loses this House in the midterm election, he has a very long two years left on his term when the Democrats will be using oversight powers to investigate him. So he's got an awful lot at stake here, and he's got to get this messaging right today.
- [37:18]
B
You know, Jeannie's a professor at Ion University. I bet she's a hard grader. Remember the daily interviews? They're just grinding through these interviews with Jared Bernstein, Brian Deese, the Biden economic team. They talk about. Talked about shrinkflation, right? They. They brought the meat packers into the White House to talk about gouging. They talked about supply chain. Will we hear specifics like that from this administration? Because it didn't work, obviously.
- [37:45]
H
Yeah, I don't think so. I mean, Donald Trump is the ultimate promoter, right? And you don't promote the negative. I mean, like, go to where he is. He wakes up every morning and says, this is great. I mean, like, you know, and even though he does things like attack his allies and things like that, it's because other things are happening that are even better than having allies. And so I doubt if he's going to go after sectors unless there's something specific he's trying to get from that sector that he's trying to do. And remember Jimmy Carter, who I'm old enough to sadly remember the high cost of power, and he said on his sweater and turned down your thermostats. Well, that went over well.
- [38:28]
B
Yeah. Right.
- [38:29]
H
And so there's no evidence that. That having this sort of serious conversation with consumers is any more effective than, you know, being the grand promoter and saying everything's fine. So I just think he's going to be who he is. Right. Whether. Whether we like it or not, Donald Trump is the cheerleader in chief of the United States of America and our economy. And more and more, he's even realizing it's his economy. So if it's bad, it's Biden. If it's good. It's me. Sure. A year from now, it'll be all me because it'll all be good.
- [39:01]
B
Yeah, well, it's tough to get out of the bubble sometimes when you're the president. Jeannie, he's going to be standing in front of throngs of supporters, right? They're probably waiting in line right now. He'll hear the cheering in the usa, chants. He'll probably figure that this is working out pretty well, won't he?
- [39:15]
I
Yeah. And that's the problem. Right. And we saw it with Biden, we're seeing it with Trump. Incumbency is a benefit, but it's also a drawback. You are in the bubble of the White House. In this case, he hasn't spent a lot of time on the road. It's one of the very few excursions he's taken out on the road because his numbers on the economy are dropping so fast and it's such a problem for him. And yeah, people will be waiting out in the cold and they will be cheering for him, but nothing changes the numbers or how people are feeling. And that's the problem he has to contend with. And there's no easy way to contend with it except to say, I've got a plan and if you hold on and wait, it's going to be coming. But that's not what people want to hear. And of course, that means he's going to go out there and probably bolster what he's done and blame the problems on Joe Biden, which, by the way, is just what he's been doing. The only difference here is, is he's going to do it in Macomb County. And, you know, this is a county that matters. And I think it's a sign how concerned he is about the midterm, that this is one of the counties that straddles two districts, two of the few in the country that are up for grabs in the midterms. And he is desperate to hold on to the House. As we go into the midterm, would.
- [40:31]
B
You send the boss to Pennsylvania? And where should he go from here if this is the roadshow?
- [40:35]
H
You know, I'm not sure I would go to Pennsylvania.
- [40:37]
B
I mean, your point is not running for real.
- [40:38]
H
Pennsylvania goes, so does the country, but he's not on ballot and he's inviting a week's worth of response from Josh Shapiro, who is running for president. And, and, and it's almost like handing a Democrat a gift bag from this administration. So I think I would find a much more Benign state with a Republican governor. Everyone's got the same problems. There's nothing unique about Pennsylvania, only zip codes nearby.
- [41:05]
D
Sure.
- [41:06]
H
And, and I think that that would be a more effective tool because then he has a governor who's going to go around that state for a week and talk about how right he is, not how wrong.
- [41:16]
B
Interesting. And as you're, as you're filling out that map in the strategy meeting, Rick, are you adding frontline Republicans who could be at risk in certain districts? Are you trying to target midterm races while you're trying to deliver your own message?
- [41:31]
H
I mean, look, this is obviously a very skilled political operation around Donald Trump. They've done things that nobody else thought they could accomplish. But I have not seen the gang tackling on administration priorities the way previous administrations have done it. You know, there's, there was a real lack of interest in selling the one big beautiful bill, his signature legislative achievement, arguably for the rest of his term. And nobody went out and really sold it other than the vice president who it was like an afterthought. And, and Republicans today grumble about that because they have to go back to their districts and defend it.
- [42:07]
B
Right.
- [42:07]
H
And they didn't get any high cover from cabinet members or from the president himself. And so I'm not surprised that this is a lone wolf effort. I mean, where's the entire cabinet push out to all these other states, all these other businesses? What events are going to be held in Washington while he's in Pennsylvania echoing the same message?
- [42:24]
B
None. So what do you make of that, Jeannie? Is it because Donald Trump in our remaining moment is the only one who can sell it?
- [42:31]
I
He is the best salesperson they have. Obviously, he's one of the best in the country on both sides of the aisle. But the reality is people have been out. Members of his cabinet are on the air all the time. They are not necessarily going throughout the country. But the problem is, is they don't have a lot of good news to sell. We are facing a crisis in health care. They've got no answer for that. We are facing, you know, a really coming off the heels of a really bad election season for them. Consumers are angry. They're facing Christmas. So, you know, it's got to be Trump that's out there. There's not a lot else they have to offer. And he's got a trumpet.
- [43:13]
B
Well, we'll see how many dolls we can afford this Christmas. Jeannie, Shan Zaino and Rick Davis, the best we have. Many thanks to our panel. Coming up, our conversation With Senator Pete Ricketts to the Republican from Nebraska weighing in on all the issues we're talking about today, only on Bloomberg. Stay with us on Balance of Power. We'll have much more coming up after this.
- [43:35]
F
Running a business is hard enough, so why make it harder? With a dozen different apps that don't talk to each other, one for sales, another for inventory, a separate one for accounting. Before you know it, you are drowning in software instead of growing your business. This is where Odoo comes in. Odoo is the only business software you'll ever need. It's an all in one fully integrated platform that handles everything CRM, accounting, inventory, E commerce, HR and more. No more app overload, no more juggling logins. Just one seamless system that makes work easier. And the best part, Odoo replaces multiple expensive platforms for a fraction of the cost. It's built to grow with your business, whether you are just starting out or or already scaling up. Plus it's easy to use, customizable and designed to streamline every process so you can focus on what really matters running your business. Thousands of businesses have made the switch, so why not you try Odoo for free@odoo.com that's o d o o.com you're.
- [44:37]
A
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.
- [44:53]
B
Play Bloomberg 11:30 Covering both ends of Pennsylvania Avenue and they do collide on this issue of health care as the President prepares to head off to Pennsylvania to talk about affordability. You've chose a very smart time to join us because an important, important lunch directed by the Senate Republican leadership has just wrapped up and we might be able to start answering some of the questions that we've been asking in our conversation earlier with Rick Davis, Jeannie Shan Zaino, even earlier with Ashley Davis, Republicans answer to the Democratic proposal on health care reform. This came up last evening in Donald Trump's conversation on Politico. He held an extended interview in which the issue of extending the enhanced Obamacare subsidies came up. Dasha Burns asked him about this.
- [45:42]
C
Listen, will you tell Congress to extend those Obamacare subsidies while you work?
- [45:48]
B
I don't know.
- [45:49]
D
I'm going to have to see.
- [45:50]
B
I'd like to get better health care.
- [45:51]
D
I'd like to have people buy their own health care, get much better health care. And what I want to do, very simple. I want to give the money to the people, not to the insurance.
- [46:01]
B
So right now people, just one of the ideas floated in this lunch meeting, I can only assume on whether to hold a vote on a Republican drafted alternative to whatever Democrats are going to put forth in the promised vote on Thursday. And what we understand is Democrats will seek a three year extension to these Covid era subsidies. A man who was in the room. This is why I say you picked a real smart time to join us on balance of power because a man who was in the room is with us now. Senator Pete Ricketts, Republican from Nebraska, live on Capitol Hill. Senator, it's great to see you. Are you any closer to answering these questions about what a Republican answer might look like?
- [46:45]
D
Thank you very much for having me on. And indeed, Republicans are going to put forward our own plan with regard to how we fix this broken system. Obamacare has been a disaster for the last nearly 2020 years. It's failed to deliver on its promises. You can't keep your doctor prices just kept going up and up and up. And we know that there are solutions out there. I agree entirely with what the president was saying is give the money to the people and not to insurance companies. In fact, in the bill that we just passed earlier with regard to reconciliation, we changed it so we could put HSAs with bronze level plans to be able to give money directly to people as opposed to giving it to insurance companies. We know there's a variety of other things that will work as well like allowing people to buy insurance across state lines, association health care plans, creating high risk pools for people who've got pre existing conditions to take care of them. So I think there's a number of things that we can do to be able to offer the American people that will actually help start bringing the cost costs down instead of this failed system that again the Democrats very cynically, you know, pass these, you know, Biden Obamacare pandemic subsidies, these bonuses and they're about to expire. But you know, they were really meant to buck up a system that was failing and so just throwing more money at a system. And your point about Democrats just want to extend the same system that we already know is rife with fraud and corruption that's wasting, you know, millions and millions of dollars. This is not what we want for the American people. We want to try and find solutions.
- [48:17]
B
Well, it was noteworthy that Senate Majority Leader John Thune last night decided to back the plan put forth by Bill Cassidy and Mike Crapo. Senator, it doesn't sound like the caucus has arrived at a plan. Is that fair to say?
- [48:33]
D
Actually I had to leave the lunch before to get the to this interview. So I don't know what the final outcome was. But we were discussing as you point out, this very idea of what we want to put forward. And I think that putting forward our ideas with regard to how we actually address health care, I know as coming from a Nebraska senator, I want to deliver for Nebraskans. We want to be able to show that we have got a plan that will help Nebraska's health care costs actually go down, not continue to go up the way it has under Obamacare. I think most Nebraskans know that Obamacare has been a failure. So we as Republicans want to show here are some of the ideas that can actually make a difference versus continue to support the same old Democrat system that we know has failed and frankly is rife with corruption and fraud.
- [49:17]
B
Almost feel like I should apologize for pulling you out of that meeting center. That's pretty important stuff. Do you have confidence that there will be a solution? We hear about what's going to happen with subsidies and premiums rising two, three and four fold if we go over the so called cliff. Will there be a solution before the end of the month?
- [49:39]
D
One of the things I think it's important to note is that when the Democrats put these Obamacare Covid bonuses out, they took the caps off who could get them. So we're providing these to people of much higher income levels. What we really want to do is focus on helping people who are at the lower income levels. With regard to that, I absolutely believe there's a solution out there. We do need Democrats help on this, right? They we need to get to 60 votes to be able to pass anything with regard to how we're going to reform health care. So I certainly encourage Democrats to look at how we can find common ground and solutions on bringing the health care costs down for people who we really need to be helping. And really for those folks at the higher income levels, let's look for solutions that involve them actually maybe getting private health care or other solutions. But really as the government we should be trying to help the people with a lower income level.
- [50:31]
B
I want to ask you about chips and national security. Senator, with your position on the Foreign Relations Committee, you're up with an important bill here and it's something that's very important to our listeners and our viewers on Bloomberg. Having just spent 24 hours talking about Nvidia potentially selling H200 chips to China. Of course we'll see if China allows that to happen. But you've got a safe act you're co sponsoring with Chris Coons that would essentially codify the export controls as I understand it, where they are now. It would cement them in place. Does your bill compete with this idea of selling H2 hundreds to China?
- [51:10]
D
So our bill, the Safe Chips act, is designed to make sure that we don't sell our high end AI chips to China. And I really think it just supplements what the administration is trying to do. It does give the Commerce Secretary the ability to adjust the standards 30 months down the road. If the administration gives licenses on the chips like the H200, it doesn't revoke any licenses the administration gives out. But it's does really set a bar to slow down the number of chips that would be going to communist China. We need to remember that communist China only produced about 570,000 of these chips last year compared to the, you know, us and our allies producing like 20 million. They need us. We need to slow this down. We don't want a world where China is dominating AI. I know for my state and Nebraskans I was the, as governor of the first governor to ban Tik Tok for example, on our state devices. Nebraska's understand the risk that communist China poses. We don't want a world where it's communist China's authoritarian values dominating AI. We want to be able to be the ones that are selling that. And so we want to keep our competitive lead. And that's what our Safe Chip act really is designed to do, is to be able to help America keep our AI chip lead.
- [52:24]
B
So are you cool with selling H200 deliverance to China? Senator, Are we playing with fire here?
- [52:29]
D
I think it's dangerous and risky to give China high end AI chips. I certainly encourage the administration to think about the risks that they're taking when they do this. I don't know what the advisers are advising the President on this with regard to that, but I think there is a risk here that, you know, China and other industries has taken our technology, copied the intellectual property and they kicked our companies out. They've done this in all these industries. And Xi Jinping specifically has said that he doesn't want to be dependent on the United States at all for any of these AI chips. And they've invested billions and billions of dollars in trying to get away from us. So we should really take him at his word and not help him actually get the technology and the know how and the chips. Frankly, for the compute power to be able to catch up with us, catch up with us in this air race. It's important we continue to have a dominant position. And again, that's what our Safety Safe Chips act does, really helps us as a country, delivers for us that national security.
- [53:31]
B
Have you heard from Jensen Huang about this? His whole message has been the only way to win the air race is to get the entire world on the American stack. If that's the case, does the H200 represent that or are you drawing the line, for instance, at the Blackwell chip, that's the one that China cannot get?
- [53:53]
D
Well, again, I think that we should slow down any high end chips from going to communist China. And frankly that just, again, I think that helps us actually supplement what we want to do with regard to dominating the tech stack with American technology, technology outside of communist China. So remember, Xi Jinping, the dictator of communist China, wants to make sure that he's got his own chips and his own technology and we should have a dominant lead on him. And that's actually how we will win the race in the rest of the world to make sure they're using the AI stack with our technology, making sure they're using our AI models, you know, using our applications. That's what we want. And so again, keeping that command signing Lee will help us make sure that we've got the ability to deliver that American AI technology stack to the rest of the world.
- [54:41]
B
Yeah, yeah. Is the White House behind this, Senator? That would help a lot. I'm curious if you have the votes, if Donald Trump says go for it, that would help, wouldn't it?
- [54:52]
D
Well, Senator Coons and I just introduced this bill last week. As you can see, it's a bipartisan bill. We've got not only Senator Coons on it, but Senator Shaheen and Senator Kim from the Democrat side, Senator cotton and Senator McCormick on my side. So we are just around, just starting right now to socialize this idea with my colleagues. We're going to continue to work on how can we make sure we limit the number of AI chips, especially these high end ones. Right. They're going to communist China. So we continue to have our lead. So we're going to continue to work with our colleagues here and of course we'll work with our colleagues in the House and the White House as well to be able to get that done.
- [55:27]
B
Really interesting moment that we're in with regard to Ukraine, Senator. And I know that the ndaa, the, the, the National Defense Authorization act includes I believe $400 million to support efforts in Ukraine through intelligence, through military and so forth, is that the way to end this war is to continue supporting Ukraine.
- [55:50]
D
Dictate dictator. Putin is only going to end this war when he thinks it's he's losing it. And so we've got to get to the point where he believes he's got more to gain through a peace than continuing this war. That means we need to continue to support Ukraine to make sure they've got a strong battlefield. Defense intelligence is obviously part of how we can do that. We also need to make sure we're ramping up the sanctions on them and frankly, helping drive down the price of oil, such as the administration President Trump have done really helps us do that. That helps keep us safer when we've got a dictator like Putin who believes that he's under more pressure. So we should continue to do that. And again, that's how we deliver national security for our country, is to make sure that we got dictators in check. And so making sure that Ukraine is successful in pushing back on Putin is one of the ways that we can help make our own country stronger.
- [56:38]
B
Well, in our remaining moment, Senator, do you support the peace plan that's being formulated? What you've heard about that so far, do you think it rewards the man you just called dictator Putin?
- [56:49]
D
Well, we all want to see the fighting in Ukraine stop. And what we need to do is make sure that we have Ukraine in a strong position to resist aggression in the future. So making sure that they've got the weapons they need, they've got the army, they need to be able to defend themselves, that they've got the support from Europe and that they've got appropriate security guarantees are all the things that we're going to need to have to get to a final peace agreement. We don't want to have something where Putin can just years later or even just the next year decide he's rebuilt enough to attack Ukraine again. So it's got to be something that actually has Ukraine in a strong position to be able to resist aggression in the future because, frankly, again, Putin's a dictator. He's going to continue to come after Ukraine. Russia has done this for centuries. This is the not something new that Russia has done just in the last couple of years. So we're going to have to make sure that Ukraine's in a strong position going forward.
- [57:42]
B
Well, Senator, I appreciate your time. You've been very generous. And it's good to compare notes on a series of topics today. Pete Ricketts, the Republican from Nebraska, with us live from Capitol Hill. Senator, thank you.
- [57:56]
Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already at Apple, Spotify or wherever you you get your podcasts. And you can find us live every weekday from Washington D.C. at noontime eastern@bloomberg.com if a Lenovo computer for your business is on your holiday list, don't shop around, just go directly to the source Lenovo.com it's your last chance to get exclusive deals on the PCs you want for your business, like the ThinkPad X914, Aura Edition and Yoga 7i 2in1. So avoid all that shopping chaos and price comparing and just go directly to the source lenovo.com where PCs are up to 35% off. That's lenovo.com.
- [58:40]
Hey Ryan Reynolds here for Mint Mobile. You know one of the perks about.
- [58:43]
D
Having four kids that you know about.
- [58:46]
B
Is actually getting a direct line to.
- [58:48]
D
The big man up north.
- [58:49]
B
And this year he wants you to know the best gift that you can give someone is the gift of Mint Mob Mobile's Unlimited Wireless for $15 a month. Now you don't even need to wrap it.
- [58:58]
D
Give it a try at mintmobile.
- [58:59]
B
Com.
- [59:00]
C
Switch upfront payment of $45 for three month plan equivalent to $15 per month required new customer offer for first three months only. Speed slow after 35 gigabytes if network's busy. Taxes and fees extra. See mintmobile.
- [59:10]
I
Com.