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- [00:00]
Karen Moscow
Being a small business owner isn't just.
- [00:02]
Nathan Hager
A career, it's a calling.
- [00:04]
Karen Moscow
Chase for Business knows how much heart.
- [00:05]
Nathan Hager
And effort go into building something of your own.
- [00:08]
Karen Moscow
Manage all your business finances, from banking.
- [00:11]
Nathan Hager
To payments to credit cards, all in.
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Karen Moscow
One place with their digital tools. Plus access online resources designed to help your business thrive. Learn more@chase.com business chase for business Make More of what's yours the Chase Mobile.
- [00:25]
Nathan Hager
App is available for select mobile devices. Message and data rates may apply.
- [00:29]
Karen Moscow
JP Morgan Chase Bank Naomi Member FDIC Copyright 2025 JPMorgan Chase & Co.
- [00:40]
Nathan Hager
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.
- [01:03]
Joe Matthew
And we knew that would be the case and we said goodnight Friday. We told you the government would still be shut down on Monday. Not a shocker here because they did take the weekend. Now it's another round of voting today that's supposed to look just like what happened on Friday. About 5:30. We understand that'll be the late edition of Balance of Power. It's the same cr, the same clean Republican CR and the Democratic version that has other elements that are considered toxic by Republicans. The conversation's not changed. Everyone still thinks they have the moral high ground and there's no deal in sight. The House, by the way, is going to hang for another week before they come back. Speaker Mike Johnson made that announcement on Friday, right? They're waiting for the Senate to take care of this, so why bring the members back here to sit around and watch? He spoke earlier today, as a matter of fact. The speaker is in Washington. Here's Mike Johnson.
- [01:56]
David Hale
We have one plea and one plea alone.
- [01:58]
Rick Davis
We need a handful of Democrats to.
- [02:00]
Joe Matthew
Stop the madness, reopen the government so.
- [02:02]
Rick Davis
That we can get to these critical.
- [02:05]
David Hale
Debates about the year end policy decisions.
- [02:08]
Rick Davis
With regard to the further reforms to health care.
- [02:11]
David Hale
Plain and simple.
- [02:11]
Karen Moscow
I'm anxious to get my folks back.
- [02:13]
Joe Matthew
And look, I want to bring the.
- [02:14]
David Hale
House back into session and get back.
- [02:15]
Joe Matthew
To work, but we can't do it.
- [02:16]
David Hale
Until they turn the lights back on.
- [02:19]
Joe Matthew
Keeping the lights back on. Interesting. Or getting them back on. Remember how many Democrats here on the program said sure we can close the government but we need to have a plan to reopen it and there still doesn't seem to be one. Eric Watson is certainly looking Bloomberg congressional reporter hasn't missed a beat up there and he's back on the Hill today with us now live on Bloomberg TV and radio. It's like Groundhog Day up there, right, Eric?
- [02:42]
Eric Watson
Yeah, it looks to be, it looks like the votes will fail again, you know, barring some last minute surprise. And, you know, we had a story on the terminal today. The White House is signaling if this Monday vote does go down, they're prepared to announce and unleash a new round of mass firings. We, you know, not entirely sure what agencies would be targeted or even if that's an empty threat. We know from past experience that, you know, layoffs do require a lot of paperwork. You know, human resources would have had to been working overtime over the weekend to prepare and make sure these are legally bulletproof. But, you know, that could be the big development today if there are mass firings. We're also looking to see if moderates are any closer to some kind of off ramp for, for Democrats. You know, I talked to a well placed source earlier today who said that they're trying to entice just enough Democrats five Democrats to come over and vote for the stopgap bill by saying, look, we'll pass some of these regular appropriations bills. There's what's called a minibus funding the agricultural, Veterans affairs and other departments. We could pass that. Maybe pair the defense bill with a Labor Health and Human Services bill, you know, that has a big increase for the National Institutes of Health. So that Democrats could say, okay, look, we fought Trump's attempts to cut medical research. So far that's not getting enough traction. Democrats are still saying, look, we have the larger issue of the Obamacare subsidies and that has to be addressed in some way, not just a vague promise to deal with it later before we can sign on.
- [04:10]
Joe Matthew
Boy. All right, Well, I don't know if we're going to get a layoff announcement here today, but I just wonder about the two dates that everyone's looking at, Eric. The 10th is when federal workers start missing a pay cycle. The 15th would be for members of the military. Would those compel a couple of Democrats to cross the aisle and get this done?
- [04:30]
Eric Watson
I think it's certainly a very motivating factor and certainly economic terms, we start to see missed paychecks, you know, ramifications of GDP start to pile up. You know, the Trump shutdown in 2019 really ended when air traffic controllers said they're not going to work anymore without pay and started to threaten to close down the skies. You know, at some point, you know, do you do have essential workers say, look, this is enough. So, you know, that could add some pressure. If we go beyond that, though, you know, both sides may even feel they want to dig in. So I think there's a real feeling, you know, we talked to Mike Rounds, is one of these moderate Republicans trying to negotiate some kind of near term deal and also a deal on Obamacare subsidies, saying, look, this drags out. The rhetoric could get even more heated. Let's do something now. So far, that plea is falling on deaf ears, at least here in the Senate.
- [05:20]
Joe Matthew
You mentioned the Obamacare subsidies, which is something we certainly chewed on a lot last week, Eric, whether we get there or not in terms of this continuing resolution. And maybe there's a promise to get an up or down vote on Obamacare subsidies. But what makes us think the government won't just be headed for another shutdown at the, the end of the year here if we can barely get this done now?
- [05:44]
Eric Watson
You know, it's certainly a possibility. And I feel like, you know, Republicans are hoping they kind of break Chuck Schumer here. You know, if Chuck Schumer sees a defection of Democrats, you know, and is unable to hold the line, then his, you know, future threats, perhaps in December or even beyond of not, you know, voting for a spending bill may ring hollow. We're also looking into the possibility that the Senate could change its rules. It's done so for nominees. You know, it could change its rules to say, for example, a stopgap spending bill in the event of a shutdown only requires a simple majority. But there's certainly some experts who believe that would be the end of the legislative filibuster. And Republicans are loath to really go that far because then we'll see, perhaps Democrats come in one day and make D.C. a state, Puerto Rico a state do other things without the threat of a filibuster holding them up.
- [06:36]
Joe Matthew
Keep hearing about a jailbreak, Eric.
- [06:38]
Nathan Hager
Right.
- [06:38]
Joe Matthew
You got Fetterman, Cortez, Masto, King. That means they'd only need a handful more Democrats here. You don't have to have a grand bargain if you can peel off a couple more names.
- [06:49]
Eric Watson
Right, Right. And that's why they're really looking at certain appropriators like Jeanne Shaheen, people who know that buried in these appropriations bills there are potential victories for Democrats. There is a potential pushback on White House Budget Director Russ Vote, who's wanted to slash all of these federal jobs. You know, if the appropriations process goes forward and passes higher spending levels for agencies, the nih like the Department of Education, that you certainly have a case to go to the Supreme Court and say Congress intended these to be fully staffed in the absence of any bills. Certainly the White House is going to see a lot more flexibility and certainly see its court case before the Supreme Court enhanced. So there is that argument in the backdrop. But, you know, the ACA issue is so paramount and a real sense among Democrats that because, you know, as we reported, some 70 to 80% of recipients of Obamacare subsidies are in Republicans. Republican one states that the Republicans will come around on that. We're also looking to see where a deal could be. There's some reporting. We're trying to confirm that there's a White House proposal to only allow previous enrollees to get the subsidies from capping and ending the program. We'll see if that plays out.
- [08:06]
Joe Matthew
Eric Watson, great to have you. Bloomberg congressional reporter with us live from Capitol Hill. To think we're still talking about this and maybe we will be a week from today. We thought it would be smart with the idea of a jailbreak at hand here. Apologies to Thin Lizzie to speak with someone who's actually in the middle of it. Republican Nicole Malia Takis from New York's 11th district joins us now. Congresswoman, it's great to have you back on Bloomberg TV and radio. I know you were probably planning to start packing to return to Washington until just on Friday when the speaker said it would be another week. So the House is clearly letting go of the reins, saying we passed the bill now you guys figure it out, get enough Democrats on board. Is that the most likely way for this to end that you peel off a couple more Democrats, or does there need to be some sort of agreement in principle on Obamacare subsidies?
- [08:57]
Karen Moscow
Well, this was already the negotiated bill that we passed out of the House of Representatives. Remember, this is a continuation of existing funding levels that Senator Schumer himself negotiated last year voted for. And then some Senate Democrats joined in a bipartisan fashion to extend it three times since then. So the idea that they don't want to vote for it now and they were willing to shut down the government was not only a surprise, but I think it was a really bad move on their part because as you mentioned in your report, it's difficult to get out of this now. And the Senate keeps bringing up the same bill over and over, hoping that five rational Democrats will just vote for the same bill that they voted for four times already. That is the easiest way to get out of this. And I think it's the way it's going to likely get. We're going to get out of this. But in the meantime, you're seeing a lot of pressures in the districts. We're seeing military will not be paid on the 15th. We're seeing the women and Women in Infant and Children's program will run out of money. That's a nutritional program that is very important to many of our constituents. You're going to see probably delays at the airport as a result of TSA agents who are not getting paid being frustrated. And you'll probably see a lot of other things unfolding. And the economic impact, of course, the GDP will be affected. Consumer spending will be affected. This is costing the taxpayers $400 million a day. And it's unfortunate that we came to this point. It was absolutely unnecessary. All we needed were the seven Democrats to join the 53 Republicans to get the 60 votes necessary to pass this bill, just like they've done before.
- [10:42]
Joe Matthew
And to think that the Democratic leader in the Senate is from your state and you're surrounded by Democrats in New York. Maybe not in your district, Congresswoman, but what are you hearing when the cameras are off and guys like me are not around? Will there be some common ground here at some point? Do you see an off ramp?
- [11:03]
Karen Moscow
I hope there will be, but it's completely in their hands at this point. Remember, this passed out of the house on the 19th. And if Senator Schumer should just vote for the same bill that he supported four times before. And the impact here in New York, you know, it's 61,000 military personnel that won't be paid. I went around the district. Our VA hospital, thankfully, is operating as it always is. The clinic on Staten island is running smoothly as well. The national parks are all clean. I looked, took a look to see if we had any maintenance issues as a result of the furloughs. We don't at this time, but people, I think, will start feeling it more and more as time goes by. And what has changed since the four times that Chuck Schumer supported these funding levels that he himself negotiated? The only thing that has changed is President Trump is now the president. We know that they don't like him and they want to, you know, do this to, I think, put pressure on President Trump. And the other thing that changed was that Alexandria Ocasio Cortez in the left wing of the Democrat Party, threatened to primary Senator Schumer. Those are the only two things that have changed here. Everything else remained the same, including the text and the bill. Now they're trying to add other types of outside policy initiatives into this clean funding bill, if the tables were turned and Republicans were trying to jam outside policy, the scrutiny from the media and the public would be outrageous. So I just ask people to be honest about what's going on here and say, look, there's nothing wrong with a clean extension of the funding levels that Senator Schumer negotiated and voted for four times. He should just give the seven votes. Let's open the government and then we can have a serious discussion about some of the other policies which I agree on some level that we need to do something about, certainly the Affordable Care act, cuz it is not affordable as they sold us when it passed. And we could talk about some of those other subsidy issues, but we will not accept by any means $200 billion going to states that make its way to fund illegal immigrant health care. We will just not accept that. That is not negotiable.
- [13:14]
Joe Matthew
Well, okay, so there's a lot there, Congresswoman, but I still feel like I heard the glimmer there at one point that there would be some common ground if the government reopens with regard to illegal immigrants making their way to hospitals. And the way that you said that, by the way, is duly noted. This is money that comes from the federal government. States use it as sort of a fund to help hospitalize hospitals from going out of business if people can't pay for their care. What's, what's the option though? You let them bleed out on the street?
- [13:45]
Karen Moscow
Well, no, but first of all, this, this should be on the states. The federal taxpayers should not be paying for the sanctuary policies at the state and local level. That's number one. Number two, our, our emergency rooms should not be utilized for common colds and other things that they have been, which leads to tremendous overcrowding and actually hur who are in serious emergencies, they should be going to a clinic, one of the local health centers and paying out of pocket if they have a common cold or something else. So let's differentiate and make sure that people understand that they are going for emergency hospitals when it's not an emergency for routine services, picking up the bill, which is, which is a tremendous burden in New York.
- [14:33]
Joe Matthew
I appreciate the thoughtful answer on that, Congresswoman. And yeah, the numbers are staggering. I completely understand. I want to ask you about what Russ Vote is talking about and whether an rif if that happens tonight, the White House says it could come after this failed vote. If that is in fact what takes place this afternoon. Does that make it more difficult for frontline Republican lawmakers in blue states like yourself does it make it more difficult to get a deal here in Washington?
- [15:00]
Karen Moscow
Look, I think there's no easy answer here, but the reality is that, that the taxpayers are paying $400 million a day to pay for individuals who are currently furloughed not reporting for work. And so if Senator Schumer continues this shutdown, we're going to, we're going to see the consequences of that. You probably will see some action taken to try to save the taxpayer money. Now all of this again can be ended today because at 5:30 there will be another vote and they can just vote for the same bill they voted for four times and this is over and this type of pain will be prevent. And so far our military personnel have not missed a paycheck because they'll be paid on the 15th. They were paid on October 1st, but they won't be paid on October 15th. And so that's an important deadline as well. We're hopeful that if we can't come to some type of resolution that Speaker Johnson will bring us back to at least vote for a bill that I'm proudly co sponsoring that would allow for our military troops to be paid. And you should also know that many members, including myself, have asked the treasury to withhold our paychecks to be in solidarity with our military men and women. So we're hoping to get this resolved again. Senator Schumer is the one that really has the power right now to end this and then we can talk about, you know, the subsidies if you want to get into that further, I'm happy to discuss it. But the reality is is that the insurance companies have profited 230% increase since the Affordable Care act has passed. The Affordable Care act was not affordable by any means and it has put tremendous stress on the taxpayers who are paying those subsidies to insurance companies, not actual individual.
- [16:40]
Eric Watson
Understood.
- [16:41]
Joe Matthew
Well, I would love to talk to you more about it and you're always welcome here. Congresswoman. It's good to have you back. Really important legislation that you just mentioned that would in fact fund military paychecks. We'll talk more to Congresswoman Molly Itakis about that here. On BALANCE OF power. I'm Joe Matthew in Washington. Our panel is up next, only here on Bloomberg. Stay with us. On BALANCE OF power. We'll have much more coming up after the this.
- [17:05]
Public Investing Announcer
You're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic options plays on the side. The point is you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On public you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto. It's all there plus an industry leading 3.8% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com paid for by Public Investing. All investing involves the risk of loss including loss of principal. Brokerage services for U.S. listed registered securities options and bonds in a self directed account are offered by Public Investing Inc. Member Finran SIPC crypto trading provided by Backed Crypto Solutions, LLC. Complete disclosures available@public.com disclosures you're listening to.
- [18:08]
Nathan Hager
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.
- [18:23]
Joe Matthew
Glad you're with us on the Monday edition. I'm Joe Matthew in Washington, where we've got eyes on courts once again as the president tries to deploy National Guard troops to a couple of different cities. Portland, Oregon, Chicago, Illinois. Neither of those should sound new to you. If you're with us here on balance of power, enter U.S. district Judge Karen Immergut. No snowflake if you look at the resume. In fact, an experienced federal prosecutor worked for Ken Starr. This is the good old days on the Clinton impeachment. Literally interviewed Monica Lewinsky in 1998, as I read in the Playbook this morning, and was appointed as a district judge by a president named Donald Trump in 2019. Twice now ruling against the administration in just two days against this deployment, the president wants to send 200 National Guard troops into Portland, which he says is burning to the ground. And we've got the president here talking about this, about the judges, specifically in this case when he appointed. Let's listen. I wasn't served well by the people that pick judges. I can tell you things like that are just too bad. I appointed the judge and he goes like that. So I wasn't served well. Obviously I don't know the judge, but if he made that kind of a decision, Portland is burning to the ground. You have agitators insurrection. All you have to do is look at the. Look at the television. Turn on your television. Wasn't served well by the people. Pick the judges I appointed. The judge, he says goes like that. So I wasn't Served well. Stephen Miller was yelling about it on cable news over the weekend. And this is going to set up a big legal clash over the deployment of these troops, which is where we start our conversation with our panel Bloomberg Politics contributors Jeannie Shanzano and Rick Davis. Coming in hot off the weekend, Jeannie is democracy visiting fellow at Harvard Kennedy School's Ash Center. Rick, a Republican strategist and partner at Stone Court Capitol. The way he talks about Judge Immergut, Jeannie, you would think that this was an Obama appointed judge. But the idea of going into multiple cities now and it looks like the model that was set in D.C. and in L A is something that, well, according to Stephen Miller, they want to try in all 50 states. So how important will be this next ruling?
- [20:55]
Nathan Hager
Well, I wonder if Donald Trump realizes that the judge is indeed a woman, not a man. I heard that clip there. And he keeps saying he, he, but it is a woman who he appointed. And in all fairness, no president can know all the judges they appoint. And I love the end of the clip when he talks about, you know, just look at television, which is very much how Donald Trump seems to run his life. But a federal judge can't just look at federal television. A federal judge has to look at the facts before them. And the facts before her were from the Portland Police Department, officials in Oregon, security forces in Oregon, all of whom said the same thing. There is not an invasion in Oregon, nor are there is there urban decay. At most, the protests in the last few weeks have been 20 people per night, night that the, that the Portland police are well situated to handle. And so she rejected the claim, of course, then they tried to back end around and she, and she rejected it again and said it's untethered from reality. Meaning that the idea that there is so much chaos you need to federalize the National Guard, there's just no evidence for that. So the judges can't really just look at TV and make a decision. They have to look at the facts and the facts don't support this, this nationalization of National Guard troops.
- [22:17]
Joe Matthew
What do you think about this moment in time, Rick? We saw L. A that was kind of its own isolated experience. Washington, D.C. up the ante, but it was the federal city. These rulings that we're seeing now, two over the weekend, one looming now from an appeals court, could determine what happens in a lot of other American cities. Is that how you see it?
- [22:36]
Rick Davis
Yeah, I think that we're headed down kind of a slippery slope on the constitutionality, the legality of deploying Troops from, in this case, Texas, to quell protests in cities like Chicago and Portland. It really does sort of stress out your common sense. Why in the world would you need to do, you know, bring these guys, call them up, you know, get them to leave their jobs and their families in Texas to go fight with protesters in cities that they have nothing to do with, with. And that's just the common sense side. Then you have Stephen Miller publicly, you know, talking about how this judge, a Trump appointed judge, as he points out, is somehow violating the constitutional order and, you know, bumping up against the supremacy clause of the president. You know, things have got to be tough at the White House when your chief spokesman is Stephen Miller. You know, he, he has a way about him, him that is one way or the highway. And American public is all about fairness. They, they, they love the teams that come from behind. They want to treat their neighbors with respect. And I think it's only a matter of time where this starts to get picked up in the polling data. It starts to cut against the president's numbers on immigration. Because a lot of the premise here is that the, the protesters or the violence that's being happening in these cities is being perpetrated by illegal immigrants. And at the end of the day, this is a narrow thread to pull for this administration. And if they pull too hard, they might find it breaking and losing the support of the American public because of the confusion that they've wrought in this policy.
- [24:29]
Joe Matthew
Jeanne, when we talk about invasions, when we talk about domestic terrorism, and I'm looking at Stephen Miller's tweet in which he said the President won in a colossal landslide, therefore has an absolute moral and constitutional duty to follow through. Calling the ICE protesters in American cities domestic terrorism. We just came off a couple weeks ago another terrible spat of political violence in this country that was blamed squarely on rhetoric. Rhetoric, and in the eyes of this administration, rhetoric from the left. How do we rationalize this approach now?
- [25:10]
Nathan Hager
Yeah, it's hard to rationalize. I think it was Stephen Miller over the weekend who also, in addition to what you said, he also used the term, described what's going on as a legal insurrection. And of course, insurrection has a. That is a very serious crime that you were accusing federal judges of. We shouldn't lose sight of the fact that as the first Monday in October, October, this is also the opening of the Supreme Court's term. And so many of these questions about federal power, especially executive power, will be addressed by that court. But the reality is, is that there are justifications for nationalizing the Federal Guard. The problem is no judge yet has found those justifications have been met. At the district level, we did see the 9th Circuit. At the appellate level, these things have to be debated in court, and the administration has to prove that there is a reason for doing this. And I think one of the most chilling things I heard over the weekend came from the Minneapolis Star Tribune. They had some terrific reporting about administration official out there using signal again to talk about the homeland Security sending in the 82nd Airborne into cities like Portland and like Chicago. Now, this is a report of the Minneapolis Star Tribune. It has to be verified by other networks, etc. But one of the chilling things about this was apparently, according to their reporting, Pete Hegseth was not convinced they should do this, and yet they should send in the National Guard instead. In other words, what we're seeing now as so concerning about the National Guard isn't only the tip of the iceberg about what people like Stephen Miller are talking about when it comes to sending in troops into American cities. And to Rick's point, this is not something that American public is likely going to welcome with open arms. And it's also something that flies in the face of everything the Republican Party has said for years and decades when it comes to states rights. So there's a lot here. And I think Stephen Miller has a problem of overreading an election win. And in doing so, he threatens to undermine the president's good poll numbers on immigration and crime.
- [27:30]
Joe Matthew
You know, we heard from the mayor of Chicago as well. The deployment has not begun there, at least in a real way, but it could be coming. And Texas has offered some National Guard troops to help out in that end. But I want to bring everybody back to last week for a moment when the President was speaking at Quantico, Pete Hegseth was there as well. Remember, he talked about using American cities as training ground for the US Military. The quote, though, was to help quell an enemy within. Quote, no different than a foreign enemy, he said, but more difficult in many ways because they don't wear uniforms. This is a direct quote. At least when they're wearing a uniform, he said, you can take them out, unquote. Mayor of Chicago, Brandon Johnson. Listen, if we break the law, you should be held accountable. If Congress will not check this administration, then Chicago will. For now, let me just say that we are unequivocally going to continue to reject the military occupation of our city. The Trump administration must end the war on Chicago. The Trump administration must end this war against Americans, the Trump administration must end its attempt to dismantle our democracy. What do you make of this rhetoric, Rick? At least when they're wearing a uniform you can take them out. But you hear the mayor of Chicago, he does make it sound like a president that is aiming at his own people. How about you?
- [29:05]
Rick Davis
Yeah, it's a, it's tough to, tough to legitimize. Treating Americans as sort of counterinsurgency strategies is really not going to, not going to meet the moment. You know, you started out talking a little bit on this segment about political violence. We've seen it cropping up almost on a daily basis now since we focused in on Charlie Kirk's killing. And I don't see any effort on the part of this administration to try and tamp down that political violence. Something they may made great theater around at the time of Charlie's killing but subsequently seemed to only be stoking it up. I mean I really do worry that people in these cities who are law abiding citizens whose lives are going to be turned upside down by the presence of federal troops in their cities are going to start to react in a way that is more violent. I mean we're, we're not conflicting, we're increasing the temperature and, and that's something right now this country sorely needs a rest from. So I don't know, it's, it'll be interesting to see if cooler heads prevail in the administration if, if, if Stephen Miller is writing the script. You know, it's going to be a dark day.
- [30:29]
Joe Matthew
Boy, some honesty from Rick and Jeannie. Bloomberg Politics contributors Jeannie Shanzano and Rick Davis stay with us on balance of power. We'll have much more coming up after this.
- [30:42]
Public Investing Announcer
You're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic options plays on the side. The point is you're engaged with your investments and public gets that. That's why they built an investing platform for those who take it seriously. Seriously on public you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto, it's all there. Plus an industry leading 3.8% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com and earn an uncapped 1% bonus when you transfer your portfolio.
- [31:25]
David Hale
That's public.
- [31:26]
Public Investing Announcer
Public.com paid for by public investing. All investing involves the risk of loss including loss of principal brokerage services for U S listed registered securities options and Bonds in a self directed account are offered by Public Investing Inc. Member FINRA and SIPC. Crypto trading provided by Backed Crypto Solutions, LLC. Complete disclosures available@public.com disclosures you're listening to.
- [31:44]
Nathan Hager
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.
- [31:59]
Joe Matthew
Play Bloomberg 11:30 We've had our eyes on a briefing at the White House. Press Secretary Caroline Levitt holding forth, reminding us of a couple of important events that are coming up over the course of this week. A Cabinet meeting along with a visit from the Finland President on Thursday. Mark Carney, Prime Minister of Canada, is going to be here tomorrow. So we're already building out a pretty busy week. That is of course laid against the backdrop of a now six day long government shutdown. There will be voting, if you're just joining us, likely in the 5 o' clock hour in the Senate and the very same results is expected. They are likely to fail. So we'll meet on day seven. Two of the big questions at the Red Sea resort of Sharm El Sheikh today is whether Hamas will in fact free the hostages and whether Israel will withdraw from Gaza. In terms of the former, it's something President Trump talked about on his way out of town yesterday. Let's listen. We had some very good meetings. The countries of the world, a lot of the countries surrounding Israel, frankly, Muslim, Arab and many others have had great meetings with Hamas and it looks like it's working. We're joined by a voice of great experience on this matter, David Hale, Global Fellow with the Wilson center and former Under Secretary of State for Political affairs, former Special Envoy for Middle East Peace 2011-13. I could keep going down the resume here was also Deputy Assistant Secretary of State for Israel, Egypt and The Levant in 0809 Director for Israel Palestinian Affairs 2001-2003 so Mr. Ambassador, we've been looking forward to this conversation. It's good to see you.
- [33:41]
David Hale
Likewise. Thank you.
- [33:42]
Joe Matthew
I can only imagine the complex thoughts that you have right now based on your experience. But I go back to where we were last week just to start off our conversation. Benjamin Netanyahu was in Washington. The American people in a room full, a state dining room full of media, were presented with what was called a deal. No questions were taken. Now a week later we're having talks when people thought that the talks had resulted in a deal. Where are we actually in this process?
- [34:13]
David Hale
Well, as always with this administration, things are kind of a little bit disorganized and not necessarily in keeping with conventional ways of doing business. But I think that the important thing to remember is that all these leaders are in New York during the annual opening of the UN General Assembly. So I imagine that behind the scenes, there are a great deal of conversations that occurred between Arab leaders, Israel, European leaders, and Donald Trump and his. So I wouldn't say that this was just, you know, born yesterday. I think the plan has been an evolution. It's actually serious. It addresses the real issues that no one has been addressing about what the day after a ceasefire is going to look like. But it doesn't appear that Hamas was fully involved in this. And of course, they do have the gun to the head of the Israeli hostages. So we've got to get over yet again this obstacle of how do you get a ceasefire and prisoner exchange and deal with that problem?
- [35:05]
Joe Matthew
Yes. Right. The president says he wants them to act fast, knowing the Nobel Peace Prize will be announced on Friday. Maybe I shouldn't conflate those two, but is it possible for this to be taken care of this week? If we're that far down the road, it could be.
- [35:20]
David Hale
It's not as if this hasn't been discussed forever in a day. Yes, of course. Over and over and over again, there's a split between Hamas. They have a more, perhaps realistic, I wouldn't say moderate, but realistic wing, the political wing in Qatar. I think the Turkish President, Erdogan, has been working on them and trying to convince them to go in. But the military side of the equation, Izzedine is in Gaza and calling the shots. And of course, their only leverage left are these hostages. So they want concrete guarantees about the day after, which the Israeli government is unlikely to provide. So the pressure that the president's applying is the right way to go about this. Pressure of time, pressure of military responses if the Hamas team doesn't react. And pressure is also coming probably from the Palestinian people themselves, who must be more than fed up with this.
- [36:06]
Joe Matthew
You called this a serious plan. Is Hamas a serious player at the negotiating table?
- [36:12]
David Hale
Well, I think if this works, you know, part of why it's going to be difficult to get Hamas to agree to release the hostages is that the plan deals them out. Yeah, right. Politically, they will not have a say. So. And so that is a recognition of reality on the part of where the Israeli public is, even many Arabs, certainly the United States. But Hamas is going to have a hard time swallowing that So I think that, you know, the fact of the matter is that their leaders, if they want to survive, have come to the point where it's time to move and move out of Gaza.
- [36:46]
Joe Matthew
The accept the plan or all hell breaks loose mantra from the president would mean, what if this didn't work out? And I mean, you're bombing, literally bombing rubble at this point. Did they flood the tunnels? What else could be done by the idf?
- [37:00]
David Hale
Well, I don't know. I'm sure they have their options. I mean, they were planning to move into Gaza City and occupy it, which would involve, frankly, rather risky, you know, building to building block to block warfare, which I don't think any soldier would relish. So it's a real threat, but it's definitely plan B. I think plan A is the, that all of these various pressure points put on Hamas may make them finally do this deal. Now, they could get a lot out of it. I mean, if the equation is that, of course, a number of Palestinian prisoners would be released, including very prominent personalities and the remains of the two Sinmar brothers who were assassinated by Israel.
- [37:35]
Joe Matthew
We've got a bit of a headline crossing the terminal, a couple of them from President Trump, not related to what we're talking about. It's about tariffs. Beginning 1st November, all medium and heavy duty trucks coming into the United States from other nations, he writes, will be tariffed at a rate of 25%. We'd heard about the tariff on heavy Trucks Having the November 1st date is news here. It just went red on the terminal. And it's a story that, of course, we'll be tracking throughout the day here. That meeting a week ago with Benjamin Netanyahu was obviously interesting timing. Did the President have to twist his arm to the extent that reports would suggest to get there?
- [38:16]
David Hale
Well, I don't know, but my guess is he did. I think that Prime Minister Netanyahu is very reluctant to remove the tool of military pressure on, on Hamas. And he has a right wing element in his coalition that not only wants to exterminate Hezbollah militarily, excuse me, Hamas militarily, but wants to permanently occupy and return south settlements to Gaza. And so he has to balance these political equations. But we also see there's 70% support for this deal among the Israeli public. So I think for Netanyahu, it's maybe not as hard as people are projecting, but President Trump was clearly determined to do this. He's serious about it. And a forceful president like that can accomplish a great deal when you're dealing.
- [38:57]
Joe Matthew
With the matter of hostages kind of complicates a potential ceasefire here. And I'm wondering how, as a diplomatic diplomat, how that plays into negotiations. Are there separate teams that work on that and how formal should be the handing over of the hostages and the bodies of those who died?
- [39:18]
David Hale
Well, I found my stomach turning when I watched those initial images, the first hostage exchanges where Hamas was allowed to basically exercise theater with these people who held in basements and so forth, had their colleagues killed. So, hopefully it won't be formal. Hopefully it will be up to the normal international standards. There are lots of ways to do that. Icrc, the International Red Cross can help with that. Red Crescent Society that honors and protects the dignity of the hostages. But, you know, President Trump, again, I worked in his first term, he puts hostage issues at the top of the agenda, Americans or other national in ways that very few presidents, in my experience have. And that's part, I think, of why he is so motivated to try to bring this tragedy to an end.
- [40:04]
Joe Matthew
It's really interesting you bring that up. Whether he's talking about the hostages here, he always stops down and says, you know, the families, even with those who lost their loved ones, they still want the body back. He always comes back around to talk about how remarkable that is, to make that point. When you hear him talk about the war in Ukraine and the number of young men and women who are dying each week, he talks about the only thing that can stop a bullet is the human body. The terrible death, the tremendous death, as he puts it. Is this a man consumed with his own mortality or that of others?
- [40:37]
David Hale
I'll leave it to.
- [40:39]
Joe Matthew
I just asked you the wrong question. I think I find that to be a very compelling point of his personality and character that very few people probably are exposed to. But you work for him.
- [40:49]
David Hale
Well, you may be onto something. I was just struck as a diplomat that often hostage issues are not always put at the top of the agenda.
- [40:57]
Joe Matthew
How come?
- [40:58]
David Hale
It's just different. Presidents have different priorities. But this president clearly has prioritized it, perhaps for the reason you said. I don't know. But what I will say is that his ability to apply leverage to get hostages out may clear the way then for what's even more important than the hostage issue, which is bringing this violence in, the situation in Gaza. Gaza and the insecurity for Israelis emanating from it to an end. Now, I'm not an optimist in the Middle east peace process. I think that optimism is, you know, you have to have your head examined. If you're total optimist about it. But again, this plan is not pie in the sky. The 20 point plan is about much more basic, realistic, you know, getting basic governance in place with qualified Palestinians and in international experts. It's about security provided by Arab states primarily and some international troops there to stabilize Gaza. But above all, it requires Hamas first and foremost to disarm.
- [41:58]
Joe Matthew
Will we get to the end of this? Assuming that this ends and a great deal of credit will be owed to Jared Kushner, did he end up providing a critical, playing a critical role here?
- [42:09]
David Hale
Well, I don't know again, but I think that the nuances of this plan suggest that somebody with the kind of prior experience that Jared had from the first term was probably involved.
- [42:20]
Joe Matthew
Interesting.
- [42:20]
David Hale
And so my guess is that he probably helped shape it. And the fact that he's in Egypt helping Steve Witkoff with this is also a good sign. It demonstrates it redoubled presidential commitment to this. And, you know, presidential involvement in Middle east peace has become the coin of the realm. Without it, it's very hard to get anywhere.
- [42:38]
Joe Matthew
Not right. How often has it been due? How usual or unusual is that to have someone who's actually not a member of the administration step in and provide the insights or the salv that's needed at that moment?
- [42:51]
David Hale
Yeah, it's happened less on Middle east peace, but I think back on Jimmy Carter's retired president going to North Korea.
- [42:57]
Joe Matthew
That's right.
- [42:57]
David Hale
Think of Richardson similarly going to North Korea. You can go all the way back to fdr. Even the Wilson administration, a trusted aide and friend, is respected by international partners if he also knows what he's doing.
- [43:13]
Joe Matthew
Yeah, that's a fascinating component to all of this. We haven't talked about Iran. We haven't talked about Iran's proxies other than Hamas. When you consider Yemen, when you consider Hezbollah, will there be a fit of opposition? Opposition, maybe violence in the wake of a deal being struck? Because that would indicate that they're out of business.
- [43:35]
David Hale
No, I don't think the Iranians are in a position right now to mount the kind of opposition, violent opposition to peace process making that they did in the past. The intifadas and so forth had a heavy hand of Iran, but they're lying low. They don't want to be whacked anymore. It doesn't mean they've given up. They want. They assume we're to going, going to lose interest at some point, walk away and then they can rebuild their strength. I think you will find there are going to be elements in Gaza who do not want this. I'm not even sure Hamas is in full control of the bands of armed men who have emerged in the chaos there. And so it's going to be tough. And that's why a stabilization force is going to be required.
- [44:14]
Joe Matthew
Absolutely. Bands of armed men. Whatever fills that vacuum could be actually making it an even more dangerous place. Your point?
- [44:23]
David Hale
Yeah, which is one reason why the Israelis don't want a full pullout. That's why they've drawn this yellow line.
- [44:28]
Joe Matthew
Fascinating. If this meeting goes well today, do we meet again? What should be the next step?
- [44:34]
David Hale
Well, if this meeting is successful, then the hard work begins. I mean, we always think getting to agreement is the hard part. Actually implementing often can be even more challenging.
- [44:43]
Joe Matthew
Right.
- [44:43]
David Hale
So getting a ceasefire, making sure that there is a real hostage exchange and that above all, the disarmament of Hezbollah is for real and not pretend.
- [44:51]
Joe Matthew
Well, really great conversation and delighted that you could spend some time with us, David. He's global fellow with the Wilson center, and I think I made clear his extensive background and experience in this area. Ambassador, thank you, David Hale, the Wilson center with us on Bloomberg TV and radio. Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already, at Apple, Spotify, Fire, wherever you get your podcasts. And you can find us live every weekday from Washington, D.C. at Noontime Eastern@Bloomberg.com.
- [45:20]
Nathan Hager
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- [45:24]
Karen Moscow
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- [45:28]
Joe Matthew
And I'm Nathan Hager. Each morning we're up early putting together the latest episode of Bloomberg Daybreak US Edition. It's your daily 15 minute podcast on the latest in global news, politics and international relations.
- [45:41]
Karen Moscow
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Nathan Hager
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- [45:48]
Joe Matthew
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