Jeffries on Ending the Shutdown, NYC Mayor's Race

Summary

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Balance of Power — Episode Summary

Podcast: Balance of Power (Bloomberg)
Episode: Jeffries on Ending the Shutdown, NYC Mayor's Race
Date: October 23, 2025
Host(s): Joe Mathieu, Tyler Kendall
Key Guests: Hakeem Jeffries (House Minority Leader), David Gura (Bloomberg), Adam Hodge, Rick Davis, Mike McGlone, Amb. James Jeffrey

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Overview: Main Theme & Purpose

This episode offers a timely and detailed exploration of two high-stakes issues: the ongoing federal government shutdown—now over three weeks old—and its political and human repercussions; plus the context and implications of the New York City mayoral race as early voting looms. A major focus is an in-depth interview with House Minority Leader Hakeem Jeffries, who discusses Democratic strategies to end the shutdown, the role of President Trump, health care policy battles, and his perspective on NYC politics. Additionally, the episode breaks down breaking news on U.S.-China and U.S.-Russia relations and features strategic analysis from political insiders and policy experts.

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Key Discussion Points & Insights

1. Government Shutdown: Political Tensions, Fallout, and Negotiation Stalemates

• The government has been shut down for 23 days. Major impacts highlighted include unpaid air traffic controllers, potential lapse in SNAP (food stamp) benefits, and looming pressure points like federal health insurance enrollment (00:56–02:14).
• House Minority Leader Hakeem Jeffries speaks candidly on why negotiations are stalled, pinning primary blame on President Trump’s resistance to bipartisan talks and accusing him of “inflicting pain on federal employees” (03:44–04:32).
• Jeffries argues health care is deeply entwined with the shutdown, specifically the urgent need to extend Affordable Care Act (ACA) tax credits (03:44–04:21).
• Partisanship continues to dominate, as Democrats reject Republican proposals to selectively pay certain federal workers during the shutdown, insisting on a comprehensive deal (16:47–18:16, 20:49).

Notable Quote:

"We continue to make clear to our Republican colleagues that we will sit down with them anytime, any place, in order to reopen the government, to negotiate a bipartisan agreement that actually makes life better for the American people..."
— Hakeem Jeffries (03:44)

Key Segment:

• The pressure is building for congressional leaders as vital programs and worker pay reach critical dates:
  • Air traffic controller paychecks at risk (01:27)
  • SNAP benefits set to expire Nov 1 (02:14)
  • Open enrollment for federal health insurance around the corner (02:14)

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2. The Role of President Trump in the Shutdown

• Jeffries faults Trump for stalling negotiations, alleging he has “not given House Republican leaders or Senate Republican leaders permission to negotiate” (04:32).
• Accusations fly about Trump prioritizing golf and a trip to Asia over resolving the shutdown (05:25), alongside attacks on his allocation of taxpayer funds for other projects and foreign bailouts.
• Some moments verge into dramatic—Jeffries sharply criticizes renovations to the White House’s East Wing (05:25–06:17, 25:54–28:15).

Notable Quote:

"Donald Trump has not given House Republican leaders or Senate Republican leaders permission to negotiate, reinforcing the principle, from our view, that he made the decision to shut the government down."
— Hakeem Jeffries (04:32)

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3. Congressional Dynamics & Mechanics

• Attempts for bipartisan outreach are described as limited. Jeffries notes that traditional channels—such as personal calls to the White House—are far less effective under Trump, who rarely meets with Democratic leadership (07:12).
• Strong resistance from both parties to partial solutions; Democrats insist on a bill to pay all federal employees, not just select groups (20:49–21:55).
• Political strategists warn about the midterms, pointing to the dysfunction as both a risk and an opportunity for campaign messaging (18:16–19:18).

Key Observation:

“You shouldn't pick and choose who does or doesn't get paid. That's a simple basic principle."
— Adam Hodge (20:49)

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4. NYC Mayoral Race: Political Stakes and Jeffries’ Hesitance

• Jeffries hasn't endorsed the Democratic nominee, Zoran Mamdani, citing an obligation to weigh in but expressing concerns over the nominee's foreign policy and executive experience (08:13–11:27).
• Jeffries praises Mamdani’s focus on affordability but emphasizes the complexity of implementing these priorities (10:41).
• Discussion touches on the “vacuum” created by lack of endorsements from leading Democrats (11:38).
• Context: Former Gov. Cuomo, defeated in the primary, is running as an Independent, raising questions about party unity (11:27–11:49).

Notable Quotes:

"I was prepared to try to bring this to a close one way or the other. Several weeks ago and then the government shutdown hit. And honestly...it's been all encompassing because this is a traumatic moment for the country..."
— Hakeem Jeffries (08:38)

"His relentless focus on affordability is the right focus. The question...becomes...how are you going to implement that objective?"
— Hakeem Jeffries (10:41)

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5. Foreign Policy Hotspots: U.S.–China, U.S.–Russia

U.S.–China:

• Breaking news on President Trump scheduling a meeting with President Xi Jinping at the upcoming APEC summit (29:35–30:08).
• Analysts expect a likely 90-day extension to the U.S.–China tariff truce, with broader negotiations expected over trade, agriculture, and energy imports (30:08).

U.S.–Russia & Ukraine War:

• White House imposes new sanctions on two of Russia’s largest oil companies—a first direct measure in Trump’s current term (31:02–32:26).
• Expert commentary highlights:
  • Sanctions will hurt but are unlikely to be immediately decisive for the war; Russian oil is expected to find other markets, notably China (32:26–35:17).
  • The steps are incremental but send a strong signal of continued Western resolve (35:17).

Notable Quote:

"This is a major hit. In the end, the Russians will get their oil out, will be able to absorb that...but this is going to hurt the Russians...it sends a signal politically to Putin that our will has not collectively been broken."
— Amb. James Jeffrey (35:17)

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6. Markets & Economic Impact

• The announcement of Russian oil sanctions sparks a sharp rise in oil prices (WTI up nearly 6%, Brent crude up 6%) (32:26–34:24).
• Bloomberg's Mike McGlone forecasts continued oil oversupply and predicts a return to prices below $50/barrel despite current volatility, citing weak global demand—especially from China (33:35–34:24).

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Notable Quotes & Memorable Moments

| Timestamp | Speaker | Quote | |-----------|---------|-------| | 03:44 | Hakeem Jeffries | “We will sit down with them anytime, any place, in order to reopen the government... but we also have to decisively address the Republican health care crisis.” | | 04:32 | Hakeem Jeffries | “Donald Trump has not given House Republican leaders or Senate Republican leaders permission to negotiate...” | | 05:25 | Hakeem Jeffries | “He’s found more time to golf than he has to engage with Democrats on Capitol Hill…” | | 10:41 | Hakeem Jeffries | “His relentless focus on affordability is the right focus. The question… is how are you going to implement that objective?” | | 20:49 | Adam Hodge | “You shouldn't pick and choose who does or doesn't get paid. That's a simple, basic principle.” | | 35:17 | Amb. James Jeffrey | “This war is being fought in every sense as an attritional campaign… little things are not going to make a difference decisively. Rather they add up. So you take what we just heard. This is pretty significant. This is a major hit… it sends a signal politically to Putin that our will has not collectively been broken.” |

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Important Timestamps & Segments

• 00:56: Shutdown impact overview; air traffic controllers missing pay
• 03:44–06:17: Hakeem Jeffries interview: negotiations, ACA, White House criticism
• 08:13–11:27: Jeffries on NYC mayoral race, Democratic unity, and endorsements
• 16:47–18:16: Senate Democrats block GOP measure for partial worker pay
• 20:49–21:55: Analysis on political risks for Democrats, pitfalls of partial pay strategies
• 29:35–30:08: Breaking: Trump–Xi meeting at APEC announced
• 31:02–32:26: U.S. sanctions on Russian oil companies, oil price reaction
• 35:17–41:44: Amb. James Jeffrey on sanctions, Russia, Ukraine, and allied support

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Flow & Takeaways

The episode maintains its signature brisk, insightful, and occasionally wry Bloomberg style. The sense of urgency is persistent—both in the context of the shutdown’s human costs and the broader gridlock of U.S. politics. Jeffries’s passion and frustration are clear, especially as he frames the shutdown as a national trauma inflicted for political gain.

The show weaves in sharply relevant context on New York politics, foreign policy tensions, and financial market reactions. Listeners come away with a thorough understanding of the stakes: for working Americans missing pay, for party leaders weighing tactical moves, for voters in major cities, and for the global community monitoring U.S. diplomatic signals.

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For Those Who Haven't Listened

This episode is a comprehensive primer on the state of legislative gridlock in Washington, the Democratic Party’s messaging and maneuvering, the intricacies of the NYC mayoral race, and the intersection of domestic crisis with international policy. You'll get sound bites direct from top political players, grounded explanations from seasoned journalists, and real-time market and policy updates—essential for anyone seeking an informed overview of politics, economics, and America’s place on the world stage as of late October 2025.

Transcript

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[Tyler Kendall]

I'm Tyler Kendall here alongside Joe Matthew in Washing, where the government shutdown continues. We are now in day 23 and we're seeing Republicans starting to try to ramp up their own pressure on Democratic colleagues. We saw the Transportation Secretary, Sean Duffy, on Capitol Hill today and we've given you a lot of different dates to put in your calendar. But Joe, here's another one. Tuesday, Sean Duffy confirmed, is the first full paycheck that could be missed by air traffic controllers amid really what's been a shortage already from them since this shutdown has started.

[Joe Matthew]

To think we're clearing another pay cycle here is pretty remarkable. It was two weeks ago. We were talking about how that might be an inflection point, but it's true in air traffic controllers long before the shutdown ever hit. And we were reminded of this with that terrible, tragic crash here in Washington, D.C. in many cases working 60 hour weeks, exhausted away from their families. And to remove their paychecks right now is a very difficult circumstance. Knowing we simply cannot train more air traffic controllers fast enough to fill these towers. So yes, the airline component here is a big one. We talked about the expiration of SNAP benefits the first November, the open enrollment. All of these items are creating a pretty major point of pressure here on Capitol Hill. That brought us to our conversation with Hakeem Jeffries.

[Tyler Kendall]

Right, Exactly. And just to put a finer point on that November 1st date for Snap benefits, we really are seeing this become an issue on both sides of the aisle. But I can say that I spoke to one senior aide to Democratic leader Chuck Schumer today who told me that it really is the moderates within the Democratic conference that appear to be really making this a pressure point. And that is something that we should watch as we inch closer to that.

[Joe Matthew]

Date, that's for sure. The aforementioned David Gura is still in Washington and graces our desk right now here on Balance of Power, of course, Bloomberg correspondent, host of the Big Take podcast, which is why you sat down for a good chunk of time with Hakeem Jefferies in his office. The sense of frustration was, I'm guessing, palpable.

[David Gura]

It was. And as you both know, this is such a unique shutdown, the circumstances of it, how it's unfolding, and you've done such a good job of laying out all the potential pressure points here in the days to come. So far, over the course of these 23 days, a lot of people have been shielded from those effects, the effects of the shutdown. We've seen Russell Vogt, the head of omb, moving a lot of things around to make it so that some people are paid, others aren't. Some programs are kept running, others aren't. That can only last so long, one would think. And as we look ahead to Friday of this week, to Tuesday of next week, to when open enrollment begins for health insurance, pressure is going to mount. So it was a good time to sit down with the minority leader just to get a sense of sort of how this is all unfolding from his vantage in a very quiet Capitol building today. I asked him just sort of what kind of conversations are happening among Democrats and Republicans, and here's what he had to say.

[Hakeem Jeffries]

Well, as Democrats, we continue to make clear to our Republican colleagues that we will sit down with them anytime, any place, in order to reopen the government, to negotiate a bipartisan agreement that actually makes life better for the American people in terms of spending and funding. But we also have to decisively address the Republican healthcare crisis. We've maintained that position from the very beginning, before Republicans shut the government down and during the entirety of the shutdown, because it is a real crisis that has been created at this moment, particularly as it relates to the urgent need to extend the Affordable Care act tax credits.

[David Gura]

As you and I are speaking, the House speaker is doing a press conference just down the hall. What is the level of engagement? Do you pass one another? Are you speaking with one another? Are Democrats talking to Republicans right now?

[Hakeem Jeffries]

The conversations have been very limited, unfortunately, because Donald Trump has not given House Republican leaders or Senate Republican leaders permission to negotiate, reinforcing the principle, from our view, that he made the decision to shut the government down. They want to continue to inflict pain on federal employees. They've done that from the very beginning of Donald Trump's presidency. In fact, more than 200,000 federal employees had been forced off the job of prior to the government shutdown. And this is something that we've continued to see them build upon during the shutdown. Until Donald Trump gets serious about reopening the government, unfortunately, we're going to remain in this situation, and everyday Americans are being hurt.

[David Gura]

He's getting ready to take a trip to Asia. Is it appropriate for him to be doing that at this moment, when the government is shut down?

[Hakeem Jeffries]

I think that the President has a responsibility both domestically and throughout the world. However, what has been irresponsible is that throughout this shutdown, he's found more time to golf than he has to engage with Democrats on Capitol Hill. He's decided to try to steal $230 million in taxpayer funds from the Department of Injustice. Donald Trump and his administration have found $40 billion to bail out a right wing wannabe dictator in Argentina and can't find a dime to extend the Affordable Care act tax credits to keep healthcare affordable for tens of millions of Americans. And on top of all of that, they are demolishing the east wing of the White House in ways that have appropriately horrified the American people.

[David Gura]

I wanna ask you about potential off ramps, and Tammy Baldwin, the senator from Wisconsin Democrats, said Trump is the off ramp at this point. Do you agree with that assessment? And has there been any kind of outreach or dialogue between you and the White House?

[Hakeem Jeffries]

Leader Schumer made clear earlier this week that we have reached out to the White House again to indicate that prior to Trump's departure for Asia, he should sit down with Democrats to find a path forward to reopen the government, to enter into a bipartisan spending agreement, and to address the healthcare crisis that Marjorie Taylor Greene acknowledges must be addressed and that traditional conservatives, who are in the toughest seats in the country, have now publicly acknowledged this week needs to be addressed.

[David Gura]

Can I ask you a question of congressional mechanics, and that is, can the Democratic leader pick up the phone, call the White House and reasonably expect the president's going to take that phone call? Are you able to do that? And if so, what's keeping you from having that dial?

[Hakeem Jeffries]

Well, traditionally, that probably is the case, but in this White House, that's very much unclear. Donald Trump didn't have a meeting with House or Senate Democratic leadership until two days prior to the government shutting down.

[David Gura]

It was opening night at the Garden last night. Knicks vs Cavs. Knicks won 119 and 111. Also, the final mayoral debate in New York City did You watch it. Have you kept up with what happened on stage last night?

[Hakeem Jeffries]

I wasn't able to catch the debate live. I did catch the final few moments of the Knicks game, I do admit, but the debate had already ended at that point by the time my day ended. I did think it was interesting yesterday and a strong step that was taken by Zoran, the Democratic nominee, when he indicated his intention to retain our current police commissioner, Jessica Tisch. I think that probably will provide a lot of comfort to people throughout the city of New York. She's done a great job. She's well respected. We're a diverse city. And it'll be interesting to see how that is received upon my return home.

[David Gura]

You've been asked about this a thousand times. Let me ask 1001 times, are you prepared to endorse the Democratic nominee for mayor of New York State?

[Hakeem Jeffries]

Well, what I'll say is I'm prepared to weigh in in advance of early voting. And early voting starts two days away. Early voting starts on Saturday.

[David Gura]

Yeah. What's holding you up and what are the issues that you're still concerned about? I know that you said the last time you were asked about this, you were going to have a conversation with Soren Mandani. Another conversation.

[Hakeem Jeffries]

Yeah.

[David Gura]

What's left undiscussed?

[Hakeem Jeffries]

Well, I hope to speak to him today or tomorrow. And in fact, I plan on speaking to him today and tomorrow. And I think from my standpoint, look, I was prepared to try to bring this to a close one way or the other. Several weeks ago and then the government shutdown hit. And honestly, David, it's been all encompassing because this is a traumatic moment for the country that this has been inflicted on the American people and then laying on top of it. Right. Just shutting the government down, as Republicans have done, is very problematic. But trying to communicate with the American people why we as Democrats also believe that addressing the Republican health care crisis is necessary and explaining the entirety of the assault on their health care that has occurred this year. Beginning with the one big ugly bill and the largest cut to Medicaid in American history, and the fact that their hospitals and nursing homes and and community based health centers are closing all across the country, home care will be adversely affected. The possible cut to Medicare at the end of the year, the Republican refusal to extend the Affordable Care act tax credits and the threats that they're now making to even try to repeal the Affordable Care act and the assault on public health infrastructure. This is extraordinary stuff. We've never seen anything like this in the history of the country, which is why we believe it needs to be decisively addressed, along with, of course, reopening the government, standing by our hard working federal civil servants, and making sure that we can enact the bipartisan spending agreement. So it's been all encompassing, you know, for the last several weeks. That said, I do have a sense of obligation to weigh in one way or the other in terms of the mayor's race in advance of early voting.

[David Gura]

So I did watch the debate and the themes of criticism that came up from the other two candidates were he's inexperienced and his comments on the Middle east are problematic. Are those likewise the same issues that you want to talk to him more about? What's left unsaid between the two of you?

[Hakeem Jeffries]

Well, I've certainly already publicly communicated and privately communicated some of my concerns with respect to some of the views that he's expressed in terms of foreign policy. That said, I believe his relentless focus on affordability is the right focus. The question, you know, becomes for any mayor, for any executive, how are you going to implement that objective? Because it's the right objective. But he's got to navigate a treacherous governmental terrain in terms of the city, state, and most significantly, the federal government, because it's clear that Donald Trump has it out for Democratic led cities all across the country. And we've got to be prepared for the fact that Donald Trump is coming for New York.

[David Gura]

I guess my question is one of confusion. So I sat down with Governor Cuomo and in that conversation he said, I'm a Democrat, my dad was a Democrat. He's really taking up that mantle. Of course, he lost the primary. He's running as an independent.

[Hakeem Jeffries]

Yeah.

[David Gura]

Isn't there an element here of confusion that in this vacuum, and you could, I guess, do something to close that vacuum, he's able to take up that mantle to the detriment of the duly elected Democratic nominee?

[Hakeem Jeffries]

Well, it's interesting because he is running as an independent, so he's not the Democratic nominee. But of course, he has a long history as a Democrat. I think some of the concerns that I've seen articulated, however, is, well, what is the actual path to victory given the inability to convince a majority of Democrats in the primary that you were the right person to lead the city moving forward at this moment.

[David Gura]

A fascinating conversation, wide ranging. We did talk a lot about the Democratic Party and what it can learn from the race in New York as well. So picking up on what he's just saying there, a moment ago, I mean, Zoran Mamdadi had a substantial win in that Democratic primary. What does he take away from that as he looks at the political terrain across this country, which, of course, is a huge part of the minority leader's job to assess who's running for what, what primaries are, ones that can be contended. We talked about kind of younger voters that say that they might have, how they've been animated by some of these issues. And we came back to that notion of affordability, which again, he got. The mayoral candidate in New York got a lot of praise from Hakeem Jeffries about focusing on affordability in a very, very, very singular way.

[Tyler Kendall]

Well, affordability also perhaps lends to this conversation about the shutdown. I was pretty struck with the Democratic leader telling you that this is a traumatic moment for our country, in his words. We're of course tracking this vote on Capitol Hill tonight. Potentially could pay federal, some federal workers, but doesn't look poised to pass. Did you get any sense of from Leader Jefferies that the pay aspect, the federal workers, they're potentially going to miss this full paycheck tomorrow, that that is really leaning and weighing on the Democratic Party?

[David Gura]

I think it is certainly weighing on him, and he said as much. But you heard from him in that conversation his adamance that this not be doled out selectively, that you can't prioritize some federal workers over other ones in the way in which Republicans in the White House have have proposed here. So, again, getting back to those pressure points, I think there's awareness here among Democrats and Republicans as well that this is going to moment when, for lack of a better phrase, a lot of Americans wake up to the fact that this is happening. It's going to really hit them hard. And by virtue of how this is all played out, that last paycheck wasn't one that was as seismic as this one is likely to be. So, yes, I think he recognizes it's going to weigh on a lot of people. Is it enough to kind of push him to make any concessions? No, it didn't seem like he felt that way.

[Joe Matthew]

Do we really believe he didn't watch the debate last night? I mean, I believe he caught the end of the game.

[David Gura]

Yes.

[Joe Matthew]

He didn't watch that wasn't on in the office.

[David Gura]

I mean, two days away from a divorce and only believe what he's saying there. But I will say in New York, where I live, these were two dual. I mean, you've had both candidates, both Cuomo and Mondani, going to the stage. The first thing they said was, sorry that you're not able to watch the Knicks game tonight, but thank you very much for watching this debate. So there's a recognition of the fact that there was some split screen programming there.

[Joe Matthew]

Wow, that's New York last night. Absolutely. So if you'd done the interview tomorrow, we'd have the endorsement? I guess I didn't feel like I.

[David Gura]

Got 99% of the way there based on what he was saying about his obligations.

[Joe Matthew]

So what do you think of that? And did he wait so long that it. It doesn't matter in New York?

[David Gura]

That's a really great question, one I've really wrestled with over the last few weeks. I spoke with Governor Cuomo a few weeks back. How much does an endorsement like this matter? Of course, we haven't heard from Senator Schumer either. And in the past, both of them have weighed in on mayoral races. If you look at how well Mamdani performed in that Democratic primary, he did so without these endorsements. That's fine. So I think you raised a really great point, which is, how much does this really matter to the base of support that's really elevated? Sorry, Mandani. I don't think that it matters that much. But again, you heard there from Hakeem Jeffries. He feels an obligation to do so because of his position he's in and that he's in the 8th district of New York. He feels like he has to do it. So we'll see if in fact he doesn't hear in the next, as I said, two days.

[Tyler Kendall]

Yeah, well, I was going to ask where, where this is headed. How likely is it that we are going to see something from the leader?

[David Gura]

Look, I'm, I'm guessing here, based on the conversation, the tone that he took, I think he's likely to do it. I think he feels that obligation is a real one. But again, time is ticking.

[Joe Matthew]

So there's a lot more of that interview. By the way, the Big Take podcast about the droppers just, just dropped 30 minutes in length.

[David Gura]

So you hear the whole thing.

[Joe Matthew]

Apple, Spotify, you know the drill. I go through this every day. The Big Take podcast with our good friend David Gore. It's great to have you back in dc, David, and thank you for the great reporting. I'm Joe Matthew alongside Tyler Kendall. This is Bloomberg. Stay with us. On balance of power. We'll have much more coming up after this.

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[Joe Matthew]

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[Bloomberg Announcer]

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[Tyler Kendall]

The Thursday edition of Balance Power on Bloomberg Television and Radio. And we have some breaking news happening just moments ago. Senate Democrats blocking a Republican backed measure aimed at paying military troops and some federal workers during the US Government shutdown. It is the latest sign that we are no closer to any agreement to reopen the government. Joe, a pretty partisan vote here. It looks like it failed to advance 54 to 45. Of course, as you well know, 60 votes are needed in order to get such a measure through.

[Joe Matthew]

Yeah, this is something that we knew was going to happen. We in fact talked to the author of that legislation last evening, Senator Ron Johnson, who was struggling with this idea of not necessarily having the votes for it to pass, knowing that Democrats were filibustering against this measure. And a lot of campaign ads are probably going to be made from those speeches.

[Tyler Kendall]

Right, right, exactly. But Democrats of course have put up their own measures and they're arguing when it comes to this bill in particular, it's going to give the administration too much power to determine who gets paid and who doesn't. And ultimately that's how this bill really did fail today in the U.S. senate.

[Joe Matthew]

Yeah, it's your take is spot on. Democrats have two bills of their own today that they're going to be offering. Chris Van Hollen, Democrat from Maryland, has one, Gary Peters of Michigan the other. Those are going to fail as well. So this swirl continues. And the aforementioned Ron Johnson, the Republican from Wisconsin, tried to make the case for his bill last evening here on Bloomberg. Listen, clearly the current system is utterly broken right now.

[James Jeffrey]

We just crossed $38 trillion in debt.

[Joe Matthew]

And definition of insanity is doing the same thing over and over again, expecting different results. So again, we're in this dysfunction. Let's not make federal workers who are being forced to pay pay for our dysfunction. Not a difficult case to make. This is legislation that would pay employees who have been forced to stay on the job, not furloughed, but still as essential workers continue working. Democrats are concerned, as Tyler mentioned, that gives the administration too much authority and in fact makes it a case of some get paid and some don't. And we shouldn't be making decisions like that now. 750,000 federal workers furloughed. See how our panel feels about it. Bloomberg Politics contributors Adam Hodge and Rick Davis are with us. Adam, our Democratic strategist, managing partner at Bully Pulpit International. Rick, Republican strategist and partner at Stone Court Capital. What do you think about this, Rick? We knew it was going to fail and this is going to be fodder for Republicans in the midterms.

[Rick Davis]

Yeah, this is just a sort of continuation of the exercise that, you know, leaders Thune has been doing every day, pushed putting up the clean CR for a vote. It fails. Do it again tomorrow. It fails. I think there have been 11 or 12 votes now on that. And, and so this is sort of a another way of saying the same thing, which is, you know, we want to try to create some progress on government reopening, but unless we've got a deal across the board on all these various issues that the Democrats have raised, nothing is going to pass. And, you know, I actually think it may have a pretty salutary effect on the employees because these are the folks who are sitting around going, now wait a minute, we're the victims. You guys are dysfunctional on Capitol Hill. And maybe we just start not showing up for work. And you know, I think if I were in a union in the federal government, which is almost laughable, that I would be in a union in the federal government. You would have to argue that these union managers should start telling their employees, hey, you know, maybe you shouldn't show up tomorrow. Maybe we ought to do a walkout, maybe. I mean, like, I don't hear any of that happening. And yet that's a classic union strategy.

[Tyler Kendall]

Well, Adam, what's your take and what was the risk reward calculus here for Democrats? Because as Joe mentioned, this seems like perfect fodder for Republicans as they start to make their midterm election campaign ads.

[Adam Hodge]

I think the thing to keep in mind is that you shouldn't pick and choose who does or doesn't get paid. That's a simple basic principle. Just Joe mentioned Democrats have put forward proposal to pay all federal employees as the law makes Clear. I think the fact that the White House has said that they may or may not fire some folks and keep some folks from quote, unquote, Democrat run agencies as if they're not the leaders of the entire US Federal government, I think gives Democrats a little bit of pause here. But I think the biggest takeaway is that through all of this debate, throughout the entire show shutdown, it really has become a topic about health care and what will happen on November 1st when people start seeing some of those real price increases and get that sticker shock. And Democrats have said, look, let's negotiate on this bill. Come to Washington, let's do it. The problem for the President, I think the more he does go and play golf or does take this trip to Asia, it raises questions about whether he's serious about getting a deal. And he is the only one who can get a deal done to stop the government shutdown.

[Joe Matthew]

What do you think about the timing of this trip, Rick? Because it looks like the government will be shut down for at least another week and we're going to be knocking on the door of November 1st here by the time the President gets back to the United States. That's when snap benefits are going to start expiring and so forth. This gives Democrats, as we heard from Hakeem Jeffries a little while ago, a pretty good talking point as well. Should the President cancel?

[Rick Davis]

No. I kind of feel for the President. This is actually the one time he hasn't exactly told Thune and Johnson what to do. And, and then he gets criticized for usurping Congress. Right? Here's Congress's chance to go and do their job. The President has a job to do. He should go to Asia. He should meet with Xi. He should figure out a way past these trade barriers that we have installed and, and make sure that Asia doesn't erupt into either a trade war or shooting war. I mean, like, I'd say that's important and that's the President's job and he didn't pick the timing of this. But. But I just can't fathom why there isn't more leadership by the Republican leadership in the House and Senate. It's their House and Senate and they have been criticized heavily for being usurped by the White House. And here's an opportunity that they can do something on their own to get government back working. And yet they seem unable to finding a strategy that will work 22 days in. And I mean, I don't know about you, Joe, but, like, that's a long time to be thinking, oh, we'll just keep doing the same thing and that'll work over time. That is the definition of insanity.

[Tyler Kendall]

So, Adam, is it actually more to perhaps Democrats benefit if President Trump does get more involved with these conversations, whether that is before or likely after he comes back from this trip to Asia?

[Adam Hodge]

I mean, on this, I just listened to some of the president's own words. I mean, he's clearly articulated in some of his more candid moments that he knows his health care issue is a real anchor around the political standing of the Republican Party. It's shocking maybe to some, but the fact that Marjorie Taylor Greene, even as Hakeem Jeffries alluded to, is essentially saying the same thing that House Democrats have been saying, that this is a real issue. We got to solve this issue. It hurts working class families who are going to pay higher premiums for health care. That is, I think the President understands the politics of it. I think John Thune and to more, greater extent, Speaker Johnson politics in his caucus in their conference, that makes it harder to do a deal on the aca. But at the end of the day, as Rick was alluding to, the math of the vote of The Senate is 60 votes. The way out of this is doing the deal that gets 60 votes to reopen the government and to tackle the health care crisis that some of the Republicans created. And so that is, I think that is the key. And the sooner we get there, the sooner this will all be over.

[Joe Matthew]

We have an update on the ballroom project that we need to ask you both about. Of course, happening at the White House right now as the President leaves. I guess they'll be able to do some serious work over there because it is a massive construction site. And according to some, it looks like somebody dropped a bomb on the East Wing. There's an update here. Just even in the last 24 hours, President Trump has now decided to demolish the entire East Wing of the White House to make room for the ballroom. Remembering that he had said back in July when this was first announced, the construction of the ballroom, that it would not interfere. This is a quote, would not interfere with the current building. The project's plans paid total respect, he said, to the existing structures, architectural style. Two things have happened since then. One, the price tag has gone up $100 million to $300 million. And as the President explained yesterday in the Oval Office, they had no choice but to tear down the entire East Wing.

[Rick Davis]

Listen, we determined that after really a.

[Joe Matthew]

Tremendous amount of study with some of.

[Rick Davis]

The best architects in the world, we.

[Joe Matthew]

Determined that really knocking it down, trying to use a little section, you know.

[Rick Davis]

The East Wing was not much.

[Joe Matthew]

There was not much left from the original. It was. Over the course of 100 years, it was changed. Well, it's gone or will be soon. I actually took a walk by there last evening, Rick, and realized you actually cannot walk, walk through the complex on Pennsylvania Avenue. There's a massive wall there. They've walled off Lafayette park, and there's a wall running along the Treasury Department. So you cannot see this demolition taking place or take pictures of it. You've worked in the White House for a couple of administrations. What did you think when you saw the entire East Wing is coming down?

[Rick Davis]

You know, I'm kind of torn. You know, it is a historic location, right?

[Joe Matthew]

And.

[Rick Davis]

And it is a rare thing to have in the middle of the nation's capital, both the office and the residence of a president in one place. I mean, it's a wonderful kind of construct for the American people. That being said, there's been a lot of changes to the White House, the West Wing, the East Wing, over many, many years. And so change in its own right has already been happening quite a bit. And. And it's not the same place that it was initially, and the Brits burned it down in the 1812 war. So, like, there's been a lot of changes in that place over time. And yet at the same time, and I do think they could use more function rooms like this. I mean, you. You almost have to now do things inside the White House compound for security reasons. I mean, we used to go over and do events for the White House in, like, the Daughters of the American Revolution hall because it was just down the street and we could walk there.

[Joe Matthew]

Can't really do that anymore.

[Rick Davis]

So I'm kind of. I'm kind of torn because I do think the facility needs upgrading and you do need a bigger ballroom capability. The East Room just doesn't hack it for the kinds of things that are considered normal today for heads of state. And yet, at the same time, I'm feeling kind of sad about it.

[Tyler Kendall]

All right, our political panel today, both Bloomberg Politics contributors Rick Davis and Adam Hodge. Thank you both so much. And a redhead crossing the terminal right now. President Trump confirms he will meet with Chinese President Xi Jinping. That's next Thursday. That's according to the White House press briefing that's currently underway. We'll get into that and a lot more when it comes to foreign policy, including moves against Russia. That's up ahead. Stick with us. The. This is Bloomberg.

[Joe Matthew]

Stay with us on Balance of Power. We'll have much more coming up after this.

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[Joe Matthew]

Thanks for being with us here on the Thursday edition of Balance of Power on Bloomberg TV and Radio with breaking news from the White House. This just came from the Press Secretary who's at the podium right now in the briefing room with some opening remarks making clear that the meeting will take place. President Trump and Chinese President Xi will sit down together on October 30th. That's a week from today, knowing the President is about to be wheels up this weekend towards the APEC summit in South Korea. Tyler, you're going to be along for the ride on this trip. This is about as high stakes as it gets.

[Tyler Kendall]

As high stakes, highly anticipated, Joe. It's going to happen on the sidelines likely of the APEC summit that's happening in South Korea. There is a lot at stake in this meeting, but I have to say our analysts at Bloomberg Economics say that their base case right now is that we're likely looking at a 90 day extension to that tariff truce that's in place that's set to expire on November 10th if everything goes as planned. But of course a lot on the table. Everything from export curbs to soybeans to also China's imports of Russian energy supplies. Which brings us to this latest move from the White House moving to sanction two of the largest Russian oil companies. And we we heard this come out of the White House yesterday after President Trump had met with the NATO Secretary General, Mark Greta he explained earlier sort of where these negotiations with Russia currently stand. Take a listen to part of what he had to say.

[Rick Davis]

We canceled the meeting with President Putin.

[Joe Matthew]

It just, it didn't feel right to me. It didn't feel like we were going to get to the place we have to get.

[Rick Davis]

So I canceled it. But we'll do it in the future.

[Adam Hodge]

Mr. President, can you tell us a.

[James Jeffrey]

Little bit about why you're elevating sanctions.

[David Gura]

Against Russia right now?

[Joe Matthew]

What's currently. I just felt there was time. We've waited a long time. I thought that we'd go long before the Middle East.

[Rick Davis]

And Mark, as you know, we did.

[Joe Matthew]

The Middle east plus seven. So we did seven different wars.

[Tyler Kendall]

That was the president yesterday at the White House. The price of oil soaring today after the US Announced these sanctions against two of the largest Russian oil companies. It's really considered a change of course for President Trump. This marks the first direct US measures on Russia of this term. WTI currently hovering around $62 a barrel. And Bloomberg estimates that the Russian companies that were blacklisted, one is state controlled, the other is privately held. Together they account for nearly 50% of Russia's crude oil exports. For all of the latest. And to look into whether or not this is going to make a difference when it comes to the Kremlin's calculus, we're joined now by Mike McGlone, Bloomberg Intelligence senior commodity strategist. Mike, thanks so much for joining us. Can you answer that question? Can you put this into context? Just how difficult will it be for Russian barrels to reach the market after this move from the Treasury Department?

[Mike McGlone]

Well, that's the thing about Russian barrels. Any type of sanctions, they always find their way to the market. This is a question how they do it, where they do it. And you also mentioned the largest, one of the largest buyer of Russian oil is China. Yet China's total demand is declining. So Russia is becoming increasingly dependent on its unlimited friendship with President Xi to take that oil. But the bottom line for crude oil is we've had a big bounce in crude oil in a bear market from Lowe's. The Mineral was trading $57 the other day. The low for the year is 55 and last year's low is 65. So it's still very much a bear market is bouncing at the same time. This week we had a pretty significant correction in gold. Now that's a bull market that's backed up. But I look at crude oil as it's a bear market. Someone has to shift in the bottom line. I'LL end with is crude oils going up? I'm so crude oil is going down despite this record setting stock market. Just imagine if we get a little pullback in the stock market. Crude oil is ready I think for the next impetus to push it towards those lower lows. And it needs something unusual like this to keep at least somewhat bad in the near term.

[Joe Matthew]

Huh. So you're not moving off your forecast though, right? Mike McGlone, you've been very consistent and you have been correct. Are we going back below $50?

[Mike McGlone]

Oh, yes, I'm sticking with that one, Joe. I don't know. It's going to change it. And just the fact that crude oil is down about 15% this year and the stock market's up about 15%, that's divergent deflationary weakness. But it's not alone. Corn, soybeans, wheat, the grains are all doing the same thing. Natural gas has a problem and its price for a colder than normal winter yet we might get normal global warming trends and crude oil is just oversupplied. And also let's remember what's changed in the history of crude oil's last 20 years when a bottom around $40 a barrel since 2008 as US was a net large importer then, now US is one of the largest exporter on the planet, a major producer and the rest of the world, for instance, China is not demanding as much anymore. Crude oils are stuck in a normal bear market. I don't know what shifts it but I can, I'm fearful what can really make it accelerate. And that's just a little backup and beta.

[Joe Matthew]

Got it. He's the best at this. Mike McGlone with us live from Miami. Bloomberg Intelligence senior commodity analyst. Mike, thank you so much. Right now, WTI West Texas Intermediate, as Tyler mentioned, right below $62 a barrel, up almost 6%. Brent crude also rising almost 6% to $66 a barrel. So we're seeing an instant reaction here in the financial markets. The question what will be the diplomatic reaction to this? And for help we turn to an expert. James Jeffrey, the former ambassador is with us right now on Bloomberg TV and Radio. Former ambassador and longtime diplomat here in Washington. It's great to have you back, sir. Does this decision by the Trump administration to sanction Russian oil bring us closer to an end to this war? Because so far sanctions have not done a lot to alter Vladimir Putin's behavior.

[James Jeffrey]

No, that's true. But first of all, thanks for having me on.

[David Gura]

Yes, sir.

[James Jeffrey]

This war is being fought in every sense as an attritional campaign. Think of World War I, at least in the west, almost four years with very little change on the ground. So therefore little things are not going to make a difference decisively. Rather they add up. So you take what we just heard. This is pretty significant. This is a major hit. In the end, the Russians will get their oil out, will be able to absorb that, because as you have been reporting, oil prices per barrel have been quite low, around $60. They're up a bit now, but this is going to hurt the Russians. In addition, the Trump administration has been apparently greenlighting intelligence for long range European missiles that the Ukrainians have to hit targets deep inside Russia. You have the campaign against refineries by the Ukrainians using their own drones. And you have the Europeans moving forward on a slower timetable to cut off all Russian gas that they're still importing. Bit by bit. This is a making things harder for the Russians. Their economy is at a point where it's not growing and they can't produce more military capability, although they can sustain what they have. And two, it sends a signal politically to Putin that our will has not collectively been broken. That's important because he thinks he can wear down Zelensky, wear down the Europeans, and we're down Trump.

[Tyler Kendall]

Mr. Ambassador, much to Joe's point earlier about this idea that we have seen sanctions before, President Trump himself has pointed to that as a reason why he waited. He's previously been asked why he wouldn't do this. He said he wasn't sure if it would deter Russia or not. But then he said that the time is right now. If we sort of just retrace our steps from these past few weeks. Is there any, any moment that you can point to that you think might have been the tipping point here? Or have we been creeping along towards this end goal all along?

[James Jeffrey]

We've been creeping along, but I would say the turning point was after the President's recent call with Putin where he thought, and probably correctly, that Putin gave him some signals, some hints that he could be flexible on a ceasefire and a termination of the war. There was in a follow up call between Secretary Rubio and the awful long term Russian Foreign Minister Lavrov, Mr. Ngo. Well, apparently Rubio reported back that the Russians were not moving. So Trump, who had of course invited Putin to Alaska, was ready to have another summit in Budapest, decided this guy is playing with him. So bang, he cancels the Budapest meeting and also he's taking these additional steps. Trump would like to see a negotiated settlement of this war because he doesn't see it leading to a Ukraine win and he needs to do business with Russia, he needs to do business with China, etc. But he's not going to cave on this. And that's another today is another signal of that.

[Joe Matthew]

Is he correct on his assumptions about the battlefield? Ambassador, I'm wondering where your thoughts are at this point. As President Zelensky requests Tomahawk missiles to turn the tide in this war, we know that they are also using long range missiles even without the United States contribution being provided by Europe. These desert shadow or dark shadow missiles, if I'm using the term correctly, could strike deep into Russia. Is that what Ukraine needs?

[James Jeffrey]

Well, Ukraine has those from the French and from the British and as I said, they use American components and intelligence and we've just greenlighted long range strikes into key infrastructure inside Russia for them. So that's another big step. The Tomahawks would help further, both as a signal of American strength and willingness to push back on Putin and also marginally on the battlefield. But basically nothing much is going to change the situation on the front unless one or the other side collapses psychologically, politically or economically. And neither Ukraine nor Russia seem to be in that position now. So it's going to drag on unless we can get negotiations going.

[Tyler Kendall]

Well, you alluded to it there with how some of our allies are also providing, of course, military assistance and weaponry to Ukraine. The sanctions package that we were talking about seems to be coming in concert with the European Union this morning approving its 19th package of measures, including that there's these plans to ban Russian LNG imports into the bloc by early next year. Can you talk to us about how regional partners have been so important to this effort to the White House's stance when it comes to, to the future of the war in Ukraine, particularly as we had the NATO Secretary General, Mark Rutte, there just yesterday.

[James Jeffrey]

Right. And he is a guy who is able to turn Trump around and explain to Trump why Europe and Ukraine are important. He's playing a huge positive role. But the Europeans have funded, when you look at both weapons, including buying them from US and economic assistance, not to speak of taking in refugees, a greater burden than the United States has. But that's reasonable. We have global responsibilities. They don't and they're closer. There are also a lot more Europeans than Americans, so that's okay. But they are doing a good job. These latest sanctions, some come into effect next year, some not until 2027. But the key thing is there has been broadly defined a dramatic decline in hydrocarbon exports from Russia into Europe since 2022, particularly when the North Stream gas pipeline was cut off. What we're seeing now is LNG shipments and some oil shipments they need to be cut off. That will take place, as I said, over the next 12 to 24 months. It's a good signal. In the short term, it won't have much impact, though the Trump oil sanctions that we just announced will have a bigger effect, I think.

[Joe Matthew]

Interesting. So with our remaining moment, Mr. Ambassador, is there a need for secondary sanctions has been drafted on Capitol Hill or should the president be in charge of this from the White House?

[James Jeffrey]

The president always, regardless of the President, I'm speaking as a guy who worked for many of them, so I'm biased, should have the final say on life or death things, including a conflict with another nuclear power. But he needs to keep that in his back pocket. He needs to escalate. He determines, like Kennedy did in the Cuban crisis, how quickly and to what degree he escalates. But these things are good tools, be it the Tomahawks, be it these congressional sanctions, secondary ones if we need to put pressure on. And he will eventually, I think, if Putin doesn't change his position.

[Tyler Kendall]

All right, Mr. Ambassador James Jeffrey, former Ambassador to Iraq and Turkey and special envoy to the Global Coalition to Defeat isis. Thank you so much for joining us.

[Joe Matthew]

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

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