Senate Passes Russia Sanctions Bill; Sen. Cassidy Backs Todd Blanche

Summary

Balance of Power Podcast Summary

Episode: Senate Passes Russia Sanctions Bill; Sen. Cassidy Backs Todd Blanche
Date: August 7, 2026
Hosts: Joe Mathieu and Kailey Lines (Bloomberg Correspondents)
Special Guests: Josh Wingrove (White House Correspondent), Jared Bernstein (Stanford/Former CEA Chair), Army Secretary Dan Driscoll, Panelists Jeannie Shan Zaino & Maura Gillespie

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Overview

This episode dives deep into a packed day on Capitol Hill, covering three major storylines:

1. The Senate’s dramatic confirmation of Todd Blanche as US Attorney General, hinging on a last-minute decision by Senator Bill Cassidy.
2. The Senate’s passage of a wide-ranging Russia/Iran sanctions bill, raising questions about presidential tariff powers and the future of US foreign policy.
3. The state of the US economy, featuring mixed signals from the latest jobs report, persistent inflation, and commentary on military readiness in light of global conflicts, especially with Iran.
   The program also gives exclusive insight into US Army modernization efforts and congressional skepticism toward the Pentagon’s funding requests.

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Key Discussion Points & Insights

1. Senate Confirmation of Todd Blanche as Attorney General

• Drama on Capitol Hill: With only two GOP senators (Collins, Murkowski) able to be lost before the nomination failed, Senator Bill Cassidy’s surprising “yes” vote secured confirmation.
  • [05:41] Cassidy on the Senate floor:

    “Mr. Blanche is not perfect and he will tell you this. But the choice is not between perfection and Mr. Blanch. It is between Mr. Blanch and another acting attorney general who may not run the department effectively under President Trump...”

• Political Dynamics:
  • Cassidy, a Trump skeptic targeted by the President, broke expectations by supporting Trump’s nominee, possibly reflecting GOP unity on key appointments.
  • Some analysts speculated that Murkowski’s “no” vote was made possible only once it was clear Cassidy would vote “yes.”
  • Panelists described the moment as “pretty big” and “dramatic.”

2. White House Legal and Political Battles

• Ballroom Construction Controversy:
  • The president is locked in a legal battle over plans to construct a ballroom in the White House’s East Wing, now requiring explicit Congressional approval following an appeals court ruling.
  • [08:22] Josh Wingrove:

    “This is muddying his message…He veers into the renovation projects regularly...whether that is what voters respond to remains to be seen. Polls are showing voters are very frustrated with the state of the economy, that Trump is underwater on his handling of the economy, which is normally a strong suit for him in polls.”

  • Trump intends to take the case to the Supreme Court.
• Political optics: The focus on the ballroom was noted as a distraction from pressing issues like the economy, with persistent approval rating lows.

3. Jobs Report & Economic Analysis

• Mixed Economic Signals:
  • July saw payrolls decrease by 23,000, declining for the first time after earlier surprising strength; however, the unemployment rate ticked down to 4.1%.
  • Labor force participation is at a near 50-year low (excluding COVID), with notable declines in “prime-age” (25-54) participation.
  • [11:48] Jared Bernstein:

    “The reason they like the unemployment rate this morning is because it ticked down a tenth. If payroll jobs had been strong, they would have said they like that. So that’s all just spin…The unemployment rate can go down for two reasons…That’s what happened in July.”

• Wages & Inflation:
  • Year-over-year wage growth at 3.2%—lowest since the pandemic—appears to lag behind inflation (tracking “well north of 3%”).
  • [14:51] Jared Bernstein:

    “Whatever inflation we’re seeing isn’t coming from the labor market…it’s largely coming from the supply side, the tariffs, the war…”

  • The divide grows between Wall Street’s optimism and “Main Street’s” struggles.

4. Senate Passes Russia/Iran Sanctions Bill

• Legislative Details & Political Legacy:
  • The bill, originally focused on Russia and championed by the late Lindsey Graham, has been expanded to sanction Iran as well.
  • [18:21] Senate vote: 86–11, strong bipartisan support.
  • Concessions were made to win over skeptical Democrats, such as sunset clauses on certain tariffs and safeguards regarding the president’s expanded tariff authority.
• Concerns Over Presidential Powers:
  • [20:28] Jeannie Shan Zaino:

    “There are Democrats and Republicans who are concerned that this is what they call a prescription for bedlam. It’s going to fuel inflation domestically, giving the president…unchecked authority to weaponize tariffs. That’s a big concern…”

  • The legislation’s wide tariff authority (up to 500%) raises anxiety over economic blowback and executive overreach.
• Foreign Policy Implications:
  • Cited US defense vulnerabilities, low munitions stockpiles, and risk of adversary miscalculation (e.g., Russia testing NATO).
  • [22:19] Jeannie Shan Zaino:

    “I do think that is one of the concerns about this sanctions bill…I think it does give people like Putin, Kim Jong Un, I think it gives China, if they want to do anything in Taiwan, I think it does give them an opening.”

• House Prospects:
  • The bill’s prospects in the House are uncertain; passage likely hinges on presidential lobbying and further concessions.

5. Defense Spending, Military Preparedness, and Transparency

• Funding Conflicts:
  • Bipartisan calls for increased defense funding—a $1.5 trillion Pentagon budget and $70B supplemental—are complicated by congressional demands for transparency from Secretary Pete Hegseth.
  • [24:17] Maura Gillespie:

    “I don’t think Secretary Hegseth has been transparent remotely enough and giving Congress the answer they’ve asked for in terms of where the money is going…before Congress, they need to be demanding those answers, demanding transparency…and the numbers from Pete Hegseth.”

  • Congress’s willingness to write “a blank check” for the Pentagon is waning.
• Foreign Policy & Military Constraints:
  • The US is stretched thin: Iran, Ukraine, Asia, and the Middle East all place competing demands on limited resources and munitions.
  • The administration’s Iran policy faces skepticism with little progress in talks and lack of achievable objectives.
  • [26:06] Jeannie Shan Zaino:

    “How can we attack Iran if we don’t have the defensive missiles to defend ourselves, our soldiers, our assets, and our allies in the region? We simply can’t. The president knows that.”

6. Innovation in Defense Procurement

• Accelerating Army Modernization:
  • Interview with Army Secretary Dan Driscoll at Camp Grayling, Michigan, highlights new measures to speed access to military testing ranges for private industry and international partners.
  • [30:56] Dan Driscoll:

    “Industry on average was having to wait between 12 and 18 months…what we’re announcing today is...a new front door...we are going to aspire to get these companies onto our range within 30 days every single time.”

• Funding, Flexibility & “Operation Jailbreak”:
  • A $750 million “venture model” fund accelerates contracts with defense startups (down to under 30 days in some cases).
  • Army is integrating open data standards and “Operation Jailbreak,” ensuring future equipment can plug seamlessly into shared data/sensor networks—critical for drone defense witnessed in Ukraine.
  • The biggest challenge: unpredictable annual funding cycles (“continuing resolutions”) hinder long-term planning and rapid scaling.
• Counter-drone and Stockpiles:
  • Emphasis on building layered, flexible air/missile defense—“variability is the key to success.”

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Memorable Quotes & Segments (with Timestamps)

• Sen. Cassidy’s Reluctant Endorsement:

  “Mr. Blanche is not perfect and he will tell you this. But the choice is not between perfection and Mr. Blanch. It is between Mr. Blanch and another acting attorney general who may not run the department effectively under President Trump...”
  — Bill Cassidy [05:41]

• On the President’s Distractions:

  “He veers into the renovation projects regularly...whether that is what voters respond to remains to be seen.”
  — Josh Wingrove [08:22]

• Jobs Report Skepticism:

  “The reason they like the unemployment rate this morning is because it ticked down a tenth…That’s all just spin…”
  — Jared Bernstein [11:48]

• Wage Growth, Inflation, & Divide:

  “3.2% wage growth is almost certainly below inflation, which has been tracking well north of 3%. And we know that labor share of national income actually hit an historic low in the productivity report yesterday. So there’s a real split between macro and micro these days.”
  — Jared Bernstein [14:51]

• Sanctions Bill, Presidential Power Fears:

  “…giving the president…unchecked authority to weaponize tariffs. That’s a big concern. You had Gregory Meeks calling it a Trojan horse…”
  — Jeannie Shan Zaino [20:28]

• On US Security Risks:

  “Our munitions are at what seem to be a historic low at this point…this does give people like Putin…an opening to take those steps.”
  — Jeannie Shan Zaino [22:19]

• Army Changing Procurement Game:

  “We are going to aspire to get these companies onto our range within 30 days every single time.”
  — Army Secretary Dan Driscoll [30:56]

• Flexibility & Transparency:

  “We know that they need dollars from the U.S. army in order to continue their innovation...if we’re asking them to come out and spend time with soldiers...we have got to be there for them on the other side with actual hard dollars.”
  — Dan Driscoll [32:06]

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Important Segment Timestamps

• [05:41] — Cassidy’s pivotal speech on Blanche confirmation
• [08:22] — Trump’s ballroom legal fight and messaging
• [11:48] — Jared Bernstein’s economic analysis
• [14:51] — Wage growth and Wall Street/Main Street split
• [18:21] — Sanctions bill passes the Senate, panel discussion begins
• [20:28] — Expanding tariff powers, panel concerns
• [24:17] — Congressional skepticism over Pentagon transparency
• [30:56] — Army’s new innovation/testing policy with Secretary Dan Driscoll

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Tone and Style

The conversation is sharp, lively, and often skeptical—typical of veteran Washington reporters and analysts. While hosts Joe Mathieu and Kaylee Lines report with measured objectivity, panelists and guests offer frank and critical takes on politics, policy, and the realities behind official narratives.

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Conclusion

This episode of Balance of Power is a one-stop primer on today’s most urgent stories in Washington: shifting alliances in the Senate, the risks and rewards of expanded presidential sanctions powers, doubts about the true strength of the US labor market and military preparedness, and concrete efforts to foster innovation within the defense sector. For listeners who missed the episode, the detailed discussions and pointed analysis offer crucial perspective on both the legislative sausage-making and the broader policy dilemmas facing the US at home and abroad.

Transcript

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[Joe Weisenthal]

Back to bad news on Main Street, Good news on Wall Street.

[Kaylee Lines]

Yeah, I guess it depends on your view on how bad the news. Because yes, payrolls did decline by 23,000 plus. You had downward revisions to the prior two months, but the unemployment rate ticked lower to 4.1%, which is the narrative that the White House is seizing on today. And the National Economic Council Director Kevin Hassett said that's the number he's watching. But then we have to consider unemployment is lower because less people, fewer people. That's right, are participating. Participation outside Covid is now at the lowest level we've seen since the 1970s.

[Joe Weisenthal]

Surprisingly low number here. That's not, incidentally what the president is posting about, by the way. He's talking about the ballroom. This just hit right? We began this hour taking the case to the Supreme Court after an appeals court today ruled that he must stop construction without the approval of Congress.

[Kaylee Lines]

Yeah, and it's not clear that he can get approval of Congress on that or other matters that he prioritizes, like portions of the Save America act, which are embedded, of course, in this budget reconciliation package that may or may not get a procedural vote in the Senate today. They're instead dealing with a few things. First, they're voting right now on a Russia sanctions bill that does have the votes to pass. While the vote count is not final, it does look indeed like that is going to be sent over to the House. Plus, the votes are there for the confirmation of Todd Blanche to be attorney general after Senator Bill Cassidy said he will be a yes on that.

[Joe Weisenthal]

Pretty big moment this morning. Didn't see it coming. In some cases when you announced you're going to have a moment like that, it's usually not as easy as saying yes, but that in fact is the case. So it looks like the United States will have a new full time attorney general. Be curious to see if they get it done before they leave town, though, when it comes to a full vote.

[Kaylee Lines]

Yeah, the jet fumes are in the air. They might want to just get out of Dodge. We'll get to all of that this hour, of course, but we begin with jobs day markets and for that we turn to Charlie Pellet in New York.

[Charlie Pellet]

Hi, thank you very much, Kelly. And happy Friday to you both. Employers unexpectedly cut jobs in July. Hiring in the prior two months was revised lower, suggesting that the labor market is weaker than previously thought after surprising strength earlier in the year. Non Farm payrolls down 23,000. Stocks higher. Oil also higher right now. Let's begin with crude because West Texas Intermediate back above 78 a barrel. 7813 right now, up 1.1%. Barrel of Brent 83.38 heading into the weekend, up now by 1.1%. S&P is a baseline at 7744, up 34 points, up by about 5. 10 of 1%. The Dow higher as well, up 78 points now up by about 1/10 of 1%. We've got Nasdaq up 254, up 1%. Nasdaq 100, up by 9. 10 of 1%. Big move for the stocks today. The Philadelphia Stock Exchange semiconductor index up now by 2.1%. The 10 year currently yielding 4.65%. The 2 year 4.20% and the 30 year 5.20%. Gold up $93 the ounce to 43.32, up 2.2%. And again, WTI up by 1.1%, 78.12 a barrel. Earnings news, we've got Sweetgreen shares plunging by 8.4%. The restaurant chain, the salad chain did cut its annual outlook due to reduced consumer demand for fresh prepared foods during the CYC cyclospora outbreak. Also, we've got United Armor, Under Armour, I should say, forecasting a sharper revenue decline than previously expected after earnings. Under Armour shares down now by 4.1%. Recapping stocks higher. S P on this Friday, up now by 5/10 of 1%. For on demand news 24 hours a day, subscribe to Bloomberg News now wherever you get your podcast. And that, Joe Matthew, is a Bloomberg Business flash. And Kylie Lines, too. There you go.

[Kaylee Lines]

Thank you very much, Charlie Pellet bringing us through these markets as we close out the trading week. And it looks like we maybe are on track to close out this week in Washington in the United States Senate unless this does bleed into a Saturday session as they've been taking care as best they can of a number of different agenda items. And if you've been listening or watching this program this week, you know that included the confirmation of Todd Blanch to be the next attorney general. There was very much a question as to whether or not they could get to the requisite amount of votes to get the president his nominee confirmed, as they already lost Senator Susan Collins of Maine, who's up for reelection as of 6am this morning. They had also lost the vote of Senator Lisa Murkowski of Alaska. And those were the only two votes they could afford to lose. A third would have tanked the nomination for the first time we've seen in decades. So it was all up to Senator Bill Cassidy of Louisiana, who took to the Senate floor in dramatic fashion to announce that indeed he would be a

[Jared Bernstein]

yes, Mr. Blanche is not perfect and he will tell you this. But the choice is not between perfection and Mr. Blanch. It is between Mr. Blanch and another acting attorney general who may not run the department effectively under President Trump and

[Maura Gillespie]

who

[Jared Bernstein]

indeed may not be as good as Mr. Blanche.

[Joe Weisenthal]

That's where we start our conversation with Josh Wingrove. Let's get the latest from the White House right now. Bloomberg White HOUSE Correspondent live on the North Lawn. Josh, it's always great to have you. Was that the decision that lawmakers had to make, approve Todd Blanch in case or to keep the president from appointing someone worse?

[Josh Wingrove]

I mean, it's one way to frame it, I suppose. You know, as we know, the backs of story here is Cassidy has been a foe of the president. The president's gone after him, supported a primary against him, and it really has not bit the president very much yet. Of course, we saw the same thing in Texas with John Cornyn. And so the question was Cassidy didn't really have a lot of reason to go to bat for the president. And that's what made today's announcement pretty surprising. Senator Cassidy kind of choked up towards the end of it to give you a sense of at least the weight of the moment that he felt. But Trump world had been pressing for this, both sort of acknowledging that Blanche has been at risk, but also expressing confidence that in the end he would be confirmed, including of course after that deal to get him out of committee. And so in some ways I think they'll be taking a victory lap here, but not be too surprised on it, of course, incoming, what appears to be our new permanent attorney general or confirmed attorney general, former lawyer of the president and just goes to show you that Congress continues to back essentially the Republicans in Congress in particular, of course, back what the president wants to do. So it's a surprising one, I suppose you could say in some ways Murkowski's announcement nodded to it in that she might not have come out with her no vote had she not known that she had the wiggle room to do that. But that's just pure speculation on my part as I melt here like an ice cream cone on the North Lawn ear on Friday. But yeah, certainly they're going to be celebrating him in the business behind, in the building behind me.

[Joe Weisenthal]

Yep.

[Kaylee Lines]

Yes, indeed, we appreciate you suffering the elements for us. And next or one wing of the building behind you, of course, is not visible to our audience on television. And it's not visible unless from above. There's just a giant hole in the ground where the East Wing used to be. That, of course, is where the president wants to construct his ballroom. And the judge today ruled if he wants to continue to do that above ground, he must get the authorization of Congress. Cue President Trump taking to true social Josh to pledge to take this case all the way to the Supreme Court. What do you make of that?

[Josh Wingrove]

I think he continues to be very focused on the renovations on this building. Not only that, but the helipad, which we saw reporting, of course, this week, that has been, they've been kind of ripping it up to go restart what he's doing. The risk for the president here is this is muddying his message. Right. So he's going to take this to the Supreme Court, essentially keeps the fight going. He's talking about it on the stump. I was with him when he gave a speech in Vegas a couple of days ago. And that speech really focused on, you know, what he casts as the strength of the economy. He's talking about Iran and hoping it will end soon. He veers into the renovation projects regularly, including the ballroom. And the question is whether that is, you know, ultimately what will get, what voters will respond to. Right. Polls are showing voters are very frustrated with the state of the economy, that Trump is underwater on his handling of the economy, which is normally a strong suit for him in polls, and that his overall approval rating is at or near all time lows. Trump dismissed these, dismisses these polls as fake. But I just think what we're going to continue to see as this legal fight drags on is just profile from it, whether it's those or the reflecting pool, I should add. And the president just continues to be very interested in them. So I don't think I'm not surprised that he's going all the way to the Supreme Court. We'll see what they say. They've given him a lot of leeway in to date. And so you know, read into that what you will. But the saga on the ballroom will continue to go and the President just keeps wanting to talk about it.

[Joe Weisenthal]

Can we ask quickly about jobs? Josh, this is a big story today and we're about to talk to Jared Bernstein, who you used to speak with pretty often in the Biden administration to get his take on these numbers. I haven't seen anything, maybe I've missed it from the President. Are they celebrating this report to the extent that Wall street is?

[Josh Wingrove]

Yeah, I mean Jared was stood here often during the Biden administration, so trying to keep his podium warm here at the Bloomberg tent. They are essentially shrugging it off right now with saying look, these, these are high variance numbers. This is an aberration. They noted that the consensus estimate was higher. So she's saying that's a good, good thing, that maybe the experts are right. Of course, by the way, when the numbers beat consensus, they say the experts don't know anything. So they could pick their, pick their lane on that one. We'll see. But right now I think Trump one revealing comment from Hazard today is that one of the only economic indicators he says he's looking at is that unemployment rate. Kaylee, I believe you alluded to that earlier and I think that that is telling. Right now Trump likes to talk about the strength of the stock market, all time highs, all that. But his one of the top economic advisers saying they're really watching that employment rate. And so I think that that is telling. There continue to be mixed signals at best in the economy. Of course, if you listen to the President's speech, you wouldn't necessarily hear that.

[Kaylee Lines]

All right, Josh Wingrove, we'll let you get into the air conditioning. Thanks for joining us. Bloomberg White House correspondent live from the hot north lawn for us on this Friday, 3% humidity. Yeah, that's, that's brutal. I don't, I don't envy Josh right now. We're in a nice air conditioned studio ourselves. We have, we have the good gig today. And of course, as Josh alluded, Jared Bernstein has braved those elements on the north lawn of the White House many times during his tenure in the Biden administration as the chair of the White House Council of Economic Advisers. He's now distinguished policy fellow at the Stanford Institute for Economic Policy Research and is back with us on Bloomberg TV and radio. Jared, good to see you as always here on balance of power. As Josh was touching on on the end there, the White House says just look at unemployment, 4.1%. But I wonder in your mind how much that lower unemployment rate has to do with the 61.4% labor force participation rate and whether or not that actually is cause for concern.

[Jared Bernstein]

First of all, it sounds like the labor force participation rate is awfully close to the humidity rate on the White House. Those two numbers together, the reason they like the unemployment rate this morning is because it ticked down a tenth. If payroll jobs had been strong, they would have said they like that. So that's all just spin. One of you made, I think was. I think was. Joe a second ago said something the effect that the unemployment rate ticked down for the wrong reasons. And that's correct. And it's important. The unemployment rate can go down for two reasons. One, people looking for jobs leave unemployment. They get a job. Two, they give up. And that shows up as the labor force contracting. That's what happened in July. We saw a lower labor force and we also saw lower employment, not just in the payroll survey, but in the household survey. Well, the survey that measures unemployment. And that's actually been a sequence lately. So we've seen quite weak numbers on the household survey. And you know, that's, that's obviously a sign of increased lag. That said, 4.1 is still pretty low unemployment. So no reason to panic, but certainly a soft report.

[Joe Weisenthal]

Did they give up, Jared, or did they just go away? When you see a participation rate falling to. It's actually 61.4%, lowest since the 1970s when you exclude the pandemic. We've heard a lot of explanations here that include even the impact of the president's immigration policy. Where did everyone go? Are they on the couch giving up looking for.

[Jared Bernstein]

Well, the problem with using the top line number, and we all do it and it's right there staring you in the face as soon as you open up. The report is it also includes a lot of older people who have left the labor market because we have an aging baby boomer workforce. I can speak from personal experience in that regard, but if you look at the more narrow, what we call prime age, 25 to 54 year old, we got a big tick down in the employment rate or the labor force participation rate in June. And a lot of people thought, well, that's surely going to correct in July because these numbers are noisy month to month. It corrected a tiny bit. But I think if you look at the trend year over year or again, look at the prime age rate, you see some softness there. And so this is remains to be a no hire, no fire job market with pretty weak job creation, relatively low unemployment, not a ton of layoffs, but real fragilities under the hood.

[Kaylee Lines]

Well, and you have some softer wage growth as well, Jared, and obviously that has implications for the American worker which is facing inflation and may not be seeing their wages keep up. But also does it not have impact on the way in which the Fed is considering inflation here if you're not seeing the kind of wage price side of things that you might expect?

[Jared Bernstein]

All really interesting, important questions that I dove into in my write up this morning. 3.2%, that's the year over year wage growth. That's the lowest we've seen in nominal yearly wage growth since the pandemic. And by the way, if you stack that number up with a bunch of other wage reports, as you should, again, these can be noisy numbers, but if you take an average of everything out there, you get the same pattern. And so the folks at the Fed recognize that whatever inflation we're seeing isn't coming from the labor market, it's not coming from the wage side. But we know that the more hawkish contingent over there, which seems to be growing, are well aware of that and they're still nervous about high and sticky inflation. That means that it's largely coming from the supply side of the equation, the tariffs, the war, along with some pressure from a picks and show levels. The question for them is can they really look through that or after month after month, year after year of missing their target? Do they have to worry about this pattern dislodging inflationary expectations, in which case they would hike. But I don't want to let the consumer get lost in this picture. I mean you guys started off talking about Main Street, Wall Street. Boy, are they going in different directions. Right now, 3.2% wage growth is almost certainly below inflation, which has been tracking well north of 3%. And we know that labor share of national income actually hit an historic low in the productivity report yesterday. So there's a real split between macro and micro these days.

[Joe Weisenthal]

A huge split. Jared, it's good to see you and thanks for weighing in on all of this. I'm glad you're not sweating it out on the lawn today. Jared Bernstein, Stanford Institute for Economic Policy Research Stay with us On Balance of Power. We'll have much more coming up after this.

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[Kaylee Lines]

The United States Senate just passed, as we told you, was on track to do so, the Russia sanctions bill that, of course was championed by the late Senator Lindsey Graham. This is obviously no longer just a Russia sanctions package. It has been expanded to include Iran at the request of the president. And passage in the Senate does not guarantee its passage in the House, which wouldn't happen, of course, until after the August recess, but nonetheless, an important signal that Washington is sending in terms of its willingness to apply greater economic pressure to the US Adversaries in Russia and Iran. And of course, it had to get over some hurdles, Joe, in order to get to this point, including a commitment that the US Trade Representative, Jamie Jason Greer, had to make to Democratic Senator Raphael Warnock about the tariff authority that this gives the president. Part of this package is that the president can apply tariffs on buyers of Russian and Iranian energy, that the tariffs eventually would have to come down for countries that are no longer in the top five purchasers.

[Joe Weisenthal]

Yeah, this was a difficult decision for some. There was a time when it was thought to be a possible candidate for unanimous consent, knowing that it had been named for the late Senator Lindsey Graham, 86 to 11 the vote count, according to the cloakroom here and our reporters on Capitol Hill. Let's play this to the panel. Not what we thought we'd be starting with, but it's breaking right now. And we have Bloomberg Politics contributor Jeannie Shan Zaino with us, a democracy visiting fellow at Harvard Kennedy School's Ash center, and Republican strategist Maura Gillespie, founder of Blue Stack Strategies. Great to see you both, ladies. Thanks for coming along. Maura, you worked on the Hill when Lindsey Graham's career ascent was taking place, and this, of course, is seen by many as his crowning achievement considering the time that he put into supporting the war effort in Ukraine. 86 to 11, what do you think of the turnout and some of the concessions that were made, as Kaylee mentions, when it comes to expanding the president's tariff authority?

[Maura Gillespie]

I mean, overall, I think this is a victory for Lindsey Graham's legacy in terms of what he was working on up until his untimely death. You know, he really, he was just getting back from a trip where he was with Zelensky, president of Ukraine, working on this and really trying and working with, with the president to try to remind him of the threats that Russia poses and pushing forward this bill, working across the aisle to get this bill forward and to get the votes for it. And so I do think with, with there being the added Iran war contingency there, I think it still is a victory for Senator Lindsey Graham's legacy, for sure. Mm.

[Kaylee Lines]

Well, Jeannie, come in here on the concern that some Democrats had who, yes, did want to make sure that the United States was applying more pressure to Russia, but also were very, very concerned about extending more authority for President Trump to be able to enact tariffs and tariffs at a large scale. We're talking 500% in some instances, 100% in others in this legislation. How easy could it be for President Trump to abuse this authority? Even the concessions that some Democrats were able to extract.

[Jeannie Shan Zaino]

Yeah, I think there's still concern. Obviously, this was, in this Senate, of course, a bipartisan win. You know, you only had the 11 Democrats, the one Republican fall off. And that is bipartisan for sure, but the concerns are very real. You know, you were just talking about the economy. There are Democrats and Republicans who are concerned that this is what they call a prescription for bedlam. It's going to fuel inflation domestically, giving the president, who loves tariffs more than anything else, he tells us this unchecked authority to weaponize tariffs. That's a big concern. You had Gregory Meeks calling it a Trojan horse. He was concerned about the bill's national security waiver. So there are a lot of concerns out there. You had some Democrats who wanted to wait until after the midterms, but by and large, this was a bipartisan victory. And I think the big question is now, is Donald Trump going to push this in the House? Because for it to pass in the House, where there is even more concern, he is going to have to get on the phone and make some phone calls and twist some arms to get this over the hump. I think he will likely do that considering it extends his tariff authority, but it's going to have to wait until they come back from recess.

[Joe Weisenthal]

Pretty scary. Reporting Jeannie in the Wall Street Journal today, US Intelligence reports posit that Vladimir Putin could try to test NATO's resolve with a limited assault on an allied country in the next few years. The US had previously assessed that Putin would not provoke a NATO country while at war with Ukraine. But that assessment has changed as Putin becomes more cornered. Does legislation like this make him a greater risk?

[Jeannie Shan Zaino]

I think legislation like this certainly does. I think you add to that the way we have overextended ourselves in Iran, and you have people in the DoD world now saying that we do not have the capacity to defend our interests in places like Asia. That makes what is happening around the world, whether it's in Russia, whether it's in Ukraine, whether it's in Asia, whether it's in the Middle east, east, all of these things come together and make it harder for us to defend our interests, to help our allies and to secure ourselves. And so I do think that is one of the concerns about this sanctions bill. But I think it has become more volatile and more likely considering our defensive weapons and our munitions are at what seemed to be a historic low at this point. And the reporting the president has pushed back on, many people behind the scenes are saying he knows full well that we have a problem there. So, yeah, I think this does give people like Putin, King Kim Jong Un, I think it gives China, if they want to do anything in Taiwan, I think it does give them an opening to take those steps.

[Kaylee Lines]

Well, on the munitions question, Maura, this is part of the reason why the Pentagon is asking Congress for more money. And there's supposed to be some $70 billion for the Pentagon in the budget reconciliation package, assuming that it can make headway in the Senate. It's not entirely clear what will be action before they break for recess or what will become of things come September, but especially if they are willing to pass a continuing resolution to fund the government and to keep funding levels steady. I wonder, Maura, what you're thinking about in terms of this Congress giving this White House and this DOD what it wants in terms of not only supplemental funding to refill our munition stockpiles, but also the one and a half trillion dollar defense budget that they've asked for.

[Maura Gillespie]

I think the problem comes with transparency. I don't think Secretary Hegseth has been transparent remotely enough and giving Congress the answer they've asked for in terms of where the money is going, where it's being spent, and what the real state of things are at this current moment. I mean, when the president talks about having interest in so many places. Right. Jeannie mentioned what's happening in Iran, what's happening, you know, in Ukraine and Russia, but also what's happening in the Middle east, what's happening in Venezuela, what's happening in the waters that they've been this conversation isn't just there, but our interests are in Greenland, what our interests are in Asia. There are so many different areas that the president has mentioned, talked about, true social about. And Secretary Hegseth has shut down the Pentagon's press, essentially, and the opportunity for them to ask questions. And so I think before Congress, they need to be demanding those answers, demanding transparency. And, and the numbers from Pete Hegseth, well, where the finances are going before they write him another blank check. I think that's going to be really crucial and a hurdle that's going to be big for him to go over because right now Pete Hegseth feels pretty empowered by the president to stiff arm Congress, but also the press.

[Joe Weisenthal]

You know, when we pull out and look at the situation with Iran this week, Jeannie, it's now Friday. We started this week with the president of the United States taking credit for canceling a wave of attacks that he said would have decapitated the regime last weekend at the request of Iran's neighbors, suggesting that within one to two days a deal would be had. He said this was going to go quick. We're not going to let this last forever. This is the 13th time he's done this. Now we're at Friday and the president says talks are moving along, but we have no news. How important will it be for him to announce a breakthrough this weekend then?

[Jeannie Shan Zaino]

It would be wonderful if we saw a breakthrough, but I don't think we can hold our breath on that. I mean, the talks going on now that are moving forward are talks between Iran and Oman. It's unclear where the US Is on those talks, except in all likelihood, the best deal we get is going to be reopening the strait with Iran having more control over it than it did prior to this war. And for all the presidents. And if you listen to the Iranian media, you can hear the way in which they are making fun of the president for all of his bluster. How can we attack Iran if we don't have the defensive missiles to defend ourselves, our soldiers, our assets and our allies in the region? We simply can't. The president knows that. So, sure, we could use dumber weapons, but when you use dumber weapons, that means you send US Forces, US Military soldiers potentially closer to Iran and the president knows we cannot get in a ground war with Iran. The president's hands are tied on this. He doesn't like the word. This is truly a quagmire. And his best bet is going to be getting the strait reopened, easing some of these sanctions on Iran if we need to, and trying to press forward on a nuclear deal. And he'll be lucky if it's anywhere close to what the Obama deal looked like that he rescinded. I mean, this is truly a disaster foreign policy for the president at a time when he has in five months gotten our munitions capacity as low as it is that we are now vulnerable around the world, as are the Ukrainians who are depending on us to assist there.

[Kaylee Lines]

Maura, we have less than a minute left. But when it comes to the war in Iran, if Senate senators are able to get out of town today, and the house obviously has been out of town, what are they all going to hear about at a time home wondering

[Maura Gillespie]

why the gas prices are where they are and what the plan is? I think there's a lack of understanding about what the plan is. And Jean just laid out what she thinks is the best case scenario for an outcome here. But there really is then no semblance of an idea of what we would want to get out of this and what we would president says we are getting out of it. Right. I think that he and Secretary Hegseth have not delivered a clear message to the American people, and members of Congress are going to hear it.

[Kaylee Lines]

All right, Mara Gillespie and Jeannie Shan Zaino, our political panel on this Friday. Thank you so much for joining us.

[Joe Weisenthal]

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

[Barry Ritholtz]

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[Carol Massar]

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also list live on Amazon Alexa from our flagship New York station. Just say Alexa. Play Bloomberg 11:30.

[Kaylee Lines]

And as we've been discussing a lot On Balance of Power in recent weeks and months, due to the ongoing conflict with Iran and the increasing focus that has been put on the United States military capabilities and supplies of critical munitions. A really important conversation happened earlier today with the US Secretary of the army, who sat down with our colleague Tyler Kendall. Joe. To talk about effectively what the army is trying to do to speed things along in terms of not only getting these things produced, but also testing them as they try to brace themselves for the wars of the future, wars as we're seeing in the present, that include more and more drone technology. That, of course, is cheaper than what a lot of our interceptors have been costing to this point.

[Joe Weisenthal]

Yeah, this is all about accelerating the procurement process. And by way of testing, testing, this is one way they can get to that. There are a lot of different ways that we'll be talking about expanding the defense industrial base, but testing these new ideas and this new equipment is awfully important right now. So the army is opening up Kaylee 5 ranges to private industry for testing drones, counter drone technology, other weapons we probably haven't even heard of yet. And yes, Tyler got on an airplane and she flew to Michigan to sit down with the Secretary of the Army, Dan Driscoll. They sat down at one of those training. Training facility is called Camp Grayling. It's an army base in Grayling, Michigan, to talk about this new program. Let's watch and listen.

[Barry Ritholtz]

This is a really big deal. It was a couple of months ago. I was out at one of our test ranges. And what I heard was that industry on average was having to wait between 12 and 18 months, sometimes from the moment they wanted to get on our test range, until we could give them access. And fundamentally the problem with this is if you think of these innovative companies, if you think of the primes, everyone needs to be able to test their product and they need to be able to learn from that. And the innovation loop that comes from actually using your thing in the real world is makes all the difference. And so when we slow things down in the innovation loop by 12 or 18 months at a time, that is just bad for soldiers, it's bad for taxpayers, and it's bad for companies. And so what we're announcing today is, is basically a new front door to access all of the US Army's or many of the US Army's ranges. We're layering in international partners, we're going to give concierge access, and we are going to aspire to get these companies onto our range within 30 days every single time.

[Tyler Kendall]

So then after they're on that range, I think a lot of these Companies are probably wondering how quickly can they get into business with the U.S. army? If you like what you see, how do those purchases work from there? What sort of timeline are you eyeing for that? That.

[Barry Ritholtz]

So under President Trump, what we've been able to do is we've been able to reallocate dollars we already had. And so we created almost a $750 million venture like Model that has allowed us to get industry on contract sometimes in under 30 days. That is unbelievable. I mean, I think if you looked historically, the fastest time I had heard anyone ever reference was like nine months. But on average, it could be up to two years sometimes. And so our commitment to industry is, is we know that they need dollars from the U.S. army in order to continue their innovation. We know that if we're asking them to come out and spend time with soldiers, get their products in the dirt and the mud, and to innovate, we have got to be there for them on the other side with actual hard dollars.

[Tyler Kendall]

How are current conflicts highlighting the need for initiatives like this and for the US army to scale? Is there a new urgency here?

[Barry Ritholtz]

I think if you look at what's occurring in Ukraine, they have this existential risk to their nation that allows them to innovate very quickly. You would never want to have that risk as a nation. So what we're trying to do is synthetically create the conditions for innovation that can get as close to matching that environment as possible. And so one of the things we're doing here at Camp Grayling in September is we're creating an electronic warfare in a UW environment that is as close to what Ukraine has as we can create.

[Maura Gillespie]

State.

[Barry Ritholtz]

We're inviting in small, medium and large businesses from across our country. We're having soldiers come down, and we are trying to empower these incredible American innovators to do what they do best, which is to out innovate the rest of the world.

[Tyler Kendall]

So the army lives off of annual budgets, right. How do you ensure that you're able to scale and grow initiatives like this in what is, I think it's fair to say, pretty unpredictable funding cycle? Ann and how much weight maybe does that put on the $67 billion supplemental package in terms of what the army needs to get done?

[Barry Ritholtz]

So the quirk of the design of our democratic form of government is our funding is annual. It is oftentimes continuing resolutions, which means we can't do new starts on our spending. And that is full stop bad for soldiers, that is bad for our national security. And we must, as a nation Fix it. That being said, what we have tried to do is just accept that that has been the reality. I think 18 of the last 21 years we've had continuing resolutions. And so what the United States army has been trying to do Under Secretary Hex's leadership, is innovate as fast as humanly possible with what we do have. And we feel very good that working with Congress and Senate and consolidating down some of our budget line items, we are getting more flexibility than we have had in the last couple of years. Years, not as much as we had a couple of decades ago. And we are taking that and earning back the trust of Congress to give us even more going forward.

[Tyler Kendall]

But is that putting any more weight on the supplemental funding request, the $67 billion?

[Barry Ritholtz]

I think the. We need the supplemental, we need the reconciliation, and we need the budget to be passed on time. That will lead to the most secure country that the United States army can possibly give it.

[Tyler Kendall]

So today is a lot about these low cost interceptors, drones, counter drones. Can you talk to me about how you assess what that mix should look like when it comes to the higher end interceptors in US Stockpiles?

[Barry Ritholtz]

So one of the big takeaways from Ukraine is that the very first thing you must do is create a data layer. And what you want in your data layer is you want as many sensors and radars as humanly possible, and you want them to be able to fuse into trap. And so practically what that means is you want to be able to give yourself and your allies as much warning as humanly possible. And so what the United States army has been focused on in the last couple of months is what we're calling Operation Jailbreak, which is basically, we have said we are no longer going to allow any sensor, any radar, any piece of equipment that we own to have data that is siloed. All of it is getting broken out, and all of it through APIs and SDKs is going to be able to share the data and receive data or actions. That is step one. Every new thing we're buying is already open source, so we're good. So once we have this data layer and anywhere American soldiers exist, we want that data layer to be as robust as humanly possible. The next step is to layer in effectors or interceptors. And you want as wide of a range of options as possible. On the cheapest, lowest side, you want a 50 cal round that might cost a dollar, and you want to be able to shoot that at something that's really close on the highest end, you might want to pick PAC3, that's now $4.2 million or $4.4 million a shot. The key to defense and this layered concept is you want as many options as humanly possible, all tied into an agentic solution with a human in the loop that can choose between the right option at any given moment. And so the answer is actually, there's no one perfect answer. Variability is the key to success for conflict going forward.

[Tyler Kendall]

In the final minute that I have you, how much will initiatives like today compressed timelines. Can you give us any context on how many years you're looking at when it comes to the army building up these stockpiles?

[Barry Ritholtz]

So I think if you take the math of what, what we believe for a lot of these most exquisite interceptors and most exquisite offensive weapons, if it was taking 12 to 18 months each time to come to the range, and we're consolidating that down to, I'm saying guaranteed, but I don't mean we will pay if we miss, but that is what we will hold ourselves publicly accountable. If you can get to the range every 30 days, what we hope to do is cut out at least a third of the R and D time, which will make a huge difference for soldiers.

[Kaylee Lines]

All right. That is Army Secretary Dan Driscoll sitting down with our colleague Tyler Kendall in Michigan earlier today.

[Joe Weisenthal]

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

[Jared Bernstein]

hi, I'm David Westin. Join me every week for the Wall Street Week podcast to hear stories of capitalism from around the world, from geopolitical tensions and central bank decisions to artificial

[Joe Weisenthal]

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