Signal Report Deepens Hegseth Scrutiny

Summary

---

Balance of Power – "Signal Report Deepens Hegseth Scrutiny"

Date: December 4, 2025
Host: Joe Mathieu, with Kailey Leinz (Bloomberg)
Key Guests: Tony Capaccio (Bloomberg Pentagon Reporter), Evelyn Farkas (McCain Institute), Rick Davis (Bloomberg Politics), Janee Wartell (ARC Initiatives), Marlon Stutzman (Rep., IN-3)

---

Episode Overview

This episode centers on two critical headlines out of Washington:

• The highly anticipated Inspector General’s (IG) report on "Signal Gate," scrutinizing Defense Secretary Pete Hegseth’s handling of classified information and the subsequent risks to U.S. forces.
• The broader political fallout on Capitol Hill, including divided GOP leadership and an unfolding health care debate, culminating in a live interview with Rep. Marlon Stutzman.

With Bloomberg’s Joe Mathieu steering the discussion, the program features in-depth guest analysis on national security, legal implications of military decisions, and the GOP’s political turmoil.

---

I. Signal Gate and the IG Report: Deep Dive with Tony Capaccio

[00:51–08:32]
Joe Mathieu and Tony Capaccio discuss the findings, fallout, and implications of the Pentagon's Signal Gate scandal.

Key Points & Insights

• Scope and Revelations of IG Report:

  • The report is 84 pages; essential content is found on pages 14 and 25 ([02:29]).

  • Confirms Defense Secretary Hegseth shared mission-critical, classified battle plans via Signal shortly before operations over Yemen, taking "cavalier" risks ([02:29–03:36]).

  • Hegseth denied sharing classified information, but IG report indicates otherwise.

    “Bottom line is this showed that the Secretary of War or Defense... was cavalier in his use of this information. This is clearly classified... And he sent this stuff out on Signal two to four hours before the operations began. That was new to me.”
    – Tony Capaccio ([02:29])

• Declassification Authority and Accountability:

  • The IG acknowledges Hegseth’s declassification authority but sidesteps whether it was appropriately exercised ([03:43]).

  • Regardless, the “actions created additional risks to US forces and missions” ([05:17]).

    “Even though these events did not ultimately occur, the Secretary's actions created a risk to operational security that could have resulted in failed US mission objectives and potential harm to US pilots."
    – Joe Mathieu, quoting the IG report ([05:24])

• Erosion of Operational Security:

  • A journalist’s inadvertent addition to a Signal group by Michael Waltz exposed sensitive information. Hegseth used personal channels instead of secure facilities ([04:16–05:17]).
  • Senator Roger Wicker (R-MS) downplays it, calling for better tools but not accountability:

    “It's clear our senior leaders need more tools... So nothing to see here.”
    – Joe Mathieu quoting Sen. Wicker ([05:37])

• Political and Professional Repercussions:

  • Capaccio predicts limited fallout; no overwhelming bipartisan outrage, making it unlikely to force Hegseth’s resignation ([07:04–07:29]).
  • Reporters feel less access since being exiled from the Pentagon, but Capaccio says the flow of scoops is unchanged; what’s lost is real-time crisis access ([08:08–08:32]).

---

II. Yemen Strike Legal Controversy & Military Testimony: Evelyn Farkas

[08:32–16:53]
Evelyn Farkas analyzes the legality of U.S. military strikes and the handling of survivors at sea, questioning international law compliance.

Key Points & Insights

• Legality and New Precedents:

  • Farkas asserts ongoing operations are likely illegal, as U.S. actions blur lines between war and police action, particularly in high seas engagements ([10:23]).

    “These operations in and of themselves are likely illegal. The fact that we are conducting these... on the high seas, the fact that we're calling them war, doesn't make it war. These are police actions... resulting in the killing of people we don't even know.”
    – Evelyn Farkas ([10:23])

• Survivor Protections under International Law:

  • Killing survivors clinging to wreckage or radioing for help is unequivocally unlawful ([13:03]).

    “Radioing for help... is an act of survivor survival, if you will. That is a civilian act... those individuals cannot be killed for radioing for help.”
    – Evelyn Farkas ([13:03])

• Accountability for Command Decisions:

  • Farkas anticipates future court-martials or military justice reviews regarding these actions, emphasizing U.S. credibility hinges on upholding international norms ([13:49–14:29]).

    “I do think that these individuals will be court martialed... we need to make sure that we abide by international law... so that we want them to also be given fair treatment and given the protection that the Geneva Conventions gives them.”
    – Evelyn Farkas ([13:49])

• Culture of Dissent – Firing of Admiral Halsey:

  • Farkas calls the firing of a commander during ongoing operations “incredibly rare” and dangerous, especially if it results from legal challenges expressed up the chain ([15:43]).

    “You do not remove your leading commander unless there's real cause. And in this case, the only thing he did was question the legal assessment.”
    – Evelyn Farkas ([15:43])

• Halsey Testimony Prospects:

  • Halsey could testify as a civilian, limited only by state secrecy, but would likely be compelled by Congress ([16:37]).

---

III. Congressional Politics in Turmoil

[18:25–29:16]
Joe Mathieu hosts a roundtable with Rick Davis and Janee Wartell on intra-GOP tensions, Elise Stefanik’s criticism of Speaker Johnson, Republican strategy, and the health care impasse.

Key Points & Insights

• Google Trends Reveal Political Engagement:

  • Poll data and trending searches show Americans’ heightened focus on political topics — K-pop, Labubu, tariffs, and the “one big beautiful bill” ([18:25–20:14]).

• Elise Stefanik vs. Speaker Johnson:

  • Speaker Johnson responds to Stefanik’s public criticisms regarding legislation and leadership breakdowns, expressing confusion over her grievances ([20:53]).

    “I'm not sure exactly why she's frustrated with me. I literally had nothing to do with it. But I'm happy to roll up my sleeves and help her.”
    – House Speaker Mike Johnson ([20:53])

• Analyst Takes on GOP Fractures:

  • Wartell interprets Stefanik as courting independence for political gain, given discontent with Trump and mounting GOP vulnerabilities ([21:43]).

  • Rick Davis points to electoral warning signs for Republicans, foregrounding the risk of further legislative gridlock ([23:47–25:20]).

    “If you lost 50 Republicans in a House, you can forget any initiative legislatively for Donald Trump in the last two years of his office. So this is, this is a major political fallout...”
    – Rick Davis ([23:47])

• Johnson’s Leadership Tie to Trump:

  • Wartell contends Johnson’s effectiveness is less about individual skill, more about Trump’s coercive influence on House Republicans ([25:58]).

    “I think that Mike Johnson's effectiveness has really been tied more directly to how much that folks have fallen in line with Donald Trump rather than his own political maneuvering...”
    – Janee Wartell ([25:58])

• Upcoming Health Care Legislation:

  • With both parties anxious over health care costs, a Senate vote is set for the following week. Johnson’s capacity to secure victories depends on narrowly threading legislative deals ([28:06]).

    “It's pretty clear that we lost the, the narrative debate around the shutdown over health care... my guess is you have a very high chance that something comes out of the House that the speaker will try to take a victory lap on...”
    – Rick Davis ([28:06])

---

IV. Rep. Marlon Stutzman on Health Care, Party Unity, & 2026

[31:49–44:20]
Rep. Marlon Stutzman offers a Republican perspective on health care negotiations, the GOP’s internal strife, budgetary priorities, redistricting, and pending nominations.

Key Points & Insights

• GOP Outlook on Health Care:

  • Skeptical of bipartisan framework (Gottheimer/Higgins), Stutzman prefers empowering consumers directly, not insurers, via Health Savings Accounts (HSAs) ([34:42]).

    “I would much rather send it to the HSA's, send the money directly to the consumers, let the consumer make the decision on what to do with those funds.”
    – Rep. Marlon Stutzman ([34:42])

• Shutdown Prospects:

  • Stutzman is confident another shutdown will be avoided, credits "big beautiful bill," and frames current struggles as lingering effects of the Biden era ([35:41]).

• Budgeting, Minibuses, and GOP Unity:

  • Advocates for flexibility in funding the government (12 appropriations bills or minibuses). Supports Speaker Johnson’s leadership despite a fractured GOP majority ([37:06]).

    "Speaker Johnson has a very tough job. And I think that the fact that, you know, this, the shutdown did hurt the momentum that we had... But we're going to get back on track."
    – Rep. Stutzman ([39:05])

• On Elise Stefanik’s Criticism:

  • Minimizes public GOP infighting, attributes Stefanik’s actions to her gubernatorial aspirations and suggests issues should be handled in-house ([39:05]).

• Redistricting in Indiana:

  • Supports state-level initiatives to ensure fair representation, in line with national Republican strategy ([40:35–42:15]).

• Federal Reserve – Endorsement:

  • Would support Kevin Hassett as next Fed Chair, highlighting his optimism and steady leadership ([43:23]).

---

V. Notable Quotes & Memorable Moments

• On Civil-Military Standards:

  “Deeming them war does not make them war to begin with.”
  – Evelyn Farkas ([15:07])

• Capaccio on Reporting Changes:

  “What we're not getting, though, is access in an emergency. If the United States struck Venezuela tonight or tomorrow, we wouldn't be able to run in and get stuff... It would be all depending on Twitter and their babble from other places.”
  – Tony Capaccio ([08:08])

• On House GOP Discord:

  "If an election were held today for a Speaker, no way would this guy get elected. So... you've got a pretty good mess in the leadership in the House of Representatives."
  – Rick Davis ([28:06])

• On the Use of Signal for Sensitive Material:

  “There's a judgment call here whether to do it on Signal. It's a judgment issue.”
  – Tony Capaccio ([06:26])

---

VI. Timestamps for Key Segments

• [00:51] Show open, focus on IG report and ‘Signal Gate’
• [02:09–07:29] Tony Capaccio on IG findings and Hegseth’s conduct
• [08:32–16:53] Evelyn Farkas on military legality, Geneva Convention, and testimony before Congress
• [18:25–29:16] Roundtable on GOP tensions, Speaker Johnson, and health care debate
• [31:49–44:20] Rep. Marlon Stutzman live interview: health care, budgeting, party unity, Fed chair

---

Conclusion

This Balance of Power episode offered a revealing look at the Pentagon’s emerging scandals, pressing the need for stronger operational security and legal oversight. It also spotlighted deepening Republican divisions in Congress, debated health care ahead of a key Senate vote, and featured in-depth congressional perspective on the path forward. In sum, it was a news-rich, fast-moving program that delivered both behind-the-scenes reporting and political analysis in the original, candid style listeners expect from Bloomberg’s D.C. bureau.

Transcript

[Chase Sapphire Reserve Advertiser]

When you own your own business, you own every decision. Now own the card that rewards you for it. Chase Sapphire Reserve for Business is a painful card that elevates your travel experience and offers premium benefits that can take your business to the next level. Sapphire Reserve for business offers 8x points on all purchases through Chase Travel, 3x points on social media and search engine advertising, airport lounge access, and more. With over $2,500 in annual value, it's the card that gives back all you put in. Learn [e-mail] ReserveBusiness Chase for Business make more of what's yours. Accounts subject to credit approval restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank NA member FDIC.

[Joe Matthew]

Bloomberg Audio Studios Podcasts Radio news.

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomb Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. Thanks for joining us on the early edition this Thursday on Bloomberg TV and radio. Available as well live on YouTube search Bloomberg Business News Live. Our conversation ahead with Evelyn Farkas from the McCain Institute as we get our hands on the IG report that Tony Capacio broke yesterday, our Pentagon reporter no longer inside the Pentagon, yet somehow making more news than ever. This is the report, the watchdog report into Signal Gate, which of course has caused the walls to start closing in a bit around Pete Hegseth. Michael Waltz, the president's former national security adviser, has already been reassigned over this. And what we're learning here is indeed, troops may have been put at risk when the Defense secretary decided to share on Signal on the app that we're talking about here some battle plans that were about to unfold over Yemen. We're joined now by the aforementioned Tony Capacio, Bloomberg Pentagon security reporter, who has his hands on the report. This is what, 80 something pages long?

[Tony Capaccio]

84 pages.

[Joe Matthew]

Yeah, yeah. Now you saw portions of this yesterday. Are we learning more today than we didn't know?

[Tony Capaccio]

We didn't see portions. We were given. We were someone who did, someone who saw it, gave us and other media. So I don't want to overplay that.

[Marlon Stutzman]

Absolutely.

[Joe Matthew]

But you're looking at these documents now. How much more of a complete picture do we have?

[Tony Capaccio]

It's somewhat more complete and somewhat more distressing. So it's 84 pages, but not every page is laced with gold. For the viewers here, they want to look at page 25, page 14. Basically those are the kind of the meat on page 25, it says the secretary's communication of non public DoD information created additional risks to US forces admissions. And the killer quote is in that page. But bottom line is this showed that the Secretary of War or Defense, whatever you want to call it, was cavalier in his use of this information. This is clearly classified. Battle of war, A time on target. F18s hitting XYZ timeframes. And he sent this stuff out on signal two to four hours before the operations began. That was new to me. Just a very cavalier notion. And then in his very cocky letter to the ig, basically sticking thumb in his nose saying no classified information was sent March 25, he said the same thing. I didn't text war plans to the media. Well, this report shows that he was.

[Joe Matthew]

Not telling the truth, but it also indicated he had the authority to declassify. How do we rationalize these two findings?

[Tony Capaccio]

The IG thought they didn't. They were silent on the issue of whether he should have declassified or could declassify. Okay, excuse me. They were. They acknowledged that he was a declassifying authority, but they didn't get into that episode, that issue. It was more what he did send out potentially could have caused risk. The pilots, the Houthis, don't have a great electronic warfare capabilities to divine into signals. Signal gate. But the possibility was there. And clearly they put his actions, potentially put US Airmen at risk.

[Joe Matthew]

Well, of course, the reason why we know about this is because a journalist was inadvertently added by Michael Waltz, the former National Security Adviser. To what extent then is Pete Hegseth implicated? Because the chain was already there. Right by. And there were two different chains. We should be clear about this. One had cabinet officials. The other he had friends and family.

[Tony Capaccio]

Yeah, the second one, they, verily, they barely discussed and it was like a blink of an eye. That just wasn't a highlight of the.

[Joe Matthew]

Report was that an existing thread before these battle plans were put forth with the first or second, the one that had the reporter on it, the one that had the Atlantic, My impression was.

[Tony Capaccio]

No, he set that up after he got the info. And in fact, the report makes the case that he actually had access to a secure facility. They call it a scif. Yes, he had access to the facility, could have used it to send the same material out. But yeah, the point here is that he denied it was classified information. The IG was pretty clear that it was classified information and that putting it out there.

Created additional risks to U.S. forces and missions.

[Joe Matthew]

I mean, I'll say as a point of fact, not could have. Are you reading?

[Tony Capaccio]

Yeah. And let me read. Even though these events did not ultimately occur, the Secretary's actions created a risk to operational security that could have resulted in failed US mission objectives and potential harm to US pilots.

[Joe Matthew]

Reading directly from the IG report that's on page 25. I'll read directly from the statement from Senator Roger Wicker, chairman of the Senate Armed Services Committee. Quote, it is clear from the reports that the Secretary acted within his authority to communicate the information in question to other cabinet level officials. He then goes on to write, it's clear our senior leaders need more tools available to them to communicate classified information. So nothing to see here.

[Tony Capaccio]

There was a gentlemanly bob boppin weave.

[Joe Matthew]

Okay. You know, I would be the man to do something about it.

[Tony Capaccio]

His statement, effectively in my eyes, pretty much deflates this whole issue.

[Joe Matthew]

But, you know, signal gate becomes deflategate. That was for producer James.

[Tony Capaccio]

There was also football.

[Joe Matthew]

Remember that? Well, that's what I'm saying, unfortunately, was there for that.

[Tony Capaccio]

But the point here is that, you know, while he had the authority to do it, there's a judgment call here whether to do it on signaling. It's a judgment issue.

[Joe Matthew]

Correct. Whether it is legal, whether it is right are two different questions right? Now let me ask you about the brick in the wall here because, you know, we're talking about a potentially difficult day for Pete Hegseth. You've also got top brass, the chairman of the Joint Chiefs and the admiral who ordered the double tap strike on the boat coming out of Venezuela testifying today on Capitol Hill. There are questions today, and we'll talk to Evelyn Farkas about this. At what point do these stories combine to create a weight that the SecDef cannot handle? You know, I don't think, politically speaking.

[Tony Capaccio]

Tony, I don't think the wake is going to be that big. Based on this report.

[Joe Matthew]

How about what's happening on the Hill today?

[Tony Capaccio]

It depends on whether the Republicans come out and show some outrage. It can't be all Democrats predictably saying the guy should go. And I don't see the wake. I don't see the wake over the water coming over the ship side. Yeah, I see it maybe pounding against it, but still rocking, but not capsizing.

[Joe Matthew]

Just a quick note where I started here. You were excised essentially from the Pentagon by not signing, agreeing to sign this.

[Tony Capaccio]

Exiled. Excise means I might have been assassinated.

[Joe Matthew]

Exiled. We'll go with fine. Exile, I think, kind of. Well, listen, you choose the language you want. Would this have come out yesterday if you guys were all still in the building. I feel like reporters like you are getting more news now, having left the Pentagon, than you might have been getting inside the Pentagon.

[Tony Capaccio]

No, no, this definitely would have come out had we been inside. It would have been more contentious because we would have gone in their face and say, what about this? What about they might have come back more.

[Joe Matthew]

I don't think you're getting more scoops than you were before this happen.

[Tony Capaccio]

I think the scoops are. I'm getting about the same. Interesting. What we're not getting, though, is access in an emergency. If the United States struck Venezuela tonight.

[Joe Matthew]

Or tomorrow, we wouldn't be able to.

[Tony Capaccio]

Run in and get stuff grabbed and we'd be dependent on emails and emails and calls which wouldn't be answered. And it would be all depending on Twitter and their babble from other places.

[Joe Matthew]

People love it when you come on the program because you're authentic and I appreciate your bringing this reporting to us as always. Tony Capacio, Bloomberg Pentagon reporter, with us in the flesh here in the studio. We're lucky he's in the bureau more often now. That was the decision across the river. As we add the voice of Evelyn Farkas with more today on the testimony and the idea of the legality surrounding this second strike on the same boat with survivors in the water. There's been some illuminating reporting by the New York Times into this conditions that had been set before this scenario. By the way, the secretary of defense on how to handle survivors and whether, in fact, they continued to present a threat. President Trump talked about this just yesterday. As a matter of fact, he was in the Oval Office when it came up. Listen to what he said. We know every route, we know every.

[Tony Capaccio]

House, we know where they manufacture this crap.

[Joe Matthew]

We know where they put it all together. And I think you're going to see it very soon on land also. Yeah. So to be clear, you support the decision to kill survivors after the. No, I support the decision to knock out the boats. And whoever is piloting those boats, most of them are gone.

[Tony Capaccio]

But whoever piloting those boats, they're guilty.

[Joe Matthew]

Of trying to kill people in our country. Evelyn Farkas is executive Director at the McCain Institute at Arizona State University and has been in the building. She's former deputy assistant secretary of defense for Russia, Ukraine, Eurasia. Evelyn, it's great to see you back on Bloomberg TV and radio. I don't want to turn you into a lawyer here, but there are things like the Geneva Convention, international law and training that troops go through and certainly top brass go through. When you talked about the general staff and dealing with scenarios like this. What are these senators hearing today from the admiral who ordered the strike and from the chairman of the Joint Chiefs who both say they acted legally?

[Evelyn Farkas]

Well, Joe, thanks again for having me back on again. And I'm only sorry I can't be on with Tony Capaccio, who is one of my favorite journalists going back decades. So, look, unfortunately, we in the public don't yet know exactly what transpired. I do think eventually we'll see the videos and we'll get the full story. But I think we have to step back one minute and understand that these operations in and of themselves are likely illegal. The fact that we are conducting these operations on the high seas, the fact that we're calling them war, doesn't make it war. These are police actions that are resulting in the killing of people we don't even know. Targets who we have been told are drug smugglers working for kind of a drug terrorist organization. So this is all new legal waters, to use a pun intended, that we are being asked to explore. And I would like to hear from lawyers, frankly, I don't want to hear just from the admiral. I want to hear from seasoned judge advocate generals, people who understand the military law. And certainly when it comes to the issue of people who are survivors, who are not piloting the boats, Joe, who are in the water clinging to them for their lives, those people are survivors and they should be given safe passage. So we know that if those were Americans in a war context or in a police context, that we would expect the same from any other actor who comes across them.

[Joe Matthew]

We have a literal split screen unfolding live right now in Washington. Evelyn, as President Trump has begun speaking at the Donald J. Trump Institute of Peace, as it was renamed just 24 hours ago. He's there with the presidents of Rwanda and the Congo to talk about their arriving at peace. The if you're with us on Bloomberg Radio, the backdrop behind the president has big lettering that reads delivering Peace. So with that in mind, Evelyn reporting by the New York Times today shows that Pete Hegseth approved contingency plans for this very scenario. The military would, in fact, attempt to rescue survivors if they appeared to be helpless, shipwrecked or out of what they considered the fight. But it would try to kill them again if they took what the US Deemed to be a hostile action, like communicating with suspected cartel members. After the smoke cleared from the September strike, there were two, as you mentioned, survivors clinging to wreckage. One of them radioed for help. Is radioing for help a hostile act.

[Evelyn Farkas]

No, no, we know that from our own service members who explained to us that they have survivor survival kits, and the survival kits include radios, radios to call for help. That is notthat is not an act of war. That is an act of survivor survival, if you will. That is a civilian act, if nothing else. So those individuals cannot be killed for radioing for help.

[Joe Matthew]

It's really interesting because Admiral Bradley and his legal adviser, according to the Times, concluded that they were attempting to continue their drug run, and they're telling senators today that made the already damaged vessel a legitimate target. Evelyn, what does senators say in response?

[Evelyn Farkas]

Yeah, I mean, I would doubt that that will hold up in any kind of court of law. And frankly, I do think that these individuals will be court martialed at some point or brought before a military court of justice, if not now, than at the end of President Trump's term or some other point in time when Congress can step in more assertively. The reality is we need to make sure that we abide by international law, the United States, that is because we have service members who are working all over the world every day during peace and obviously during war, and we want them to also be given fair treatment and given the protection that the Geneva Conventions gives them.

[Rick Davis]

Huh.

[Joe Matthew]

Utes you believe Admiral Bradley will be court martialed or others, Evelyn?

[Evelyn Farkas]

Well, I don't know. Obviously, we have to look and see what the.

How the investigation unfolds. But it does appear, I guess I shouldn't go so far forward, lean so far forward to say that he definitely will be. But there must be more investigation. Let's just leave it at that. And then someone might have to be held accountable. But there's also an overriding question, as I mentioned, Joe, about the legality under international law of these operations. Deeming them war does not make them.

[Joe Matthew]

War to begin with. Reporting in the Wall Street Journal about a different Admiral, Alvin Halsey, who was the head of southcom, and until now we believe that he had stepped down from his position in some sort of protest over these operations. Evelyn, the Journal is reporting that he was forced out by Pete Hegseth after voicing initial concerns about the legality of these operations. Based on your time in the Pentagon, how unusual is it to see a commander fired from his post or taken off of that post during an ongoing military operation?

[Evelyn Farkas]

Well, it's incredibly rare, Joe. And I will note that when I worked on the Senate Armed Services Committee, I had oversight for the Southern Command as well as the Special Operations Command. So you do not remove your leading commander unless there's real cause. And in this case, the only thing he did was question the legal assessment. It sounds like. I mean, I don't also know the full details on this. And to fire someone for questioning, which really should be the commander's job. I mean, he should be questioning everything to make sure that he's protecting the men and women in uniform who are working and conducting operations under his orders as an admiral.

[Joe Matthew]

Can Alvin Halsey speak out about this or just in our remaining 30 seconds, Evelyn, will he need to be compelled by Congress to speak publicly?

[Evelyn Farkas]

He likely will. Well, that's a good question. He can speak out as a civilian, certainly. And the only thing that he can't talk about are classified items publicly. But of course he can speak to the relevant committees in a classified session about all of this.

[Joe Matthew]

Be very curious to hear from him at some point here. Evelyn, thank you for walking us through this. It's very helpful. Evelyn Fark is so speaking from experience in her time at the Pentagon and of course in the United States Senate. She's executive director of the McCain Institute at Arizona State University. We'll assemble our political panel next. Rick Davis and Janee Wartel are with us today. I'm Joe Matthew. This is Bloomberg. Stay with us on Balance of Power. We'll have much more coming up after this.

[Odoo Advertiser]

Running a business is hard enough, so why make it harder? With a dozen different apps that don't talk to each other, one for sales, another for inventory, a separate one for accounting. Before you know it, you are drowning in software. Instead of growing your business, this is where Odoo comes in. Odoo is the only business software you'll ever need. It's an all in one, fully integrated platform that handles everything, CRM, accounting, inventory, E commerce, HR and more. No more app overload, no more juggling logins. Just one seamless system that makes work easier. And the best part, Odoo replaces multiple expensive platforms for a fraction of the cost. It's built to grow with your business whether you are just starting out or already scaling up. Plus, it's easy to use, customizable and designed to streamline every process so you can focus on what really matters running your business. Thousands of businesses have made the switch, so why not you try Odoo for [e-mail] that's o d o o dot com.

[Joe Matthew]

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube with one of the most honest polls in America today. You might have heard about it. Google trending topics throughout with their yearly list. What were we searching about? What was important to you? Interesting to see politics creep into the list in a number of cases here. In some cases pretty esoteric actually. But it is honest about what's important to us in America. Charlie Kirk was number one. Number one on the top ten here. The late Charlie Kirk spiking search is like no other story that we saw this year. It is immediately followed by K Pop Demon Hunters. If you want to humble yourself as an American. Continue reading. Number three Labubu. That's how you say it, right? Those scary looking toys followed by iPhone 17. And how about this number five, one big beautiful bill. I guess that communications effort worked pretty well for the President. Followed by Zoran Mamdani Deep seek government shutdown and in number 10 tariffs. The stories that we talk about every day here. On Balance of Power. Pretty remarkable. As we asked today, with evidence of Congress showing up in the Google yearly search trends here. What is happening in the House of Representatives? If you read the tip sheets this morning, you'd think it was Lord of the Flies Elise Stefanik and Chip Roy running around the bonfire calling for the name of the speaker of the House.

Mike Johnson.

Indeed, there are some crosscurrents that are making life very difficult for the Speaker. And in the case of Elise Stefanik, now taking a victory lap, criticizing the speaker, calling him an ineffective leader who is losing control of his conference. But she managed to impact legislation in the form of the NDAA to her benefit. Listen to what the speaker said when asked about his standoff with Stefanik. She's been attacking him on social media and on television. He was asked about it on Tuesday. Listen, all of that is false. I don't exactly know why Elise won't just call me. I texted her yesterday.

[Marlon Stutzman]

I sent my friend Elise a text.

[Joe Matthew]

Last night and I said, can you find out what the issue was and I'll help you resolve it. I support her provision. I mean I would vote for it. I think it's smart and I'm not sure exactly why it wasn't included. So I don't know why she's frustrated with me. I literally had nothing to do with it. But I'm happy to roll up my sleeves and help her. I want everybody to be successful and we're going to try to make the bill as best it can be. Let's assemble our political panel for Their thoughts on this. Bloomberg Politics contributor Rick Davis is with us. Republican strategist partner at Stone Court Capital, alongside Democratic strategist Jenny Wartel, partner at ARC Initiatives. Great to see you both. Janay, what does it tell you when the speaker of the House is is talking to his membership, in this case, a member of his own conference, through the media saying, I wish you would call me?

[Chase Sapphire Reserve Advertiser]

Well, look, of course the GOP is spiraling. They have control of the White House, control of Congress, both chambers. And yet we're in a 2026 election cycle and the American people are not happy. We're in an affordability crisis. Healthcare is under attack. So now folks like Elise Stefanik want to be out front as being dissenting or expressing discontent with the direction that Congress is taking and their key votes on some of these policies. Now, yes, she could have just picked up the phone or sent a text and reached out to Speaker Johnson, but instead she wanted to be out front as showing that she is not a part of the rank and file of Republicans who have gone along with the Trump administration's policies and the most recent controversial votes that Congress has taken. And so, you know, she's reading the tea leaves here, as are many we're seeing these Google searches really reflecting that Americans are tuned in to politics in a way that they haven't been Googling the one beautiful bill, understanding what tariffs are. Folks are dialed in. And what we're seeing now is that Republicans are trying to figure out ways to show some independence from what has been Donald Trump's real stranglehold on the party.

[Joe Matthew]

You know, interesting it wasn't just this provision in the ndaa. Rick Stefanik talked to the Wall Street Journal, cited matters ranging from members criticizing Speaker's decision to keep lawmakers in their home districts during the recent government shutdown to weak showings in special elections to what she cast as his failure to address the expected jump in health care costs if the party doesn't reach agreement soon with Democrats. And that's going to bring us to the jumping off point here when it comes to the looming health care vote a week from today in the Senate. How many members of the Republican Conference is Elise Stefanik speaking for, Rick? Because we know Nancy May says she may soon announce her decision to follow Marjorie Taylor Greene out the door and not running for reelection.

[Rick Davis]

Yeah, look, I mean, you don't need to look any further than last week's special election in Tennessee or this week's special election in Tennessee where, you know, you lost basically, you know, 10 to 12% of the Republican vote from 2024 to 20 or from 2024 to 2025. I mean, it's, it is a big deal. There are 50 House Republicans in districts that Trump won by 10 to 12 to 15% that now we're waking up saying I could lose. And if you lost 50 Republicans in a House, you can forget any initiative legislatively for Donald Trump in the last two years of his office. So this is, this is a major political fallout that's occurring both after the elections last year and then this year. And it's got Republicans in a pretty grumpy mood. I mean, and talk about Elise Stefanik. How about the most recent thing? I mean, she got out there beating up Mayor elect Mandani before his trip to Washington, and then Trump throws her under the bus in a love fest with a socialist. I mean, like, she has made every bet wrong this month, and she's mad about it, and she should be mad about it because the party has become something different than what she had. And Marjorie Taylor Greene read the same tea leaves and is out. And as you point out, there are others like Mace who are running for governor and have other things to do. And maybe I don't want to spend my time getting wasted in Washington for the next year.

[Joe Matthew]

Wow. Boy, oh, boy. Well, you know, Rick reminds us Stefanik is running for governor here, Janae. And so we do need to look at her remarks and her posture here through that prism of the campaign. But she went on to say to the journal, whereas Kevin McCarthy was a political animal, Mike Johnson is a political novice. And boy, does it show with House Republicans underperforming for the first time in the Trump era. I'm confused, Janae. I thought Mike Johnson was the golden boy, the only guy who got to deliver at the end for Donald Trump. Kevin McCarthy was fired for doing things that Mike Johnson managed to pull off. How has this changed so quickly?

[Chase Sapphire Reserve Advertiser]

Well, you said the two magic words, Donald Trump. And one of the reasons why Mike Johnson has been so successful is because Donald Trump, under threat of primary for any lawmaker, Congress, congressman who steps out of line, has threatened to primary them. So for the first nine, ten months of the administration, we saw that no one was stepping out of line. They were voting on unpopular legislation. They were voting against the interest of constituents in their districts. And now those chickens have come home to roost because we're in the 2026 election cycle. So I think that Mike Johnson's effectiveness has really been tied more directly to how much that folks have fallen in line with Donald Trump rather than his own political maneuvering and how he's been able to bring folks together. And now, surprisingly, given that we're in the 2026 election cycle, we see that folks are starting to realize that they're in these vulnerable districts. They, as we mentioned, saw the election results from a few Tuesdays ago and said, wow, a lot of what we've been voting on and what we've been loyal to Donald Trump about has created this affordability crisis for our constituents. They're not happy about health care. They're not happy about anything right now. And so we've got to find ways to show some independence. So I think Mike Johnson's real effectiveness has really more so been tied to how strong has the Republican brand been under Trump for the first, you know, few months of this administration.

[Joe Matthew]

Interesting. You know, it's a week from today, as I mentioned, that the health care vote's supposed to take place in the Senate. That's what John Thune promised. And we are seeing the gears turn a little bit today. Rick. There was a meeting yesterday that included Senator Bill Cassidy representing his plan on the Senate side. Representatives Josh Gottheimer and Jen Kaggins, dnr, were in that meeting as well. They didn't come to a particular agreement, but they're talking. And today the aforementioned Gottheimer and Higgins are introducing a framework, their own bipartisan legislation here to reduce health premiums. Is this going to be another case where Mike Johnson gets a vote, something passes in a squeaker, and he's the made man once again?

[Rick Davis]

Well, he hopes so, because right now Republicans are outside of affordability, desperate to do something positive around health care. It's pretty clear that we lost the, the narrative debate around the shutdown over health care. Regardless of how you feel about the shutdown writ large, we got on totally the defensive Republicans did on health care, and they're desperate to get back into the game. And so my guess is you have a very high chance that something comes out of the House that the speaker will try to take a victory lap on, even though, you know, his strategy around the shutdown was what put us in this place to begin with. Memories are not that short in the House of Representatives. And as least the phonics said if an election were held today for a Speaker, no way would this guy get elected. So, you know, you've got, you've got a pretty good mess in the leadership in the House of Representatives, and you kind of hope that they can eke something out on health care. So that we can get through this year in a better position going into the election cycle than we are at now.

[Joe Matthew]

Boy, you gotta wonder who could get elected. Great conversation, Rick and Janay, thank you so much. Great panel today. Rick Davis, Bloomberg Politics contributor, Stone Court Capital, and Janee Wartell, Arc Initiatives. Fascinating insights. We're going to go to the source on this. You're not going to want to leave because coming up we'll speak with a member of the Republican Conference in the House, Marlon Stutzman, Republican from Indiana's 3rd District, with U.S. on a range of issues, including what we've all already talked about here. Remembering as well, he's on the Financial Services Committee as we consider the next Fed chair being announced and how easy it might be for him to be confirmed. This is Bloomberg. Stay with us. On balance of Power. We'll have much more coming up after this.

[Odoo Advertiser]

Running a business is hard enough, so why make it harder? With a dozen different apps that don't talk to each other, one for sales, another for inventory, a separate one for accounting. Before you know it, you are drowning in software. Instead of growing your business, this is where Odoo comes in. Odoo is the only business software you'll ever need. It's an all in one, fully integrated platform that handles everything, CRM, accounting, inventory, E commerce, HR and more. No more app overload, no more juggling logins. Just one seamless system that makes work easier. And the best part, Odoo replaces multiple expensive platforms for a fraction of the cost. It's built to grow with your business whether you are just starting out or already scaling up. Plus, it's easy to use, customizable and designed to streamline every process so you can focus on what really matters running your business. Thousands of businesses have made the switch, so why not you try Odoo for [e-mail] that's o d o o dot com.

[Joe Matthew]

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg 11:30 as we talk policy and politics here in Washington. I'm Joe Matthew in the nation's capital and thank you for spending part of your Thursday with us. With our eyes on Capitol Hill and a looming vote one week from today in the United States Senate, at least John Thune promised that vote, the majority leader to Democrats as part of the conversation to reopen the government that vote on health care, whether it extends the current.

Covid era, I should say subsidies from Obamacare or is some other type of reform or an entirely different plan to replace it, no one has come to terms on this. But an important development today as a Democrat and a Republican in the House of Representatives drop a bipartisan framework to reduce health premiums. That's Representatives Josh Gottheimer and Jen Kaggins, the D and R, respectively, providing potentially some hope to get around this matter and then move on to, or at least continue the work to fund the government past the end of January. Time is tight if we're following along on our home game here. I think we're below 10 legislative days remaining to get all of this done. And it's where we start our conversation with Congressman Marlon Stutzman. The Republican from Indiana's 3rd district is with us. And it's great to have you back on the program. Congressman, you've got a couple of important committee assignments for our audience here on Bloomberg. As members of Financial services and as a member of the Budget Committee, do you see all the chaos surrounding health care finally being solved in the next week?

[Marlon Stutzman]

Great to be with you, Joe. I don't think we'll get all of the problems solved. I think, you know, what we all are realizing is that the Affordable Care act isn't as affordable as was promised. And I think that there's a lot of frustration. I was just talking to my brother who runs family businesses for us back home and he was talking about the cost of health care going up for, you know, smaller, you know, to mid sized companies. And that's one of the challenges that we've all been facing in this country is the fact that, you know, inflation has definitely affected the economy and the ability to, to make those raises for employees. My hope is, is that we've set the table with the big beautiful bill keeping taxes where they're at, that and making sure that the regulatory environment is much more.

Affordable or much more, you know, in check. So that way businesses don't have to those high cost of accountants and attorneys and consultants to be able to, to make a profit. So I don't think it's going to happen all in this next week. You know, I always, of course, commend those who want to try to find a solution. I'm always willing to look at anything. But at the end of the day, I think what, what's really going to be, what's going to matter here is that these, these subsidies should go directly to the American consumer Rather than to the insurance companies. I think the insurance companies have really lost the faith and trust of the American people and don't feel like they're getting their best bang for their buck.

[Joe Matthew]

Well, what do you think of this gottheimer Higgins bill and what are you hearing about it? It would provide, as I understand, a one year extension for these subsidies, would also add new guardrails when it comes to, to eligibility, cracking down on fraud and a menu of separate pay for options not in the form of subsidies. Is that getting closer to something you might support?

[Marlon Stutzman]

It's going to be tough for me, Joe. I'll be honest, just because I don't have the faith and confidence in the insurance companies either. You know, if we send them the money, they're going to, you know, add it to their bottom line. I would much rather send it to the HSA's, send the money to directly to the consumers, let the consumer make the decision on what to do with those funds. Because I think that's where the American people feel like, you know, they're getting gypped. I mean, because the, you know, the money goes through government, the money goes through big corporations and then what gets left to them at the end of the day is, isn't enough to cover the bills. And I think that's why, you know, just like the Trump, the Trump savings account that has got some attention this week, it empowers the American individual. It makes sure that the money gets to them and then they can decide how those monies would be used. And going through an HSA would give those guardrails to be sure that the funds go to actual health care services provided.

[Joe Matthew]

Yeah, well, with so little agreed upon, Congressman, what's your gut? Are you worried about a shutdown in the new year or can this be solved by then?

[Marlon Stutzman]

I don't think there will be a shutdown again. You know, I think the Democrats, you know, they got what they were looking for to show that they show their base that they were fighting for them. You know, again, I don't think it comes back down just to these subsidies. I think there's more with the Democrat side that they're just trying to put a stop, put slow the momentum that President Trump had. And it has worked. You know, we're not getting things moving as quickly as we'd like to in Congress, but we're getting there. It's going to happen. I think a lot of the hard work was a lot already done with a big beautiful bill making sure that we're, you know, companies are ready to set their budgets for 2026, whether it was last month or this month. But we've got a lot of work to do. And I know that affordability is a big issue, whether it's housing, whether it's, you know, buying a new car or buying a used car. Interest rates are coming down a little bit. That's, that's helping. I think the outlook is bright, but we're still going through the leftover, kind of the hangover of the Biden administration.

[Joe Matthew]

Well, so talk to us about the budgeting process. You're actually on the budget committee, and there's been talk of something revolutionary happening, as the speaker promised regular order. Congressman, I don't mean to get too cute here. I don't think anybody sees 12 separate bills coming together. But we could have a couple of minibus bills. Correct. That would help us fund the government. Passed January 30th. How close are we to making that happen?

[Marlon Stutzman]

Yeah, well, that's always the goal. And I appreciate Speaker Johnson's leadership. I mean, he has brought the Republican conference a long way in the House with a small majority. It doesn't take too many members to jump off. That makes it difficult to pass anything. That's one thing that Republicans need to do is stick together. We've got a great leader at the White House. We've got partners in, in the Senate where we're getting stuff done. It's not easy. But at the same time, you know, that should always be the goal of getting 12 appropriations bills passed. If it doesn't work exactly the way we want it, we've got to be nimble and flexible to be able to put the best packages on the floor that we can always going to be some other issues that come up that take attention. But. But I think we're going to get there and we know from what we've passed already that we're going to start cutting the expenses that Washington has been doing for the last several decades that just seem to be out of control. And that's where reforms are going to have to be made. But we can do this by empowering the American people and not just empowering the big corporations that take a lot to their bottom line.

[Joe Matthew]

I know you're referring to Republican unity in the House, but there have been some concerns about discord in the family. Congress been look no further than Elise Stefanik, who has been at odds with Speaker Johnson over a number of issues beyond the provision in the NDAA that she planted a flag on. There are questions about more than that. She says, speaking with the Wall Street Journal, citing matters ranging from members criticizing speakers decision to keep lawmakers like yourself home during the shutdown to weak showings and special elections to what she cast as his failure to address an expected jump in health care costs, which you and I were just talking about. She went on to say Kevin McCarthy was a political animal. Mike Johnson is a political novice, and boy, does it show. Is this just a member running for governor, Congressman, or is there more to it in your conference?

[Marlon Stutzman]

Well, no, I mean, this is the first I've actually heard of this. I know, I know there's been a couple of members that have expressed frustration publicly. Marjorie Taylor Greene is one of them. And of course, Elise Stefanik, she was put in a really awkward, difficult spot. You know, here she thought she was going to be the UN Ambassador and, and those things didn't work out. And now she's running for governor. You know, I wish we would always keep those conversations inside the family and, you know, especially one on one, she should be expressing her frustration with the speaker. If it's genuinely real. I mean, that's what we should all be doing. So, you know, taking them public I don't think is the right way. But I have a ton of respect for Elise. She's a great leader. She will be a great governor of New York if, if that's what she decides she's going to do. Speaker Johnson has a very tough job. And I think that the fact that, you know, this, the shutdown did hurt the momentum that we had. If that's what Democrats wanted, that it probably did help them. But we're going to get back on track. We're going to make sure, you know, the NDAA is a, it's kind of one of those must pass bills. And so everybody's jockeying trying to get their piece of legislation into the NDAA because they know it's going to likely get across the finish line. But Speaker Johnson will navigate all of that. I'm sure he's already, you know, making the phone calls to at least to say, hey, let's get together and talk and work this out. We really got to stick together as a team.

[Joe Matthew]

Ever the diplomat in Marlin Stutzman. Congressman, I've got to ask you about redistricting. There is an effort in your state, a big push in pull at least in the state legislature when it comes to Indiana. Do you support the effort?

[Marlon Stutzman]

I do. You know, and it's, it's one of those things, again, where these issues come at you and you're like, why do we have to do this? You know, why are we having to break the precedent? Well, the problem is, is, you know, we meet all the time in legislative bodies because something's changed, you know, precedent changed. And so we always are faced with challenges. And I think that it's one of those that the Indiana legislature wasn't expecting. But a lot of this comes back to the politics that I mentioned earlier. The Democrats have been, you know, drawing their maps in states like California, Illinois. Massachusetts is a good example. Massachusetts is as Democrat as Indiana is Republican. And, you know, there's nine districts in Massachusetts. There's nine districts in Indiana. Yeah, Every. Every district in Massachusetts is Democrat. It's favored to the Democrats. You know, in Indiana, I think the maps were actually very favorable to the Democrats because there was one district in Indianapolis that it was a true blue Democrat seat. And then, of course, northwest Indiana was a swing seat kind of. But we've had a lot of people moving over from Illinois. And, you know, if we're going to play partisan politics, Indiana is a 90 state, and so the Republican friends in the state legislature there need to realize we're in a, a national battle here. This isn't just about Indiana. It's a national battle where we need to be sure that there's equal representation in Washington for Hoosiers.

[Joe Matthew]

Wow. Well, a couple of different scenarios that you just outlined there. Right. And first of all, California was responding to Texas, which got the ball rolling on this, and some of those other states you mentioned, like Massachusetts, were on schedule with the census. Right. The question has been, should every state just go for it right now and hope for the best when it's done? And it looks like that's a yes for Indiana.

[Marlon Stutzman]

Well, it is, but Texas was also forced to do it by the court. So it wasn't just they decided to do that. That's something that I've, you know, checked on several times because I always hear that explanation. You know, California, they actually put it to a vote to the people, and the people overwhelmingly voted, said, hey, we're going to let the legislature go ahead and draw the maps again. So I tell my Indiana colleagues, like, you know what, if you put the issue in front of the. The people of Indiana, they would probably look at it the same way as Californians did. But they just have a different process. You know, they actually have to take it to the, to a vote first with the public. Indiana has a different process. We have a super majority. I think it needs to be something that needs to get done. So that way we can continue to push the conservative agenda forward.

[Joe Matthew]

I thought you were going to say that you might actually bring this to a vote in Indiana. I know Governor Braun had some concerns about this to begin with, but I read what you're saying right now. I have to ask you quickly, while you're with us, Congressman, with your post on the Financial Services Committee about Bloomberg's reporting that Kevin Hassett is leading the charge here and at the top of President Trump's list to be the next Fed chair. Is that a name you would support?

[Marlon Stutzman]

Oh, I would. I hope so. I love Kevin. He's done a great job for the administration already. You know, he's just got a great smile. He's always optimistic. But I think he's also the level head that we need, a steady hand, you know, between Kevin and Scott Besant, two great folks at the wheel for the American economy. And he's got my vote if, if there's anybody that is listening.

[Joe Matthew]

No, Scott Bassett might, if this happens, Bloomberg reporting that the White House might give him Hasset's job as well, running the nec. That gives, I think, Scott Bessett three hats. Are you comfortable with that?

[Marlon Stutzman]

Well, he's got a really big one with just the irs.

[Joe Matthew]

I should say so. Right.

[Marlon Stutzman]

So, you know, Scott is tremendous. I always enjoy our, our meetings with him on the Budget Committee. He's very thoughtful. He's got a great team around him. He knows how these things work. And I'm sure he'll do whatever he can for the president ultimately for the American people.

[Joe Matthew]

Great. Congressman, come back and talk to us about your Invest act next time. We'd like to keep the conversation rolling. Marlin Stutzman, Republican from Indiana's 3rd district, with U.S. live from Capitol Hill.

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 podcasts. And you can find us live every weekday from Washington, D.C. at noontime [e-mail] if a Lenovo computer for your business is on your holiday list, don't shop around. Just go directly to the source lenovo.com you'll find exclusive deals on the PCs you want for your business, like the ThinkPad X914 Aura Edition and Yoga 7i 2in1. So avoid all that shopping chaos and price comparing and just go directly to the source lenovo.com where PCs are up to 50% off. That's lenovo.com lenovo Lenovo.

Amazon Five Star Theater presents real customer reviews performed by Eva Longoria. Tonight's review, sports briefs. Oh, boy. Where do I even start with these performance mesh boxer briefs. These boxer briefs are like a magician's trick. You know, the one where you go, where did that rabbit come from? So if you're looking for underwear that not only performs well, but also gives your package the attention it deserves, then look no further. 5 stars. Nickalicious Shop the perfect gift this holiday season on Amazon.