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Joe Matthew
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Podcast Host
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.
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Kailey Leinz
The messaging we're getting from President Trump regarding negotiations with Iran and just on time for Balance of Power to begin the hour, President Trump has posted something new on True Social saying, quote, fake news reports that the Islamic Republic of Iran and the USA stopped speaking a few days ago are false and erroneous. He goes on to say, the conversations between us have been going on continuously, including four days ago, three days ago, two days ago, one day ago, and today. Where they lead, one never knows. But as I told Iran, it's time one way or another for you to make a deal. You've been doing this for 47 years and it cannot be allowed to go on any longer. And he signs it. Joe President Donald J. Trump.
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Joe Matthew
So presumably he did write this and it is amazing how he times this with the top of the program so often. Skylar Woodhouse is tracking all of this Bloomberg News White House correspondent as well as the new acting DNI that the president announced earlier today. We want to get to Skyler for details, details on all of this. What do we make of this? Scholar 4 days ago, 3 days ago, 2 days ago, 1 day ago, and today. So, well, I guess the last four days, this is a White House that is talking, as Marco Rubio suggested in testimony on Capitol Hill. Sometimes it takes a long time to hear back because of the communications difficulties in Iran. Is that why we're still waiting today?
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Skyler Woodhouse
Yeah, Joe, look, I mean, I was working this past weekend and what we saw from the president is he was at his golf club in Virginia and he was often truthing about the Kennedy center, about his ball room, about sort of the renovations that were going on around here in Washington with all eyes and ears and questions wondering if we would receive any sort of real update on Iran. I was on high alert for any potential deal. But I think, you know, what we're seeing in sort of True Trump fashion right now is as he goes about these deals, we often just hear about the timelines continuing to be pushed and stretched. But I do Think it is raising a lot of questions on when that deal could actually come about. It was only last week that the president met with some, met with his national security team and, you know, walked, did not come out with a deal when the expectation was that there would be a deal. So I think we'll have to see what this week brings. But yeah, no, there's still a lot of questions on what we can expect to see.
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Kailey Leinz
Well, and Skyler, as you referenced the president's national security team, I guess it's getting a new member, a new acting director of National Intelligence in Bill Pulte. What qualifications does he have in that regard to be advising the president on matters like a war in Iran?
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Skyler Woodhouse
Yes, lots of questions being raised on this decision by the president. Definitely a pretty unconventional choice. Polte, who does not have a national security background, has no military ties. So this is definitely one of those that is raising eyebrows as people try and digest what does this mean. And also, look, Pulte, he is very loyal to President Trump and he is sort of someone that, you know, the president can trust right now. So I think it will be interesting to see how he uses this role. And it also raises questions on how long will he serve in this active position and if we can expect to see, you know, how he plans to navigate the war in Iran.
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Joe Matthew
Pretty remarkable that he's going to keep his jobs as well as director of fha, chairman of Fannie and Freddie, while also working in this new role as acting dni. Skyler, I have to ask you before you leave us quickly about the anti weaponization fund said to be scrapped, the Department of Justice following the guidance from the court. But a lot of Republican lawmakers are looking for something more official, if not in the form of legislation or, or an announcement from the White House. Do we expect to hear anything else from the president on this?
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Skyler Woodhouse
Yeah, well, it sounds like right now going off of reporting is that this is put on pause. I think with this administration, anything can always come back and resurface at any point in time. But it appears to be right now that it is on on pause as it was drawing a lot of criticism from from not just Democrats but also Republicans as well.
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Kailey Leinz
All right, Bloomberg's Skyler Woodhouse, thank you so much as always helping us run through the latest from the White House. And of course, that latest includes President Trump posting on true social that continuous conversations are happening with Iran four days ago, three days ago, two days ago, one day ago and today suggesting that it's unclear where they will lead. But calling again on Iran to make a deal. Of course, he's contested for months now that Iran wants to make a deal. Let's remind ourselves Iran is very much
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Rick Davis
intent, they want very much to make a deal. So far, they haven't gotten in.
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Joe Matthew
We have to have a deal that's acceptable to me. They come to the table, they're begging to make a deal. They want to make a deal badly,
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Duke Energy Announcer
and we'll see if we get there.
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Joe Matthew
They think that they are getting very
- [05:40]
Rick Davis
close to making a deal.
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Kailey Leinz
For more, we turn to Alisa Ewers, senior fellow for the Middle East Studies at the Council on Foreign Relations, a former Pentagon and State Department official in both the George W. Bush and Obama administrations. Lisa, welcome back to Bloomberg TV and Radio. When we consider the prospects of a deal being made here, Iran is suggesting that one will not be until we see a resolution to Israel's incursion into Lebanon in the name of going after Hezbollah. How do you see that resolving, given the public rhetoric, rhetoric we continue to get from Bibi Netanyahu?
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Alisa Ewers
Well, thanks for having me back. I mean, I think what we're seeing is that despite the desire by the administration, it's becoming increasingly difficult to keep Lebanon separate from these broader Iran talks and that Tehran has not relented in demanding that a ceasefire be across the board. And so I think the president is struggling with how to manage for that demand and not risk losing the possibility of an agreement, at least in the near term on the Strait of Hormuz and on future negotiations on the nuclear program because of Israel's escalation in Lebanon.
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Joe Matthew
Secretary Marco Rubio, we were noting, made the point in congressional testimony earlier today that sometimes it takes days to hear back from Iran because of their communications challenges. The president here is suggesting that they are talking every day. Is it possible that they're talking to different people?
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Alisa Ewers
I think both things can be true at the same time. I think that there is constant communication, especially through the mediators. We've seen that Pakistan, Qatar, Saudi Arabia, Turkey and others have been part of this process since the first day, and they've been continuing to try and keep those indirect channels open. So you add that step that definitely prolongs the time that messages take to go back and forth. And then you consider that the leadership inside of Iran knows that the United States and Israel is very eager to find out exactly where the supreme leader and other members of the leadership are at any given moment. And so the degree of caution I think that they're taking to stay under the radar compounds this timeline. So I think there is probably talk with mediators every day, every hour even, but the back and forth directly with the Iranian players is taking some time.
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Kailey Leinz
Well, and as we consider the players and to Joe's suggestion that they may be talking to different people, how do we guarantee that all different parties in Iran would abide by a deal if one could be reached? We note the resignation of the Iranian President over the weekend suggesting that too much power has been given over to the irgc. Is that who's really in charge here? Who needs dealing with?
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Alisa Ewers
I mean, I think we've definitely seen since the beginning of the war and the, the targeting of so much of the previous regime's leadership that there has been a consolidation of power. And while I wouldn't say that it's the IRGC solely in the position of power, it has certainly gotten the upper hand on the decision making inside of Iran. And ultimately we're seeing indications that the supreme leader, the new supreme leader Khamenei is, is in fact surrounding himself, himself with his, his closest advisers and is making decisions perhaps slowly, but that consolidation of power is most certainly in the security apparatus, including the IRGC.
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Joe Matthew
Lisa, what's the point of seeking a 60 day extension to the cease fire if we seem to be in one already indefinitely?
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Alisa Ewers
Well, we have been. Right. I think part of the challenge is that it's a fragile one. It's been a fragile cease fire since April. The Strait of Horm has not been reopened fully to commercial traffic. And so while the guns perhaps have gone mostly silent, although not entirely silent, the situation is not what, what you would want it to be. And so this, this conversation about a negotiation is really an agreement to continue to talk. It's really not dealing with the issues of the nuclear program, but it does give perhaps an opening to get the Strait of Hormuz a more open than it certainly with less direct threats from Iran on commercial traffic and on neighboring countries infrastructure. We have seen that continue even during the ceasefire. We've had quite a number of attacks in Kuwait and UAE on commercial vessels even as recently as reports today, but it has died down. What this deal would get you is the opening of the Strait of Hormuz in some form that allows the thousand plus vessels that are still stuck there and have been stuck there since February to move out and for some of that commerce to resume and everything else gets kicked down the road for at least 60 days.
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Kailey Leinz
Well, and when we consider the prospect surround the Strait of Hormuz. Lisa, in a phone interview yesterday, President Trump suggested that just because there's no deal doesn't mean he's going to return to firing on them. He just says, okay, we'll just maintain the US Blockade. For how long? Is that a sustainable position for the United States?
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Alisa Ewers
Well, I think technically the United States could continue the blockade for some time in terms of the vessels that are deployed and the assets that are necessary to conduct that mission. That that is sustainable. But it's at a cost. It's at a cost for supporting that operation, for at a cost of what we're not doing with the US Military is not doing elsewhere in the world as it continues to be focused on the United States. But I think what we're seeing here is that both sides see very little upside to returning to that kind of hot conflict. But the president isn't getting what he wants. He's not getting the capitulation he has sought from Iran despite his coercive diplomacy, despite his aggressive statements, despite the economic pressure. And so he's continuing that pursuit, but it's not, it's not getting him the surrender that he's looking for.
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Joe Matthew
Interesting. You know, there's a line in Washington that we hear a lot on Capitol Hill, time kills deals. As more weeks drag by, could we resolve into some sort of rolling cease fire that lasts the rest of the year, that goes on for years? Possibly.
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Alisa Ewers
Well, I think in some ways that might be the least of the bad options. Right. If you do have some degree of confidence that the strait will reopen, that the hot conflict will not return, and that some degree of negotiations on the nuclear front are, are being pursued, that might be enough to kind of bridge the gap. I think the real question here, and I think this is what concerns partners and allies in the region and beyond, is the kind of unpredictability of the US Staying power in such a kind of prolonged and fragile situation, and whether the president will continue to kind of stay the course, even if that's not the best option, it may be the least bad of the bad options.
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Kailey Leinz
Well, Lisa, finally, if we can come back to Israel, as Benjamin Netanyahu considers his options, does he have the incentive right now to just go along with whatever it is President Trump wants, or do domestic considerations at home give him a whole different set of incentives and therefore options he may want to consider?
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Alisa Ewers
Well, the domestic situation is always at the front of mind of the prime minister of Israel. I think that is just even more in sharp relief when you have elections on the horizon and those elections are planned for later this fall, September, possibly October, and so every decision he makes, I think, has to be seen at least in part through that domestic lens. And what we're seeing, I think, in Lebanon in terms of the escalation in recent days and everything on the ground kind of indicates that we are definitely seeing an escalation. This is more significant than anything we've seen in the last 20 years. It reflects maybe an anticipation of what we might see President Trump do in terms of exercising some leverage and restraint on Prime Minister Netanyahu. We obviously saw reports of that alleged call and then the reaction to that report of the alleged call. But I do think that this escalation reflects, you know, anticipating a moment at which that that space is going to be close and not able to pursue targeting Hezbollah in quite the same way. But I think I would end with saying that at the end day, we've seen that military force alone isn't working in Lebanon. It's not completely eliminating the Hezbollah threat. And that disarming Hezbollah is not something that happens overnight. But we are, I think, seeing talks resume today between Israel and Lebanon here in Washington. And it's this, it's this very thing that's going to give you a sustainable solution.
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Joe Matthew
She worked in the Pentagon and the State Department under the George W. Bush and Obama administrations, now with the Council on Foreign Relations. Lisa, it's great to have you with us. As part of our conversation today on Bloomberg, we'll assemble our political panel next. The president names a new acting dni. It's not who you might think. Stay with us on balance of power. We'll have much more coming up after this.
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Duke Energy Announcer
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Joe Matthew
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Podcast Host
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Aut Burg business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa.
- [16:07]
Joe Matthew
Play Bloomberg 11:30.
- [16:10]
Kailey Leinz
I'm Kailey Leinz alongside Joe Matthew here in Washington, where we got some news we weren't expecting today. Granted, that happens on a lot of days here in D.C. especially with this White House, but not sure we saw this one coming. We knew that President Trump was going to need to tap someone else to lead the office of the Director of National Intelligence as Tulsi Gabbard is resigning this month due to her husband's cancer diagnosis and make a decision on who will replace her. President Trump has, at least on an acting basis. The acting DNI will now be Bill Pulte. Yes, the housing Bill Pulte. He, of course, runs the FHFA right now and chairs Fannie Mae and Freddie Mac. He will continue to do those things, but he also will be serving as acting director of National Intelligence in the meantime. The acting capacity, of course, Joe, means that he won't necessarily be subject to the Senate confirmation process where senators could do things like question him on his qualifications for this particular role.
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Joe Matthew
Recalling that it was Donald Trump himself who made this a cabinet level position in the first term, which is something that, of course, the Biden administration abided by. And it's not just this new job for a real estate man, for a home builder. He's going to keep the existing jobs as well. President Trump announcing this on Truth Social says during this period he will remain director of the Federal Housing Finance Agency and chairman of Fannie Mae. Freddie Mac. Congratulations, Director Pulte. Signed by the president himself. What does the panel think about this? Rick and Jeannie are both back with us today, each Bloomberg Politics contributors. Rick is our Republican strategist and partner at Stone Court Capital. Jeannie is our Democratic analyst and democracy visiting fellow at Harvard Kennedy School's Ashe Center. What motivates the president today, Jeannie, in making this pick, if nothing more than a loyalty play?
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Podcast Host
I mean, it's certainly not experience. This is a serious job. This is one where, you know, even in the case of Tulsi Gabbard, you had a lot of eyebrows raised that she had some limited background, but she didn't have enough experience. And yet she was put in there, Republicans and even a few Democrats, Democrats look the other way on that one. This one's going to be a little tougher. This is somebody in Bill Pulte who has proven himself to be an attack dog for the president but has little if any experience in intelligence, either collection, analysis or any other part of this job. And so even if he doesn't get confirmed, and I think there's a great questions about whether he in fact would, he could be there for up to a year in this position while he's still serving in his other position. And that raises a host of questions about what he's going to be doing there. Some people saying this sounds a little bit like The Rick Brunel appointment in the first term, very little experience, but a lot of attacks that Donald Trump used as part of his revenge tour then. And Bill Pulte has proven to be the Rick Grinnell of this second term.
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Kailey Leinz
Well, on the suggestion that he's an attack dog, Rick, we should remind our audience that he's the guy who first leveled mortgage fraud accusations against the likes of Fed Governor Lisa Cook and others. He went after, for example, Senator Adam Schiff on similar grounds, too. If he has the power of overseeing 18 all 18 of the United States intelligence agencies, does that not enable him to further go after, frankly, anyone, not just senators or members of the Federal Reserve Board?
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Rick Davis
Yeah, I would think if you're enemy of Donald Trump, this is not a very settling appointment. You would have to fear that if he took housing data, mortgage data that he was overseeing as the head of Fannie Mae and Freddie Mac, and used it to attack political enemies of the President. Imagine the corpus of material that 18 spy agencies have that could supply him with similar ammunition. Look, I mean, there's no explanation as to why he would be appointed to this by the President, other than the fact that he will be loyal and do the President's bidding. From best I can tell, he doesn't even have a security clearance. And that may be, ultimately, the resolve is that Congress is now saying, hey, the guy's got at least go through a security clearance before you can appoint him to the head of the dni. So it's a. It's a real head scratcher. I don't think. It's very hard to figure out that this is an appointment to. That the President is making so that he has someone there who will do whatever he asks him to do.
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Joe Matthew
Regardless, there are some consistent threads here, Jeannie. Just to add to your point, the President has sent a couple of real estate professionals to negotiate peace in the Middle east, in Ukraine and other places, including Africa. That, of course, would be Jared Kushner and Steve Witkoff. He is now tapping a homebuilder and a real estate professional to run intelligence here inside the administration. Is this a. Is this about going with what you know?
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Podcast Host
I think it's about one thing and one thing alone, and that is complete and utter loyalty to the President. His experience, his background, his expertise be damned. And the President is doing this at a time that we are obviously in war. We are in war with Iran. This is a key national security post post. And you are putting somebody in there with little, if any, experience. His experience is an attack dog for Donald Trump a political targeter. I've got to say, you know, when you think about it, he has had a number of dust ups in the administration already. And some of these people have to be not so thrilled that he is going into this post. And that includes the Treasury Secretary. I mean there was, there was a repeated discussion about this back and forth between the two of them not that long ago, Scott Bessant and there are others. But this is what he is seemingly has a background in is as a political attack dog, but absolutely no experience as far as we know, in national security. And I think this raises a question about the seriousness of this role anymore. And what does it say to our allies around the world who deemed depend on us? If you're another country, if you're an ally, you've got to be looking at an appointment of a real estate scan like that and be saying what is happening in the United States today as far as national security is concerned.
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Kailey Leinz
I also have to wonder about the timing of this, Rick. We were expecting that in fairly short order the Senate was going to vote to approve a three year extension of the Foreign Intelligence Surveillance Surveillance act, specifically section 702 of Pfizer. This was supposed to be the longer term solution. We got a short term extension just ahead of the deadline earlier this year. Could you see Bill Pulte's appointment as acting DNI as potentially throwing a wrench into actually getting FISA across the floor in both chambers?
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Rick Davis
Yeah, probably not. The Senate certainly itself has never really given that much import to the dni. It doesn't originate any intelligence gathering. It accumulates it and briefs the President. All these other agencies are really led by folks who I think understand the intelligence business and can operate regardless of who the DNI is. Doesn't mean it's a good appointment. It just means it's unlikely to degrade the intelligence gathering capability of the United States. And so I can't imagine something as important important as FISA reauthorization is going to be affected by something that most senators I think would agree is irrelevant to the security of our country.
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Joe Matthew
Hmm, interesting. You know, we've got some issues here on Capitol Hill, Jeannie, that we really haven't had a chance to get to because of so much other news today. But the President wanted a reconciliation bill on his desk on 1 June. That did not happen. And as of today we thought there might be a Votorama tomorrow night. Maybe there still will be. But as of today, Republicans do not have the votes to start floor consideration of this reconciliation plan that again would fund ICE and Border Patrol. And a big reason is because of this anti weaponization fund that's been knocked down by the courts. And a lot of Republican lawmakers want to have some definitive evidence that it is gone before they vote on anything else. Senator John Kennedy, Republican from Louisiana, said the reconciliation bill looks like a broken arm with the bones sticking out. Do you see the White House making a statement to put a lid on this, or will this have to be handled legislatively?
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Podcast Host
Yeah, always leave it to Senator Kennedy. He's got the most colorful quotes there. Yeah, I think Republicans and Democrats, obviously, but Republicans in this case are rightly concerned because of course, all we have so far is a pause and many, many Republicans and most Democrats would like to see this definitively put to rest. And the frustrating thing for Republicans has got to be we would have moved probably beyond reconciliation to reconciliation three, which, you know, all four of us talked about just a few weeks ago, a few months ago as the tougher of the two if it hadn't been for this attempt, attempt to stick this in. And it is really held this up. So I think they are looking for something definitive. I think they are doing that rightly so, because of course, all we have now is a pause and that is not particularly reassuring for Republicans. And so you hear from people like Kennedy and many others who say it's going to need to be a lot more than just a pause. We need to definitively put this to rest. And they know that Democrats are going to come with these amendments and they're going to be forced to take votes on those and they want to be on the right side of this thing.
- [26:38]
Kailey Leinz
Well, it's not just about the fund itself, Rick. Remember, the deal that came with the $1.8 billion fund was also that Trump and his sons were going to have immunity from IRS audits perpetually. And Bloomberg is now reporting that US Officials are going to continue on with that part of the plan. I just wonder if you think the Senate will allow for that even if the fund goes away.
- [27:02]
Rick Davis
Yeah, there's a lot of anxiety on Capitol Hill, not just with Democrats but with the Republicans. To senators like Langford and Murkowski have expressed real concerns, not just about the fund, but also of this aspect of it. You know, basically getting immunity with your family and all your businesses for the rest of your lives, I guess. I mean, it's really hard to even understand, understand what this deal looks like. Some of the cynical Republicans I've talked to said, hey, this is great. You know, immunity for taxes. We finally gotten people not talking about the ballroom and so I don't know if this is strategy or just dumb luck.
- [27:43]
Kailey Leinz
Well, they're still talking about the ballroom too. All of it yet going on Rick Davis and Jeannie Shan Zaino, Bloomberg Politics contributors and our political panel.
- [27:53]
Joe Matthew
Stay with us. On Balance of Power. We'll have much more coming up after this. Support for the show comes from Public
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Podcast Host
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.
- [29:15]
Joe Matthew
The AI trade not doing super great today. And while it's been on a tear lately and we do see in video now on the downside, down about a dollar here, Most of the MAG7 trading lower as well, unless Charlie tells me otherwise. And a lot of that has to do with this $80 billion fundraise that Alphabet announced. But it also comes on the same day that the White House very quietly dropped its a IEO artificial intelligence executive order, an earlier version having been canceled just two weeks ago. Kelly will remember that some high tech executives, you've heard of them, Mark Zuckerberg, Elon Musk, reportedly David Sachs as well. Got to the president say this, this could actually hamstring America's effort to win the AI race. And so he canceled that event with some executives actually in the air. No event today, but the EO is out.
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Kailey Leinz
Yeah, a slightly amended version that perhaps won't act as the blocker that President Trump feared it would in terms of US Progress in this arena versus China which is the concern that he cited. Instead of a 90 day review period for companies to voluntarily share new models with the government before their release, that window is now a shorter 30 days, but it still remains voluntary. This EO actually explicitly says that this will not be a mandatory process, that there will be no granting of licenses here, for example. So let's get into all of this now as we turn to Michael Shepard, Bloomberg Senior editor for Technology and Strategic Industry. So is that really the big change is just a shorter window? This is still all, all voluntary. These companies are still not going to be compelled to do anything if they don't want to?
- [30:54]
Michael Shepard
Well, that's right. And the voluntary component is key. They want to make it clear that they are not standing in the way, acting, as the President himself said two weeks ago, a blocker in the way of innovation in this arena. And we can see just what the financial stakes are, not only with developments, you know, every day from the AI companies themselves, but the related investment, you know, that capital raise that Alphabet is planning is just, you know, the tip of the iceberg when you talk about the money going into the economy, going into hard infrastructure being built, as well as some of the soft infrastructure and software that's being rolled out to industries across the country. So the President doesn't want to be seen standing in the way of that.
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Podcast Host
That.
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Michael Shepard
And yet at the same time, we do have a public that is feeling some misgivings about, and concerns about what I could mean in terms of, you know, their jobs. But then businesses also wondering about what it means in terms of their security. And that is what this order is aimed at, cybersecurity specifically. But it does not, Kelly, mandate much in the way of teeth at all.
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Joe Matthew
So if it's toothless, then is there still more to follow either from this administration or from, from Congress? I mean, I realize we can barely pass a budget on Capitol Hill right now, Shep, but there was a call for guardrails and a lot of people might not see this as being the definitive example of that.
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Michael Shepard
Yeah, this certainly would not be the definitive version of guardrails really by any stretch of the imagination. And instead it really is focusing on some of those emerging cyber vulnerabilities that Mythos has highlighted for us in, since its release back in mid April. You know, a moment that really shook the financial world, shook governments around, you know, in different blocks. Looking at, okay, these are the cyber vulnerabilities that we have always feared could be exposed by AI. Now it's real. But some of those fears now seem to be attenuating. For example, Anthropic today is releasing mythology those to a far wider range of organizations for their testing and use. And so some of this is becoming normalized, too. So now the question is what would the next step be now? Guardrails from this administration on a technology it's seeking to promote. Hard to imagine. And yet, Joe, you brought up Congress. Congress has been talking about this for some time, not only in the security question, but there are so many other fronts that include privacy and that includes include the questions of job security and economic security as well. So we may still hear from lawmakers on this. Whether or not, as you say, they can get it done, of course, is the eternal open question on Capitol Hill.
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Joe Matthew
We know that Republicans and Democrats largely do not agree on this issue. Shep, thank you so much. Michael shepherd with us live in Washington with the Breaker today, the AIEO out of the White House. And I'll tell you what, Kelly, one of the stories that we'll be pursuing toward the end of this midterm election election cycle is the role that AI money spent in helping to decide elections. Maybe this is the crypto of 2026. Knowing that crypto money had a major impact on races in 2024, I bring this up to say, happy primary day. It's another mini Super Tuesday and we've got six states in play, including California. The Jungle Primary. And we dare traipse into the jungle now with the help of Kyle Conduct. You know, it's campaign seat. Kyle is back on with us, managing editor of Sabato's Crystal Ball at the University of Virginia's center for Politics. Kyle, it's great to see you. I'm starting with California. We'd love to be able to get a couple of states in here, but the gubernatorial race is a big one and we just spent some time out in la, so I had a chance to be treated to the political ads from Javier Becerra and Tom Steyer. The question is, with these two Democrats potentially out in front, and the conventional wisdom is this is Becerra's to lose here. There's a question about whether a Republican named Steve Hilton will make his way into a likely runoff. How are you looking at the gubernatorial contest in California?
- [34:59]
Duke Energy Announcer
Yeah, I mean, you name the three contenders for the, for the two slots and you also can remember, you know, California, it's a, it's a Hollywood cliffhanger in terms of the actual vote count. It's going to take weeks to actually finalize it. And so, you know, when we wake up tomorrow morning in the east, we probably won't really know exactly who will have advanced because you might still have a big chunk, chunk of the vote that still remains to be to be counted. It is worth noting that, you know, a few months ago when the Democratic field was much more muddled, there was some worry among Democrats that two Republicans might advance to the general election despite California being a blue state in a blue leaning year. Now it seems more likely, or at least more possible that those two Democrats, Becerra and Stier, could actually advance to the general election. Certainly you'd favor strongly a Democrat to be the next governor of California. And it's among those three to determine who makes the, you know, the top two election in November.
- [35:57]
Kailey Leinz
I really want to ask you, Kyle, about Spencer Pratt in the LA mayoral race, but I feel like I probably should instead lean on your expertise. He's to talk about the fact that California in the House or the congressional primaries is dealing with the new map post prop 50. So with that in mind, which races are you watching most closely today?
- [36:16]
Duke Energy Announcer
The two shakiest intended Democratic pickups are an open seat. California 48, which has Palm Springs, then some more kind of conservative leaning territory voted for Kamala Harris by about three points. There's a pretty hotly contested race on the Democratic side to see who the Democrat emerges against. Jim Desmond, who's a San Diego county office holder, is the leading Republican candidate. And then David Valadao, who lost in 2018 but is a Republican incumbent, but otherwise has been a great survivor in a kind of a swing district that really swung pretty heavily toward Donald Trump in 2024. And even under the new lines voted for Trump by two points. And there's kind of a left versus center. You kind of get a Democratic primary to see who gets to advance to face Valadao. And again, those are two seats that are really important to the overall Democratic House math. You know, you see these analyses of redistricting and say, oh well, Democrats are, you know, they're going to pick up five seats in California. Not necessarily because they do have to win those two swing seats. And I'd say the same thing about how, you know, in Texas, Republicans drew themselves five new seats, but they're not guaranteed to win all five of those seats.
- [37:30]
Joe Matthew
Really interesting. Let's go to Iowa for a moment, Kyle, because we've got a really important Senate race there. This is one of the seats that Democrats think they can flip the seat that's being vacated by Joni Ernst. And it's A test as well for Chuck Schumer, who has come behind Josh Turek, a moderate Democrat state lawmaker who's also a Paralympic gold medalist. And he's up against a progressive named Zach Walls. How does this shake out?
- [37:56]
Duke Energy Announcer
Yeah, Turek is definitely kind of the D.C. democratic candidate against Zach Walls, in the context of this race, is kind of more of the outsider, even though, you know, Walls is also a member of the state legislature in that state. You know, there's been a lot of money that's come in through this third party group called Vote Vets Democrats, which is kind of connected to Democratic leadership. It's sort of an indirect way. Turek himself is not a veteran, but his father was. And, you know, obviously they're, you know, they're coming in very strongly for Turek. You know, waiting for the Democratic nominee is very likely to be Ashley Hinson, who is a House member from Northeast Iowa. Hinson won a very competitive race in 2020 to get elected as Republican to the House, and I think is a relatively strong replacement nominee for Joni Ernst, who's retiring. I do think that, you know, if Turk gets nominated, I think that race gets more competitive, although I don't necessarily think it's a true toss up, at least, at least to start the general election. We'll see who ends up winning the Democratic nomination.
- [39:03]
Kailey Leinz
Well, so where right now, in terms of the reaches and then potentially achievable or more likely to be achievable Senate flip for Democrats, does Iowa rank right now? Kyle, you also have the likes of Alaska and Maine in Texas. Is Iowa actually potentially the easiest of all of them?
- [39:22]
Duke Energy Announcer
I don't think so. I would probably rank Alaska and Ohio ahead of Iowa, at least at this point, mainly because Mary Paltola, former House member running in Alaska, and Sherrod Brown, former senator running in Ohio, are, I'd say, more, more proven candidates than whoever the Democrats end up nominating in Iowa. Iowa also is a little bit more Republican for president, at least. At least Ohio was. And then I put maybe Texas and Iowa in a similar kind of, kind of bucket. You know, bottom line is, is that even if Democrats win essentially all the other competitive races, so, you know, Maine and North Carolina as seats that Republican seats, they're targeting, you know, Democrats need to defend Michigan, but even if they do all that, they need at least two double digit 20, 24 Trump states in order to flip the Senate. Alaska and Ohio, again, I think are probably at the top of that list. But then you look at like an Iowa and a Texas and maybe a few other places as possibilities, depending on, you know, how the candidates do and how good the environment is for Democrats. Certainly the political environment does look pretty good for Democrats right now. It kind of looks like 2018 or maybe even a touch bluer than that by the time we get to November.
- [40:25]
Joe Matthew
I just want to mention a breaking headline that just crossed the terminal. It's a redhead. Having told you a bit earlier that they are going to do another White House correspondents dinner at the end of July, July 2024. The President just posted that he does plan to attend. It's apparently going to be at the former Trump Hotel now, the Waldorf on Pennsylvania Avenue. Kelly didn't want to get into it, Kyle, but I've got to bring up Spencer Pratt because this is the talker
- [40:49]
Kailey Leinz
I wanted to be.
- [40:50]
Joe Matthew
Star wars videos alone bring us to this moment here. Is this really. Because he's said to be in third place behind Mayor Karen Bass. Can he make the runoff?
- [41:00]
Duke Energy Announcer
My guess is it'll be relatively close for.
- [41:02]
Rick Davis
For.
- [41:03]
Duke Energy Announcer
For whether he makes it or not. And remember, whatever the results look like when you wake up in the east are not necessarily what they're going to look like. Finally, one of the things that seems like it's happened is that because of some of the drama in the California governor's race and also arguably that the L. A Mayor's race, too, it seems like Democrats were a little bit later in terms of turning in their ballots. And so, you know, at various times over the last 10, 15 years, under California's current election system, you had this sort of like a red mirage to start, meaning that the initial results kind of look more Republican. And then it got bluer as all the votes were counted. It seems like. Like we're probably in for that sort of dynamic again. So don't make any judgments based on what the results look like overnight. You got to. Got to wait for the whole thing to be finished.
- [41:44]
Joe Matthew
Mm.
- [41:45]
Kailey Leinz
All right. Kyle Kondik of the Crystal Ball, thank you so much for joining us. The center for Politics, of course, where the crystal ball lives, although it's not actually.
- [41:53]
Joe Matthew
Have we ever seen.
- [41:54]
Kailey Leinz
I think. I think we all wish we could
- [41:55]
Joe Matthew
keep that somewhere in the office. Larry Sabato's got it in his real. You went there. Crystal ball.
- [42:00]
Podcast Host
Yeah.
- [42:01]
Joe Matthew
Go. Diversity, of course.
- [42:03]
Kailey Leinz
That in.
- [42:03]
Joe Matthew
I got to bring the tuxedo back to the cleaners, huh?
- [42:05]
Kailey Leinz
Yeah.
- [42:06]
Joe Matthew
July 24th. Did I have that right?
- [42:07]
Kailey Leinz
Yes.
- [42:07]
Joe Matthew
At the wall.
- [42:08]
Kailey Leinz
President Trump will be in attendance. He suggests it shows strength and fortitude that the White House Correspondents Dinner will be rescheduled after, of course, the shooting.
- [42:17]
Joe Matthew
Do they still do a garden brunch on a Friday? This feels off. It's a day early. Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already at Apple, Spotify or wherever you get your podcasts. And you can find us live every weekday from Washington D.C. at Noontime eastern@bloomberg.com
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Podcast Host
Dog grooming genius here most people see
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Kailey Leinz
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Joe Matthew
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Rick Davis
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