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- [00:03]
Podcast Host
Bloomberg Audio Studios Podcasts Radio news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app Listen on Demand wherever you get your podcasts or watch us live on YouTube.
- [00:25]
Joe Matthew
Here in Washington, D.C. it's a place I haven't actually been to the District much in the last six months. I've been hanging out in the suburbs. I think, Joe, actually the Israeli Prime Minister Benjamin Netanyahu may have made more trips to the District of Columbia than I have in the last in the last half a year.
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Kailey Leinz
He's got to be true.
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Joe Matthew
7Th during the Trump administration. Pretty remarkable day.
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Kailey Leinz
7Th we didn't really see him on the last one. We may not see him today, which is interesting. They're talking about some pretty critical stuff here with potential strikes against Iran. Gaza, of course, is on the agenda as well, but we didn't even see him go in the front door. Kelly, It'll be curious to see how long they talk. Yeah.
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Joe Matthew
And if we learn anything about what exactly they discuss, as we know, Israel may singing a bit of a different tune than President Trump himself as to what they'd like to see from Iran and its nuclear and ballistic missile program specifically.
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Kailey Leinz
That's true. Obviously, we've heard from Iran wanting to sort of narrow these talks around nukes. But Israel is deeply concerned about progress being made on its ballistic missile program and I'm sure he'll be urging the president to get into that. But also having claimed that their nuclear program had been totally obliterated, the president today has to face the Israeli prime minister who wants him to acknowledge the fact that they are making progress on rebuilding it.
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Maura Gillespie
Yeah.
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Joe Matthew
And let alone, of course, progress on rebuilding Gaza or reaching the next phase of the cease fire agreement there. There's still an open question mark in.
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Kailey Leinz
That regard, that's for sure. Bloomberg's Tyler Kendall is with us, Washington correspondent live from the North Lawn of the White House where all of this is happening. Tyler, do we expect to see these two gentlemen later today?
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Tyler Kendall
Well, Joe, at this point nothing remains open to the press, perhaps underscoring the sensitivity of these discussions, as you and Kelly were just outlining. We know Iran is at the top of the agenda amid reports that Israeli Prime Minister Benjamin Netanyahu is going to present new intelligence to President Trump regarding Iran's military capabilities. Now, ultimately, we know that this meeting this week comes after the Israeli prime minister had met in Jerusalem last week with special envoy Steve Witkoff and the president's son in law, Jared Kushner. The two that are leading the now bilateral negotiations between the US And Iran, which kicked off last Friday and both sides characterized as relatively positive and said that they're going to have future talks, talks likely next week when it comes to the second round. But going into the discussions, we know that there was sort of this shifting of parameters around what the talks would revolve around. Iran wanted them to be bilateral and only focused on their nuclear program. But part of the Israeli prime minister's goal here today, it's our understanding is to press President Trump to make sure that those talks expand to other key issues for Israel and the United States. As we've repeatedly heard here from top administration officials, they want to also discuss Iran's ballistic ballistic missile program as well as its support for proxy militia groups in the region. And the US Actually wants to bring in some other regional partners to these discussions, which officials say could help ultimately bolster the potential that a longer lasting deal could remain in place. At the moment, President Trump maintains diplomacy is on the table. But Joe and Kelly, as you well know, our own analysts at Bloomberg Economics have spoken about the high likelihood that we could ultimately see military strikes, particularly as as President Trump just yesterday floated the idea that he could send a second armada to the region to bolster what is already a very large presence of U.S. military assets in the Arabian Sea.
- [03:51]
Joe Matthew
Yeah, could be bringing in another carrier potentially. We'll see whether or not we get more commentary from the president in that regard or anything at all that he might say about his meeting with Netanyahu today. Tyler. So far today, though, the only thing we've directly heard from the president on true social at least is praise for the jobs report we got on this Wednesday. He said great jobs numbers far greater than expected. No surprise perhaps that the White House is trying to focus exclusively on the positive here, Right?
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Tyler Kendall
No surprise there, Kelly. Even as this report showed revisions to last year, there was this market slowdown in hiring President Trump, also in that post calling for lower interest rates, even as we know that traders are now pushing back bets for a Fed rate cut. So there's a lot that the administration is going to try to pull out of this report. They are focused on that upside surprise. It was interesting to hear officials ahead of this report, including the NEC director, Kevin Hassett, as well as the senior trade counselor, Peter Navarro, try to actually downplay expectations, saying that any weakness that may come is ultimately due to shifting population changes in the president's deportation policies. I've heard a few Officials out this morning blaming any weakness on the prior administration because this White House right now is really playing defense when it comes to the economy as we head into the midterm elections. I point you to a new poll out just this week from Gallup that shows 50% of US adults are concerned about unemployment going up in next six months and view the economy, but in particular the labor market, negatively. So there's going to be a lot to watch here as we head in to November. But as you well know, this administration is really pushing those domestic manufacturing policies. In this report, we did see that factory jobs increase for the first time since late 2024, something that White House officials here have been pushing pretty strongly.
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Joe Matthew
All right, Bloomberg's Tyler Kendall live on the North Lawn at the White House. Thank you so much. And standing in the spot where Tyler was standing just now earlier this morning was actually the acting chair of the White House Council of Economic Advisers, Pierre Yared, who spoke with Bloomberg earlier today about these jobs numbers. This is how he characterized the figures.
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Pierre Yared
Not only is it total jobs that are up above expectations, it's also private sector jobs that are at 170,000, so more than 160,000, which are more than double double expectations. I think the way to think about the way we are thinking about it is if you look at demographic changes as well as the big reduction in immigration relative to, in particular illegal immigration relative to what was happening under the Biden administration, those two factors should lead you to lower break evens.
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Joe Matthew
And joining us now for another analysis perhaps is Katie Richards, who is here with us in our Washington, D.C. studio. She's senior strategic adviser at the Groundwork Collaborative, also former official at the Treasury Department under the Biden administration. Thanks for being with us on Bloomberg TV and radio. Good to see you again, Kitty. What we consider the first part of what he had to say there, this notion that jobs were double what the average expectation was, we did see a lower than expected unemployment rate even as labor force participation was picking up. That is one way you could view and characterize this report. The other is, of course, look at the revisions. Look at how gains are kind of exclusively in sectors like health care. How do you look at it today?
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Katie Richards
That's right. I do feel like focusing on the revisions is important and I don't want to take away from the fact that we beat expectations on the labor market for January, although I do think that it's important to recall that expectations were quite low. So the revisions that the BLS announced led to a total net job Gain for last year of 181,000 jobs. That is a number that we used to see as a month over month gain on a pretty regular basis. And in fact, in the 10 years prior to last year, the average job gain over the year was about 1.9 million jobs a year. What we've seen is this very anemic job growth. And you know, I was here last year during some of these prints and it was already concerning what was happening with the unemployment rate, what was happening with the pace of hires and firing. And to then see that actually we were way off and the labor market was much softer than it appeared, I think is troubling. Though it does kind of align with some of some of the anecdotes that we've been hearing from job seekers who say it's difficult to find a job. We're seeing those jobs numbers start to look a little bit more like that soft labor market that people were experiencing.
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Kailey Leinz
Interesting, Kitty, but the President says the golden age of America is upon us. So when do the jobs start showing up?
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Katie Richards
I think that's a great question. And you know, Kaylee, you mentioned that what we saw in the revisions and in the monthly data is increasingly what job growth there is is driven by the health care sector specifically. And in fact, you know, last year outside of health care, there was actually a net reduction in jobs across the. And thinking about, you know, where are those health care jobs? Are they good jobs? Are they going to continue to deliver? Especially given that the President has passed into law really large health care cuts that are going to start coming down the pike over the next few years and families are having to face really high health care premiums. You know, thinking about we see GDP growth continuing and people are often very focused on is this a sign of a recession? Are we at a tipping point? Point? But I think the bigger question is how is the economy performing for real people? And so when we see GDP growth that is driven to an outsized extent by, for example, the building and stocking with materials of data centers for AI, one way to look at that is that AI is driving GDP growth, but is it driving jobs? Is it driving increases in wages? Or is it just sort of an accounting factor fact that we have a lot being spent on computers. So really thinking about how this impacts workers and the day to day, and we might not be in a recessionary environment, but you can still have a softening labor market that's going to hold down wages, going to make it hard, especially for new graduates and other entrants. Into the labor market to get a job that can pay the bills well.
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Joe Matthew
And I'm sure the Fed officials there are considering some of those very same questions you were asking about what dynamics are actually at play here, both when it comes to growth overall and in the labor market. So if you're sitting in the Federal Reserve right now, you look at all this data before you, is it supporting the idea that we need looser policy, that more cuts should be coming or not?
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Katie Richards
I think it's a complicated question for the Fed to deal with because of course, inflation remains elevated and the Fed is very concerned about signaling to the markets that they are going to keep inflation under control and bring it back down. You know, Jerome Powell has reiterated on multiple occasions that the Fed target rate is still 2% and we're well above that. And so they are balancing those equities. I do think that, you know, the President's advocacy is a little bit of a double edged sword, as you were pointing out. He's at the same time saying that this was incredibly strong labor market conditions that we're seeing and also we should cut interest rates. I think there are also issues with, you know, the new nominee for the Fed Board of Governors for the Fed Chair is really being received as mostly a political appointment who will do what the President says or will try to. I think that other members of the Fed Board of Governors are going to be concerned about maintaining a posture of neutrality and of independence. And it's all going to be really difficult as it plays out. And I'll be watching along with you.
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Kailey Leinz
I want to get back to this impact of AI on the job market because it's impossible to quantify right now. Elon Musk just told a podcast that created this vision of buildings 20, 30 stories tall, filled with humans doing calculations that will soon be replaced by a laptop. How if you can't forecast that, how does the Fed forecast that? How do you have any estimate for where we're going?
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Katie Richards
I think that we are in a little bit uncharted territory in some ways. But also this isn't the first time that we've had a potentially disruptive technology enter the scene. And I think it's important to keep our wits about us as we think about, as we measure what we think of Elon Musk's predictions versus what we're actually seeing in the labor market.
- [12:42]
Kailey Leinz
Well, I could point you to anthropic and it only gets worse from here in some cases, by the way, that we'll all be be replaced at some point. You're going to have two AI, Kaylee and Joe sitting here. Interviewing Kitty richards.
- [12:54]
Katie Richards
I mean, one thing that I'd say is that what we know from the history of technology adoption is that it's really up to us as a society to decide whether technologies like AI are used to provide more to Americans, to provide more, you know, leisure, more productivity gains that lead to higher wages, wages support people in their jobs, or whether things just kind of get worse and worse and cost cutting increases and people are deskilled, people's jobs are deskilled. These are policy choices that we really have to make. And I think if we just let the sort of techno optimists who also stand to make another trillion dollars if things go their way, if we let them entirely set the agenda, we're going to to we're going to see the worst possible.
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Kailey Leinz
He was wearing a T shirt that said Optimism Prime. It's funny.
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Katie Richards
Optimism for whom?
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Joe Matthew
You could probably do a whole thing on Elon Musk and the various T shirts. Remember the apparel he had early on in the early days of this administration. Just quickly, Kitty, before we let you go, is we're approaching tax refunds. We are in tax season now and the argument Republicans are making is Americans are about to get a way bigger refund than they expected. And this is going to be juice for the economy. Given everything that we're seeing with the cost inflation, with wages not necessarily keeping up, as you were alluding to, should we expect that's going to be funneled back into consumption, consumer spending, or is that literally just assistance in making ends meet?
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Katie Richards
Well, unfortunately for the Republicans making this argument, I think that given how much they've hyped up the effects of their tax policies, Americans might be expecting a significantly larger refund than they are going to get because remember that the vast majority of the Republicans tax bill flowed to the wealthy in corporations. And so your typical American family did not have much to gain there. What they have seen, unfortunately, is these skyrocketing health care premiums, partly because of the expiration of the ACA subsidies. And what they're going to see out of the one big beautiful bill act is Medicaid cuts that are already starting to impact hospitals and state budgets around the country.
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Kailey Leinz
Great to have Katie Richards back with us in studio. We never got to 15% growth. We have so much more to talk about next week. Don't be a stranger. Senior Strategic Advisor, the Groundwork Collaborative. And great insights from Kitty Richards. Thank you as always for the conversation. I'm Joe Matthew alongside Kailey Leinz in Washington. We'll assemble our political panel next only here on Balance of Power on Bloomberg TV and Radio. Stay with us on Balance of Power. We'll have much more coming up after this.
- [15:42]
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- [16:42]
Podcast Host
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Joe Matthew
Joe and I here in Washington are keeping an eye on the White House as well as on Capitol Hill today and every day. And there will be some action on Capitol Hill potentially later this evening, specifically when it comes to a vote in the House of Representatives on the President's tariffs policy, tariffs on Canada. Specifically, it's a resolution that has been put forward by Democratic Congressman Gregory Meek of New York that will now see a vote, a vote forced, despite the attempts of the House Speaker Mike Johnson, to make sure that that did not happen, putting some of his vulnerable members in the majority in a tricky position of going on the record as to whether or not they support these policies. Because Speaker Johnson, despite knowing that he had a very thin majority and the math was going to be hard, did try to pass a rule yesterday, Joe, that would have seen effectively an extension of the ban of putting forward tariff related resolutions like this on the House floor. And three Republicans, Republicans told the speaker and the President, we're not with you on this one.
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Kailey Leinz
That's true. Not all the names surprising, but this is Getting back to why margins matter here, 2:17 to 14, the speaker's seen this movie a lot of times. All right, Tom Massie of Kentucky, I know you're not surprised. Add Kevin Kiley of California, Don Bacon of Nebraska, and it's a fail. The question is, and we'll have to pose this to the panel, is this a watershed moment or just a jailbreak of three members?
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Joe Matthew
Well, and when we consider the composition of those three members, yes, Bacon's retiring. Massie, as you point out, not unusual to break with the party. Kevin Kiley, though, could potentially be representative of an entire group of Republicans, those who are in swing districts having tough seats to defend, who have to consider these policies and what they mean for their constituencies a bit more carefully. So could there be more? Kevin Kiley is coming out of the woodwork on actual tariff resolutions.
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Kailey Leinz
You outline that perfectly. And this is what Democrats are hoping because they want to have a series of votes like the one tonight with Meeks on Canada to try to put Republicans on the record, knowing that this won't likely become law. The president's going to veto it. But a lot of political ads can be made in the meantime time we're going to find out who's worried about tariffs and who is worried about Trump. Let's assemble our panel for their take on this. Bloomberg Politics contributors Jeannie Shann Zaino and Rick Davis are with us. Jeannie is our Democratic analyst and democracy visiting fellow at Harvard Kennedy School's Ashe Center. Rick, a partner at Stone Court Capital, our Republican strategist. How are you reading these three, Rick, knowing that the Senate has already voted against Donald Trump's tariff regime, is this in fact a rebuke? Did the president find the line or are we making too much out of this?
- [19:24]
Rick Davis
This, Yeah, I think Kelly nailed it with sort of the various motivations. Although I would say, Kevin, Kylie, I mean, he actually doesn't have a district. His was wiped out with Proposition 50, the redistricting. So he's out there wandering around trying to figure out where he's going to run for reelection. But he does plan to run for reelection. But he does represent, I would say, almost the majority of the Republican caucus in the House of Representatives who are very offended that the president has usurped their Article 1 constitutional responsibility to make tariffs. And so if you needed 4 votes and not just the three that, that you got, would you have gotten another Republican? Probably. And I would say, too, with this one, this goes right to the White House. I mean, yeah, we like to see the speaker deliver the votes. But the White House said, you know what, this is on us. We're going to make this happen, happen. We're going to put the pressure on these guys. And so the White House ledge office was all over this thing. And this is a huge loss for Trump. It's his first big loss legislatively where he thought he could actually win. And so is this a thing of the future? Maybe a lot of these guys are from districts that are not going to be easy to win reelection in, in a bad cycle year. And I wouldn't be surprised to see more jailbreaks in that race regard.
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Joe Matthew
Well, so when we consider the potential scope and scale of said jailbreaks. Jeannie Rick just suggested it might be a majority of the Republican conference in the House of Representatives that actually disapproves or at least wants the congressional authority to be the one that matters. On tariffs, are we wrong in assuming that a 2/3 majority, veto proof majority could actually be present or not be present on this issue?
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Jeannie Shannon Zaino
Yeah, I mean, this is one of the, there's so many confounding things about what happened last night to me, me, number one, if this passed Congress, the President was going to veto it and it was going to. It's hard for me to imagine he wouldn't survive that veto. But, you know, setting that aside, we knew very clearly because all three of these individuals forecasted that they were not going to vote for this thing. So Mike Johnson knew it, the White House should have known it, and yet they let it go forward as if it wasn't going to be a big loss for them. As opposed to what you would think a normal White House would do is you are facing a very difficult election year in just nine months from yesterday. Let your Republican members in these swing districts, these purple districts who are trying desperately to win, give them a little, a little latitude to go against you on something that most Republicans don't support, which is terrorist tariffs and taxes. But instead they want to keep everybody together. And you know, to me, this, this seems like the same thing we see Pam Bondi doing in the doj. Mike Johnson is playing to an audience of one. You go to the doj, try for indictments you know you're never going to get. You go to the floor, try to vote, try for votes you're never going to get, and then say to Donald Trump, oh, listen, I tried. Can't blame me. Look at the grand jurors or look at Tom Massey if you're up to set. I mean, I think that's what's going on here, but it makes no sense politically or strategically for these Republicans or for this White House.
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Kailey Leinz
Well, I'll tell you, it also did not make sense, apparently, to a grand jury to indict the six Democratic members of Congress who urged members of the military in a video that came out some weeks ago. Now, we've talked about it. To not follow unlawful orders. This is when we were busy blowing alleged drug boats coming out of Venezuela. You remember this video? Alyssa Slotkin, Mark Kelly and others. Here's a little refresher.
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Rick Davis
This administration is pitting our uniform military.
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Pierre Yared
And intelligence community professionals against American citizens like us.
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Kailey Leinz
You all swore an oath to protect.
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Tyler Kendall
And defend this Constitution.
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Kailey Leinz
Right now, the threats to our Constitution.
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Pierre Yared
Aren'T just coming from abroad, but from right here at home.
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Kailey Leinz
Our laws are clear.
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Rick Davis
You can refer to refuse illegal orders.
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Kailey Leinz
That was called sedition by the President. This grand jury decided that this was not a case. They failed to secure the indictment here, despite the better intentions of the attorney general. This is something that came up in Pam Bondi's testimony earlier. Rick, what do you make of this? I know that Mark Kelly is still in some hot water here with Pete Hegson, Seth, specifically, but as far as these other members go, is this a good day for the Constitution? If you read the quote from Jason Crow, the Democrat from Colorado who we saw there, I can't even read it on the air. I'll do my best. If these efforts think they're going to intimidate us and threaten and bully me into silence, they have another thing coming. Rick, this is clearly a bridge too far. What's the recourse?
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Rick Davis
Are you baiting me to do something I shouldn't do on air?
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Kailey Leinz
I wouldn't.
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Rick Davis
Look, I mean, this is the most confounding thing I've ever seen. First of all, it was a total political stunt by these six Democrats to do that video. I mean, when does anybody do a video to talk writ large to a million uniformed service personnel? I mean, come on. But what happens? The White House totally takes the bait. I mean, like, you're supposed to ignore stuff like this. And in taking the bait, not only does the president say some pretty injurious stuff about like, this is seditious and these people should be put to death. That's a bad thing, right? That's a bad news day for Donald Trump. He doesn't really mean it. I'm highly confident he doesn't want to put Mark Kelly to death. But at the end of the day, he unleashes the Justice Department on him. And then what happens? They elevate Mark Kelly. Now people are talking about him running for President of the United States in 2028. I mean, like, that's the best thing that ever happened to Mark Kelly's political career. So. So, you know, I just, I don't understand why everyone isn't just taking a step back on this and saying, you know what, this makes absolutely no sense. Why are we prosecuting this thing? And now to get the black eye of a grand jury saying no to the Justice Department, by the way, in another high profile case like the Comey and the Letitia James case, they're like striking out at the plate. So I don't know. I mean, I mean, to me, this was all very avoidable. But I guess if you, if you want to play, you got to, you got to decide whether you're going to win or lose.
- [25:57]
Joe Matthew
Yeah, well, and to the point Rick is making on these strikeouts, Jeannie, arguably the bar for a grand jury indictment isn't incredibly high necessarily. We're not talking conviction here. This is just the indictment to try to make to bring the case forward. Do you take heart in the fact that this isn't necessarily just, just everything the DOJ wants, the DOJ is getting?
- [26:20]
Jeannie Shannon Zaino
Yeah, the old ham sandwich, Kelly. And you know, somebody was saying at the hearing today, the number of strikeouts by this DOJ is astronomical compared to any attempts to get grand jury indictments in the years before. And so I believe we are hearing Pam Bondi respond to messages that Donald Trump has accidentally sent her publicly. And I'm sure she's gotten a lot more heated messages from him privately immediately saying, you need to pursue this. So, again, very much like Mike Johnson, even though they know they're going to strike out, they keep pursuing this and end up looking weak. And, you know, somebody said, and it's so true, this video that they put forward is the same message that the Department of the Defense Law of War manual says. And yet you're going to try to go to grand jurors, jurors, and indict people for repeating what the law of War manual actually says. That's a nonstarter. And God bless our grand jurors. We now are in a situation in this country where it is average people on the street who are hauled into a grand jury to sit, who are checking the president and the doj who are wildly overstepping any sort of executive mandate. It's not a great place for our country to be, but it's where we are. And if we had courts that would do the same, we'd be in better shape. But now we have grand jurors who are saying this is a nonstarter in a way they never have before in American history.
- [27:51]
Joe Matthew
All right, Jeannie, Shannon Zaino and Rick Davis, Bloomberg Politics contributors in our political panel today, thank you both, as always.
- [27:57]
Kailey Leinz
Stay with us on Balance of Power. We'll have much more coming up after this as markets move and headlines break. What matters most is context. A Bloomberg subscription gives you unmatched reporting, sharp analysis and powerful tools that help you connect the dots. Visit Bloomberg.com podcast offer to learn more.
- [28:19]
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. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg 11:30 really.
- [28:38]
Kailey Leinz
Seems like it should be Thursday. Is it just me? And until this ice is gone, it's going to probably feel like that we're just grinding through winter. But the fact is we're back above freezing. And if you're here in the nation's capital, maybe in New York or Boston, you can relate. If you're listening to me in la, you can laugh at us later because Snow Crete remains our reality. And if you think you're a big shot because you survived Snowmageddon, you saw nothing. Nothing until snow Crete. 20 days of temperatures below freezing. Are you kidding me? So everyone's walking around. You're looking to see like bros with shorts and flip flops on by the end of the day, sliding across the ice with a little bit of a melt starting here. And people are like walking across the river now. And on ponds and stuff, you see this James, you, producer James, by the way, an avid ice fisherman. If you get bored in the winter, that's who you want to be with. With ice cover on area waterways at its most extensive level in decades, in fact, local ponds are apparently completely frozen all the way to the bottom. So playing hockey is taking on new meaning here this winter. But it's not going to last long. The melt is beginning and the mud is coming to the swamp. The question is, will the Department of Homeland Security be open beyond the end of this week even? And it's kind of looking like a no right now. We set the baseline on what's happening on Capitol Hill with administration officials talking reportedly with Democratic leadership. But there is no deal yet when it comes to putting controls or restrictions on ice and therefore unlocking a funding package that could pass. So we could be in a world in which 11 agencies are up and running, but DHS is closed, unless, of course, there's a continuing resolution. Progressives say they don't want that. And same for the Freedom Caucus. Right. So no one's getting along. And it's times like these we benefit from. A couple of minutes with Maura Gillespie, a veteran of John Boehner's Speaker's office, Republican strategist, now the force behind bluestack Strategies. It's great to see you in the nation's capital.
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Maura Gillespie
Thanks for having me.
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Kailey Leinz
We did away with some of the ice before you, but I'm sure it's worse in New Jersey anyway. Right.
- [30:44]
Maura Gillespie
But there's still ice here. There's a lot I can tell you. I wiped out earlier today.
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Kailey Leinz
No, you didn't.
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Maura Gillespie
Really? I did, yeah.
- [30:49]
Kailey Leinz
So sorry.
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Maura Gillespie
In a very cartoon esque fashion.
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Kailey Leinz
I don't believe that. Did anyone see it really?
- [30:55]
Maura Gillespie
I would hope that some people saw.
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Kailey Leinz
It for their own sake. For their own.
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Maura Gillespie
Just listen.
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Kailey Leinz
That's very gracious of you. I took a major digger on the ice about two weeks ago and it was like one of those redefining. I was seeing stars. And it's definitely changed the way I approach my walk.
- [31:12]
Maura Gillespie
It's humbling.
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Kailey Leinz
Yeah. To the office. So. Humbling indeed. How humbled will Mike Johnson be at the end of this week? Because it's not looking like this is going to turn into a deal. But it's funny more. I keep seeing headlines about cautious optimism light at the end of the tunnel. You're saying there's a chance. Are you buying any of that?
- [31:30]
Maura Gillespie
What other position does he have to have? I mean, he's got to try and stay optimistic given what he's got in a caucus where, a conference where he doesn't have much to wiggle room to have. He's got to stay optimistic. You know, you got Senator John Thune coming out saying he's really urging Democrats to play ball, to find a way to resolve this. Because. Because as he pointed out, TSA doesn't get funded if DHS goes without funding again. And the lapse is just a dhs, as you already pointed out, everything else is funded, but they're only funded more or less through a continuing circumstance. Anyway, Appropriations policy, typically it's done in the summer and then goes through another process. But we've kind of pushed and kicked the can down the road so often. That's kind of why we're here where we are now. But it becomes a numbers game as it has been for Speaker Johnson. And I think Thune is trying to do as much as he can to help him be in better footing.
- [32:21]
Kailey Leinz
Is there anything that Republicans that you're hearing at least are willing to offer beyond body cameras was kind of, I think the attempt by the agency to say, hey, okay, we're just gonna do this right now. But when it comes to demasking, total breakdown. When it comes to judicial warrants, total breakdown. Is there anything that Democrats walk away with here, here or no.
- [32:40]
Maura Gillespie
You know, it's interesting because you're seeing different states say that they're going to enforcing that mask rule. Yeah, I don't know how they're going to do that without having. Yeah, and I think that's where you're going to see some, maybe some movement. Because if states put pressure on their members saying we're looking to do this, you need to push, you know, kind of push back, that's going to become an issue. So I do think there's going to be some conversations going on between state and federal to maybe then get them to either acquiesce on the position that Republicans have or vice versa.
- [33:06]
Kailey Leinz
So are you considering a world in which which DHS shuts down indefinitely? I mean, there's been a conversation about how do we silo dhs, but consider ice, I guess would be the real way of putting it. While also funding fema, Coast Guard and the tsa. Is that possible? Could. Could appropriators do this?
- [33:25]
Maura Gillespie
I don't know how they'll separate it. I do think that's going to be a problem. I'm sure it's what members would love to have happen because it's easier for them to get behind a bill that supports fema, supports TSA agents, and making sure that that's all covered. But there's something that's going to get done between today is Wednesday, you know, Friday is the deadline. So if so many members are saying they're not going to be part of this continuing resolution, you're going to start hearing from organizations and from constituents who are concerned about travel. There are already enough concerns about travel right now. We just saw the FAA just put out this El Paso and then overturned it within a matter of which felt like hours. Totally bizarre, very bizarre situation. And so more questions and more confusion. And that's the last thing that airports need is fearful travelers. It's already a heightened situation. And so I do think that continue resolution to get through Friday into the weekend, if they're not willing to Play ball there. Then you have to look at what's going to happen next week. And members weren't slated to be at least the House to be in town.
- [34:20]
Kailey Leinz
Yeah, TSA would go without pay once we get into March from what I understand. So maybe Democrats see a couple of weeks to play with before this becomes an urgent front page story, airport story. But talk to me about what happened with this tariff vote yesterday. This is interesting and it is being framed at least in the tip sheets this morning as a very big deal, a turning point. Donald Trump finally found the line in the Republican led House and Senate. What we're really talking about is217,214 three Republicans crossed over to block future votes or to block a block on future votes over the president's tariffs. Mike Johnson tried like heck to keep the conference together. Is this a watershed moment or a jailbreak of just three members?
- [35:08]
Maura Gillespie
I think what it shows you is that there is an appetite to reclaim control over a power that the how the Congress has it's Article 1 of the Constitution and many members have privately expressed frustration over it being handed over to the President because they also know that back at home tariffs, while it was messaged differently during the campaign, it's a tax and it's largely felt by the American consumer. And that's a message that they're having a hard time not only justifying to their constituents but then in talking from a constitutional aspect, that's a role that they had that the speaker has more or less given over to the president. And I understand that Speaker Johnson's approach to this is saying let's let the courts play out out and let them decide. Members who have said okay, fine, they've waited a long time for the court to decide on tariffs and still hasn't come out yet. And so presented with this vote last night, they chose to say no, I'm going to reclaim the position of the ability of Congress to make decisions on tariffs. I don't know that I necessarily say it's a watershed moment, but it may give other members who are feeling this privately a little bit more courage to say I support that.
- [36:13]
Kailey Leinz
Okay, so that's my next question is because Democrats aren't waiting around, there's going to be a vote tonight, it looks like on, on Gregory Meeks bill when it comes to Canada tariffs and they're going to come around again and again and again to try to get Republicans on the record one way or the other. You either like tariffs and you can make Trump happy and maybe your constituents unhappy or you're going to cross the boss on this. Is that the actual strategy here?
- [36:36]
Maura Gillespie
Well, I'd have to see what Gregory Meeks's legislative, you know, kind of text is because if it's revolving around this bridge issue situation that we saw kind of play out on social media this week, that may give some members some cover to say, well, we're still figuring this part out. Bigger picture, though. Bigger picture.
- [36:52]
Kailey Leinz
Do you want to be called out if you're a Republican being put on record, being put on record here because the president can veto whatever they pass. Right, right.
- [37:00]
Maura Gillespie
That becomes a problem again when you're getting we inch every day closer to the 2026 midterms.
- [37:05]
Kailey Leinz
Yeah.
- [37:06]
Maura Gillespie
And. And they're going to be on record saying that they are pro tariffs, pro taxes. That's going to be a problem and it's ripe for an advertisement against them.
- [37:14]
Kailey Leinz
Come the summer over and over and over. By the way, the Senate has already voted against these tariffs. I assuming that there's no anti veto majority here.
- [37:27]
Maura Gillespie
Well, and you have several senators who have come out saying this is our responsibility in the Constitution. It lays it out for Congress as a side on taxes and tariffs and then for the executive to implement it. And I think on the show I've said it's hard for me to recognize that. I've agreed with Rand Paul more times this year than I can really remember in my lifetime on the Hill. But he has been pretty vocal about it and among others who have again pointed to the constitutionality of this position to give them cover in their conservative values that they are standing by the Constitution and the president isn't. And so trying to draw that line I also think is going to be a benefit to them as they look forward in their, in their elections because again, the president's not running again. Right. He can't and they are. And if they are, they need to be sitting in their conservative principles. And so this is in a position where they could point out that difference.
- [38:17]
Kailey Leinz
This is going to get even more interesting after the midterms. But he's trying very, very hard to put himself on the ballot. It's going to be a Republican midterm convention. Does that keep the conference largely in line until then?
- [38:28]
Maura Gillespie
I don't know the but it does. I do think that there are more and more cracks in the Trump stronghold as people recognize the economy is not where it was supposed to be. That was promised that these, these ICE raids have been more damaging and making people feel less safe, which is the opposite goal which was intended to create a safer, stronger security. And you find more and more of these fissures in the Republican stronghold that Trump has had. And I think again, you're pointing to some off ramps for Republicans to look to and say, I'm standing for my constituents, not just for what the administration is pushing out today.
- [39:07]
Kailey Leinz
Really interesting. I think you pointed to something really important. And remember this, if and when it happens, this could turn into a states versus federal law enforcement issue when it comes to masking. If Congress can't figure this out, and it may, that in itself is a pretty scary prospect.
- [39:20]
Maura Gillespie
It is. But I also think you have to remember that conservative conservatives in a principle, they believe in smaller, more accountable government.
- [39:26]
Kailey Leinz
And so that looks like states rights.
- [39:28]
Maura Gillespie
Absolutely.
- [39:28]
Kailey Leinz
Great to see you. Maura Gillespie. What a rare treat to have the founder of bluestack Strategies with us in the flesh in Washington. Let us know when you're back in town and I'm sure you'll be back on our panel soon. 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 podcast podcasts. And you can find us live every weekday from Washington, D.C. at noontime Eastern at bloomberg. Com.