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- [00:00]
IBM Representative
So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business IBM,
- [00:33]
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.
- [00:55]
Bloomberg Anchor/Host
Keeping an eye closely on the bond market as well as we have seen a series of weak auctions to your notes, then five year notes over the course of Tuesday and Wednesday and now today Thursday we just saw a week seven year note auction as well, drawing 4.255% compared to the 4.247% yield pre sale. So that's something to keep an eye on as well as the appetite for US Government debt at a time when there are real concerns out there, of course, about potential inflationary risk stemming from the conflict in the Middle East. And while the President did try to downplay that today, as did the Treasury Secretary Scott Besant in a televised cabinet meeting, the idea that the US does not need the straight of Hormuz, energy prices will be going lower soon, depending of course on what happens, I suppose, in the strait and who all is going to get involved in it. As the president, of course, has called on Gulf allies as well as NATO allies to help secure that vital waterway. And he spoke of those NATO allies in the meeting. Take a listen.
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Donald Trump
One thing we're very disappointed, I'll say it publicly, we're very disappointed with NATO because NATO has done absolutely nothing. And I've always said 25 years ago, I mean I was somebody that wasn't a politician, but I was always involved in politics.
- [02:03]
Bloomberg Correspondent/Interviewer
Politics.
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Donald Trump
And I understood politics. I said 25 years ago that NATO is a paper tiger, but more importantly, that will come to their rescue, but they will never come to ours.
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Bloomberg Correspondent/Interviewer
So just imagine the conversation at the G7 meeting that is getting underway in Paris. And I'm glad to say Bloomberg's Europe correspondent Oliver Crook is there and reporting on our behalf here on balance of power. We want to bring Oliver in live now from Vaude Serenay. Oliver, what Are you hearing about this military action against Iran and the President's remarks about our NATO allies?
- [02:40]
Rick Davis
Yeah.
- [02:40]
Oliver Crook
So what's remarkable is in sort of ordinary times, a G7 meeting would be the venue in which the United States might consult allies, potentially before an invasion of a major country, potentially after an invasion. There would be discussions about strategic petroleum reserves that are sort of organized across these G7 countries. But as we know, these are not really ordinary times. I've been speaking to a number of people, including the highest diplomat from the European Union. She's awaiting Marco Rubio's arrival tomorrow to again be on this sort of fact finding mission that I think everybody in Europe is on to try to establish what the US War aims are, where they see things going, and also specifically what kind of support they're seeking from allies. I also spoke to the Canadian foreign minister, also a NATO member, about their potential appetite of entering in some way in this conflict, whether it's easing the waterways, if there's an attack, say on some of the Gulf allies. Is that something the Canadians are willing to step in on? And the realistic situation for the Canadians and many others is this is not the moment, this is not our war. That being said, we do know, know from the NATO Secretary Mark Rutte, that there have been conversations about building a so called coalition of the willing. Apparently 30 or so countries are already in discussions about this, of potentially getting involved in the day after in order to help ease the sort of naval vessels going through the Straits of Hormuz. But right here, you know, there's no appetite to really get fully involved. And really for them, they're going to try to A, get a sort of fact finding mission from Marco Rubio to establish what the US Aims are and B, try to keep him onside in Ukraine.
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Bloomberg Anchor/Host
All right, Bloomberg's Oliver Crook live at the G7 Foreign Foreign ministers meeting in France. Thank you so much for joining us. And we want to go live now to Capitol Hill where we're joined by Republican Senator Ted Budd of North Carolina who of course sits on the Senate Intelligence and Armed Services Committees. Welcome back to Bloomberg TV and Radio. Senator, we appreciate your time. Your, your chairman on the Armed Services Committee, Senator Roger Wicker, as well as the chair on the House Armed Services Committee, Mike Rogers, have both expressed in recent days some frustration about understanding from the administration what exactly the options are they are considering when it comes to putting further troops into the Middle East. Right now, of course, you had Rogers saying that essentially the briefing that he received yesterday didn't answer lawmakers questions around this. I understand that you need to have some ambiguity in public, that there is much the president doesn't want to reveal through the news media, for example. But does he not have, does the administration not have an obligation to tell you exactly what it's considering?
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Donald Trump
They do.
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Senator Ted Budd
And that's why we're Article 1 in the Constitution, the Article 2. The President and the administration are supposed to work with us on such matters. If they're going to come to us for a supplemental, they need to be letting us know about these things. This is a classified setting. But I'll also say in defense of the administration, you have to have a Congress that you can trust. When we go into those classified settings, you see members occasionally go out and talk to the press. We want to be open with the press, but not with things that we hear in a classified setting. So the administration needs to make sure that they can trust Congress and individual elected officials need to make sure that they're keeping classified things classified. But we do need more information. The administration, the Pentagon are going to work much quicker than Congress will by design, but they need to have a good flow of information. So I understand what Chairman Wicker and Rogers are concerned about.
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Bloomberg Correspondent/Interviewer
Well, and we don't want to put any classified information on the air, Senator, but I would ask you, are the justifications that the White House presented to the American people the same ones that you heard in that classified briefing?
- [06:13]
Senator Ted Budd
In broad strokes, absolutely, yes. I mean, you see the ballistic capabilities, it's known what they shot towards Diego Garcia. It's much further than we were anticipating. As far as Iran's capabilities, the vastness of what they've done over the last 47 years, particularly since 2020 in the buildup in Iran, I mean, that has been all sources of terrorism tend to lead right back to Iran. We've seen Hezbollah, we've seen Hamas, what they've done. We've seen what they've done to our soldiers. We've seen their threats to our homeland. And when you take that capability with ballistic missiles that we've just recently seen and the whole world now knows about, plus their intent to ENRICH Uranium to 90% levels, I mean, that is nuclear capability that not only could destroy Europe, but it could destroy us as well. And so if you want a safer America, you need to have a defanged Iran. And that is certainly what the President's trying to do.
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Bloomberg Anchor/Host
Well, when we consider that defanging, though, obviously the President as well as the Defense Secretary have heralded what they're claiming is American and Israeli air superiority over Iran. Yet the President also said today that Iran had to grant them a present of allowing 10 vessels through the Strait of the Hormuz. Also noting that Iran is right now charging some of those vessels in order to transit. Does that not underscore that it is actually still Iran that has complete and total authority at this time over the Strait?
- [07:35]
Senator Ted Budd
Well, I don't think so. When you look at our capabilities in the region and yes, I mean, there is a geological issue when you've got a 24 mile wide strait and you've got essentially Iran that wraps around it. But when you see their geological advantage there, it pales in comparison to what we can do militarily. When you have the 11th Marine Expeditionary Unit on the way, you have America's 911 force in 82nd Airborne going there, that increases our option. I think it's going to cause Iran to step back and rethink if they want to preserve any semblance of their regime. And again, we can't have the hostile part. We don't want an enemy of America. If they want to be a great country and 90 million people and good for the region, good for themselves and not a threat to the United States, that's fine. But they need to come to the negotiating table in good faith, not this constant years long deception that they've put forth. We have. When you go back to what Steve Witkoff has done to go over there to talk, they actually bragged about their nuclear capabilities and their enrichment. That's not the way you have a good negotiation. So I don't think they've been trustworthy partners at all in this. But we keep coming back to them. We're pausing. The President gave him a window of time to say, come to the table. Let's talk about the next phase. And if they don't, it's going to be very hard on Iran.
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Bloomberg Correspondent/Interviewer
Yeah. There are reports today that the Pentagon, Senator, is developing options for what they're calling a final blow. And Axios lines them up to include invading or blockading Carg island, which is something the President's talked about about a lot. But also invading Laraq, an island that helps Iran control the strait. And the strategic island of Abu Musa, along with a couple of smaller islands, the western entrance to the Strait. If the Strait of Hormuz remains closed, would occupying these islands be enough?
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Senator Ted Budd
Military pressure to reopen would certainly increase it. But what we want to do is give the Pentagon, give the Commander in Chief as many options as as possible to do what he needs to do to protect the American people. Because when you take their ballistic capabilities and you combine it with their enrichment goals, I mean, that is devastating to the United States. And they've chanted death to America for 47 years. So we need to give the President. We need to give the Department of War and our war fighters all the protection, all the options that they need. We pray for our troops. We're grateful for them. We don't want a prolonged war. And we want to get this thing resolved completely and decisively as quickly as possible. But we have to give the president options in order to do so.
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Bloomberg Anchor/Host
Well, of course, your leadership in the Senate is also seeking a quick resolution on another issue, although it is one that has been protracted. 40 days now that the Department of Homeland Security has been shut down. We understand that Leader Thune has submitted what he's called a final offer to Democrats. Senator, whatever that offer looks like, are you prepared to vote for that? In the name of getting TSA agents and others paid?
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Senator Ted Budd
The Democrats have used 57,000 TSA agents in the whole of Homeland Security at a time of concern for the defense of our homeland. The Democrats have held it hostage. It's absolutely unbelievable. We have to get this department open. We have to protect the homeland. This is critical. We've got a great secretary there and Mark Wayne Mullen, one of our colleagues here recently from the Senate. I think he'll be a great leader for that. But we have to get this open. We can't hold these people hostage. And we're not just talking about airports here. And those 57,000 individuals that are walking off the job, not because they don't like their job, not because they're just mad, and they deserve to be mad for what Chuck Schumer has done to them. But these are people that can't afford gas to get to work. These are people that are sleeping in their cars. These are people that they can't afford food to get them through the week so that they can get to work without being paid. This is absolutely ridiculous. We have to open this up. The American people are fed up with what Chuck Schumer is doing here. It's unbelievable what they've done. They have walked away from two different deals. They keep moving the goalposts. They want things like body cameras for enforcement agents. That's fine, but it was in the original deal. So look at the original deal and that they walked away from. And you'll see that we've been reasonable at every turn, and we're still continuing to be I think they're the Democrats are inherently afraid of their increasingly radicalized base and their far left base. And they're worried about their own primaries. They're worried about their own elections. We're just here trying to serve the American people and be reasonable, get these departments open, keep them regularly funded, be good stewards of the American taxpayer. That's all we're trying to do here. And we're asking them to come in good faith to the negotiating table.
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Bloomberg Correspondent/Interviewer
Senator Ted Budd, Republican from North Carolina, we thank you for the insights. Of course, Democrats are saying many of the same things about Republicans who are entering primary season. And we assemble our political panel for their take on everything that we just discussed with the senator. Bloomberg Politics contributor Republican strategist Rick Davis is with us, partner at Stone Court Capitol, alongside Democratic strategist Laura Fink, former, I should say founder and CEO of Rebelle Communications. Laura, I'll give you a chance to respond to that and I'll ask you, do you think these TSA agents should be made whole once DHS someday reopens, should they get back pay for this closure?
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Laura Fink
I mean, I think that they're legally required to get back pay. And I also think that I know that overtime pay should be paid. They should, we should incentivize them and we should protect them in future negotiations so that structurally they're not the ones having to go out and raise families on no dollars and deal with what I imagine to be very grumpy customers in line. So the senator is right about that. But I think what, what you can't deny is that when you are in, when you win elections, as the Republicans did in the last election cycle, you do have to take responsibility. And sometimes you've got to make concessions you don't want to make. And that's where we are. We know we're not talking about what's on the table here because if Americans heard about what we were arguing over, it really seems like it's something that should be done by now that's on the desk of the president and then the Republicans who are negotiating on his behalf. So as someone who has some flights coming up, I hope certainly that they resolve it. And especially for those TSA workers who work hard every day and are dealing with some real tough circumstances.
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Bloomberg Anchor/Host
Well, and senators themselves would like to have flights coming up. Rick, they're trying to get out of here for two week long recess. How much of an incentive is that beyond the human impact of these TSA agents?
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Rick Davis
Well, as Patrick Henry said earlier, jet fumes are a great motivator. And, and these guys want to get out. They it's an election year, too. I mean, so not just a time to be with your constituents and your families around Easter, but you need to be in touch with these folks because you're going to be on a ballot certainly in the House and in a third of the Senate. So it's really a critical period of time and it is a great motivator to get a deal done. And something I'd like to pick up, what Laura said, just because Republicans are in charge, it gives him, gives us Republicans a obligation to get something done. It's not my way or the highway. It's like actually getting something signed into law. And, and the public knows that the Democrats don't have a vote on that. And if you look at past polling, Republicans, even when we're in a minority, get blamed for government shutdown. So there's never a good outcome for the Republicans on a ballot when you start shutting down portions of the government. And so I really don't get why there isn't a bigger crisis within the caucus to get a bill and get it done and get home.
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Bloomberg Anchor/Host
All right, Rick Davis and Laura Fink, they will not be going home yet as our political panel will be back with us for more later on this hour because we have to get a view from the other side of the aisle as well. After speaking with Republican Senator Ted Bud. Joe, Congresswoman Susan Del Bene, the Democrat, of course, from Washington, the chair of the DCCC joins us next. I'm sure she wants to weigh in on what all this means for the midterm.
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Bloomberg Correspondent/Interviewer
I suspect she does. This is the woman who is responsible for getting Democrats elected to the House. If they take control of the House, it'll be largely due to the work that she's up to right now. And she'll be with us live from Capitol Hill straight ahead here. On balance of Power. Stay with us. On balance of power. We'll have much more coming up after this.
- [15:55]
IBM Representative
So there's a lot of noise about AI, but time's too tight for more promises, so let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a Global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.
- [16:24]
Podcast Host
IBM, 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.
- [16:45]
Bloomberg Correspondent/Interviewer
We keep tabs on Wall street here. With so much information from Washington driving the financial markets here, beginning of course with energy, but also when it comes to interest rates and the stock market, it's hard to remove the two. We just had an interesting conversation with Senator Ted Budd, the Republican from North Carolina, on what is now day 40 of this partial government shutdown. When I say that, I'm of course referring to to the Department of Homeland Security. There have been on again, off again talks, if I can characterize it that way, this week about reopening DHS. There was the prospect 48 hours ago, in fact, of a piece of legislation that would fund all of DHS without funding ice, knowing that it has a lot of money from the president's big beautiful bill. But that seems to have crashed into the rocks. And when we talked to Senator Budd about why knowing Democrats would like further reforms when it comes to ice, he said, I think the Democrats are inherently afraid of their increasingly radicalized base, worried about their own primaries and elections. We're just trying to serve the American people. So we thought we would talk to the member of Congress who was responsible for getting Democrats elected in this midterm cycle. That would be Susan Del Benet from Washington. She is chair of the House Democratic Congressional Campaign Committee. And Congresswoman, it's great to see you. Welcome back to Bloomberg TV and Radio. How would you respond to Senator Budd?
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Congresswoman Susan Del Bene
I'd respond to Senator Budd that he should probably listen to the American people. If you listen to the American people, two things are very true. One, they want to make sure that TSA workers are paid. They're struggling because they haven't been paid in so long. These are people doing important work for our communities, making sure that we fund the Coast Guard in fema. We have legislation that could be passed right now to fund the parts of Homeland Security that we all agree on. Things like TSA and FEMA and Coast Guard. That could be done right away. While we continue to talk about the need for reforms for ice, look at what's happened across the country. Violence in communities, two Americans killed because of the violence that we have seen from ICE agents. People want to see reforms. Across the country are demanding reforms. If Republicans were listening to people, they would understand that and come to the table. But right now, there's a very straightforward solution. Rosa DeLauro has a bill to make sure that we fund the parts of Homeland Security that we agree on, and then we continue to make sure that we are working towards reforms for ice. Those could be happening right now. Republicans don't know what they want to do. They're waiting for Donald Trump to tell them what to do.
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Bloomberg Anchor/Host
Well, are Democrats united in what they would like to see done either? Congresswoman, do you trust whatever deal it is that Chuck Schumer may be able to negotiate?
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Congresswoman Susan Del Bene
Well, look what's happened to the House. We have a piece of legislation. We have something called the discharge petition to force a vote on the floor. Since Republicans won't put the bill on the floor again, just fund all the other parts of ICE, like tsa, or fund the other parts of Homeland Security like tsa, and then make sure that we continue to negotiate on ice. That's a very straightforward solution. Strong support Republicans. I don't think they know what they want to do, but I think Senator Kennedy on the Republican side was clear that he thought the problem was Donald Trump.
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Bloomberg Correspondent/Interviewer
Well, Donald Trump was speaking last evening, as a matter of fact, at a fundraiser. This is the NRCC March dinner, which brought in tens of millions of dollars. Yeah. If we can have those comments, Congresswoman, I'd love for you to hear what he said and we'll have you respond. Listen.
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Donald Trump
Well, we have a hot party. We have a very hot party. With your help this November, we'll defeat the radical left Democrats and we'll win a midterm victory like our country has never seen. For whatever reason. I don't know what it is, but a president who wins, Republican or Democrat, almost always does poorly in the midterms. Nobody knows why, even if it's a successful presidency.
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Bloomberg Correspondent/Interviewer
I don't know if he's projecting, Madam Chair, but there are questions about the money race and the extent to which Republicans have been outraising Democrats. How concerned are you or not about that in this midterm cycle?
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Congresswoman Susan Del Bene
Well, the American people are with us. We've seen that across the country. We've seen that in special elections across the country where Democrats are overperforming, flipping seats across the country, including that state legislative race, Donald Trump's or Mar a Lago, is located flipping from Republican to Democrat by a wide margin. Folks are angry because Republicans have broken promise after promise. They promise to to lower costs on day one. A big broken promise. Promise to only go after the worst of the worst. When it came to immigration, a big broken promise promise no forever wars. And now we have a president with no plan entering a war in the Middle east, and he still hasn't articulated what his plan or objectives are. So people are angry all across the country. We have had strong support. And the American people want folks who are going to stand up for them, who aren't just going to be a rubber stamp for Donald Trump. We also have great candidates who see what's happening on the ground, who want to run and folks with incredible backgrounds, veterans and farmers, small business owners, mayors and ministers, all who are going to help us take back the House in November.
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Bloomberg Anchor/Host
Well, Congresswoman, I'm glad you raised that legislative district in Florida, home to Mar A Lago, a Democrat winning it after Trump carried it by 11 points in 2024. There's been murmurs today among Florida Republicans on the idea that the redistricting push that the state Republicans are making may be more a more risky proposition. Now, given the results that we saw, does it make you rethink how that map may be more advantageous to Democrats than previously thought?
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Congresswoman Susan Del Bene
Well, we have 44 districts, districts where we are on offense across the country, all across the country, including in places like Texas, because people are outraged and because in special elections, in congressional special elections Since November of 2024, Democrats are running 17 points ahead. So when you look at the districts out there where we have opportunities, they're all over from Texas to Iowa to Arizona to Michigan and Pennsylvania, because people are outraged from the actions of this president and Republicans in Congress. So absolutely, we have opportunities. We have great candidates who are authentic and independent minded. And people want folks who are going to stand up for them, not just be a rubber stamp for Donald Trump. And this Republican Congress has done nothing but wait for Donald Trump to tell them what to do.
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Bloomberg Correspondent/Interviewer
Got to ask you quickly, Congresswoman, I'm almost out of time, but I'm just struck by gas prices in states like yours around the country. We have a national average today of $3.98, which is obviously a big problem, especially if you're not getting paid at TSA. In your state of Washington, it is $5.30, which means half of your constituents are paying more than that. This is just an average. How long can your state pay that much money to fill the tank?
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Congresswoman Susan Del Bene
Well, remember, folks are struggling already. Working families saw costs skyrocket because of actions from Trump with tariffs, costs of housing, food, health care costs going up because of Republican actions. So folks were already struggling. Now you add this on top, all directly the result of decisions made by Donald Trump and Republicans in Congress, we know number one issue across the country is affordability, and we're going to stand up and fight for working families, unlike Republicans who seem to not care.
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Bloomberg Anchor/Host
All right, Congresswoman, we appreciate you joining us. Democratic Congresswoman Susan Del Bene of Washington, the chair of the Democratic Congressional Campaign Committee with us live from Capitol Hill. Thank you so much. Of course, when we consider what is driving gas prices higher, in large part it is the conflict between the US Israel and Iran in the Middle east, which President Trump during a Cabinet meeting today said once again he actually thought would drive energy prices that even higher. He continues to contend he thought it would be worse than it is. And on that messaging, we turn back to our political panel. Rick Davis, partner at Stone Court Capital and Republican strategist alongside Laura Fink, Democratic strategist and founder and CEO of Rebel Communications. Rick, I wonder what you make of the president repeatedly saying this, that actually he thought it was going to be way more bad than it is when we're looking at gas prices that we haven't seen this high in some time. Is that what you want to be telling the American people right now?
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Rick Davis
Well, it's a device he's used in the past, you know, as far as impact on tariffs and things like that, where, look, they've gone way up almost a full dollar to most Americans. Oh, don't worry, that's not so bad. It could have been so much worse. And so he can't actually speak to lowering those gas prices. And of course, for a year, all he talked about was how he has lowered gas prices. So I can see how this is the best possible way to address the issue without actually addressing the issue. So he's built kind of a trap for himself. After spending a year talking about how he's reduced the price of gas, now he can claim that it's much it's not as bad as you think it would have been. And I mean, it's not where you want to be politically, that's for sure.
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Donald Trump
Yeah.
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Bloomberg Correspondent/Interviewer
Well, isn't that right, Laura? Did you hear what Susan Del Bene said, 44 seats, I believe she, she said they are playing offense. I know that Democrats have history on their side in this midterm cycle, but is the party certainly at least on the House side, getting a bit over its skis?
- [26:49]
Laura Fink
Well, it's a, it's an embarrassment of riches in terms of the number of districts that are in play, which has a lot to do with the energy on the Democratic side and the real lack thereof on the Republican side, we see that, you know, Republican voters are not enthused for all the reasons that Rick is suggesting. And, and Donald Trump does not seem to be really paying attention to his base. He has a very loyal base but also there are people who he has swung in previous elections that he needs to hold on to to make up for that traditional slide in the midterms. But I think not only is the wind at Democrats back, but they also seem prepared. Although I will say I do think she might need to get out there and start making that money competition a little more even because the more districts you have, the more you have to spend in order to ensure that your candidates get across the finish line. But you heard her on message talking about affordability, talking about the impact in the districts and you also heard her talk about the quality of the candidates. I think people are really stepping forward. We saw that with the first time candidate in the Florida race and then again in the special elections that we really have incredibly strong diverse candidates who are really from and, and built by the districts that they're running in so that that will be the secret to their success if the Democrats are able to pull it off come fall. And Republicans have a lot to contend with and President Trump with the war in Iran and many of his other moves is, is not helping them.
- [28:15]
Bloomberg Correspondent/Interviewer
Really great panel. Rick Davis and Laura Fink, we thank you both so much for the insights. This has been a very productive half hour as a matter of fact. Kaylee, I love this when we have a chance to talk with members from both sides of the aisle to still it with the panel here and it really gives us a sense of the uncertainty here that's being reflected in the markets. Stay with us on Balance of Power. We'll have much more coming up after this.
- [28:38]
IBM Representative
The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slashed repetitive tasks and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM.
- [29:09]
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.
- [29:28]
Bloomberg Correspondent/Interviewer
So we're back in this same world. Stocks and gold down oil and interest rates up. With great concern about what might happen next in the Middle East. And ahead of our conversation with retired Admiral John Kirby. And it's one that we've been really looking forward to. I'll just bring you back to the Cabinet meeting with President Trump. So many questions, so few answers and mixed messages when it comes to the potential for negotiating a deal. The President saying they're lousy fighters but they're great negotiators, they're begging to work out a deal, went on to say, I don't know if we'll be able to do that. I don't know if we're willing to do that. Yet at the same time, he talked about the so called present that he was given by Iran. He teased reporters with this a couple of days ago and actually identified what that present was today.
- [30:16]
Donald Trump
Listen, they said to show you the fact that we're real and solid and we're there, we're going to let you have eight boats of oil. I said, well, I guess we're dealing
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Bloomberg Correspondent/Interviewer
with the right people.
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Donald Trump
And actually they then apologized for something they said, and they said we're going to send two more boats and it ended up being 10 boats. All right, I hope I haven't screwed up your negotiations. But I thought it was appropriate to say because I did taunt you the other day by saying they're going to give us a present.
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Bloomberg Anchor/Host
So when we considered the Strait of Hormuz and this conflict, we will speak now, as Joe said, with someone who is not only experienced having naval experience in this theater, but also experience in communicating around armed conflict and national security. Retired real Admiral John Kirby is with us, of course, the former White House National Security communications adviser in the Biden administration. Thank you so much for being here on Bloomberg News, TV and radio. Admiral, obviously you know this area well. If Iran is giving us gifts of allowing vessels to pass through the strait, if they're charging others some $2 million in order to do so, one could argue that is Iran being able to continually exercise control over this Waterway, is the U.S. navy alone able of, able to wrestle that control back? What would it take?
- [31:34]
Retired Admiral John Kirby
It would take more than the US Navy. I did convoy, convoy escort operations back in the 80s when President Reagan sent us there to do exactly the same thing, make sure that oil traffic could flow in and out safely. And we didn't do it alone back then. And I really don't think the US Navy wants to or can do it alone today. Now, obviously we're the most powerful Navy in the world we have a lot of capabilities and certainly our destroyers can conduct these kinds of convoy escorts. But it's dangerous, it's slow, it's time consuming, it's resource intensive and it's going to require a lot more ships than the US Navy is going to be able to afford to that mission it could take, you know, just to get through the, just to get through the strait itself. That's a, you know, good half a day transit. But depending on how long the route is, where you're picking the convoy up and where you're dropping it off, I mean, it could take, you know, days to a week. And with the traffic shut down the way it's been the last few weeks, it's going to take a while before confidence can be grown enough in the shipping industry to get back to anything near the semblance of traffic that was going through before this conflict started.
- [32:36]
Bloomberg Correspondent/Interviewer
And well, this is incredibly helpful. Admiral, it's great to see you. It's been a long time since we've heard from you here on Bloomberg. And so I'd like to hear a little bit more based on your experience of what it would take to reopen the strait militarily because it's been suggested that we would need to have a full blown stand up, a full blown no fly zone to help protect the naval vessels who would be escorting ships. The President has talked about volume that he needed the help of our NATO allies, which he now says he never needed to be able to create the scale. Is that correct? Is that the approach the administration should be taking?
- [33:10]
Retired Admiral John Kirby
Yes. And I was glad to hear the President when he did talk about the need for allies and partners to chip in, I think he was 100% right on that. And back to the origin of your question is because it's not just about convoys. It's not just about a man on man kind of defense, you know, putting ships with oil tankers. It's about ISR intelligence, surveillance and reconnaissance. You have to have eyes on over that strait 247 so that you can see anything the Iranians might or might not be doing. You need good. And that requires again, a lot of resources from the air. You're certainly going to need seaborne assets and you need to worry about not just the mines. It's not just floating mines that the Iranians could put in the water or even seabed mines. It's their drones. I'm mostly concerned about the drones, air drones and sea drones. Sea drones can attack by stealth. Air drones can be very, very hard to knock down. They're very slow, slow moving, but they fly close to the level of the water. They can be hard to knock out of the sky. And all it takes is one. One of those things, whether it's a missile, a drone, air or seaborne, and of course, a mine to get through to shut down traffic for potentially weeks. So it's a very difficult thing to defend against, and it would require an awful lot of assets and an awful lot of time.
- [34:25]
Bloomberg Anchor/Host
How would two Marine expeditionary units and thousands of troops from the 82nd Airborne contribute to a mission like this or another mission? Admiral, what exactly do you think we could be getting ready for as we position these thousands of other American service members into this theater?
- [34:44]
Retired Admiral John Kirby
Difficult to know, of course, what the administration is planning. But if we're just going to talk about the Straits Strait, the Marines could be helpful if you wanted to go after a couple of the small islands that bound the strait, which are in Iranian control and therefore could be used by the Iranians as bases to launch drones or even small boat attacks. So you could put the Marines on those islands and help again, restore a little bit of confidence in the shipping industry that you've got eyes on, that you've got a presence, and that you have the ability to defeat Iranian threats. There's also talk, I know, about maybe using the Marines to assault Kharg island, which is that island way up in the north of the Gulf of Gulf, right off the coast of Iran, about 15, 16 miles off the coast that they use for infrastructure. That's kind of their report of departure and embarkation for all the oil that comes out of the Gulf. So there's been talk about maybe the Marines taking that over. That is a much taller order. It's a bigger island, and I suspect that the Iranians are going to want to defend it. In fact, I saw press reports today that they're already fortifying Kharg island in anticipation of some kind of amphibious assault. And then, of course, there's always the other option here, which when you have the 82nd Airborne coming, it certainly you can't ignore it as an option, is the potential to put US Troops on the ground in mainland Iran, in the area around the strait, sort of southern Iran, to try to prevent the Iranians from using their coastal facilities to attack ships in the strait. That is a much, much taller order for the US Military and would require an awful lot of planning, organization, coordination, and, of course, time. And, of course, it's, it's. It's very risky. Very risky indeed.
- [36:27]
Bloomberg Correspondent/Interviewer
Yeah, I don't know if these are in some of the documents, the classified documents that the president had at Mar A Lago that mapped out Iran battle plans, Admiral, but we are seeing reports today that the Pentagon is developing options for what they're calling a final blow. And occupying Carg island is one of them, as well as invading Laraq, if I'm pronouncing it right, the island that helps Iran keep control of the Strait of Hormuz and seizing the island of Abu Musa to that same extent. Are these battle plans that you have seen for years. Are these options that the Pentagon has been looking at for other administrations as well?
- [37:07]
Retired Admiral John Kirby
Well, I won't get into the details of operational planning or what I was cognizant of when I was in the uniform, but. But I can tell you that the US Military has long been looking at threats to the Strait by Iran and coming up with contingency plans for how to deal with those threats. I have no doubt that after I left service, the US Military and Central Command continued to refine those plans and those contingency operations. I'll leave it to the planners to speak about what they're thinking or what they may not be able to do. I would just tell you that if you're going to introduce ground troops, and that certainly appears to be an option the president has not eschewed. There is a whole new level of risk here and quite frankly, a whole new level of potential escalation of the war. Once you insert troops on the ground, then you're in a different kind of fight than we are right now.
- [37:57]
Bloomberg Anchor/Host
Well, of course, the president hasn't ruled that out entirely. And to your point about there being some things that you are not able to communicate publicly, obviously things can be classified for a reason and strategic ambiguous can be a real strategy. But I wonder if you see the administration as kind of straddling the line of not having credibility, either as they seem to President Trump or the secretary of State, the defense Secretary. Others aren't necessarily sending a consistent message as to what it is we are not only trying to do, but what it is we're willing to do to get there.
- [38:30]
Retired Admiral John Kirby
It's an interesting question, I think.
- [38:32]
Donald Trump
Why?
- [38:32]
Retired Admiral John Kirby
I swear spent a lot of my time focusing on the Pentagon briefings. I wish they did more. I wish they had more traditional media in the briefing room. But when you listen to General Kaine, the chairman of the Joint Chiefs, talk, or when you watch the videos by Admiral Cooper, the Central Command commander, you do get a clearer sense of what they believe their military objectives are what they've been ordered by the commander in chief to do. And it's pretty simple. They're pretty limited objectives. But then when you listen to the political messaging, it does tend to be all over the map. And it's very hard on any given day to. Is it unconditional surrender? Is it regime change? Is it just the. Is it just the nuclear program? Or now, you know, we're talking about maybe going after energy infrastructure on the ground in Iran. There's a lot of mixed messaging. This administration might contend that that's good, that that is strategic ambiguity, that that confuses the Iranians. But if you are, in fact, in the middle of negotiations, if you are trying to end this diplomatically, then clarity and concision in message is absolutely vital. Not just for the public that's paying attention, like you and I are, but for the Iranians, for your enemy, and for your allies, Israel. And it's not clear to me that the Israelis share the same strategic objectives as the United States in here, and they get a vote in how and whether this war ends. So clarity and concision and simplicity in the message as you approach negotiations is absolutely vital. And I would hope that we'd be able to see a little bit more of that than we have in the last couple of days.
- [40:02]
Bloomberg Correspondent/Interviewer
Admiral, you, of course, were appointed Pentagon press secretary by Chuck Hagel when he was the Defense secretary. So you know what it's like to stand up in front of that room and manage a press corps in a very sensitive environment here. And I'm curious what you. You make of the posture that this Pentagon has taken when it comes to journalists. Of course, we just saw a recent court ruling in favor of a lawsuit brought by the New York Times that struck down the administration's decision to curtail the activities of reporters. And in response to that ruling, the Pentagon says it's going to be kicking reporters out of the building altogether. They'll build an annex, some sort of outhouse on the property where reporters will purportedly be allowed to work, although they still won't be allowed to solicit information, even if it is not deemed classified. Is this all good for the country?
- [40:49]
Retired Admiral John Kirby
I think it's not only not good for the country, it's not good for the Pentagon, it's not good for Mr. Hegseth and his leadership and for what they're trying to communicate about the war effort. So I really hope that they revisit these policies and begin to allow more briefings to occur and more media to be in the briefing room for them. And to have the press back in the building, I think is important. Look, when you're talking about issues of life and death, war and peace, when you're talking about the US Military and the billions of dollars the American people are spending on their national defense and the literally millions of sons and daughters who are in uniform, the Pentagon has an obligation. It's not a privilege, it's not an opportunity, it's an obligation to explain what they're doing with those tax dollars and with those young men and women in uniform and how they're using those resources to keep the country safe. It's an absolutely sacred obligation. And I always looked at it that way from the podium. So did Secretary Hagel when I worked for him, Secretary Austin when I worked for him, that we had an obligation to get up there and explain ourselves. The other thing I would say about access to the press and having the Pentagon press there with you all day long, and they were with me all day long, is it makes you a better spokesman, it makes you a better policy leader because you get to hear what they're hearing from their sources. You get to understand what stories they're working on. You get an opportunity to maybe shape their thinking about those stories. And I think you also, quite critically, get a chance to make better policy because there's nothing better for policy than to throw it open to the scrutiny of an independent press every day and let them poke holes in it, let them ask the tough questions. You can actually, if you're wise and you're humble as Secretary Hagel in Austin, where you'll, you'll change your mind from time to time.
- [42:36]
Bloomberg Correspondent/Interviewer
Spoken by someone who's been there. Admiral, it's great to see you. We'd like to stay in touch with you as this entire story progresses. John Kirby, retired rear admiral, former White House national Security comms adviser, and a fascinating conversation you're only going to hear today on Bloomberg. 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
- [43:06]
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