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- [00:00]
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Oliver Crook
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- [01:01]
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.
- [01:24]
Kayleigh McEnany
We also have to check on the True Social feed from President Donald Trump because that is basically the only way we've been hearing from him in the days since the cease fire between the US And Iran were announced, and he has been using this platform to express some frustration, especially with the fact that the Strait of Hormuz, despite what he said when the cease fire was announced, what the White House said it expects, is still not really open for business. Only a trickle of vessels getting through all of them. Iranian Tide and President Trump's latest True Social post says the following the Iranians don't seem to realize they have no cards other than a short term extortion of the world by using international waterways. Read straight of Hormuz the only reason he says that they are alive today is to negotiate. And of course those negotiations are expected to happen tomorrow morning, Saturday morning local time in Islamabad between the US And Iran. Iran is saying today those negotiations cannot start unless there's a ceasefire between Israel and Hezbollah in Lebanon and its assets are unfrozen. So there's still a question mark as to whether Iran is willing to show up to the table at this time. But the Vice President of the United States, Vance is already on his way. He boarded Air Force Two earlier this morning, sharing this message before he did.
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Jeannie Shanzano
So we're looking forward to the negotiation.
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Kayleigh McEnany
I think it's going to be positive.
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Oliver Crook
We'll of course, see, as the president
- [02:42]
Jeannie Shanzano
United States said, if the Iranians are
- [02:44]
Kayleigh McEnany
willing to negotiate in good faith, we're
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Oliver Crook
certainly willing to extend the open hand. If they're going to try to play
- [02:49]
Jeannie Shanzano
us, then they're going to find that
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Oliver Crook
the negotiating team is not that receptive.
- [02:54]
Kayleigh McEnany
So for more, let's turn to Bloomberg's Tyler Kendall, our Washington correspondent who is live on the North Lawn of the White House. So, Tyler, the stakes are high and we have a lot of unanswered questions here.
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Tyler Kendall
Exactly, Kelly. I mean, you outlined it perfectly. We got this post from President Trump within the last hour expressing frustration about how the Strait of Hormuz still remains closed, even though that is one of the top US's demands in order for the cease fire to go forward. And also expressing some frustration as we get these reports that Iran wants to see some of these additional demands that you mentioned, including a cease fire in Lebanon met before these talks can progress. Now, this White House has maintained throughout the week that a cease fire in Lebanon was never part of any of the discussions for this truce. While we heard from the Israeli Prime Minister Benjamin Netanyahu earlier today who said that operations against the Iranian backed militant group Hezbollah will continue, though reaffirmed that Israel is set to have direct talks with Lebanon here in Washington next week. Amid all of this uncertainty, the New York Post is now reporting that President Trump is making plans for additional strikes on Iran if these talks fail. Not necessarily surprising considering President Trump reiterated earlier this that he would keep military assets in the region. Because, Kelly, at this point the White House says that diplomatic efforts are moving forward. We already know Vice President JD Vance is on his way to the region accompanied by the special envoy Steve Wyckoff and the president's son in law, Jared Kushner. But there is going to be a lot that we need answered as it appears, at least publicly, the sides are very far apart and as you well know, of course, most notably when it comes to the closure of the Strait of Hormuz, Kayla Kelly, data analyzed by Bloomberg News shows that since the cease fire was announced, only nine vessels have been allowed to either exit or enter the critical waterway.
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Kayleigh McEnany
Well, and Tyler, the Strait of Hormuz obviously, yes, is, is vastly important in these conversations, but so too is Lebanon and Israel's activity there. We've had the president suggest in various phone interviews that he expects the Israeli Prime Minister Benjamin Netanyahu to low key. It I think was one quote from him in his conversation with NBC. And yet Israel is continuing these strikes against Hezbol target. So how big is the gulf right now between the Israelis and the US that to this point have been acting in lockstep?
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Tyler Kendall
Right. I mean, at least publicly, Right? They have been. Although we did get this reporting yesterday from NBC News that President Trump had called the Israeli Prime Minister Benjamin Netanyahu directly and asked him to scale back the strikes. At the same time, though, we know that Israel is dealing with its own domestic pressures when it comes to combating the militant group. And pretty incredible reporting, reporting the Bloomberg big take out today shows that there has been a divide between US and Israeli officials when it comes to just exactly how far this war ultimately should go. So you're right, it's at this point emerging as a major roadblock to these ongoing negotiations. But at the same time, this White House has maintained publicly that this was never part of the agreement to reach this two week cease fire and truce. But amid international pressure for Israel to scale back these attacks, we'll have to see how it develops because at this point, what has been put on the table is that we are going to see at the ambassador level talks between Israel and Lebanon about potentially disarming Hezbollah next week here in Washington held at the U.S. state Department.
- [06:29]
Kayleigh McEnany
All right, Bloomberg's Tyler Kendall live on the North Lawn of the White House. Thank you so much. Joining us to talk about all of the various things that need to be figured out in order for a longer term deal to actually materialize. Of course, the vice president, J.D. vance, said at least to some extent, he's optimistic as he departed today. And we know President Trump has been pushing for this, although he has also suggested that it's really Iran that wants the steal the most. Just listen to what we have heard from the president over the course of the last two weeks about the prospects for this agreement.
- [07:01]
Jeannie Shanzano
All I can tell you is they're begging to make a deal. If there is no deal, we are going to hit each and every one of their electric generating plants. We have to have a deal that's acceptable to me. And part of that deal is going to be we want free traffic of oil.
- [07:16]
Kayleigh McEnany
Well, so for more we turn to Republican Congresswoman Nicole Malliotakis of New York, who is in our New York headquarters right now joining us on Bloomberg TV and radio. Congresswoman, it's wonderful to have you back on balance of power. I think clearly there is a sense in the White House here in Washington that the hope is that diplomacy prevails. But the president maintains that there is the military threat still there that he is willing to use if necessary if no deal can be reached. In the absence of a diplomatic breakthrough this weekend, would you be supportive of the president resuming military operations and specifically going as far in those as he has indicated he is willing to?
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Nicole Malliotakis
Well, look, we don't know the specifics of what he means by military action. What we do know is that he has three leverage points, right? He has the economic, which we've implemented, multiple sanctions, sanctioning those who are providing support and equipment and missiles to Iran. We also have the diplomatic, which is going to be taking place this weekend. And then you have the military, which we've seen the decimation of so much of Iran's capabilities, whether it be manufacturing capabilities of drones and missiles or whether it be the overall components of its military, naval and air. So look, I think that we need to really just wait and see what happens this weekend, but I have faith that we'll be able to get a good outcome. Obviously, the strait is the most important thing right now for us economically. Making sure there is that free flow of oil, making sure that these gas prices come down, that is critical for so many of our world partners as well. But we need to make sure that Iran is removed as a threat. And we've already made a tremendous amount of progress in a short time frame. And we'll see now that they are weakened if we will be able to make some more progress in these negotiations because they are in a much weaker position today than they were just five weeks ago. And president did give them, remember at the beginning of all this, gave them an opportunity to negotiate, they wouldn't negotiate. Maybe now they're rethinking that.
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Kayleigh McEnany
Well, to your point, Congresswoman, about the importance of the Strait of Hormuz economically, you said specifically it is important economically for the United States, which is something that the president has disputed. His argument is that actually when it comes to the energy flowing out of the Middle east, that is much more a concern for other countries, European, Asian ones, not so much for the United States. Is that a sentiment that your constituents would agree with, especially as they're looking at prices at the pump, as you alluded to?
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Nicole Malliotakis
Well, he's right in the sense that the oil that is going through that strait really goes to many of our partners in Asia, but it does affect the overall world market. So I think that it is kind of both, a little bit of both. The reality though, here on the ground here in my community as well as parts of this, the country, gas prices have increased. We need to get those prices, those prices back down. We were under $3 a gallon. About $2.89 was the national average. And I think this is a temporary spike and it is an important long term investment that is being made for the security of our country, for the Middle east and the world. The reality is we need to make sure Iran is weakened here and that there is regime change that is important, I think, because they continue to try to kill Americans. They've attacked our military bases over the last decades. They've killed Americans, they've killed their own people, tens of thousands of their own people. And we need to make sure that there is a change there because they are the most destabilizing factor in that Middle east which affects the entire globe. And so I think the objective here is to come out of this with some type of agreement to open up that strait. If he can get them to turn over any enriched uranium, that's also critical. We need them to stop funding these proxies, Hamas, Hezbollah, Houthis as well. And that should be really the main objectives of this. And I think, again, they're in a much weaker position today than they were five weeks ago. So hopefully the United States in these negotiations can extract those concessions.
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Kayleigh McEnany
Well, and what role should Congress play, if any, in ultimately the finalization of an agreement? As we know, the the President didn't ask you and your colleagues first before launching these operations. You didn't have a direct say. But should there be a say in how this ends? Senator Lindsey Graham, of course, who has been an advocate for this war, says any agreement should have a vote in the Senate, that they should get to take a look at it. I wonder if you agree with that, with that notion.
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Nicole Malliotakis
I don't know that we need to have a vote on a particular agreement. The President did abide by federal law. He gave the federal, he gave the federal government or his partners in the federal government, Congress the 48 hours notice that was necessary. The President does have under the War powers resolution of 1973, 60 days. And so I think after that 60 day period, he certainly should come back to Congress. We should be briefed and updated on what is going on and we should talk about the next steps together. But I think that we have faith in the President's negotiating ability here. We've seen what he's been able to do with other conflicts around the world, helping mediate conflicts around the world. And he is, you know, known as the dealmaker. So let's see what comes out of this weekend before we discuss Next steps.
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Kayleigh McEnany
Well, I'd also like to talk about the next steps for lawmakers, for you and your colleagues in the House as you get set to return from recess next week. Pretty quickly, it seems you're going to have to take action on a reconciliation bill to fund at least parts of the Department of Homeland Security. The president wants it on his desk by June 1. What is your expectation as to how quickly this will get done and if it is going to be narrowly targeted to just those specific components of the Department of Homeland Security or if other members may want to be adding things to this package?
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Nicole Malliotakis
I think it's important that we fund the entire Department of Homeland Security that does include ICE and border protection. And just over the last few weeks we saw multiple American citizens in multiple states killed by people in the country illegally. And it is unfortunate that with the changes that have already been made to ice, some of the de escalation that we've seen in cities as well as the removal of Kristi Noem from the agency, the Democrats will not work with us in a bipartisan manner to fund those critical agencies that do important jobs knowing who is coming in and out of our country and removing those who should not be here. We just saw an 83 year old man here in New York City killed, being thrown in the subway tracks by somebody who should not have been here and had multiple prior arrests. There was a lack of cooperation between these municipalities and our federal government to have that person removed prior to this 83 year old veteran being killed. Completely preventable. We've seen that taking place again over the last few weeks of multiple states. So I think that we're going to go in there and fund this agency and we're going to have to do it with only Republican votes through reconciliation. Then we will work together to get that done. We were hopeful that the Democrats would work with us in a bipartisan manner, but clearly that has not happened. And the reality is this agency needs to be funded. It's the 25th anniversary of 9 11. You have the FIFA World cup coming. You have all these America 250 events happening. This can no longer be delayed. The agency needs to be fully funded from Coast Guard to TSA to ICE to CBP to counterterrorism to cybersecurity.
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Kayleigh McEnany
Well, and to be clear, Congresswoman, to get all of the parts of the agency fully funded. Are you supportive of the plan to pass the Senate, pass DHS funding bill, ICE and CBP and then handling those portions with reconciliation? That two track plan is that one
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Nicole Malliotakis
that works for you, that may be the only way we can get it done. But a lot of members, including myself, would like to see ICE and CBP funded first. Now, if the White House can reassure us that they have the necessary funding to fund those organizations, because we remember we did this in the first reconciliation, we did put additional money in there so ICE can continue its operations and enhance those operations if they have the resources. Perhaps we'll be able to do the other parts first. But I think a lot of members would feel a lot better knowing that we're funding ICE and CBP first or at the same time as the rest of the department.
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Kayleigh McEnany
Well, and of course, this is reconciliation 2.0 that we're talking about here. But Congresswoman, I'm sure you're well aware that there's a lot of buzz about a third reconciliat package. In fact, your chair on the House Ways and Means Committee, Jason Smith, has suggested if there's going to be one, there's going to be some tax measures included. What would you like to see included in a third reconciliation package, do you think achieving that that is as a realistic legislative outcome in a midterm election year?
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Nicole Malliotakis
Look, I think that, well, first of all, what I think we really do need to do is address some of the expiring provisions. We have a film tax credit. There's a NASCAR tax credit, things that are important for our local economies that have expired that need to be addressed and that could be done in a bipartisan way. It doesn't necessarily need reconciliation. But no doubt that Ways and Means will play a big role if there is a third reconciliation bill. Look, we delivered a significant tax cut for middle class families. We are seeing the benefits of that take place right now in my district. The SALT deduction is helping New Yorkers. The senior deduction are helping 88% of seniors across the country get refunded to them. What they paid in taxes on their Social Security tipped workers are seeing an average increase of about $1,300 in savings. So are many overtime workers. So we delivered a significant product that was, yes, tailored to the middle class. But let's not forget the significance of what President Trump did going back to 2016. Now, if you look at 2017, when he came in and passed that initial bill, you have seen tax revenue, despite the tax cuts, tax revenue increase as well as our GDP Significantly from 18 trillion to about $31 trillion.
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Kayleigh McEnany
All right. We have to leave it there. Thank you as always for joining us. Republican Congresswoman Nicole Molly talk is of New York on Bloomberg TV and radio.
- [17:29]
Jeannie Shanzano
Stay with us on Balance of Power. We'll have much more coming up after this.
- [17:36]
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- [18:50]
Podcast Host
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- [19:08]
Kayleigh McEnany
We get set to close out the trading week, but the most important event of this week is actually going to come potentially on the weekend. Tomorrow morning, Saturday morning, local time in Islamabad is when US And Iranian talks are scheduled to take place. And we've heard from this White House on the prospect of a negotiated agreement being within reach that the conversations that are happening privately are very different than what the sides are saying in public. But I just want to give you a taste of the public messaging we are getting from both sides right now. Ahead of these conversations, take the latest true social post from President Trump, who says the Iranians don't seem to realize they have no cards other than a short term extortion of the world by using international waterways. That waterway, of course he's referring to is the Strait of Hormuz, which was the subject of another post he made publicly last night. Iran is doing, he says, a very poor job, dishonorable some would say of allowing oil to go through the Strait of Hormuz. That is not the agreement we have have. Iran would suggest that the agreement it has also is not being adhered to. As the speaker of the Iranian parliament says that two measures mutually agreed in his words, by the parties have yet to be implemented, a ceasefire in Lebanon and the release of Iran's blocked assets prior to the commencement of negotiations. He says these two matters must be fulfilled before negotiations begin. So if there's still things that need to happen for this to even get started, what does that mean for Vice President J.D. vance, who was already on his way to the table? He boarded Air Force Two earlier today and set off for Islamabad as he is charged with leading the delegation in these high stakes negotiations. And it's that decision for J.D. vance to take the helm here that I got into yesterday with Natasha hall of Chatham House.
- [20:53]
Nicole Malliotakis
I think the choice of JD Vance as the as the negotiator says a lot right there because as you mentioned,
- [20:59]
Kayleigh McEnany
he was probably opposed to this war to begin with. So maybe this is the softer side of the US Administration going into these negotiations.
- [21:06]
Nicole Malliotakis
But you know, as Mackenzie just mentioned,
- [21:09]
Kayleigh McEnany
you know, the Iranians are very skilled negotiators.
- [21:12]
Nicole Malliotakis
They know all of the ins and outs of the United States of motivations. They know all the details that need
- [21:18]
Kayleigh McEnany
to be hammered out.
- [21:19]
Nicole Malliotakis
It's not clear to me that J.D. vance, for all of his knowledge is as has as much background.
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Kayleigh McEnany
So how tough is this going to be for the Vice president? Let's get into this now with our political panel. Jeannie Shanzano is with me, Bloomberg Politics Contributor, Democratic Analyst and Democracy Visiting Fellow at Harvard Kennedy School's Ash center alongside Lisa Kamusa Miller, Republican Strategist and founder of Friday Reporter Public Affairs. Lisa, the decision for J.D. vance to to lead these conversations obviously is an interesting one given his previous anti interventionist bent, especially in the Middle east, especially considering the idea that he may be a leader in the 2028 Republican field or the one that is tapped. Is this a make or break moment for him and his political future?
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Lisa Kamusa Miller
That's a great question, Kayleigh. The thing that sort of that strikes me is that they've sent him, as you previously said, and he has been reported to not have been in favor of the conflict in Iran the way that it has unfolded. But the one thing that we all have heard over the course of time is that no decision in this administration is made without the blessing of the President. So perhaps he is there because he is the mouthpiece and the representative of the administration, but I'm not necessarily convinced that he will have as much of a say in what decision is made as opposed to being perhaps the representative of the White House and the President himself. So I am curious about how this will go, but it's also, to me, very much an indication of how this administration operates and works, and that is that the president himself has the final say in all of these decisions. And ultimately, that is what J.D. vance will have to do and will do, whether or not it affects his own political success as it relates to his future. Hard to tell. Kelly. It will be something Democrats, regardless, will be taking very close note of and will be using against him if it does not go well in future debates and discussion. But you and I and Jeannie all know that the attention of the American people and the voting electorate is quite a bit shorter than what we'll be watching this weekend. And so for him, this is a big moment, but it certainly will be one moment in many that we'll be paying attention to over time.
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Kayleigh McEnany
Yeah, of course, there's still a long way to go until 2028. I just think it's interesting that, that the president even publicly has said he likes J.D. vance, he likes Marco Rubio, they both would be wonderful presidents. And it is not the Secretary of State that is leading this charge right now. It is the vice president. And I wonder if that is telling in some way. But, Jeannie, obviously the domestic political considerations here at home are really secondary to the wider geopolitical ramifications of these negotiations, should they happen this weekend. Iran is suggesting, as I mentioned, that these can't even get started until two things change. Its assets are unfrozen and there's a ceasefire in Lebanon, which Israel right now does not seem like it is, at least at this time, ready to agree to. So is there a very real chance that the vice president, the second highest official in the United States government, shows up in Pakistan and gets stood up? I mean, what would that, what would that mean for the United States and its credibility?
- [24:46]
Podcast Host
I do think it's a real possibility. And, Kayleigh, I'm still stuck on the truth Social. You read where the President is saying that Iran has no cards except to hold the entire international economy in a stranglehold. That's quite a card to play. So that I'm trying to get over that. Yeah, it is possible. And the reason it's possible is because the United States under Donald Trump has been desperate to get Iran to the negotiating table. We are the ones who approached Iran we are the ones who asked them to put forward this peace plan or this cease fire plan, if you will. It is the president who said that Iran's ten point plan was something that we could work with as a basis for negotiating. And everybody should read that 10 point plan because if the president of the United States said that's a basis for negotiating a settlement on this thing, Iran is going to win big time in this. Iran knows, unlike what the president said on Truth Social, that it is holding enormous cards, many more than it was holding 30 days or 40 days ago when he started this thing. And so that is why they feel fine to get out over their skis again and say, you know, in addition to all of this, we also want you to unfreeze our assets and we also want there to be a truce or a cease fire in Lebanon and who knows if they ask for more. You've been talking a lot about the fact that the speaker of the Iranian parliament came out and said these things. We also have the Ayatollah who has come out and said, hey guys, there is new management of the strait and Iran is in control of it. That is an absolute red line for Saudi Arabia, Qatar, the uae, in fact, most of the world. And Donald Trump has waffled about whether that matters or not. So this is where the United States goes in. This is where JD Vance is going in. And it is Donald Trump who said just the other day, if J.D. vance fails, well, this is all on him and we're on blame him if he wins. Wins. I'll take, I'll take the win for myself. So it is quite a thing to work for Donald Trump. And J.D. vance, I'm sure, knows that a year or so into this, at this point,
- [26:55]
Kayleigh McEnany
well, and to Jeannie's point, on the idea of a toll being required to transit the Strait of Hormuz, the president had a suggestion in an interview that maybe the US Would get in on that, that that could be some kind of profit sharing arrangement going forward. But then has since gone on to say that there should be no toll. He said if Iran is doing that, they need to stop now. So speaks to the kind of mixed messaging we continue to get around this conflict. Lisa, I also wonder about the kind of third party in all of this that is not going to be present at the negotiating table this weekend, and that is Israel. Israel cannot send a delegation in part because Pakistan doesn't even recognize the state of Israel, which kind of underscores the, the tension around the Middle east as a whole. That is the background context to all of these conversations. But we've had an ongoing conversation since this war began about to what extent the president's president's decision to start this in the first place was influenced by Benjamin Netanyahu. Is there a real chance that Netanyahu got President Trump into this and is going to be the biggest, biggest impediment to getting him out if Israel is not willing to stop what it's doing in Lebanon in the name of a wider ceasefire?
- [28:03]
Lisa Kamusa Miller
Well, if anybody is paying attention to what's happening there as it relates to who is influencing the president's decision, it's me, and it's you and it's Jeannie. And there is no question, based on the reporting that I have seen, that he has had a very heavy hand in how this decision has come together. Yesterday there was plenty of discussion about the TikTok of how this all came to pass. So it would be surprising to me if the White House, J.D. vance, or and the president haven't already considered what it is Israel and Benjamin Netanyahu want to see happen in these negotiations this weekend. So as much as they are not there in the room, they are certainly there in spirit with their own points of view and thoughts. And I think that the White House and the administration will keep that in consideration as they're going through the process that is set to unfold. It will be part of the discussion whether or not they are in the room or not.
- [28:59]
Kayleigh McEnany
Well, so Jeanne, weigh on this, in on this as well. We were having this conversation yesterday as the DNC and its spring meeting in New Orleans was taking up a number of resolutions or going to vote on them pertaining specifically to Israel, whether it was the influence of APEC and funding in primaries or recognition of a Palestinian state. I just wonder as we're having this live conversation about Israel's influence on the Trump administration and the problem it may be causing for him and Republicans as a result of that in this war. If this is still an issue that Democrats are not sure how they would like to approach,
- [29:37]
Podcast Host
I think it is an issue that has split Republicans and Democrats. And I think that's absolutely clear. And I think you can see that on the Democratic side with the minority leader in the Senate, Chuck Schumer, who was just one of many people that said when it pertains to this cease fire, let's be clear that Israel is profoundly unhappy with the cease fire. And to Lisa's point, there has been a lot of reporting about the work they did, even as far as being beamed into the Situation Room, maybe a first of its kind to help convince the president because they were unable to convince his predecessors to go into this war. And of course, they do not want to end this war as it pertains to either Lebanon or Iran until they've achieved their goals. And of course, they have not achieved their goals or objectives. So they don't want this to end. And I think that's what raises questions about to what extent will Benjamin Netanyahu have the ability and the Israeli to undermine what the president is asking for by way of his push and pull to get this thing to the negotiating table. So Israel, to your point, is a huge, huge presence in these negotiations and of course, in a country that doesn't even recognize it. I mean, this is how far back and difficult this goes for these negotiations.
- [30:57]
Kayleigh McEnany
All right, Jeannie, Shan Zaino, Lisa Camusa Miller, our political panel On Balance of Power on this Friday. Thanks for being here on Bloomberg TV and Radio.
- [31:04]
Jeannie Shanzano
Stay with us On Balance of Power. We'll have much more coming up after this.
- [31:11]
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- [32:11]
Podcast Host
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- [32:28]
Kayleigh McEnany
Checking on the markets on this Friday. Of course, the big event of the week is set to happen Saturday morning in Islamabad, Pakistan. That is where negotiators from the US And Iran are at least scheduled to meet for conversations on a longer term end to this conflict. That has of course now in a third day of a ceasefire but drug on for more than a month. Iran maintains today that some conditions need to be met first before these conversations can begin. One being a ceasefire in Lebanon, the other being the unfreezing of Iranian assets. Was this really pre agreed as the Iranian speaker of Parliament suggests, or is this potentially a moving of the goalposts ahead of negotiations, knowing that the US Also says that things that it thought the US and Iran had agreed to have also not yet materialized, including the reopening of the Strait of Hormuz. President Trump on True Social yesterday, suggesting that the Iranians were being dishonorable in not opening the strait. And of course earlier this afternoon taking to True Social on the Strait of Hormuz specifically, and the idea of it being, being around a piece of leverage. He says the Iranians don't seem to realize they have no cards other than a short term extortion of the world by using international waterways. So that is the backdrop to which we begin our conversation with Mick Mulvaney, the former acting White House Chief of Staff in the first Trump White House. Also of course, former Congressman from South Carolina, co founder of the House Freedom Caucus, also former Director of the Office of Management and Budget in the first Trump administration. Mick, welcome back to Bloomberg TV and Radio. The last we spoke with you, the ceasefire had not yet begun. But you, you told us here at Balance of Power that the President cannot end this until the Strait of Hormuz is open. You have seen his frustration now over the course of the last several days that despite this cease fire being in place, that still has not materialized. What lesson do you think he's learning here about whether or not the solution to this is going to be as easy as he hoped he would. Not saying that it was easy, but the idea that there can be a clean wrap up of this and the free flow of transit in this waterway.
- [34:30]
Nicole Malliotakis
One more.
- [34:31]
Jeannie Shanzano
Yeah, I think there's an axiom, I think in the, in Middle Eastern politics that the reigns have never won a war and they never lost a negotiation. I think Trump is starting to realize that right now that these are, these are tough negotiators. He's right. They've only got, you know, they don't have a lot of cards to play, but the one card that they play is a significant card. If you really can shut down the Straits of Hormuz for a period of time, that is a tremendous piece of leverage. And believe me, Donald Trump understands leverage as much as anybody else. You know, look, I don't know what the agreement was. You don't know what the agreement was. I don't think anybody knows what the agreement was. The point of the matter is there's no agreement. The Iranians say X, we say Y. The bottom line is the straits are still closed. So they might not be active military engagements right now, but this war is still going on. And this issue is not resolved. That Donald Trump needs and wants to resolve it quickly. But I think, again, as we talked about last week, he's finding it's going to be much more difficult than I think they expect.
- [35:25]
Kayleigh McEnany
You say he needs and wants to resolve this quickly. Is he being too obvious about that in public and giving the Iranians a stronger hand at the table?
- [35:33]
Jeannie Shanzano
Mick, you know, look, I'm not going to give Donald Trump negotiating lessons. He's better at it than I am. But I don't think it takes a rocket scientist to figure out that, you know, he has telegraphed that he wants an off ramp here. I mean, how many different outlets have talked about that? How many different, how many times have has he talked about it that he wants this war to end and so forth? The Iranians don't need the war to end. They just need not to lose. This is a war of resistance and survival on their part. Time is not part of their, their, their calculation right now. It is when it comes to the United States because the straits can't stay closed forever because the world economy will choke, including ours. So, yeah, to the extent that the Iranians do have that one card, as Donald Trump mentioned, it's still a heck of a card.
- [36:20]
Kayleigh McEnany
Well, so what does it say to you, Mick, that The vice president, J.D. vance, is the one who has been entrusted in trying to, to spearhead the solution here alongside, yes, the envoys that Trump has long gone to for negotiating various geopolitical disputes, Steve Wyckoff and Jared Kushner. But it is, it's JD Vance who is en route to lead this delegation in Pakistan. What do you make of this selection?
- [36:43]
Jeannie Shanzano
Yeah, I know a lot of folks are trying to read into the tea leaves on this, on, oh, my goodness, it's J.D. vance and not Marco Rubio or something like that. I wouldn't read too much into that, Caylee. This is the issue here is who does the president trust to go and deliver a message? And you can trust Marco Rubio and J.D. vance or both under those circumstances, or Witkoff or Kushner, it doesn't make any difference. But what I think folks need to realize is regardless of who Trump sends, none of them really speak fully for him. Donald Trump is the only person who speaks for him. That was the case in the first term. It's the case in the second term that you can go, you could be the Secretary of State, you could be the Vice president, you could be the Chief of staff, whatever. But you're not there to make your own calls. You're there to sort of, you know, deliver information from the president and take information back. And JD Is going to be perfectly capable of doing that and a reliable source for the president. It's a. Look, there's a parallel here that, you know, when Mike Pence took over the, the, the, the COVID task force back in 2019, it wasn't because Mike knew more about COVID than, say, the Health and Human Services secretary did. It was just the president trusted him to run the process. And I think you're seeing the same thing here with J.D. it's not that he knows more or less than Marco Rubio, it's just that Trump trusts him.
- [37:54]
Kayleigh McEnany
Well, and when you say that all of this comes down to the decision making of President Trump, is that to say, Mick, that once again, Congress, Congress is. Has no role to play here, didn't have a role in how it started, isn't going to have a role in how it ended. Even as Senator Lindsey Graham, who has been one of the biggest proponents of this war in the first place, says, look, if you want to make a deal with Iran, especially if there's a nuclear component, you have to bring that to the United States Senate first.
- [38:18]
Jeannie Shanzano
Yeah, really good question. That is a difference from COVID So what I would say to my good friend Lindsey Graham is, okay, maybe. But I tell you this, the one thing that Congress can do, they can't keep the war going if Trump. Trump doesn't want to. Okay, if Trump says, I'm bringing the troops home, Congress, Congress can declare war, but they can't prosecute the war. So as much as Lindsey would want the war to go on for a really, really long time, Congress doesn't have that authority. They do, however, have the other side of that equation. They can stop it because the Pentagon is going to run out of money, they need the $200 billion to continue to prosecute the war, and Congress could say no. I know a lot of folks have talked back and forth about, oh, Trump didn't go to Congress as required, the War Powers act, always got 60 days under the WPA, etc. I throw all that out the window. It's an interesting constitutional discussion for another day. But from a practical standpoint, this is about the money and either Congress is going to approve of what Trump is doing and give him the $200 billion he needs to continue the war, or they are not going to give him that $200 billion, in which case the war has to stop. It's a very, very difficult situation for Trump to be in. It's a difficult situation for Congress to be and I've never seen, seen an overseas contingency operation money, emergency spending for the war fail. But it could in this particular circumstances. So that will be fascinating to watch. My guess is, Kelly, by the end of next week, I think maybe the week after that, they're going to have to start having hearings on this.
- [39:44]
Kayleigh McEnany
Well, that'll be interesting indeed, as there's a lot else on Congress's plate as they get set to return from recess next week, including Mick, as you know, reconciliation package to fund ICE and CBP that the President says he wants on his desk by June 1st. In fact, the aforementioned Senator Graham and Senator John Barrasso are going to be meeting with Trump at the White House about that this afternoon. The idea is that this will be a narrowly tailored package, really just focus on these two things in the name of expediency. But how messy could even that effort get?
- [40:12]
Jeannie Shanzano
Really messy. Really messy. You know, people, I don't think folks understand, you know, what reconciliation is. You can't, reconciliation is just not, oh, we can't pass something with 60 votes, so let's use reconciliation and pass that same thing with 50. That's not how it works. Reconciliation is a specific to the budget process, specific to the spending process. And you can't just say, okay, we're going to approve DHS funding on the reconciliation and we're going to approve $200 billion for the military and that's it. That's not, that would be ruled out of order in the Senate. And unless they want to overturn the parliamentarian, that, that's not going to see the light of day. They have to find a way, way to pay for it. Reconciliation is part of the budget process and it has to be at least budget neutral, which means if they want to spend 250 odd billion on the war plus DHS, they're going to have to find $250 billion worth of offsetting cuts. And that's where it could get really, really nasty. Because as you get closer and closer to the midterms, it's a lot of folks, even Republicans, who don't like to vote to cut spending. So, yeah, this is going to be, that's why this how often do we hear this in life in general in Washington, D.C. see, follow the Money. And this debate about money is going to be absolutely insightful as to where we are in the war.
- [41:19]
Kayleigh McEnany
Well, in our final moment, Mick, I want to follow the money in another way. The activity we're seeing in prediction markets that, at least for some traders, have been quite accurate in terms of the timing of events like a war in Iran or the capture of Nicolas Maduro in Venezuela. You, of course, are heading up a new coalition. Gambling is not investing. So just quickly, what was your reaction to the reporting we've seen today that in March the White House actually sent out a memoir to staffers warning them not to make bets on information they may have.
- [41:46]
Jeannie Shanzano
I saw that piece. And very briefly, here's my response. If the markets are functioning properly and they're being overseen properly, you don't have to send out that message. So you got to ask yourself, why did the White House send it out?
- [41:58]
Kayleigh McEnany
Gotta ask ourselves, indeed, we'll have more on that hopefully next time you join us, Mick, always great to have you. Mick Mulvaney, of course, the former acting White House chief of staff in the first Trump term, former congressman from South Carolina as well, here with us on Bloomberg TV and Radio. Now, we also want to talk about what else is going on outside of domestic affairs and in geopolitics. Yes, the war in Iran is huge and the talks this weekend will be major. But another big event is happening this weekend in Hungary, an election on Sunday which could spell out the end of Viktor Orban, 16 years in power. So for more on that, we turn to Bloomberg Europe correspondent Oliver Crook, who is live in Budapest, Pest for us. Oliver, obviously we saw Vice President J.D. vance, before heading to Pakistan, spending days in Hungary to advocate for Orban. Is it likely to pay off when the votes are counted?
- [42:46]
Oliver Crook
Yeah, that's the big question here, Kelly. If you look at the polls and everyone I speak to, if this is going to be a free and fair election, it's really going to go in the way of the opposition candidate, Peter Magyar, who's really staged a spectacular electoral campaign. He's really been campaigning for about a year and a half, half really went back to basics, you know, walked across much of the country to shake hands and really give a different vision of the future from president or I should say Prime Minister Orban, but in some ways has really stuck to the Orban playbook while he's sort of advocated a more sort of liberal economic policy, potentially being more pragmatic when it comes to Brussels potentially unlocking those 20 billion euros of frozen EU funds that Orban has lost because of rule of law concerns. He's also been intensely nationalistic. He's been very hedge in terms of his way of working towards in terms of Ukraine. So there are a lot of questions still open in terms of what his political agenda will be. But gayly we should say that this would be really a remarkable feat for somebody who was once part of Orban's party in a year and a half to topple what is the longest current running European legacy in terms of political dynasty here. It's been going for 16 years. Orban trying to get his fourth consecutive term, fifth term in total, and something that seems very likely going into this weekend, despite all of the concerns that there have been been around the fairness of the election of which there are a great many.
- [44:00]
Kayleigh McEnany
Well, and that's actually what Jenny Vance was arguing when he was in Hungary, the idea around the fairness of the election and election interference to the detriment of Orban. I don't know what you make of that, Oliver, but when we consider the wider ramifications here for, for the Trump administration, for the U.S. for Europeans who are looking at Russia as well, just how significant is what happens in Hungary to what, to outside Hungary's borders?
- [44:26]
Oliver Crook
I think it's really rare to find a country that's only about a quarter trillion dollar economy, about 10 million people, that has so much significance on the global stage. And you see it really everywhere. And everyone sort of lobbying in their own way to try to get their interests through. As we say, the EU has frozen funds coming to Hungary. That is part of the political contract that the Hungarians have with the European Union. That may be what J.D. vance was alluding to, to. But of course he's saying that while standing on stage with Viktor Orban and effectively campaigning for the prime minister of Hungary, which is a very rare event, you don't tend to see that from a U.S. administration. We had Marco Rubio here also after the Munich security conference and Donald Trump sent a video message again endorsing, endorsing Viktor Orban. And that's largely because they sit on the same side of what they see as the culture war, really trying to advocate for the American MAGA interests within the European Union. But it's not just the Americans, it's not just the eu. Cayleigh, as you know know, it's Moscow as well. I mean, there was a ton of reporting about the possibility that the Russians were considering a sort of false flag operation. In which they might stage an assassination attempt of Viktor Orban. We printed this week that transcript of that call between Orban and Putin back in October, in which Orban very, very openly said to Vladimir Putin, listen, I'm here at your service. So a ton of countries with a lot of invested interest in terms of how this election will shake out on Sunday.
- [45:41]
Kayleigh McEnany
All right, Bloomberg's Oliver Crook live in Budapest. Thank you so much. Sunday, big day. Saturday, a big day. As well as US And Iran talks are slated to happen in isl. We'll have more on that, the lead edition of Balance of Power right here on Bloomberg TV and Radio.
- [45:56]
Jeannie Shanzano
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 for many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships and traditional expect around masculinity can quietly wear men down, often without clear warning signs. In season three of the Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of the Visibility Gap, a podcast presented by Cigna Healthcare. From coast to coast, Unlock adventure at Red Lion Hotels by Sonesta, where restlessly
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