Trump Spars With Disaffected Senate

Summary

Balance of Power Podcast Summary – June 25, 2026

Episode: Trump Spars With Disaffected Senate

Host: Bloomberg (Joe Mathieu, Kailey Leinz)
Guests: Kay Bailey Hutchison, Tyler Kendall, Steve Ellis, Jeannie Shanzano, Katie Frost

Main Theme

This episode dives into the ongoing legislative gridlock in the Senate as President Trump withholds his signature from the bipartisan housing bill, insisting on passage of the “Save America Act” first. The conversation expands to US international commitments, defense spending, the evolution of the Democratic Party with leftward primary results, and fiscal debates over supplemental war funding.

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Key Discussion Points & Insights

1. Trump Delays Housing Bill, Pushes “Save America Act”

• Overview:

  • The Senate has adjourned for a two-week break without sending the bipartisan housing bill to the White House. President Trump is withholding his signature, demanding the “Save America Act” pass first.

• Key Details:

  • The housing bill garnered significant bipartisan support (85 Senate votes).
  • Trump wants to see lower interest rates as the main solution for housing issues.

• Memorable Quote (Trump):

  “I made billions of dollars with housing. I know housing better than anybody, maybe anywhere. It's all about the interest rate. Lower the interest rates, you can have all the housing you want.” (01:22)

• Analysis (Tyler Kendall):

  • GOP House leadership is trying to merge priorities through a reconciliation package, but faces pushback from fiscal conservatives.
  • The risk is that other legislative priorities may get attached, complicating the process further.
  • Timeline for resolution by July 4 appears unlikely.
    (02:23–03:49)

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2. NATO Relations and the President’s Foreign Policy

• Context:
  • Fresh off meetings with NATO Secretary General Mark Rutte, President Trump’s commitment to alliances like NATO and support for Ukraine is under scrutiny.
• Key Topics Covered:
  • Secretary Rutte highlighted U.S. leadership, commitments to defense spending, and the strategic importance of the upcoming summit in Turkey.
  • The concept of “NATO 3.0” – a stronger, especially more independent, European pillar within NATO.
• Notable Quote (Rutte):

  “Europeans have to step up. This is NATO 3.0. A stronger European, a stronger NATO.” (05:48)

• Analysis (Amb. Kay Bailey Hutchison):
  • G7 progress is encouraging for transatlantic unity.
  • Frustration over some allies’ reluctance during Iran crisis negotiations.
  • She disputes the notion that NATO is a “paper tiger” and expects the alliance to be strengthened at the upcoming summit.
    (07:18–09:51)
  • On Ukraine:
    • Sanctions and increased support are crucial; the U.S. should “help Ukraine finish the job.” (13:27)

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3. Tensions Within Congress and Party Divisions

• Senate-GOP Friction:

  • Trump’s tough conversation with Senate Republicans covered Iran, war powers, the Save America Act, and the stalled housing bill.
  • Amb. Hutchison: The lack of congressional support for the Iran negotiations was a major misstep.

• Democratic Party Primary Trends:

  • Notable leftward shifts in New York and Michigan primaries.
  • Split within the party between progressive Democratic Socialists and moderates/establishment figures.

• Key Segments:

  • Young voters are driving progressive wins due to housing and economic frustrations.
  • Senator Chris Van Hollen backs Abdul El-Sayed in Michigan, despite establishment support for another candidate.

• Quotes:

  • Trump:

    “They’re going radical left...you talk about the Democrat socialists you took really, it's really communist. ... They beat a guy named Dan Goldman. He's a pretty liberal guy. When they go more liberal than Dan Goldman, they're really into never never land.” (18:49)

  • Jeannie Shanzano (Democrat):

    “They aren't voting this way because they're socialists or they're communists necessarily... It's because they can't afford to live in New York City. And that's what's got to be addressed.” (19:36–21:44)

  • Katie Frost (Republican):

    “The largest demographic that vote for Democratic socialists are young people... if you are married and you have children, you're far more likely to be a Republican. That is the biggest indication of your party allegiance is actually your marital status and how many kids you have.” (22:25–23:59)

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4. Supplemental War Spending & Fiscal Accountability

• Issue:
  • A new $88 billion supplemental request for Iran war and related priorities faces skepticism.
  • Steve Ellis of Taxpayers for Common Sense blasts the ever-increasing funding requests (“either the administration was not being honest about the costs then or now”).
• Details:
  • Pentagon requested more than double its previous estimate despite a partial ceasefire.
  • Defense supplemental includes non-defense spending (Ebola, farm bailout, Penn Station), causing a “Christmas tree effect.”
• Quote (Steve Ellis):

  “Now you're a little bit more than 40 days later and it's been mostly a cease fire in there and then more than doubling the request ... So it doesn't add up.” (30:54–31:17)

  • “The Pentagon is awash in cash... they're just trying to figure out, get their finger in that appropriations pie however they can.” (31:35)
• Outlook:
  • Hard to find necessary offsets; reconciliation bill for a larger Pentagon boost seen as “dead in the water.” (34:02)
  • Continuing resolutions likely post-election; nobody wants a shutdown so close to the midterms. (35:15)

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5. Broader Reflections: Generational Economic Anxiety and Party Identity

• Leftward shift in Democratic primaries is largely fueled by affordability concerns for young voters.
• National attention on whether these progressive wins are outliers or a harbinger of a larger trend.
• Both parties challenged to respond to economic grievances, alienation, and the evolving priorities of their coalitions.

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Notable Quotes & Moments (with Timestamps)

• Donald Trump on housing bill:

  “I’m not signing the housing bill. ... It’s all about the interest rate. Lower the rates, you can have all the housing you want.” (01:22)

• NATO Secretary General Mark Rutte on alliance strength:

  “Europeans have to step up. This is NATO 3.0.” (05:48)

• Kay Bailey Hutchison on Ukraine:

  “We do need a bigger arsenal, that’s for sure. ... I think the president has shown that he is very frustrated with Russia and that we need to help Ukraine in this.” (13:27)

• Donald Trump on Democrats moving left:

  “They’re going radical left ... it’s really communist. ... When they go more liberal than Dan Goldman, they’re really into never never land.” (18:49)

• Jeannie Shanzano on frustration in progressive primaries:

  “They aren’t voting this way because they’re socialists ... It’s because they can’t afford to live in New York City.” (19:36)

• Steve Ellis on defense spending supplementals:

  “Now you’re ... more than doubling the request ... it doesn’t add up.” (31:17)

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Timestamps of Important Segments

• [00:40 – 03:49] Stalled housing bill, legislative tactics, and Trump’s demands
• [04:15 – 06:19] NATO’s evolving role and demands on Europe
• [07:18 – 13:27] Hutchison on NATO, Ukraine, and congressional support
• [16:43 – 21:44] Democratic primary shifts, generational frustration, party dynamics
• [22:25 – 25:01] Republican critique of leftward Democrats
• [29:37 – 37:36] Supplemental defense spending analysis, budget politics, shutdown threats

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Tone & Language

• Candid and slightly adversarial between political analysts and partisans.
• Contextual and wonky when breaking down legislative process and budget data.
• Reflective of frustration and urgency regarding both international and domestic gridlock.

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Takeaway

This episode underscores deep divides within and between U.S. political parties—over policy substance, generational priorities, fiscal strategy, and America’s global role. From legislative stalemates and shifting electoral coalitions to budget brinkmanship and NATO’s future, the “balance of power” is anything but stable heading into a critical summer in Washington.

Transcript

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[Joe Matthew]

here in Washington, as Joe mentioned, town has gotten a little less crowded as the Senate has now headed out for effectively a two week break. They won't be back until July 13th. Nothing left to vote on and perhaps nothing left to celebrate as they thought they were going to be celebrating yesterday in the Capitol, a signing of the bipartisan housing bill that passed both chambers with massive bipartisan majorities. It got 85 votes in the Senate and yet it did not get yet at least the signature from President Trump, who of course yesterday canceled that planned signing because he wants to see the Save America act pass first. Which raises the question as to whether and when he does intend on signing the housing bill at some point. He was asked about that in the Oval Office yesterday afternoon.

[Donald Trump]

I said, I'm not signing the housing bill. I want to see what happens. We said, look, the housing bill is housing. I made billions of dollars with housing. I know hous better than anybody, maybe anywhere. It's all about the interest rate. Lower the interest rates, you can have all the housing you want.

[Bloomberg Host (possibly Kelly)]

Lower the interest rates. Of course, that's what he would love the Federal Reserve to start doing. And it's been made more difficult by the rise in prices reaffirmed today in economic data with a 4 handle still on the PC. But we want to get to the matter at hand with regard to this legislation. It has not been sent to the president yet to our understanding. Therefore, he could take some time, in fact, all the time he wants until it's transmitted to the White House. Then he'd have 10 days to sign it before it automatically became law, unless again he decided to veto it. Bloomberg's Tyler Kendall joins us now live from the White House with the latest on this. Tyler, the speaker of the House is on his way to meet with the President about an hour from now. Can he turn this around?

[Tyler Kendall]

Well, Joe, he's definitely going to try to. We heard from the House Speaker, Mike Johnson yesterday, seeming to indicate that they're going to try to take some provisions from the SAFE act and tie it into a reconciliation package, which, as you both well know, would mean that potentially that legislation could get through with just a simple majority. It would pass on a partisan basis alongside party lines. But we're already starting to hear from some Republicans that that path may not be so easy as some of those more fiscally conservative members, if you will, have raised concerns about pass passing a reconciliation 3.0. They say that they would need to see full pay force in any such package, which could prove problematic, as we've seen with previous reconciliation pac. So this isn't going to be so cut and dry or easy. Plus, also, Joe and Kelly, that raises, of course, always the prospect that we could see lawmakers start to tack on some other priorities. Once you start a reconciliation bill, it is very hard to keep it on the slim and narrow. That means that that could spark some other debates which could ultimately derail the timeline because we know that President Trump wants to see this as soon as possible. Originally, he had said July 4, it appears difficult that they're going to make that timeline. But House Speaker Mike Johnson is definitely coming here to the White House to try to continue the conversation with President Trump after quite a contentious meeting with his colleagues in the upper chamber yesterday.

[Bloomberg Host (possibly Kelly)]

Bloomberg's Tyler Kendall live at the White House a day after the president's meeting with the NATO secretary general. The Oval Office has been a busy place lately following that meeting involving the future of Naito, the president's commitment to Ukraine. What's happening with regard to the war with Iran. Mark Ruta, the secretary general, made his way to our cameras on the North Lawn, right where Tyler was standing for an exclusive conversation. Here's what he said.

[Mark Ruta]

What I believe is to be fair, when leadership is successful, his leadership is successful. And what I wanted to show today is the successful in three ways. One, on Iran, degrading nuclear capability to NATO and not only getting the allies to deliver to, to, to commit to 5% defense spending, but also to deliver on the spending. And that's clearly what is happening at the moment. And third, by taking that, that coat, that mental of being the leader of the free world. And when he meets in Ankara, he will meet with all the allies, but also 10 countries there as guests from the Middle east, from the Indo Pacific, a total combined GDP of $7,770 trillion, two and a half the size of the United States. Absolutely there to hear his views, to get his thoughts on the next steps we collectively have to take.

[Joe Matthew]

Well, of course, the financial aspect of this and the investments into the defense industrial base are one part of it, Mr. Secretary General. But there's also the consideration of actual human capital and US Military forces that are currently stationed all around Europe. Obviously, we have now seen withdrawals and considerations this administration is making about moving troops around further. How do you avoid anything being chaotic in nature as that plays out? And how does Europe make sure that it's able to adequately defend himself itself in a, in a surprise scenario? What are those preparations like?

[Mark Ruta]

I think the United States is doing that. So let's first agree that the United States has to take care of multiple theaters, not only Europe, also, for example, the Indo Pacific. And if a situation would occur where they have to defend both sides of the equation, both in the Pacific and Europe, they have to avoid a situation in which they have spread their resources too thinly. This is why Europeans have to step up. This is NATO 3.0. A stronger European, a stronger NATO.

[Joe Matthew]

Naito 3.0 is the message from its Secretary General, Mark Ruta, who just spoke with us yesterday on balance of power exclusively after his meeting with President Trump in the Oval Office. And now for reaction to what he told us to and what that meeting perhaps portends for the NATO summit happening in Turkey in just a few weeks, we turn to a former NATO ambassador, Kay Bailey Hutchinson, who of course was the US Ambassador to NATO, also a former Republican senator from Texas. Ambassador, welcome back to Bloomberg TV and Radio. We were all speaking in advance of the Secretary General's visit about what a tough job he may have had ahead of him in trying to message to this president the importance of the US Maintaining its alliance with, with this alliance with the importance of the allies. He even brought charts, a poster board presentation to underscore the commitments the alliance is making financially to the defense industrial base. Do you believe that's enough for this president, for this administration?

[Kay Bailey Hutchison]

Thank you, Kayleigh, for having me. I do think the President is certainly looking at this and I think that G7 was a good beginning for preparation the NATO summit, because I think that the importance of the alliance for the long term, for our own country's security, when we are facing potential adversaries in Asia, Asia Pacific and the Middle east, we need allies. And I think the President was rightly disappointed when we were trying to hold down the nuclear capability of Iran and some of our NATO allies did not allow us to use airspace or even bases that we join in paying for. I think the President was concerned about that, I hope. And what I'm looking for for the summit is that we would now come together as it seemed happened in the G7 and say, okay, for the long term, we're stronger together.

[Bloomberg Host (possibly Kelly)]

Until recently, until yesterday, Ambassador, the president's been referring to NATO as a paper tiger. Did this meeting yesterday save the alliance as we know it?

[Kay Bailey Hutchison]

I think everyone that is tuned in here believes that NATO is a very important alliance, that we do so much interoperability with our NATO allies, of our, our airplanes, our, our intel sharing, all of those things are important that we do together. I don't think NATO is a paper tiger. I think NATO is a very strong and important alliance in the security of our country. And I think the members of Congress agree with that in the main and are supportive of helping our NATO allies and to keep us strong. Does that mean that we wouldn't move troops around? Yes, we will. I'm sure that's what the Secretary, the President, is saying, but I don't think it's going to be any kind of an abandonment of NATO. And in fact, I hope that this NATO summit with all of the heads of state, including our Asia Pacific partners, will strengthen the alliance.

[Joe Matthew]

Well, as we consider what may come of the summit, are you expecting, Ambassador, any firm, tangible deliverables either for the members of the alliance or even a country that is not Ukraine?

[Kay Bailey Hutchison]

But I certainly think there will be discussions of Ukraine. That is Europe's most important priority because it's so close. And I think the president is getting weary, should have been weary a long time ago of Russia's dangling peace agreements and then not coming through. I think Russia is, should, I think we should have more sanctions on Russia and I think we should help end this. And I think that will be a major topic of the, of the summit, which is in all of our interests to help Ukraine end this, this ridiculous invasion of their sovereign nation.

[Bloomberg Host (possibly Kelly)]

Well, so tell us more about that, Ambassador. What would be your advice? How do we end this now? Is it by providing more weapons directly to Ukraine? Is it intelligence? Is it what we're already doing?

[Kay Bailey Hutchison]

All of the above? I think more. I think we do share intelligence. I think we should be doing everything possible to help them get more of the drones that have been so successful now that they have perfected it on their own. The Ukrainians are making headway. They have a right to do that. I think we should be helping them and

[Joe Matthew]

having a bit of trouble. We're having a little bit of trouble with your connection, Ambassador, but we appreciate your thoughts on Ukraine knowing, of course, as the ambassador was alluding to earlier, Joe, that we heard from the president at the G7 summit in France that he would like to shift his attention to Ukraine and ending the war between Ukraine and Russia. Once this Iran situation obviously resolved, though that is still very much a work in progress. We got the memorandum of understanding. A final deal, though, still has many weeks to be negotiated.

[Bloomberg Host (possibly Kelly)]

Well, I mean, look, there's only so many patriots to go around right now, as we have also learned, with a lot of players around the world, including Israel, looking to replenish their stocks of defensive missiles. But we also know that the President likes to align himself with a winner. We've heard that a lot of times over the last couple of days, and it does appear, and we'll, we'll hear about this on Twitter as soon as we say it, that the tide may be turning with Ukraine reaching deeper into Russia and really inflicting some serious damage by using drones that are being built in people's garages. It's a pretty remarkable moment.

[Joe Matthew]

Yeah. And we asked the Secretary General, Mark Ruta, about that yesterday, whether or not any allies had concerns about Ukraine striking deeper into Russian territory. His answer was basically no. Ukraine deserves to defend itself, and they're, of course, happy to see Ukraine advancing where it can. And on that note, Ambassador, as we've reestablished your connection when you consider Joe just mentioned the need for Patriot missile systems, for example, but the idea that there is not ample supply necessarily when we have all of these different theaters that require our attention, how concerned are you that potentially the funding isn't going to be there? As we know that there has been supplemental funding requests now set sent to Congress to fund, in part, our war effort in Iran and look at our stockpiles. And it doesn't seem like there's massive appetite to, to acquiesce to that request for the Congress to pass it.

[Kay Bailey Hutchison]

Kaylee, it's a good question. I think every time Congress has voted for help for Ukraine, for instance, that has passed and it has been significant just recently. But we do need a bigger arsenal, that's for sure. We use a lot on Iran, and we certainly have been helpful to Ukraine. We hope the Europeans will step up also to help us as we help Ukraine. And I think we could do more for Ukraine and I think we could do more to tamp down Russia. I think it is time, and I think the president has shown that he is very frustrated with Russia and that we need to help Ukraine in this. And I think that can be done with more sanctions and more of a grip on Russia, but also helping Ukraine finish the job.

[Bloomberg Host (possibly Kelly)]

Ambassador, we've only got about a minute left. I'd love for you to just reach back to your old Senate cap for a moment and reflect on what took place yesterday as the president had a pretty tough conversation with the Republican caucus in the Senate about a range of issues, including Iran, the war powers vote, which he apparently turned around within the day yesterday, but also the Save America act, the housing bill that he's put on ice. Is the president being fair to the Senate majority Leader?

[Kay Bailey Hutchison]

Well, I think the worst thing that the Senate did was ever showing no support for the Iranian situation while we are in a very delicate negotiation. That was just shortsighted. And I was glad that the president showed what he had to the Senate to do, that the Senate certainly has. The Senate and the House are at loggerheads right now and it is time for them to work together going forward on these very important issues. Certainly the Save America act is so important. The housing I think is important, but it can be negotiated a bit, make it even stronger.

[Bloomberg Host (possibly Kelly)]

But hey, Billy Hutchison, thank you, Ambassador, for the insights. I'm sorry we're out of time. Stay with us On Balance of Power. We'll have much more coming up after this.

[Duke Energy Representative]

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[Podcast Host]

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[Joe Matthew]

I'm Kailey Leinz alongside Joe Matthew here in Washington, where we continue the analysis the postmortem on the primaries that happened in New York earlier this week in which a number of progressive candidates backed by the Democratic Socialist Mayor Zone Mamdani, won their primaries in two cases ousting more moderate incumbents in those seats, or at least less to the left than some of these Democratic socialists. This is debate we had on the program yesterday. If you heard our conversation with New York Republican Congressman Mike Lawler. But you're continuing to see more evidence of the wind shifting, perhaps in certain portions of the Democratic Party in a break from what Democratic leadership wants versus what others are pursuing Here and the AP now reporting, Joe, interestingly that Senator Chris, Chris Van Holland of Maryland is now backing Abdul EL Sayed in the Michigan Senate race. Of course, it's a three way race between him, Mallory McMurraw and Congresswoman Haley Stevens. Haley Stevens is the one backed by leadership by Chuck Schumer. And yet Van Hollen's choice is Al Sayed, who of course also has the endorsement of the likes of Bernie Sanders. Once again, progressive versus moderate, in which way does the party want to be going?

[Bloomberg Host (possibly Kelly)]

This is why we heard from Scott Besant and other Republicans yesterday. This isn't just a Manhattan phenomenon. Look at Maine. Yeah, look at Michigan. Look at what happened in California. And there are other examples. The president calls them communists. They are self described socialists, Democratic socialists who have become a significant part of this party, helped in part by Bernie Sanders. This is interesting for Van Hollen, of course, a progressive from Maryland, but also an establishment Democrat who's been in the mix for a lot of years here. So we hadn't had a chance to get to Jeanne on this, which I'll be very curious to hear. The question is, do we have a national trend underway? Are the crosscurrents actually what they appear to be? We're still stuck in primary season.

[Tyler Kendall]

Yeah.

[Joe Matthew]

Well, of course, at least on the Republican side, they're suggesting that this is showing directionally where the Democratic Party is headed. That's actually what President Trump said in the Oval Office yesterday in reaction to New York's results.

[Donald Trump]

Well, they're going radical left. They're going really, you know, you talk about the Democrat socialists you took really, it's really communist. He picked three, they won. They beat a guy named Dan Goldman. He's a pretty liberal guy. When they go more liberal than Dan Goldman, they're really into never never land.

[Bloomberg Host (possibly Kelly)]

Bring in our panel now. And we've got a good one today. Bloomberg Politics contributor Jeannie Shanzano, our Democratic analyst and democracy visiting fellow at Harvard Kennedy School's Ashe center alongside Republican strategist Katie Frost. Back today, the political director of the American Principles Project. Ladies, great to have both of you with us and thank you. What do you make of this conversation, Jeannie? You're not only coming from New York, but I don't know, are you a communist?

[Jeannie Shanzano]

I'm not a communist, Joe. Not yet. But you know, I think a few things. The first thing is, is that it is a little too early to say this is where the party is heading writ large. You know, you just mentioned Mike Lawler. He is going to compet against a Democratic centrist named Kate Connolly, who is a special ops, dedicated, decorated, rather veteran, a West Point graduate, a formidable force and not a member of the dsa. New York City. Richie Torres, you go over to New Jersey, Mikey Sheryl, Virginia, where you all are near. We have a governor. So, yeah, I think Michigan is the bigger test of this. And it's fascinating what you were just talking about, how those endorsements are spreading out. But the other part of this, and I think this is really important for people to think about, is that we did see the DSA do very well both for those endorsements from Donnie and then quite frankly, in the New York State Legislature as well. Here's one reason why you have about 7% to 8% of turnout in New York City, which is deplorable for these primaries. Very low. And who is turning out a lot of young people. And I talk to them day on and what do they say? Somebody yesterday just pointed me to this Wallet Hub study that was just released where New York City ranked 182nd, the last city in the country in terms of entry level jobs. Why? Because you cannot afford to live in New York City. So you know, when we ask, oh, why are they voting this way? People are frustrated. And let's not forget the president just decided not to sign a housing bill yesterday that could have eased up on that. So this is something that makes sense. They aren't voting this way because they're socialists or they're communists necessarily, or they want to abolish prisons. It's because they can't afford to live in New York City. And that's what's got to be addressed. And if the establishment Democrats aren't going to address it, they should vote for Democratic socialists.

[Bloomberg Host (possibly Kelly)]

All I know is Mike Lawler didn't like it when you referred to his opponent as a centrist yesterday.

[Joe Matthew]

And I didn't say centrist, I said more moderate. I'm thinking there's a spectrum, a political spectrum here. There's the far left, there's the far right. We're always, if you're less far left, that makes you more toward the moderate direction. But I will say my case. I heard you, Katie, on Jeannie's point about New York City not necessarily being the tell here that a state like Michigan may be will. Will lead us to know more than New York City is, is that going to stop Republicans from tying Mom Donnie to national Democrats even though he's not a president? He's not even a federal Democratic leader, he's a mayor?

[Katie Frost]

It's an extremely high profile figure within the Democratic Party and leading the largest Democrat city in the country. So of course Mamdani is going to be part of the conversation because what we're going to see is New York is going to become a hub for testing the actual ability to govern like a Democratic is. You remember what was the big slogan that he ran on? Free buses. What's happened since he was elected? Are the buses free yet? No, it's actually gone up to $3 instead of 290. Is the rent lower yet? No. Will it get lower?

[Joe Matthew]

Probably not.

[Katie Frost]

He's talking about we're going to have city run grocery stores. Those are many years away. So what we're seeing is yes, there are frustrated young people. And that's actually a very important point. Jeannie got on because the largest demographic that vote for Democratic socialists are young people. And you could say it's because there are entry level job jobs. I would counter it's because they're young. The frontal lobe probably hasn't fully developed yet. And they don't have other people in their lives that they're worried about. These are single people. They are not have children. But if we find a way to get these folks where they can have a good job, they can get married, own a home, have kids, you know what's going to happen? They're all going to become Republicans. Because, Tim, that all the data shows that if you are married and you have children, you're far more likely to be a Republican. That is the biggest indication of your party allegiance is actually your marital status and how many kids you have. So here's the thing we have. Young people are frustrated that no one says anything's affordable. So both parties have to put forward their ideas. Here is what we're going to do to help you. And unfortunately right now young people are being swayed by a bunch of theater kids who are running for class president saying they're going to give you ice cream every day, but it's just not

[Kay Bailey Hutchison]

actually going to work.

[Katie Frost]

And the national Democratic Party isn't going to have to deal with that. Every single member of Congress is going to be asked if they support the positions of the DSA and if they support the positions of members of their own caucus. And when you have someone who's the nominee for Congress who wants to abolish prisons, not ice, not defunding the police, abolish prisons. How far have we gotten away from the mainstream where the idea that there should be no prisons is actually being discussed in politics? When you don't think that someone who commits murder or someone who commits rape needs to be incarcerated. How can we take you seriously when we're discussing policy?

[Bloomberg Host (possibly Kelly)]

You said a lot there, Katie. And I'm just chuckling because I went to, I went to Emerson College. I ended up marrying a theater major. That whole thing is hysterical. But, but hold that thought. Where's. Where's Jimmy McMillan when you need him, Jeannie? Because, yes, the rent is still too damn high. Respond to what Katie said. Is the socialist promise a false one?

[Jeannie Shanzano]

Yeah, Jimmy McMillan. He was a man ahead of his time. That, that still resonates. I remember it well. And yay for the theater kids. I was one as well as your wife. So there we go. You know, I don't think it is too much for young or elderly people or anybody in between to ask to have an affordable life, to be able to get married or not married, to be able to afford a home, to be able to have health care, to be able to do better and have their kids do better than they did, to be able to afford education. I mean, look at the cost of higher education. So, you know, all of these things are not sort of pie in the sky. I'm promising you ice cream and I'm, you know, running around as a theater kid. These are real issues that people are facing. When young people that I teach go to college and their parents pay 100, $200,000 for an education and they can't get an entry level job. That is not America. We need to make the lives of our young people and our elderly people and middle age more affordable. And when you have a president, the leader of a party whose party runs Washington D.C. who says yesterday that housing costs are not a problem, this bill doesn't need to be signed. Affordability is a Democratic hoax. I'm more interested in the reflecting pool. I'm more interested in the gold adornments on my ballroom room. This is what people are hearing. And it's not just the Republican establishment, it's the Democratic establishment as well. Because where we started, this is a Democrat on Democrat fight. And I for one think competition in both of these parties is a very good things good thing. Rather, let voters have their say, let them go to the polls and express what we're all feeling, which is our government has been run to the ground and is not working and we need a change. I don't see anything wrong with that. I'm glad they're expressing themselves. And when you have people with clear ideas, if you don't like what they do when they get into office, you can vote them out if we have a fair electoral system, which gets us back to the Save America Vote Act.

[Joe Matthew]

Well, and just on that note of competition being good there, obviously, Katie, is an ongoing conversation around the primary system and whether or not the people who do turn out to vote in competitive primaries are the same type of voter that's going to turn out in the general election or whether general election voters are enticed to turn out at all if they're getting potentially more extreme candidates on both sides.

[Katie Frost]

Well, someone who's run campaigns for over a decade, I can tell you primary turnout is always one of those frustrating things because you will just go and knock on doors and spend all this millions of dollars to get 5, 7, 8, 15% maybe on a good year of the people to turn out. And it can always be frustrating. But usually what ends up happening is the people who show up in primaries. Primaries are the ones that set the direction for the party. And that's what I would always argue to folks, is you have an outsized impact if you're willing to be one of those few people that will show up and vote in a primary. And what we're seeing is the young people who are showing up in these New York primaries, are they truly reflective of the Democratic Party at large? Unfortunately, what's going to happening is a lot of people have blind allegiance and regardless of the policy, they're going to vote with their D next to the name or there's an R next to the name. The real question is going to be the swing voter first who doesn't struggle, always is. Or another.

[Joe Matthew]

Katie Frost and Jeannie Shan Zaina, we're out of time. Thanks for joining us here.

[Bloomberg Host (possibly Kelly)]

Stay with us on Balance of Power. We'll have much more coming up after this.

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[Podcast Host]

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship News York station. Just say Alexa, play Bloomberg 1130.

[Bloomberg Host (possibly Kelly)]

One of the other big stories not getting enough coverage today. We mentioned it a bit earlier. Is the supplemental. It finally dropped. We've been waiting a couple of months now for a supplemental budget request to pay for operations in Iran, knowing that a trillion and a half budget request has been made for the Pentagon overall, this one we round up to $88 billion, Kelly, to help cover the costs of the war along with some other priorities. And it got the attention once again of Steve Ellis at the group Taxpayers for Common Sense out with a blistering reaction here in which jumps off the page. About six weeks ago, he writes, the Pentagon put the cost of the Iran war at $29 billion. Here you see the statement on your screen. Now they want more than twice that. Steve Ellis says either the administration was not being honest about the cost then or they are not being honest about the costs now. He is the force behind taxpayers and with us in studio. Steve, it's great to see you. I fear that you might have an answer to that question. Do you or doesn't it matter?

[Steve Ellis]

Well, it doesn't seem like there's any real numbers. I mean, as we said they could. They either were lying then or they're lying now. They can't. They don't add up. I mean, because you had $29 billion after more than 70 days of shooting war is what they estimated.

[Bloomberg Host (possibly Kelly)]

Yes.

[Steve Ellis]

Now you're a little bit more than 40 days later and it's been mostly a cease fire in there and then more than doubling the request. It's $67 billion is what they're asking, asking for the Pentagon. And in addition, when you add in backfilling for the Coast Guard and State Department, you're looking at $70 billion, so well over twice as much in a very short period of time. So it doesn't add up.

[Joe Matthew]

Well, however they're doing the math over there, there is an argument that I would imagine the administration is going to make which is this is necessary for the defense of the country. Should this spending really be considered that that discretionary. Don't we need to restock our munitions and the like?

[Steve Ellis]

Kelly, you're absolutely right, we do. But the thing is, is that the Pentagon is awash in cash. I mean, it's not just the $1.5 trillion request this year. They got extra money in the one big beautiful Bill act last summer and they still have 100 billion of that money just sloshing around. So really what we're seeing is the Pentagon is trying to do a Money grab any which way they can. So they asked for $250 billion more in their, in their base budget, $350 billion more, another reconciliation package. And so now we're talking about another $67 billion. So they're just trying to figure out, get their finger in that appropriations pie however they can.

[Bloomberg Host (possibly Kelly)]

Well, of course, there's a lot more than defense in here. And I think the idea was to sweeten the pot for maybe get some more votes. Let's talk about what's really in here. 1.35 billion to fight the Ebola outbreak in Central Africa, A half a billion for the National Park Service to repair the World War II memorial, which would hopefully go better than the reflecting pool. $10 billion in economic assistance to farmers. There's a farm bailout in this defense supplemental request and more than a billion for Florida's agricultural sector. Kaylee, we find a billion to modernize Penn Station in New York City. I kind of hope that stays in there, to be honest with you. Steve, how does this all apply to defense?

[Steve Ellis]

It doesn't. And I mean, certainly this is there is a Christmas tree effect that happens on these. You start putting the adornments on there to try to get past. Yeah, well, I mean, arguably, then all of a sudden it starts attracting flies too. Or you start wondering is this really necessary? And there's going to be criticism about it. I mean, you mentioned the ag bailout. They've gotten more than the ag sector has gotten more than $50 billion in bailouts over the last or more than $60 billion in ag bailouts over the last five years. So this is just another one of this sort of money sloshing around that they're doing. There's other policy provisions in there too. They're trying to do year round 15 for ethanol.

[Bloomberg Host (possibly Kelly)]

Yes.

[Steve Ellis]

And so they're just trying to sweeten the pot. Now, whether that actually gets it over the finish line is anybody's guess.

[Joe Matthew]

Well, and it's a question as to whether or not this smaller in scale supplemental, although you obviously think this number may be too big, whether that can get over the finish line or whether you can still see a more than $300 billion reconciliation 3.0 bill because they also have suggested the Pentagon should get more money through that. Of course, House wants to attach the Save America act to it too. Unclear how or whether that will be ruled as budgetary. If you're dealing with numbers of that size, there's going to be fiscal hawks in Congress who are going to want to see offsets Are they going to be able to find them?

[Steve Ellis]

Well, we're certain. We're coming up with a list of ways to cut the Pentagon's budget and cut spending and we'll be out with that next week actually [e-mail] but, but, but no, they're not, they're not going to be able to find those offsets readily available. I mean this is really serious cuts that you would have to do. And so I mean, most people think that reconciliation 3.0, the third bite of the apple at $350 billion to the Pentagon is, is dead in the water. It's just going to be hard to get that level of support for something like that. They are not going to offset it for the most part. And so I'm feeling that this, that's why something like this supplemental, it gets some legs. Okay, you don't want to give us A, to $350 billion? Well, how about the 67 billion? I mean that's a fraction. Come on.

[Bloomberg Host (possibly Kelly)]

Daily saving money all the time around here.

[Duke Energy Representative]

Steve.

[Bloomberg Host (possibly Kelly)]

The numbers turned out to be very different from what I was told was the statement from Susan Collins, who chairs the Senate Appropriations Committee, which I like

[Steve Ellis]

to know what the, what the numbers

[The Hartford Representative]

are supposed to be.

[Bloomberg Host (possibly Kelly)]

Sounds like taxpayers, you're either lying then or you're lying now. So let's back off a bit. You remind US we're what, $40 trillion in debt. September is coming. No one's getting along. Midterm elections in November, we're cruising for a shutdown again, aren't we?

[Steve Ellis]

I don't know if either party has really got the appetite for a shutdown

[Bloomberg Host (possibly Kelly)]

right before the election for each other's priorities.

[Steve Ellis]

Well, no, I think it's more like the appetite for a continuing resolution. Kick the can into the lame duck after the election and then you deal with it and then whoever's feeling their oats because of the election kind of is going to push. But I think that's more likely. The last shutdown was pretty bruising and extended and I think it's still in voters consciousness. So I don't think either party wants to be perceived as being responsible for that.

[Joe Matthew]

Well, and if it's a continuing resolution we end up with, could the Pentagon actually end up with even less money than they had requested for this fiscal year ultimately?

[Steve Ellis]

Well, they still got a big boost last year. You know, I mean they got, they got a significant boost in the, in the, this, the base budget. So they'll be, they'll be fine. And, and not only that, at some point they are presumably going to do the full year appropriations and so they can survive on $1 trillion for a few months.

[Bloomberg Host (possibly Kelly)]

It's interesting when we hear about though, the need for a generational investment in the defense industrial base. Is there enough money for that? Should that be a separate bill? Is this a wider conversation or is it not true?

[Steve Ellis]

Well, for instance, when you break down what this request was, there was about 2 billion in there for UAVs. And so really what you've seen both in Ukraine and you've seen in Iran is that it's been less we need to spend on these exotic, expensive platforms, but that you want to have cheap and plentiful platforms which presumably would be less costly than, you know, the sixth generation fighter. Right. And so that's where I feel like it's it shouldn't be an and it's a pivot and it's a sort of recognizing we still need to have aircraft carriers and things like that that but we need to be making these investments in the smaller and less exotic and more replaceable items than, you know, an F15 Eagle that we've lost several of them in Iran.

[Joe Matthew]

We're about out of time. We just have 30 seconds left. But the speaker of the House is expected to be visiting the President at the White House just moments from now. What would you tell him about how he should be approaching these asks from

[Steve Ellis]

the White House, what I would Speaker Johnson should say to the President or what I would you say to the Speaker? I would say that there is not an unlimited appetite for spending and particularly in the Republican conference. And there are they've got a very small majority so they need to be able to pick their fights.

[Joe Matthew]

All right. We'll leave it on that note. Steve Ellis, the president of Taxpayers for Common Sense here with us in our Washington, D.C. studio.

[Bloomberg Host (possibly Kelly)]

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 get your podcasts and you can find us live every weekday from Washington D.C. at Noontime [e-mail] Whatever your goal,

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