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- [00:00]
Carol Massar
Introducing the all new Adobe Acrobat studio, now with AI powered PDF spaces. Do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into 5 insights with a click. Do that with Acrobat. Need templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. Learn more@adobe.com do that with Acrobat. Bloomberg Audio Studios Podcasts Radio news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [00:56]
Tim Stanwak
On Bloomberg TV and radio on YouTube as well. Sear Bloomberg Business News Live. If you want to catch us here in the studio with no path to freedom here, at least in terms of government funding, we're going to talk about this with Tyler Kendall in a moment. Having heard from the speaker earlier today, Mike Johnson is still in town. In fact, a lot of lawmakers are, as we'll hear from Chairman Boston. Just a moment. He's live on Capitol Hill, but it's of course the Senate that has to vote and we're expecting more where this came from. Another failed round without enough Democrats to pass the bill. Mike Johnson speaking earlier, as I mentioned, here's the speaker.
- [01:33]
Mike Bost
Yes, he wants to solve problems. The president is a deal maker. He likes to figure these things out and works towards solutions. And that's why he's a bold, strong leader that America needs right now. I'm excited to work with him on that. I have the exact same opinion and position. But again, none of this can happen until the Democrats stop inflicting pain on the American people and turn the lights back on in Congress and get everybody back to work.
- [01:58]
Tim Stanwak
Tyler Kendall with us in Washington with more on the shutdown and other news coming out of the White House here. There's a question today, Tyler, about based on what we just heard from the president and a memo that went out from OMB earlier, the Office of Management and Budget, that some of these furloughs may not necessarily lead to layoffs, but they also may not get back pay, which is something we had not heard before, the president says it really depends on who you're talking about. There are some people that really don't deserve to be taken care of. We don't have a sense of who he means.
- [02:26]
Tyler Kendall
Do we at this point, we don't. And we heard reporters, reporters trying to follow up for exact clarity on what this could mean. But it comes after we saw this OMB memo circulated, written by the OMB director, Russ Vogt, suggesting that the White House is considering not issuing back pay once the government reopens. Now, it appears the OMB is taking aim at this law that was enacted, as you well know, after the last shutdown in 2019. And that was considered to be this legal guarantee that federal workers would get back pay after a government shutdown. But it appears that the issue that, that they're taking with this is that Congress would have to appropriate those funds specifically. This shouldn't be considered to be an automatic guarantee. And that's really what we're going to be looking for here. It's definitely raising the stakes. President Trump said in this Oval Office meeting with the Canadian Prime Minister, Mark Carney, that in the next four to five days, we should know where those potential permanent layoffs shake out. But, Joe, we're up against a pretty firm pressure point later this week, Friday, October 10th. That's going to be the first missed paycheck for many federal workers.
- [03:30]
Tim Stanwak
Four or five days. He must be thinking, I guess, about Monday, which sounds to me like he wants to give leaders on Capitol Hill room to make a deal or peel off enough Democrats to pass the cr.
- [03:41]
Tyler Kendall
Well, it was interesting to hear President Trump basically signal that he could be open to negotiations. That was broadly taken as this positive step, even as Republicans have really been standing firm here that the government needs to reopen before any of these talks can take place. Now, what I'm really watching for is where a potential agreement shakes out on expanding those Affordable Care act premium subsidies. Whether or not a commitment to an up and down vote would potentially be enough for Democrats. Because the thing with these subsidies is subsidies is that Republicans are divided on them. Many of them go to people in these states that President Trump won in 2024. These are red states that didn't expand Medicaid and ultimately have a lot of people on Obamacare insurance exchanges.
- [04:23]
Tim Stanwak
That's right. This, of course, all as Tyler references came in the middle of an Oval Office meeting with another world leader. Prime Minister Mark Carney is in town. They're here to talk about tariffs and trade. There were a couple of questions about that. Most of this was on domestic politics, though, and that's what happens when you have a room full of American reporters. But do we expect an announcement from the White House today? On a deal with Canada.
- [04:44]
Tyler Kendall
Well, it was a relatively warm meeting, as you saw. Yeah. Mark Carney calling President Trump a transformative president. But we can't lose sight that Mark Carney really did campaign on countering President Trump and his trade agenda. And we really haven't seen a lot of movement when it comes to the trade negotiations. Canada's still facing that 35% tariff for non USMCA compliant goods, though. A lot of goods coming over the border, about 55% or so are compliant. But it's really those sector specific tariffs that I'm watching for to see if there's any sort of movement when it comes to negotiations. They are 50% for steel, aluminum and copper. Those are really high rates and they're impacting a range of sectors when it comes to Canada. It was interesting though, because President Trump seemed to demur multiple times when asked what would it take? What can Canada give in terms of concessions to get this over the finish line? As you well know, there is a range of things that this White House is looking for, from market access to curbing fentanyl to then digital services tax is something that has repeatedly come up in the conversation.
- [05:46]
Tim Stanwak
A lot going on around here, Tyler, and it certainly reminds us how much has yet to be determined when it comes to Canada. We have spent so much time looking at Europe, looking at India, looking at China, that our nearest neighbor and biggest trading partner has yet to be resolved. Tyler Kendall, frequently on the north lawn of the White House. Lucky to have her. In studio today, our Washington correspondent, Tyler, thank you so much. I'm Joe Matthew in Washington. And it's great to have you with us here as we continue the conversation with someone who's in the middle of it all with regard to the government shutdown. As I mentioned, not all lawmakers have gone home and that includes Congressman Mike Bost, Republican from Illinois, who is chair of the House Veterans Affairs Committee. And just to give you a sense of who we're about to talk to here, as I like to let you know exactly where a lot of these members are coming from because, yeah, they're real people too and bring a lot of unique experience in many cases today. Mike Bost, former firefighter, U.S. marine, ran his family's trucking business, member of the Main Street Partnership. How did I do, Congressman? Will it be the middle, will it be the, the Main Street Republicans who figure a way out of this?
- [06:48]
Mike Bost
You know, Joe, I think it's a case where we need to make sure that the Senate today makes the vote and comes back today. Now, whether that happens or not, I don't know. But I know that every day of shutdown goes on, more pain is felt by more people. And when I'm chairman of the va, I know about where we're going to those shortfalls. You know, right now we have several though. We have put a front load on the medical, most of the medical providing and most veterans won't leave it out on their main services, which is their health care. But when you start talking about TAP programs, people leaving the military, when you start talking about the FOX grants, those FOX grants are special grants set up for contractors provide mental health. When you start talking about daycare workers for those people that are homebound veterans, those are all on contracts. We're trying to work with the Secretary at this time to make sure those keep going. But each day we go farther. That is more and more danger. Remember, we in the House, we've done our job. We send it to the Senate, the Senate keeps bringing it back up. Those holdouts, they need to go ahead and open government and then we can look into all the other things they're bringing up because those are those things that we can negotiate while we work on this budget, but not while we're in a shutdown.
- [08:05]
Tim Stanwak
Understood your point, Mr. Chairman. We spoke with the Secretary, Doug Collins, about what this means for the agency and what it means for the delivery of veterans services. Ahead of our conversation with you today, here's what the Secretary told us. The positive news to our veterans, especially for Those who get 9 million plus who get their health care through us, that they're not going to see any difference in what they have seen. Our vet centers are still open. The counseling is going on. Our mental health outreach and placement are still going on. So this is a good time for that. And I think really is to look through this is we're going to do the, what we have to do to take care of veterans and we have the funding to do that. Did the secretary frame that appropriately? Because his message framed it that evening was that benefits are not being affected by this. You're looking down the road though, Congressman. How long looking down where they are.
- [08:56]
Mike Bost
And let me, let me tell you that right now we are already operating without a continuing, without the ability of Congress to authorize those particular side contracts. Everything the secretary was talking about is the actual function of the va. That is the VA that contracted. As we're moving forward, we're a little bit worried as those contracts are starting to not have authorization number. Are those, those things that can lose out Your health care is still going to be there. Your appointments are still going to be there. However, when we start talking about the TAP program, that's service members leaving. When you start talking about home care, when you start talking about the FOX grants, which is mental health, we have other mental health programs, but each one of these is important in itself for certain individuals. We're okay now and I'm glad we are, but we've got to pay attention. This can't go out for a long time.
- [09:52]
Tim Stanwak
Some are suggesting we could have another record here. I'm not sure anybody has a clue at this point. Congressman, as long as the leadership is are not engaged. Cross aisle here. And I just wonder what you think. The president mentioned last evening from the Oval Office that talks were underway with Democrats on health care. Is that a plan that could be done through back channels, that could be done quietly to bring Democrats to the table, or does there need to be some sort of grand bargain here that involves government spending?
- [10:20]
Mike Bost
I really believe that if we come back and then we can work on that, remember that that problem doesn't become to doesn't come to fruition until the 31st of January. This CR only gives us to the 21st of November. So we come back, we start negotiating these things. But the reason why this is difficult to negotiate is it just that it's difficult to negotiate. Even though we don't want to see anyone lose their health care, if we're having to subsidize the health care, there's a problem with the health care system in the first place. And we're not subsidizing the individuals, we're subsidizing the insurance companies. So therefore, the minds need to come together. But they don't need to come together by scaring our general public in a shutdown. We need to come back to work. We need to go to work on these problems. We're not saying they're not there and we don't need to work on them. But we can't be working on them while we're playing these games and you're holding things hostage. But if you look at our Democrat colleagues, many of the leaders on the other side, 13 times they voted to keep the government open with this same type of clear, clean cr. When Biden was in the end and gave quotes like we shouldn't hold the American people hostage. We've got to make sure that we don't use it as a negotiating tool. Instead, we keep the government open so that we can continue to negotiate. That's exactly what they Said they were right then. They're right. That would be right now. And that's what we're saying.
- [11:41]
Tim Stanwak
Congressman, our listeners and viewers should know that your 12th district in Illinois is not part of Chicago. It's, it's southern part of the state. You're closer to St. Louis than you are Chicago, actually in the western part of your district.
- [11:56]
Mike Bost
Yeah, St. Louis is a northern part of my district. St. Louis is northern part of my district. And I have one third of the state's land, land mass. So. Well, so my main point is you.
- [12:05]
Tim Stanwak
Got a lot of farms there too. You've got a lot of farms, Congressman. And I'm wondering, so what are you hearing from the White House on this? Does there need to be a bailout? Should it come from tariff money? How do you handle this? If they're not buying soybeans in China, what do you do?
- [12:19]
Mike Bost
Yeah, we've been talking with the administration on specifically that, the tariff money, some kind of situation to help many of these farmers through this time. Understand, these farmers, many of them are four years into their banks. Four years into their banks where they haven't turned a profit. You can only do that so long. This would be the time to give them that opportunity while we're building those markets. I'm really, really glad that he's meeting with Canada today. Now, let me explain this, that he was right. He needed to meet with Canada because if you're a grain farmer, it's one thing. And the USMCA was a good deal in itself. However, remember this when you start talking certain key products like dairy, which we provide from northern Illinois and Wisconsin or would like to provide into Canada. Canada has a 400% tariff. When we start talking about 30%. That sounds amazing. That sounds huge. But Canada has 400% tariff on the United States. Hopefully we can work through to get fair trade like the President has always talked about, and I trust the President to do that.
- [13:19]
Tim Stanwak
What happens first, a farmer bailout or a deal with China that starts soaking up some of these soybeans?
- [13:26]
Mike Bost
So the way it looks right now is probably the using the tariff money to help those existing farmers because we're so far into it, unless these negotiations go with China very, very quickly. Now, remember, we have to renegotiate with China because China, what they do is when they allowed China into the World Trade Organization, they probably shouldn't have done that in the first place because you're supposed to be a free government that would to be part of the world trade. But that happened ever since then. China will come in and they'll take the commodities where soybeans or corn or whatever, and they're going to say they're going to purchase this large amount. At the beginning of the planting season, farmers will go out and plant all these commodities, whether it's corns or soybeans or wheat. And all of a sudden then China says, oh, we don't need that much, which causes the market to fall. The commodity now is a cheaper rate. And the farmers out there trying to figure out how he's supposed to get. He or she is supposed to get the rate that they need to even make a profit at all. And so that's the problem when we're dealing with China, why we need to push them back to the table.
- [14:24]
Tim Stanwak
Because it's either your farmers.
- [14:27]
Mike Bost
Yeah, my farmers are hurt.
- [14:28]
Tim Stanwak
Your farmers feel like Lucy in the football here. Do they? Did they make off the dollar figures that we're hearing about? Is it $10 billion the president puts in a fund? What do you need?
- [14:39]
Mike Bost
That. That dollar amount is being negotiated with the chairman right now, both in the House and the Senate. Gt Thompson is working very hard with his staff to make sure and informing us as we're moving right now because, you know, if farmers are going to make it through, then you want to provide them a little bit of help. But if they're really the ones that are young farmers are, because. Because the mega farms, quite often they hurt, but they've got, they've got enough in reserve. It's those that don't have in reserves. And so trying to get those numbers squeezed through the USDA and figuring that out is where we're at right now.
- [15:11]
Tim Stanwak
Really, really interesting. You know, we heard about back pay for federal workers when the President was talking with reporters in the Oval Office. Mr. Chairman, I don't mean to sneak up on you here, because you might not have heard what he said, but there was a question about some folks not getting back pay. And he said some people don't really deserve to be taken care of. He wouldn't tell us when we followed up who he meant. Do you have a sense of who he was talking about? And do you.
- [15:33]
Public Investing Ad Voice
I don't know who you.
- [15:34]
Mike Bost
I don't know who he was talking about. And you know, the speaker also was asked about this this morning. I'll say what the speaker said. We've always made sure that our, our employees are made whole on back pay. So I would say if we don't do that again, that will be a rarity. But the thing is, if we get this done. We don't have to worry about back pay. And I'm going to tell you, I know how that is as a young Marine, remember I was in during the Carter administration and Reagan, but during the Carter administration, Marines and their families qualified for food stamp and WIC if they had it then, but they didn't. And so instead what you do is you worry from payday to payday for young Marines with, with a spouse and with children. And those are the ones that we're seeing out there that are going to need the help and they're going to just be dealing with when the 15th rolls around if they're living payday to payday. How do you go back to your creditors? Not everybody's got a parent that they can go back and reach to and say, hey, I'd really like you to send me money until I get through this. That's not how that works. Unfortunately. No pay due is a very, very bad thing for those people who make sure our freedoms are taken care of.
- [16:37]
Tim Stanwak
If you're paycheck to paycheck, this is the biggest deal there is. Congressman, I'm really glad you could join us. Mike Bost is chair of the House Veterans Affairs Committee, Congressman Republican from Illinois's 12th district. And great to have your insights with us. We'll assemble our panel next for their take on this Bloomberg Politics contributors Jeannie Shan Zaino and Rick Davis are with us here on THE Fastest SHOW in politics. I'm Joe Matthew in Washington. Thanks for being with us here on the Tuesday edition as we work our way toward the next round of voting on a continuing resolution to keep the government or reopen on Bloomberg. Stay with us. On balance of power. We'll have much more coming up after this.
- [17:16]
Public Investing Ad Voice
You're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic options plays on the side. The point is you're engaged with your investments and public gets that. That's why they built an investing platform for those who take it seriously. On public, you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto, it's all there plus an industry leading 3.8% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com and earn an uncapped 1% bonus when you transfer your portfolio. That's public paid for by public investing. All investing involves the risk of loss, including loss of principal. Brokerage services for U.S. listed registered securities, options and bonds in a self directed account are offered by Public Investing Inc. Member FINRA and SIPC. Crypto trading provided by Backed Crypto Solutions, LLC. Complete disclosures available@public.com disclosures you're listening to.
- [18:18]
Carol Massar
The Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa.
- [18:33]
Tim Stanwak
Play Bloomberg 11:30 it is October 7, two years to the day since the attacks by Hamas against Israel that killed nearly 1200 people and kicked off two years now of raging conflict. Negotiations are continuing today in Cairo. They are meeting again even on this solemn occasion in Israel October 7th. And at 3pm today it will ricochet back to the White House as President Trump meets in the Oval Office with Eden Alexander. You may have heard about this, the American Israeli hostage released by Hamas in May. He will be with the President about an hour and a half from now. We mention all of this, of course, because the possibility of peace following so much destruction and death appears to be at hand with talks underway here following the President's 20 point plan hammered out with Benjamin Netanyahu or according to some, the arm twisting that convinced Netanyahu to accept this deal and one that we have, I guess conditional acceptance of, if we can call it that, from Hamas. But they are obviously continuing to talk about the release of hostages and the withdrawal of Israeli forces in Gaza. More than 60,000 people or been reported to have been killed in Gaza since October 7, 2023. And we start with our panel on this today. Bloomberg Politics contributors Rick Davis and Jeannie Shanzano are with us. Jeannie is democracy visiting Fellow at Harvard Kennedy School's Ash center, our Democratic analyst and Rick is Republican strategist and partner at Stone Court Capital. Jeanne, it's it's difficult to imagine what the conversation is like today in Cairo knowing that this is the 7th of October. Does it heighten the urgency or, or make it more difficult to move closer to a cease fire?
- [20:27]
Jeannie Shan Zaino
I think we all hope it heightens the urgency. And you mentioned Eden Alexander. He is by some reports the last living US Israeli hostage. And I think that's going to be quite a moving moment when Donald Trump meets with him at the White House today. Another, as you mentioned, in a long line of reminders of what has happened in since that horrific assault two years ago. You know, I hope that it does lead lend a sense of urgency. The problem is we have these two phases in this deal and by all accounts these are still indirect talks, which is problematic, but it's also problematic that we haven't had yet out of Hamas an acceptance of both of these phases of the deal. If you just look at phase one, for instance, the release of the hostages and then a movement back of Israel still within four miles in Gaza, that yellow line at the Trump administration's map. The problem is Hamas has never wanted to agree to that. They've wanted total withdrawal by Israel. So we have some ways to go. But I think there is some reason to hope because the entire world seems to be pushing Hamas to accept this deal.
- [21:43]
Tim Stanwak
What is your thought today, Rick? It's a reminder, of course, about how this started, but also it tells us how long this has been going on and how important it is for us to find resolution here. Will this group meeting in Cairo manage to get this done?
- [22:01]
Rick Davis
Well, it's certainly the closest step we've seen since the attacks of October 7th two years ago. And it really has ushered in a profound change in the Middle East. You look at this right now in a, in a vacuum as a negotiation between the Israelis and Hamas. But the reality is, is it incorporated a region wide war that has been perpetrated with Israel taking out Hezbollah, fighting actively to, to weaken the, the Yemeni groups that have been supportive of India or India, Iran, an attack actually on the country of Iran. I mean, like when you think about, you know, Syria changing leadership, I mean, we are in a different world than we were two years ago when this attack took place. And I think that's the reason that you might actually see peace here because there's no retreat. Iran's its weakest point. There's not really active support for Hamas. Hamas has taken on enormous losses and there's no future for the people of Palestine without a resolution of this conflict. And, and so pressure is on. And I have to give credit to Donald Trump for keeping Netanyahu and in the game, right to forcing him to a negotiation that, that otherwise he probably would not be actively involved in. And the US Is Israel's last significant ally and without us there would be no peace.
- [23:49]
Tim Stanwak
You wonder what's next here, Jeannie, we're obviously marking October 7th today, but I just saw Marco Rubio on the couch in the Oval Office with the President. We know that Steve Witkoff and indeed Jared Kushner have both also been instrumental in getting us to this point. Who's leading the charge on this? White House diplomacy?
- [24:09]
Jeannie Shan Zaino
Yeah, I mean, I think Witkoff and Kushner have been paramount. Obviously. You mentioned Marco Rubio Secretary of State. So, you know, I think Witcough, who has had an awful lot on his plate, and Kushner are really been able to deal, to Rick's point, with Netanyahu. You know, but let's remember what these talks are being described as right now, yesterday and today as technocratic talks, really talks about this first phase, like things as basic as the sequencing. Does Hamas have access to the hostages, both living and deceased, in order to fulfill, if they decide to their end of this deal? And yet again, Hamas has still not agreed to any of that. And so we do have a ways to go. And speaking of Netanyahu, he is feeling pressure both internally and externally. We have these really striking polls from Israel in the last day or so showing that about two thirds of Israel, Israelis are saying that Netanyahu should take responsibility for the attacks and resign, where we're seeing that a good, substantial portion believe that Israel has committed genocide. Those numbers are reflected by Israelis or Jews who live in the United States. And of course, the White House is seeing those polls as well. So there is a lot of pressure on Netanyahu, but of course there's a lot of pressure on the Hamas political wing as well, because what are they going to have to do? They are going to have to sign their death warrant, and that is going to be very hard for any individual or group to do. But that's essentially what would have to happen for this deal to go through.
- [25:47]
Tim Stanwak
Do you mean political death warrant, Jeannie?
- [25:50]
Jeannie Shan Zaino
Yeah, absolute. Sorry about that. Absolutely. Political death warrant, because this says that they are disarmed, that there may be amnesty for fighters who denounce violence, but that the group itself will be disbanded and have no role in a potential future Palestinian state. And that is, as you can imagine, just like individual states act the same way. Very, very hard to imagine that the political and military end come to an agreement on that. They may, but they would be signing their own political death warrant there.
- [26:22]
Tim Stanwak
It does certainly sound like it, Rick, I'm assuming you look at it this way as well as obviously Benjamin Netanyahu does. He's calling for the elimination of Hamas. To what extent does that lead to a potential rebranding, however, with political leaders in Gaza assuming the role of leadership in some other group?
- [26:42]
Rick Davis
Yeah, look, I mean, I think it goes without saying that Prime Minister Netanyahu said at the time two years ago that the operation that he will overtake is the complete and total destruction of Hamas. And that has not happened today. There are still people who are would be considered leaders there. And they are the ones currently negotiating. Jeannie makes a good point. I'm not sure it's a political point. It actually is a death warrant for these individuals because we only have to remember the 1972 Munich Olympic massacre. And Israel at that time said the same thing. We will hunt down the people who did this and we will destroy them. And Operation Wrath the Guard did just that. It took decades. But at the end of the day, the people who perpetrate this attack two years ago on Israel will feel the wrath of Israel. And so this is a heavy negotiation. There'll be efforts to try and get leadership sanctuary in other cities, but they all know what we know, which is that Israel will always look for opportunities to vanquish their enemies who perpetrated these horrible crimes on their people. And that over that has got to be part of the negotiation that's going on today. And so, yes, there are a lot of technical issues that have to be figured out. The 20 point plan is not even close to being a comprehensive plan. But at the end of the day, all parties are now in one location hashing us out, which we have not seen happen heretofore. And I think the world is keeping pressure on these groups to try and come to a, to an end to this carnage that's been going on now for two years.
- [28:39]
Tim Stanwak
It's an important moment, Jeannie, in our final minute here in our conversation with the political leadership of Hamas, then following the signing of any deal, essentially just go into hiding fighting in Doha. They can never go back to Gaza, right?
- [28:55]
Jeannie Shan Zaino
Yeah, I think that's an open question and it's a really important one because what history shows us is that any time you destabilize a leadership, whether you describe it as evil or tyrannical or democratic or otherwise, another group is going to come in and fill that power gap or power gap. And that group can be worse than the group that preceded it. We've seen that repeatedly. And of course, of course, as the leading democracy in the world, we must always remember we do owe to the Palestinians a right of self determination as to how they live peacefully.
- [29:33]
Tim Stanwak
Jeannie Shan Zaino and Rick Davis tackling some heady issues with us today on Balance of Power. And I thank you both for the insights and we'll keep you posted on talks in Cairo. Stay with us on Balance of Power. We'll have much more coming up after this.
- [29:50]
Public Investing Ad Voice
You're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic options plays on the side the point is you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On Public you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto. It's all there plus an industry leading 3.8% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com paid for by Public Investing. All investing involves the risk of loss including loss of principal. Brokerage services for U.S. listed registered securities options and bonds in a self directed account are offered by Public Investing Inc. Member Finran SIPC crypto trading provided by Bakkt Crypto Solutions, LLC. Complete disclosures available@public.com disclosure you're listening to.
- [30:51]
Carol Massar
The Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg 11:30.
- [31:09]
Tim Stanwak
The Tuesday edition might feel a little bit like the Monday edition in that the government, yes, is still shut down and we have no idea when it's going to reopen. You start talking to lawmakers, as we did earlier with Chairman Bost, about off ramps and everybody points to the other party and that's where we are right now. With more voting in the mix in the Senate today, of course there's the prospect of either more Democrats fallen off the fence here in voting for the continuing resolution. Much as there is some falling off, there is reporting today that Angus King, the independent who caucuses with the Democrats who voted for this, one of three to cross over, might not be on board today because of some of the rhetoric that we're hearing. A lot of this comes down to trust. We're going to discuss in a moment with Megan Scully, who leads our Capital Influence team. We did discuss it earlier today with Republican Senator Bill Cassidy of Louisiana, who is on Bloomberg surveillance. Let's watch and listen him.
- [32:03]
Bill Cassidy
There's a complete breakdown of trust. Chuck Schumer, obviously he could end it tomorrow if he wants to end it, but he doesn't trust the President. That said, Chuck Schumer could end this tomorrow. I'm hoping that he does and I'm hoping it doesn't take a lot of pain from the American people in order to get him to do so.
- [32:20]
Megan Scully
Is there a breakthrough of the fact that and good morning Senator. That it does seem like both sides, at least at this point, want to talk about talking, as Politico put it, that the president is coming out and saying maybe there could be a compromise when it comes to health care.
- [32:34]
Bill Cassidy
Yeah, absolutely. You know, it's better to jaw jaw than to war war, as Winston Churchill once said. So let's go ahead and start talking. That said, Republicans suggested a seven week extension of the current budget to allow to allow dialogue to continue. And that's commonly done, as Chuck Schumer points out, happened 13 times under Joe Biden. And so that seven weeks kept the government open, allowed us to continue to negotiate. So I think there's something else that Schumer is thinking about. Not quite sure what it is, but I'd rather be talking than kind of sitting in our own corners.
- [33:07]
Megan Scully
What is going to happen though, at the end of the year when we get this premium hike?
- [33:13]
Bill Cassidy
Well, first, we don't know a premium hike is going to occur, let's just say that. But secondly, we've got to address the fact that the Affordable Care act has become the Unaffordable Care act in which it takes huge subsidies in order to continue to make those policies affordable to Americans. That's wrong. We've got to roll that back to a point where it's still affordable to Americans, but it doesn't require these huge subsidies. This is not sustainable. But by the way, it's not just me saying this. The Washington Post had an editorial about how the Affordable Care act is no longer affordable. So I think now might be the time. What can we do to help the American, American public lower health care cost in a way which is not just for the exchanges, but for those in the kind of private markets as well?
- [34:00]
Megan Scully
Could you get a compromise like that before the end of the year?
- [34:04]
Bill Cassidy
I sure hope so. But first you got to reopen the government. We're actually asking for, you know, okay, how can we do this? How can we do that? The government shut down so we can't get some of the information. The seven week extension of the current budget allows that to happen. And so I'd ask Schumer to reopen the government. In the meantime, I'm certainly committed to how we can lower health care costs for all Americans. That's what I've been doing my whole life. And so let's get on.
- [34:28]
Megan Scully
Senator, when it comes to moderate Democrats, do you see any willingness of some of them to join the three that we have seen, sign up and vote for a clear stopgap funding measure?
- [34:39]
Bill Cassidy
I've not Spoken to any of them personally? You'd like to think so. One more time. We've just asked for a seven week extension of the current budget, which was done 13 times under Joe Biden. And so, so, so I would hope they would because this is inflicting pain on the American people. But we could be talking with each other without a shutdown.
- [35:01]
Tim Stanwak
Republican from Louisiana, also a physician, we should note. So that conversation about extending ACA subsidies is important through the eyes of, of Dr. Cassidy, as it is through the eyes of Megan Scully, who we get to talk with now, runs Bloomberg's Capital Influence Team. This is the group of people here in Washington tasked with covering this shutdown 24 hours a day until it ends. And Megan, it's great to see you once again.
- [35:24]
Megan Scully
Thanks for having me.
- [35:25]
Tim Stanwak
And a shutdown here. Really interesting to hear the discipline among Republicans when it comes to messaging around this. I don't know how many times we just heard the name Chuck Schumer. Yeah, I don't think Bill Cassidy called it the Schumer shutdown, but we're getting that as often as well. 13 times. Right. Under Biden. We hear that in every answer from each lawmaker. Some of this was tipped over a little bit by the president yesterday when he talked about these talks being underway with Democrats. The White House has walked that back a little bit.
- [35:54]
Megan Scully
Yes.
- [35:54]
Tim Stanwak
I was talking with Tom Emmer last evening, the majority whip. He didn't want any part of that conversation. All I heard about was the Schumer shutdown, a rapid Republicans winning the messaging war.
- [36:03]
Megan Scully
You know, polling is indicating that they're not, of course, it's early yet.
- [36:08]
Carol Massar
Right.
- [36:08]
Megan Scully
And the full effects of the shutdown haven't been felt by the American people. When we start to see travel delays because TSA workers are calling out, you know, perhaps it will be, there will be a different, there will be a shift. But you know, the biggest, those feeling it the most are those who are going to be going without a paycheck later this week or next week. Certainly, I will say it's hard. It's easier for the, for the House Republicans particularly to stay on message because they're not here in Washington. Right. So they are, they may be at home doing some doing interviews, but they're not here voting. They're not getting tracked down in the halls by, by our reporters, by other reporters. So it is easier to stay on message then. But we did see one very important one who someone who's become a bit of a squeaky wheel in the House Republican caucus. And that's Marjorie Taylor brought this up.
- [36:59]
Tim Stanwak
What do you think about this? I can't even read the whole thing. They'll bleep us on the air. And it's also a long post.
- [37:05]
Megan Scully
It is very long.
- [37:05]
Tim Stanwak
She says she's carving her own lane and she's pointing to her own family.
- [37:09]
Megan Scully
Yes.
- [37:09]
Tim Stanwak
When it comes to rising subsidies, is she on her own here or does she open the door for other Republicans to do the same?
- [37:16]
Megan Scully
So it's hard to say at this moment. Marjorie Taylor Greene doesn't really represent anyone. You know, she was in that the ultra conservative House Freedom Cause Caucus and got kicked out. So she's sort of a caucus of one. And her, her allies may not necessarily fall in line behind her. But I think it is an interesting jailbreak from, you know, the Republican message and particularly when she's talking about her own adult children having double premiums and it being very much a concern. She also is a small business owner and a lot of small business owners rely on the Affordable Care act to get their insurance.
- [37:54]
Tim Stanwak
Sure. To your point, she's talking about her kids. I'm going to go against everyone on this issue, she writes, because when the tax credits expire this year, my own adult children's insurance premiums for 26 are going to double, along with all the wonderful families and hardworking people in my district. She may not be part of a powerful caucus, but she does have the president's ear. Right. Does this help to maybe crack the door a little bit on this issue at the White House?
- [38:20]
Megan Scully
So we are trying to sort that out. Her relationship with Trump has been a bit fraught in recent weeks, particularly over the Epstein files. She's been one of the lawmakers to sign on to what we call discharge petitions. Yes, certainly. And she was supposed to have a press conference at the Capitol tomorrow on particularly sort of a revised or updated that seems to be canceled for right now. But she's still beating the drum on the release of the actual Epstein file. So it is very interesting to see her break with the president yet again on this. I'm not sure if he's answering her calls right now. We're definitely endeavoring to find out.
- [38:58]
Tim Stanwak
Boy, I bet that's true. You know, with regard to the discharge petition, just to veer off course for one minute, there's a new member of Congress.
- [39:04]
Megan Scully
Yes.
- [39:05]
Tim Stanwak
Congresswoman Grijalva or Congresswoman Elect Grijalva has not been sworn in to office yet. There is a whole conspiracy online that this shutdown is only to keep the Epstein files from being being released. But why can you not swear in a new member when the government's closed?
- [39:20]
Megan Scully
We because the House is not in.
- [39:21]
Tim Stanwak
Session, as simple as that.
- [39:22]
Megan Scully
So they can't swear.
- [39:24]
Tim Stanwak
So next week it could be if.
- [39:26]
Megan Scully
Mike Johnson were to call the House back in, although he says they're going to stay out for the duration of the shutdown.
- [39:31]
Tim Stanwak
Yeah. I'm going to take the opportunity to mention, by the way, that we're going to be speaking with Speaker Mike Johnson tomorrow here on Balance of Power on the Late Edition, which is a conversation that we're obviously very much looking forward to to learn exactly where his head is right now. The speaker of the House will join us in the 5:00pm Eastern hour tomorrow here on Bloomberg TV and radio. Do we know what the plan is today or are we just ad libbing? There was supposed to be votes every day. Right. But we haven't heard about a time.
- [39:57]
Megan Scully
We have not heard about a time in the Senate for a vote. They've already voted on the, the seven week stopgap which Senator Cassidy mentioned five times and it's failed all five times. So six might not mention a difference. Yes. So we're waiting to see if they, if they do call a vote. I think some of the president's actions in the past day have kind of thrown a wrench into things, particularly his announcement this morning or the OMB memo, the budget office memo that's been circulating on not giving pay to furloughed back pay to furloughed employees. So that has sort of sucked all the oxygen out of the room today on Capitol Hill as, as members of both parties seize on those comments.
- [40:37]
Tim Stanwak
Well, it's interesting that, you know, Angus King aforementioned has been listening to this. He doesn't like the rhetoric and he's suggesting that he may become a no vote Once again on all of this. We've got not just Angus King, but John Fetterman. I'm assuming that he's in place for now. Senator Cortez Masto, also a question, could we be in a world where the next round of voting, and maybe that's why we don't have one today looks worse.
- [41:02]
Megan Scully
We certainly seem to be going the wrong way, at least if you're, if you are a member of Republican leadership. All senators are also not in town. There were quite a few who were, who were absent last night for the vote. And remember, it's a 60 vote threshold. So it is, it will be very interesting to see in the next round of votes. You know, Republicans had hoped to be picking Democrats off one by one. You know, there are, there are several moderates who would like to see the government reopen, particularly those in this area, people like Senator Tim Kaine from Virginia. But the president's threats to fire federal workers and to not give back pay to furloughed employees seem to be having opposite of the intended effect. Instead of scaring Democrats, it's making them more resolute.
- [41:53]
Tim Stanwak
Wow, amazing. The president says four or five days we'll have a decision of some sort on furloughs becoming layoffs, on the mass layoffs that, that have been threatened. That sounds to me four or five days everyone's going to kind of wait for the 10th and the 15th, the next stops in the pay cycle for feds and for military. Is that kind of the next stop in the road?
- [42:11]
Megan Scully
So we've been hearing him say, you know, we've gotten different timelines for this. You know, last week it was within a few days, within a day or two. Now four or five days is starting to feel like when I'm driving with my kids in the backseat acting up and I'm like, I'm going to turn this car around.
- [42:24]
Tim Stanwak
Don't make me.
- [42:27]
Megan Scully
So it remains to be seen certainly the threat is still hanging out there. Yeah, Federal workers are supposed to be paid this Friday. So that would then set them up for, you know, for layoffs at some point after he did say it would be substantial today. In the past they have said thousands, so will remain to be seen. I can't underscore enough though how different this is from previous shutdowns where, you know, previous administrations have not. Trump himself did not use.
- [42:56]
Tim Stanwak
Correct.
- [42:57]
Megan Scully
The 35 day shutdown, the last one we had in 2018-2019 to do mass firings.
- [43:02]
Tim Stanwak
Your gut check though is check back when there's news.
- [43:05]
Mike Bost
Right.
- [43:06]
Tim Stanwak
I mean, we could set a new record in this shutdown. Yes, Granted, we could reopen in a couple of days, but the prospect for protracted shutdown is there.
- [43:15]
Megan Scully
Absolutely. Talks are not happening and neither side seems like they are willing to give at this point. So I think that it will be interesting to watch. Last time in 2019, January of 2019. What ultimately convinced Trump to reopen the government after he didn't get his border wall funding was the, was air traffic controllers not showing up for work traffic in this country.
- [43:39]
Tim Stanwak
And we've got thousands of flight delays already with some thin staffing, this could really be the next leg in the story. Megan Scully, great to have you with us. Our Capital influence team is busy living on caffeine. And nothing like seeing Stephen Dennis and the rest of the crew up there on Capitol Hill do their thing. Eric Watson as well. This is Bloomberg. Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already at Apple, Sports, Spotify or wherever you get your podcasts. And you can find us live every Weekday from Washington D.C. at Noontime Eastern@Bloomberg.com I'm Carol Massar. And I'm Tim Stanwak inviting you to join us for the Bloomberg businessweek Daily Podcast.
- [44:19]
Carol Massar
Now, every day we are bringing you reporting from the magazine that helps global leaders stay ahead.
- [44:24]
Tim Stanwak
We've got insight on the people, the companies and trends that are shaping today's complex economy.
- [44:28]
Carol Massar
That's right, Tim. We're all over global business, finance, tech news, all as it is happening in real time. And we've got complete coverage of the US Market.
- [44:36]
Tim Stanwak
Close.
- [44:36]
Carol Massar
Got to say, basically, if it impacts financial markets, if it impacts companies, if it's impacting trends and narratives that are out there, we are on it.
- [44:43]
Tim Stanwak
We also have a lot of fun doing it. Bloomberg businessweek also brings you the analysis behind the headlines through conversations with our expert guests.
- [44:51]
Carol Massar
And we are doing this all live each weekday. And then we bring you the best analysis in our daily podcast.
- [44:56]
Tim Stanwak
Search for Bloomberg Businessweek on YouTube, Apple, Spotify or anywhere else you listen.
- [45:01]
Carol Massar
Check it out on your way home from work to catch up on the conversations that you miss during the business.
- [45:05]
Tim Stanwak
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- [45:09]
Carol Massar
That's the Bloomberg Business Week Daily Podcast. I'm Carol Massar.
- [45:12]
Tim Stanwak
And I'm Tim Stanovec. Subscribe today wherever you get your podcasts.