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- [00:01]
David Gura
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- [00:33]
Podcast Host / Bloomberg Announcer
Bloomberg Audio Studios Podcasts Radio news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube
- [00:55]
Kelly
here in Washington, we're keeping an eye on all things Capitol Hill and White House. Both ends of Pennsylvania covered, Pennsylv Avenue covered for you here on Bloomberg TV and radio today and at the White House. As we speak, we're preparing to see a briefing from the White House Press secretary, Caroline Levitt, who should retake the podium any minute now. Her first briefing with reporter show, of course, since having her second child. She is back from maternity leave and I would imagine she's going to be pressed a number of times as to what exactly she knows about what the President is planning to say in his primetime address.
- [01:27]
Joe
Yeah, we haven't seen her in this forum in some time and she's going to, I'm sure, try to frame what the President wants to talk about this evening without getting in front of the boss. There's only so much that you want to say, and of course there's only so much that everyone knows about what exactly is inside Donald Trump's head. He's known for tweaking the script right up until the moment it's put in the prompter and then ad libbing around it when it's on the paddles. This will be in the East Room tonight. I'm curious to know if he has an audience again this time. Remember, there was a seated crowd filled with Cabinet officials and others last time he did one of these.
- [01:57]
Kelly
Yeah, there's been reporting that the FBI director, Cash Patel could be involved this go around as it is expected at least it has been reported that the President is going to unveil new intelligence pertaining to the 2020 election, but we're all on tenderhooks to find out. We actually don't know. None of this is confirmed.
- [02:13]
Joe
This is going to be something, which is why we start at the White House. Bloomberg's Tyler Kendall is on a sweltering North Lawn. Right now it's about 95 degrees here in the nation's capital, as we anticipate the smoke plumes will be looking a lot like New York, they say by tomorrow. Tyler, what's in store for us this evening? The president speaking at 9pm Eastern. What do you know about it?
- [02:33]
Tyler Kendall
Well, Joe, at this point, we know it's going to be a primetime address. President Trump is set to address the nation about what we're expecting to be. As you both are outlining election security, there has been various reporting on exactly what the president could lay out tonight, including this report from Politico that says that he will focus on the declassification of previously unseen intelligence related to the 2020 election. But as you both mentioned, we don't know at this point. But we do know that there's a lot of context leading up to this, which is that President Trump, for the most part in the past weeks has really been pinning most of his legislative agenda on the Save America act, that voter ID law that would tighten restrictions around voting. As we head into the midterm elections, he's tied it to most of the legislation on Capitol Hill, from the FISA extension to that housing bill, that bipartisan bill that he didn't put his signature on. The other context that we know, of course, is that there are very slim margins when it comes to Congress. And perhaps this could be trying to lay the groundwork as we head into the midterm elections. Democrats only need a net gain of three seats in the House and four seats in the Senate to flip those respective chambers. And I would expect that the president's going to talk about his views on this as we get closer to Election Day.
- [03:52]
Kelly
Well, and of course, Election day does just grow ever closer with every passing day, Tyler. And that looming election and the economic consequence of what has happened in the Middle east that could impact voters as they head to the elections is the reason why the president was pursuing a deal with Iran and entered the memorandum of understanding that, of course, he has since declared dead. As we see a resumption of hostilities with Iran, do we expect that he'll have anything to tell the country about the prosecution of those operations moving forward? The last time he did this, as I recall, he was talking about Iran and how he expected that it could be wrapped up in a matter of weeks. And that was what back in April,
- [04:32]
Tyler Kendall
Kelly, it's definitely a possibility. President Trump himself said yesterday that he would have really big news seeming to allude to the election security aspect of this but he also said that he would speak on other topics. So at this point, we're going to have to see if he does give some sort of update, as it's been very clear that the US Is opting for tighter economic pressure and also kinetic action to try to force Iran back to the negotiating table. We had President Trump yesterday reiterating his threats to hit Iranian energy infrastructure by next week if they don't start to resume talks, as well as seeing just overnight the US Target a super tanker near Kharg island that was headed towards an Iranian port in the first instance of the US Upholding its naval blockade that it reenacted earlier this week. At this point, Joe and Kelly, things are pointed toward escalation. But as we have learned in the cycle of this conflict, there can always be some sort of breakthrough that may tamp down those tensions. So we'll be on the lookout to see if President Trump announces anything that either ratchets up the tensions or perhaps gives us some sort of leeway when it comes to the diplomatic channels that we know this White House would like to pursue.
- [05:46]
Kelly
All right, Bloomberg's Tyler Kendall live at the White House for us. Thank you so much. As Tyler told you and as we've told you, no one knows for sure what the president will say, though I would imagine that there's going to be some bets in the betting markets around what he could say. Joe, I just have to mention quickly this story. I know where you're this report that the teleprompter operator that Trump has long work, long worked with for years apparently was able to make $100,000 betting on what would be in his speeches. And this is under investigation now by authorities in Washington. Yeah. On Kalshi.
- [06:17]
Joe
You got to be kidding me. I guess you're in the catbird seat when you're the one loading the speech into the prompter and you know what's going to be announced. It also reminds us how quickly these things take place. You get seconds notice and you can make that much money on cowshi. Fascinating that it was Couchy that reported this.
- [06:33]
Andra Gillespie
Yeah.
- [06:34]
Kelly
To authorities maybe trying to ingratiate themselves. It's not all bad. We are also self self policing during self regulating in the absence of wonder.
- [06:43]
Joe
Who's going to be on the teleprompter tonight?
- [06:45]
Kelly
That is an excellent question. Will there be a teleprompter tonight that may dictate how long exactly this yes to that one is going to be. But of course it is expected a lot of this may center around the 2020 election. Even as the 2026 midterm elections approach, this could be some relitigation. And we saw plenty of relitigation yesterday as well in confirmation hearings for two key appointees that the president has wants to serve in key roles in the government, including the Director of National Intelligence. Nominee Jay Clayton, of course, used to run the SEC, was U.S. attorney for the Southern District of New York. Was asked repeatedly who won the 2020 election. Didn't always give an answer, as evidenced by what his exchange with Democratic Senator of Georgia Jon Ossoff looked like yesterday.
- [07:28]
Rick Davis
Listen, who won the 2020 election? You know, I'm not, I'm not going
- [07:33]
Kelly
to do this with you.
- [07:35]
Rick Davis
This is a job interview. We have established that you have an obligation to be honest and forthright with the committee.
- [07:43]
Andra Gillespie
Yes.
- [07:43]
Rick Davis
You do have an obligation to be honest and forthright with the committee.
- [07:46]
Jeannie
Yes.
- [07:46]
Rick Davis
Who won the 2020 election?
- [07:48]
Joe
Like I said, I'm not, I'm not
- [07:49]
Podcast Host / Bloomberg Announcer
going to get into that with you.
- [07:50]
Rick Davis
But you do have an obligation to be honest and forthright with the committee.
- [07:54]
Kelly
Is anything that I just said not honest or forthright?
- [07:56]
Eric Wasson
Yes.
- [07:57]
Rick Davis
You're not being honest or forthright. Who won the 20 election?
- [08:00]
Kelly
I think I'm going to ask the question. We can keep doing this.
- [08:04]
Audience Member / Interjection
Oof.
- [08:05]
Joe
And they did, by the way.
- [08:06]
Kelly
Yeah, this went on for a bit, and there were a number of exchanges that sounded pretty similar.
- [08:12]
Joe
Yes, exactly.
- [08:13]
Andra Gillespie
To that.
- [08:14]
Kelly
But all of this, of course, leads up to the address the president will give tonight. And again, 2020 could come up repeatedly in that speech as well. So on that note, we turn now to Andra Gillespie, who is joining us from Emory University, where she's associate professor of political science. We frequently talk to her about Georgia and Georgia politics. And it does seem. Andra, welcome back to the Georgia could be at the very center of the claims the president's getting ready to make tonight, both in terms of, say, what happened in Fulton county and also even, it's been reported, could look into the results that elected Jon Ossoff and Raphael Warnock in the first place, will voters in Georgia or anywhere else believe that?
- [08:51]
Andra Gillespie
I think it really comes down to the quality of the evidence that's presented. So if President Trump wants to make this case, and he says that this Election Security Commission that he's put together has findings, people are going to have to interrogate, they're going to have to interrogate the quality of the source, whether or not it is objective, whether or not the analysis is systematic or not. But suffice to say he has an uphill climb. If we look nationally at what people think about the results of the 2020 election, the Economist in YouGov did a survey that came out about a month ago. Only 28% of Americans believe that Donald Trump really won the 2020 election. If we break that down by party, it's about half of Republicans. So there are a lot of people who will need convincing, and there are a lot of people who will also want to ask whether or not this line of inquiry is even valid or prudent at this time, given all the challenges that our nation is facing right now.
- [09:49]
Joe
Well, let's catalog some of them. The president professor says, or at least his subordinates say he could talk about a range of issues. This is the narrative we've been hearing throughout the week, knowing that he wants to have a higher cadence of these primetime addresses that he has typically not embraced. If he does, in fact, get to the economy this evening, gets to Iran, what's the impact for voters here who are trying to balance their own lives here and follow the ball at the White House?
- [10:21]
Andra Gillespie
Well, this primetime address format is actually an interesting format. Political scientist Samuel Cornell kind of developed this idea called going public more than 40 years ago, and he was using the Reagan administration's use of these primetime addresses as an example here. And so what President Reagan did and what President Trump could be doing tonight is using primetime addresses to circumvent Congress, to try to persuade individual voters to put pressure on their Congress members, on their senators, to vote for legislation. So if this is about voting, then I think the big question is, does President Trump use this to try to boost his save app, which is stalled, or is he going to try to announce some type of unilateral action that could immediately be put into court because of questions about whether or not the executive branch has power over elections or whether or not it looks like he's trying to suspend elections. So we have to wait to see exactly where this is going, if he's going to make these addresses. I think it becomes a question of whether or not he uses as pursuit persuasion to try to influence the legislative branch to align with his agenda, or whether or not he's using it to justify some type of unilateral action and whether or not that unilateral action would actually be deemed constitutional, even within the context of expansive presidential power.
- [11:44]
Kelly
Well, and on the persuasion idea, Andra, it's one thing to persuade elected officials to try to do things. It's another to persuade voters to show out and to vote your way. If this is primarily going to be about 2020 and election integrity, does that not play to the President's base? Is that not motivating for them?
- [12:05]
Andra Gillespie
So it might be motivating to the base where you could look at half of them believing that, you know, that, that, that President Trump didn't win the 2020 election as an evidence of slippage in some way, shape or form. But I think the important thing to kind of keep in mind is that what, when we're talking about congressional elections in this cycle, given party polarization, most seats are safe. We're talking about a handful, a few dozen districts that could be swinging. This is not helpful for them. This is also not necessarily going to be helpful and most salient even for base voters who might have concerns about other issues like the state of the economy, like our continued involvement in the war in Iran and other types of issues. And so I think the question that we may be thinking about tomorrow, once we've heard the speech and once we know what action he's proposing or what his big announcement is, is whether or not this was actually a good use of time.
- [13:00]
Joe
Democratic Congressman Jim Himes with an op ed in the New York Times talking about this very issue. Professor, the headline on the guest essay, Trump's election denial has never been more dangerous. In he floats the prospect, knowing that, as Kaylee mentioned, FBI Director Cash Patel may be part of this, along with others, including Bill Pulte. His concern that Bill Pulte or others could declassify certain documents that are not in fact, credible, anecdotal evidence, things that have not been confirmed by our intelligence agencies, could really change some Americans view of the electoral system and the security around elections. Which begs the question, Is this about 2020 or is this about 2026?
- [13:48]
Andra Gillespie
I think it's about both. President Trump certainly has an incentive for his legacy to try to relitigate 2020, because I think he wants to, at the end feel vindicated. And this is the way that he has decided that he will feel vindicated. It's not enough to have come back in one election again in 2024 for him. He has to prove that everything was wrong about 2020 and perhaps get a pound of flesh from people who were involved in that. I think the danger with this classified information being declassified selectively is whether or not people are discerning the source of the information and the quality and the systematic analysis of that information. And so it could reinforce ideas amongst people who have been misinformed that their thoughts and that their sort of instincts about the 2020 election were real. There are also people who would be inured to that, sometimes for superficial reasons like it's coming from the wrong party, but also because there are other people who might be better equipped to be able to discern misinformation and then to be able to kind of dispel that from their thought process.
- [14:57]
David Gura
Yeah.
- [14:59]
Joe
It's good to have you back with us. Professor Andre Gillespie, associate professor of political science at Emory University. Great to have you. And of course, we're going to carry the speech from President Trump this evening. It starts at 9pm Washington time. Congressman Himes, in this piece, Kaylee says, I have read the most detailed version of this assessment of the election and the declassified findings are fully consistent with the classified material which was based on exceptionally sensitive, high value, high confidence intelligence. His concern is that will be cherry picking things this evening, declassifying unsubstantiated reports from human sources that could say a lot of wild things.
- [15:36]
Kelly
Yeah. He of course, can't divulge what he's been told in classified briefings, but he did say in that piece that he has seen no evidence of activity to actually disrupt the voting process in the midterms coming from adversaries of the United States. But of course, this is going to be the subject of much debate throughout the day to day leading up to the president's speech and I would imagine very much so in the aftermath.
- [15:58]
Eric Wasson
That's for sure.
- [15:58]
Joe
We'll be doing this again tomorrow. That's why you should join us this evening for the speech. We'll be unpacking it together live on the air and we'll assemble our panel next, only here on Bloomberg. Stay with us on Balance of Power. We'll have much more coming up after this.
- [16:13]
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- [17:10]
Kelly
Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors, LLC. SEC registered advisor complete disclosures available@public.com disclosures
- [17:23]
Podcast Host / Bloomberg Announcer
you're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa.
- [17:39]
Kelly
Play Bloomberg 11:30 at the White House in the briefing room, Caroline Levitt is back at the podium, the White House press secretary giving her first briefing to the media since returning from maternity leave. We haven't seen her do this in a few months, Joe, and no surprise, she led off her comments with some scheduling announcements. Not only will the President be attending the FIFA World Cup Final on Sunday between Spain and Argentina, he apparently will be attending a FIFA reception at Trump Tower in New York City tomorrow. And of course, before any of that, he has a speech to give to the country tonight and slated for 9pm Eastern. And the White House press secretary just confirmed what we had been reporting and seen reports about that the President will be talking about election integrity.
- [18:23]
Joe
So just to back up, first of all, if you're at the Peninsula Hotel, you're in for it on Friday night. But what will these people going to the game have to endure? Oh yeah, when he went to Madison Square Garden, that was what if he had to get there five hours early for the next game? Airport style security. I'm assuming that'll be the same on Sunday.
- [18:40]
Kelly
Yeah, plus there's the smoke factor to contend with. This might not be a great experience, but of course for fans of Spain and Argentina and soccer in general, I'm sure it's once in a lifetime stuff.
- [18:51]
Joe
Breathe deep, Wear a mask. Let's assemble our political panel. We've got a lot to talk about. Rick and Jeannie, our Bloomberg Politics contributors. Jeannie is our Democratic analyst and Democracy Visiting Fellow at Harvard Kennedy School's Ash Center. Rick, our Republican strategist and partner at Stone Court Capital. I know you've got your clock set for 9pm Guys, it's great to have you with us. Rick, talk to us about the President's decision to use the primetime address here to go back to the future. This is a very critical moment, of course, for rhetoric coming from both sides as fundraising takes place. We work through the primary calendar, the economy as we've Reasserted based on new polling this hour is shows that the economy is the number one issue, not who won the 2020 election. What's the president getting into here?
- [19:40]
Jeannie
Yeah, you would have to be living under a rock to not know that for the last 14 months, the economy has been the number one issue. And if you polled, you know, the concerns about the 2020 election outcome, I suspect, you know, you would get only the hardest core of Donald Trump's already, you know, base vote thinking that it is at all an issue. And they're already voting for him, so it's not like he needs to talk to them. So who is he talking to? I think this is probably, as has been discussed as much about his legacy as anything. It's not like you're going to go back and say, oh, well, you're deemed now present in your third term. You know, they're not going to actually declare him winner. Nobody will of the 2020 election. So what are we trying to accomplish here? If, if it's to make elections better, then the administration looks needs to look no further than their own actions. You know, basically shutting down efforts at the cybersecurity at Homeland Security, you know, having the Postal Service crack down, pursuing rules in Congress like the SAVE act, which makes it harder to vote, not easier. I mean, it's really kind of a head scratcher as to what he would hope to accomplish in this other than, you know, just his legacy saying he was right and everybody else who attacked him on this idea that the elections were rigged were wrong. His own administration at the end of 2020 said there was not a impact in the election with any of these efforts that may be described tonight. So he has nowhere else to look but himself in that regard.
- [21:36]
Joe
So I don't know.
- [21:37]
Jeannie
To me, it's a horrible waste of perfectly good presidential time in the Oval Office. I'd be trying to get the public on board with the Iran campaign. That would be a really good use of time since that seems to be exploding. But, no, we'll see, I guess, where it winds up tonight.
- [21:56]
Kelly
Well, and I wonder, Jeannie, how much you see this as if he can't make an argument that Republicans should win or focus on the issues he thinks they should win on. He can set the stage for people to question the results if Republicans lose. Is this pretense for what could happen leading up to and after the votes are in?
- [22:18]
Audience Member / Interjection
Yeah, Kelly, absolutely might be. First of all, I want to say I was questioning the speech tonight, and now that you guys are reporting he's coming to New York tomorrow. I'm telling you, everybody here is grabbing their masks and trying to leave. So now I'm questioning that as well. It's very smoky here. You know, I don't think any of us know why the president is doing this primetime address. It is a very risky strategy unless he has something really important to share with the American public. And as far as we know, he's going to focus on election integrity and he's going to try to wind it back to 2020. And there is absolutely nothing new that has been shared, at least so far, that would have changed the results of those elections. And, you know, it's almost as if the president thinks that everybody is thinking about 2020. He is. Most of us who think about it think it was a year we want to forget. That was Covid. Very few of us think about it as, oh, I'm so sorry Donald Trump lost the presidency. And of course, let's not forget, if he tells us there was foreign interference and he has some evidence of that, well, guess who was president? He was. So is he trying to tell us that while he was president, there was Chinese foreign interference in our elections? So, again, it doesn't make much sense. A big question is how do the networks handle this? Do they carry this live? Do they fact check and fact check rather in real time? And if they want to continue to do these primetime addresses and he doesn't say something very important to the American public, how much does this come back to haunted? I think this is a very risky strategy. And oh, by the way, today, as mortgage rates have hit their highest level in a year and that's what people care about, he's going to talk about the 2020 election. It doesn't make much political sense for the Republicans at all.
- [24:15]
Joe
6.55% on a 30. Rick, we're keeping tabs on Caroline Levitt here. She's being asked about this as we're discussing it and says that she's seen misreporting on what the president will say, a lot of reporting and misreporting. She says the American people will be relieved to hear what they hear from him. He's going to talk about safe and secure elections, she says. And he's also working on, quote, all these economic issues, unquote, that Americans have at home. If this is going to be a variety speech, are we getting into the sort of fireside chat mode here where we talk about a lot of things like a mini State of the Union, a White House that wants to increase the cadence of these addresses, could the president make this venue work for him?
- [25:00]
Jeannie
First of all, it's a great venue for the president. It's his bully pulpit. And sure, it probably isn't attended to as much by the public as it used to be when the president would go and do a public address from the Oval Office. It's still important and it'll make a lot of hay in the social media world afterwards. So, yeah, it's still important to do these things. If indeed he focuses more on sort of the political issues of the day and plugs his, you know, Save America act, that would, that would be okay. Traditional, but, like, where's the beef? I mean, like, why in the world do you have to do that from, you know, the Oval Office in a, you know, primetime speech when you could have been doing that in Pennsylvania yesterday? You could have been doing that, you know, in some of the other events that you've held. And frankly, he's just, for whatever reason, not wanted to talk about cost of living, affordability. And when he does, he does it in more of a disparaging way. Not like, hey, my administration's doing something. I mean, he's got some great economic news this week to talk about. He should talk about the strength of the US Economy and how that will ultimately benefit everyone. But I don't know. I mean, like, when was the last time he gave an uplifting, positive speech? I mean, like, we're still waiting around for that to happen, and so we can hope. And I'm tuning in because I know one thing for sure, it's going to be high entertainment value.
- [26:27]
Kelly
Well, so Rick Davis will be a member of the audience. So to go and I, we got Jeannie as well. But there is a question of to which audiences the president's really speaking, if it is to people at home or if it is Jeannie say to lawmakers on Capitol Hill who he wants to push to pass the Save America Act. Is he able to sway holdouts with a speech like this by applying so much public pressure? Does it simply not change a difficult math equation in that in the Capitol,
- [26:56]
Audience Member / Interjection
I would be surprised if it changed the calculation as on the same act. You know, I agree with Rick that traditionally these speeches are very important for presidents. But we're talking about Donald Trump, and Donald Trump has not proven to be adept at using these speeches. He is much better with a rally. He is much better when he is going off the cuff. He's going to have to give the networks a limited time here. He's not going to be able to bob and weave and curve the way he likes to. That makes this all very difficult for somebody like Donald Trump, who has many gifts relating to the public, but this hasn't proven to be one of them. If he was doing this in a traditional way, he would be speaking to the leaners that Pew told us yesterday have now switched 16 points since 2024 12% leaning Democrat. Those are the people who want to hear number one, two and three, economy, cost of living, affordability and optimism and a plan for going forward on the war and everything else. They're not as interested in an issue like election integrity and certainly not the 2020 election re litigation. And so he usually reverts then to speaking to the base. And while that can drum up his base getting out in 2026, you know what it also does, Kelly? It makes Democrats much more enthused. And the enthusiasm amongst Democrats is a critical problem for Republicans going into 2026 because Donald Trump says things that get them out to vote.
- [28:30]
Joe
Stay with us on Balance of Power. We'll have much more coming up after this.
- [28:36]
Public.com Advertiser
Support for the show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge on public. You can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk, monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market market paid for by
- [29:32]
David Gura
Public Investing Brokerage Services by Open to
- [29:35]
Kelly
the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors, LLC. SEC registered advisor. Complete disclosures available@public.com disclosures.
- [29:47]
Podcast Host / Bloomberg Announcer
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.
- [30:03]
Joe
Mr. Gura, great to see you. Welcome back to Balance of Power. What are you hearing about this speech tonight? I'm just curious and sidelined conversations in Aspen, as the United States leans back into war with Iran.
- [30:18]
Rick Davis
You know, I think there's some hunger here picking on what you just said a moment ago, Joe, that there are any number of issues he could talk about besides election integrity. And obviously the focus here is on the war in the Middle east, principally. There's some attention being paid to what's happening with China as well, especially when it comes to AI. But I should say there are some rolling eyes here when it comes to the president delivering a speech that would focus on election integrity, knocking back to 2020. You know, I did sit down with Rahm Emanuel, who among his many past jobs as chief of staff to President Obama, and something we talked about was just the sensitivity surrounding delivering an address like this. Obviously, he worked with President Obama on many of them when he was in, when he was in the White House. His counsel, interestingly, to the president was he should go on as much as he wants or can on this subject that it seems so out of touch with what Americans are thinking about and care about at this moment in time. It would be advantageous for Democrats or the president just to keep talking about what happened in 2020. But I think that you're highlighting the fact that there are folks here who would rather him be talking about strategy, military strategy, diplomatic strategy, than this. And I did get a note this morning an indication that one of the dinners here is off site and has very poor cell service. So if you intend to watch this speech, it may be difficult.
- [31:31]
Kelly
Well, that may be difficult indeed. David, you mentioned your conversation with Rahm Emanuel. I know it ventured into other subject areas as well, including Israel, where, of course, he visited to make a speech in Tel Aviv just recently. What did he tell you?
- [31:47]
Rick Davis
You know, I started off that conversation by saying there's kind of a sense that that speech really was a direct criticism of Prime Minister Netanyahu. And it was that in part. And I was very curious to hear from him just about how he gauged the reception to that speech. So he did travel to Tel Aviv. He spoke at Tel Aviv University. He didn't meet with the prime minister while he was there. He didn't want to be seen, as he said in many interviews, as influencing domestic politics there. But of course, that was part of the substance of that speech. Look, he took a lot of parties to task. Yes, the current Israeli government, but Arab states as well, the Palestinian Authority. He was doling out a lot of criticism. But what he emphasized to me in our conversation this morning is he really wanted to present a constructive path forward for peace in Israel and really wanted to get Israelis to recognize the fact that as prime minister, Netanyahu has focused so much on military strength and on defense, really since October 7, 2023, he's kind of squandered, playing up for emphasizing what else Israel has going for it. And part of that, of course, is economic. Israel is a country that has a huge venture capital community and ecosystem. And he thinks that that's been largely ignored by the prime minister. I found that fascinating. He also said, kind of lost in the coverage of that speech. Yes, here domestically in the United States, but around the world is on the heels of that, he traveled to Germany and gave another speech that was focused on NATO and the future of NATO and how Europe could be defending itself in kind of a different partnership with the United States. So kind of a fascinating window into him wanting to kind of make constructive strides and talking about his vantage on foreign policy, yes, perhaps in an effort to position himself as a presidential candidate here as we move ahead. But the way in which, in this political moment, when this issue of US Israeli politics is so fraught, parts of that were seized on and others were not.
- [33:26]
Kelly
All right, David Gura live at the Aspen Security Forum. Thank you so much. And let's listen ourselves to some of David's conversation with Rahm Emanuel earlier.
- [33:35]
David Gura
I think the prime minister led Israel into a, into basically a dead end. Here is what I would do to get out of that status, because I have concern for the alliance and more than that, Japan, an ally, very popular in the United States. Naito, very popular America. We have a critical ally who is dropping precipitously in America, dropping precipitously in Europe, Canada, Australia. You have to have a breakout moment that actually establishes support for the country, not just a particular prime minister or government.
- [34:05]
Rick Davis
What did you make of the reaction to the response to it? Again, it has been kind of distilled into something that it wasn't entirely. What do you make of that? What does it say about the way that we talk about US Israel policy
- [34:15]
David Gura
without characterizing, because I'm sensitive, you know, President Clinton and I talked, you know, Hillary Clinton put out a comment. I know, I've talked to Hamas, Hakeem Jeffries. So one, I view the pariah status, the isolation of Israel, strategically, diplomatically, militarily, economically, as a, as a real threat to Israel. Big article today about the economists, what this is in nature. So I laid out a strategy. You know, the Saudi Arabia, which is kind of the crown jewel, was the sponsor of the 2013 proposal by by the Arab League for a 23 state solution. Basically all 21 nations would recognize Israel if you came to a some settlement agreement between sovereignty and security the holy grail. But Saudi Arabia Now Post October 7 won't go singularly but in a There's a comfort in numbers with all 21 game on. But you don't get to sit on the sideline Arab League. You have to stand up and tell authority because there's three strikes and out they got three times offered sovereignty, three times said no and returned violence. So you've made a cynical Israeli partner. That's not how you build trust. So I'm going to give you a chance to get out of jail card a fourth chance. But everybody in the Arab League has got to stand up that partner. You've got to recognize not only the state of Israel but its historic right. You've got to stop rewarding terrorists for killing Israelis because they're Israelis and stop teaching your children to hate Israelis. Now Israel has got to stop undermining and a classic example of this government. This government undermined the Palestinian Authority but they allowed Qatar to send $6 billion to Hamas. Hamas was not using that $6 billion to build McDonald's franchise in Gaza. They were building tunnels and you knew it. That was a strategic failure of this government. Second, as you can see I recommended the IMEC India Mid East Europe Economic Corridor. Cables, ports, energy. You got to get around the Strait of Hormuz. It puts Israel's technological prowess at the center of the most important trade routes. So both economically and strategically making Israel, as David Ben Gurion the founding father said a nation among nations. Second important is and the critique every country has four tools in its security toolbox. Military power, political persuasion, economic statecraft, cultural attraction. The prime minister has atrophied three of them to the point they're non existent and relied on only one that is not acceptable. If you're trying to be and have actually security example of that and I'll pay the calling cards. You can use my AT&T calling cards. You have a Syrian government today that said Iran is our common enemy. Syria is the Highway 66 for Iran to Hezbollah you can cut it off. And he wants to come he said the president of Syria I want to come to a security agreement with Israel. The United States is now building or facilitating a building of Iraqi oil new pipeline. Yeah, call the security Syrian president. It's not even a peace agreement security agreement. The people in the northern Galilee of Israel would get security and you would actually knock out the trade route from Tehran to Beirut, suburbs that fund Hezbollah. That's it. Use your diplomatic tools. The prime minister likes to say he was raised with English. Learn the letter D. It starts first letter in the word diplomacy. Try it. It works.
- [37:52]
Joe
Rahm Emanuel speaking with Bloomberg's David Gura, who's kind enough to bring us out to the Aspen Security Forum. He's out there for the week. And we'll have more of David's conversations with us. We want to seize on this moment, though. What they were talking about plays directly into what took place last evening on Capitol Hill. A vote in the house to cut U.S. aid to Israel, more than $3 billion worth, cut the Democratic caucus in half. Kelly, the numbers that we saw there were remarkable. 103 Democrats voted to withhold the aid. 10 more voted present. Pretty remarkable here, 98 opposed it. It did fail because Republicans rejected this. But it brings us to Capitol Hill where we want to spend a couple of moments with Bloomberg correspondent Eric Wasson, who has a little bit more on this. Eric, this is something that would have been considered unthinkable a couple of years ago and it speaks to the state of the Democratic Party now in the House. What do you think?
- [38:50]
Eric Wasson
State of Democratic Party, state of US Relations with Israel? It's a real red warning sign to the Israeli government that there are large sections of the American population who are waiting in their support for Israel, especially after the way that the war in Gaza has been conducted. You know, House leader, Democratic leader Hakeem Jeffries voted against this measure, but his number two, Catherine Clark voted for it. It split the leadership right down to Pelosi voting, you know, in order to strip this aid to send a signal, she said in a statement, you know, Republicans pounced on this and their statements, you know, plan to use it in the campaign. But I talked to at least one Republican aide who said, you know, on the Republican side, there are also problems for members who voted to defend Israel aid and they may see problems from some of their right wing base, the same base that Thomas Massey represents, who are skeptical of Israel aid. So this is a troublesome time in the US Israel relationship and this was certainly a landmark moment for that.
- [39:49]
Kelly
Well, as we talk about troublesome times and fissures we see in the Republican Party in particular, Eric, I also wonder what you're hearing about the prospects for this reconciliation 3.0 package that they're trying to mark up in the Budget Committee today. Are the votes there for it? And I'm not just talking about the House is the Senate interested in this at all?
- [40:08]
Eric Wasson
Well, well, first breaking news from my colleague. Ken Tran is there. He says the committee did pass it out of the committee, which was not a given. You know, it's supposed to come to the House floor next week and leadership seems pretty confident of it. But we are hearing it from a lot of senators. This is going nowhere in the Senate. Talking to John Thune, he said it's a risky proposition. We had already flagged it to our terminal and web readers that, you know, there's a political risk here in voting to support an unpopular Iran war that's raising prices right before the election. But there are also other problems with it. It's not offset. It adds to the deficits. $95 billion right to the deficit going to the military. Bill Cassidy, I talked to him in the hallway and he said I want that thing offset. I want to find something. Spending cuts, there's got to be a way to do that. But then I talked to Roger Wicker who's a military hawks, and he says it's not spending nearly enough. He wants $350 billion for the military. So it's a real mess in the Senate. I talked to Lisa Murkowski and she said I don't see this getting done before the election at all. And frankly, after today in the Senate, my money would be on it not getting done anytime soon.
- [41:11]
Joe
Wow, Great reporting. I love this.
- [41:13]
Public.com Advertiser
Yep.
- [41:13]
Joe
Bringing it straight to us.
- [41:14]
Kelly
Eric, thank you live from the halls of Congress. We appreciate it as always. Bloomberg's Eric Wasson,
- [41:25]
Joe
Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already at Apple, Spotify or wherever you get your podcasts. And you can find us live every weekday from Washington, D.C. at noontime eastern@bloomberg.com
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