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A
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.
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B
I'm Kailey Leinz alongside Joe Matthew here in Washington where President Trump just departed. He is aboard Air Force One now making traps today Ohio and Kentucky, the next leg of his so called affordability tour. Knowing of course that he is making these claims about affordability and trying to tout them at his various venues and in his remarks today at the same time that there are questions as to what the economic impact will be of the ongoing war with Iran here at home from gasoline prices and beyond. And of course, we also don't know the timeline of that war necessarily, as the president has repeatedly condemned it could be end soon that were out of targets. Although when he spoke to reporters on his way out of the White House to to Joint Base Andrews, he seemed to suggest that there still could be more to come. So let's get the latest now with Bloomberg's Tyler Kendall who is live at the White House for us from the North Lawn. So Tyler, what exactly did we just hear from the President?
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C
Hey Kelly. Well, you laid it out pretty perfectly there. There has been some mixed messaging from the administration over the past 24 hours and the president just moments ago saying that there are certain targets that the US Is currently not hitting after telling Axios earlier this morning that there is, quote, practically nothing left for the US to strike. I will point out that earlier this, President Trump did threaten to hit electricity infrastructure in Iran if disruptions through the Strait of Hormuz continue. And as you well know, they are continuing. In fact, President Trump went on to say that the US has zeroed in on targeting Iranian mine laying ships after CENTCOM gave an update earlier this morning saying that 16 such vessels have been destroyed in a bid to try to quell some of the volatility we're seeing in energy around the disruptions in the Strait of Hormuz. You guys mentioned that we're going to see this historic release when it comes to the International Energy Agency seat. The thing is, there are big questions here about the pace and the duration. It's not as easy as just flipping on a switch and it's expecting to fall short of the now supply gap. And that is why it was actually so interesting to hear from the head of the IEA saying that ultimately the number one thing that could be done to stabilize the oil markets is to make sure that the Strait of Hormuz remains open. So that is going to be something that we watch really closely here because President Trump is really starting to play defense on the issue as these higher prices trickle down to retail gasoline. It is our understanding that the administration is still mulling a few different options that they could tap to help bring down prices, including potentially floating a federal gas tax holiday, though that would require congressional approval. We're also hearing the idea of waiving what's known as the Jones act, which mandates that vessels that transport goods between US Ports have to be on US Flagged ships. So that's another thing to watch out for as President Trump heads on this next leg of his affordability tour today in Ohio and Kentucky.
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D
You haven't heard the Jones act invoked in a minute here, Tyler. I'm just looking at gas prices. Triple A has got the average for Ohio at $3.44. The average in Kentucky, where he'll be later on, is almost $3.20. 319. What kind of an address are we going to get when he speaks in Kentucky later? Is the White House telling us anything about this? But will he acknowledge gas prices in this speech tonight?
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C
Well, we'll have to wait and see because we know that the administration is going to try to push forward their economic agenda, as polling has been telling us that Americans are growing increasingly concerned, particularly when it comes to energy prices. We got this new Epsom poll out earlier this week. I know Cliff Young comes on this program a decent amount, and his polling is finding that 67% of US adults are concerned that gas prices are going to get higher as the year goes on. Now, we have gotten a preview for his Ohio event that's expected to focus more on pharmaceutical pricing and President Trump's efforts to lower the cost of prescription drugs. We'll see what happens in Kentucky. That one may be a little bit more of a fiery speech, as you both know. He's going to Boone County, Kentucky. That's the 4th congressional district represented by Thomas Massie, a persistent perhaps thorn in the side of President Trump. I think it is more than fair to say on a range of issues, including when it comes to Iran.
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D
Tyler, thank you so much. Live from the White House, Bloomberg's Tyler Kendall. I got into the matter of Tom Massie. Indeed, President Trump will be in Massey's district later today when he speaks from Boone county, and we'll bring you some of his remarks if he's making news there. I spoke with Tom Massie's colleagues colleague in the upper chamber, Rand Paul, the Republican Senator from Kentucky who is not a fan of what is happening with the war in Iran, as I mentioned earlier, arguably the Republican face of the war powers debate in the Senate. He's also the man who is going to have to shepherd the confirmation process for the next Secretary of Homeland Security, as Rand Paul is the chair of the Senate Homeland Security Committee. We started with the matters of war and peace, however, and I asked him if he believed this war in Iran was illegal. Here's what he said.
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E
Well, you know the thing about the debate over awards, one of the most important debates we have, our founding fathers had an extensive discussion over this. The Constitutional Convention, the Federalist Papers, they all had strong feelings, but interesting. Even though there were differences between Hamilton and Jefferson, really, they all came together and said they didn't want the President to have the power to initiate or declare war. They wanted that power to be with Congress. So this is a very important, if not the most important congressional debate we have over war powers and over the Constitution. And yeah, I think the Constitution is very clear. You go to war and war should be initiated through Congress. And the reason our founding fathers made it so is they didn't like war. They wanted war to be less often. They wanted war to be a rarity, not, not common.
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D
So last week then, in that failed vote, Congress voted to abdicate its duties, its powers, the War Powers Act.
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E
A lot of people confuse it. They say, oh, it's just a reporting requirement.
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D
Yes, right.
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E
President has to report after 60 days. It's really much more than that because it acknowled acknowledges the first part of the War Powers act says you have to have either a declaration of war or a vote to authorize force or there has to be imminent danger. That's really what our judgment should be. And so many of the arguments that came from this administration really don't hold water. They said, well, they've been at war with us for 47 years. And I said, well, that doesn't sound very imminent. That kind of sounds like you might have had time to come to Congress and get a declaration of war.
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D
Absolutely. It sounds like you see this as an illegal action then.
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E
Yeah, I don't think this is what our founders founding fathers intended. It's not what the Constitution intends. And so I continue to support these war powers action to try to limit the executive the same way I would under and did under President Obama and President Biden as well.
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D
So will that make it difficult for you to vote to Support a supplemental budget request, assuming that does arrive. As we've heard, I think the biggest
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E
threat to our country and to our national security is our debt.
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D
Yeah.
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E
And so I think adding more to our debt doesn't make us safer. It actually will make us, you know, make us more in danger to be further in debt. So. So the administration has said they want to increase the budget by 50%.
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D
Yes.
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E
That sounds like a large increase from a trillion to 1.5 trillion.
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D
That's right.
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E
And then in the meantime, they may ask for another 50 billion or so, maybe 100. Already talking about, well, we got to give the farmers some money. You know, the tariffs aren't so good for farmers. And instead of removing the tariffs that are hurting the farmers, they're going to give the farmers some money. And then they're like, well, we've had had some disasters around here, so we're going to do military disasters, you know, stipend for farmers. Since the territory, it'll be a mess and it'll be something that anybody who's fiscally conservative will not.
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D
So you're a no, regardless of the number.
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E
Because we do right now, our military, we spend more on our military than the next 10 countries combined. So for people to argue we're not spending enough, we're spending more than the next 10 countries combined. We spend plenty on our military. Needs to be spent wisely. But they've spent an extraordinary amount on two wars. Two wars in one month. I mean, for goodness sakes, they're talking about another war with Cuba as we spend week.
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D
Right.
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E
So, yeah, they cost money, they cost lives, most importantly, but they also cost money. And I'm just not for. I'm not for the war in Venezuela, I'm not for the war in Iran, and I'm certainly not for a war with Cuba.
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D
Your chairman of the Committee on Homeland Security, are you hearing about domestic terror threats that we need to know about? There's been a great concern about sleeper cells, about lone wolves. Has that threat increased because of this action?
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E
I don't have specific knowledge that it has. We have not had any specific briefing to say it as. But I'm not here to argue that it isn't a potential problem. I think any time you're at war, there is the potential for, you know, terrorist actions. I think we already had, you know, one shooting in Texas that people said was related to the terrorism. End to the war.
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D
Yeah. Some have worried that the fact that dhs, the department, not your committee, is closed right now, is making us less safe. It Is the ability for DHS to combat domestic terror threats compromised by this closure?
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E
Yeah, I don't know how much DHS actually does. I know there's people who believes, of course, the FBI has an important task in trying to look for people who are in the country that might harm us. There are aspects of crossing of borders that make a difference. But you know, I'm one of Those who after 9, 11 thought, Gosh, we're just going to create these enormous bureaucracies that cost a lot of money but don't necessarily make us safer. Interesting. So I would rather the money probably be spent specifically on detailed defenses against terrorism as opposed to a big bloated bureaucracy, which is what the Department of Homeland Security has become.
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D
Well, I know that you've got TSA workers who are going to start missing paychecks if they aren't already. I understand that Global Entry is being reopened, which I thought was an interesting headline this morning, considering the strain on the system. How long can TSA hold up without getting paid?
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E
I've been for a reform of this. I think what we should do. If you work for the government and I have a contract, I pay you $80,000 a year. It's a breach of contract. We should just keep paying everybody. The appropriations could be for a lot of other things that are optional, but the employment is not so optional, particularly of like air traffic controllers. I fly all the time, frankly. I want my air traffic controller to be well paid, sir, well rested and not unhappy when he or she comes to work. Right. So there is a reform that's floated around and I've voted for it several times. And this is, you know, this isn't the first time or won't be the last time. There's a debate over funding. The debate is actually healthy. What is unhealthy is that not paying workers. And so I think the workers, if they're working, ought to be paid. And so I'm for a reform that any time we have a shutdown, the contract aspect of the workers that we pay should just go on despite the impasse.
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D
Well, so what's it going to take to reopen this agency? And would maybe a new secretary do the trick? You're going to be tasked with this confirmation process.
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E
Have you scheduled a hearing next week? If all the paperwork, there has to be an FBI background check and there has to be some ethics, ethics documents. And the minority party has to have a certain amount of days to look at these.
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D
Understood.
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E
These are things we agreed to. If it can all be done, we're going to try to do the hearing and the vote next week. But I think that overall, my suggestion. I'm not sure they're going to listen to me. My suggestion would be to acknowledge that there have been failures with ICE and that they're coming out with new policies and new regulations as to how their agents behave. When I had the agents come in recently, the head of ICE and the head of the Border Patrol, I asked him that specific question. You know, if. If I'm me to you and I'm the ICE agent, you're yelling at me, is it okay for me to lunge at you and spray you right in the face with pepper spray for your words? And he said, no, but that's what we were seeing in all of those images. We saw women thrown to the ground for yelling at officers, and nobody likes to be yelled at, but that is part of America. People are going to yell at you. And as long as it's words, we shouldn't be reacting in a physical way. So I think ICE needs to announce. They kind of, in our hearing, admitted that all the actions that we were seeing in these videos wasn't appropriate. But there was also a lot of denial going on, and I'm looking to see if it's going to be any different. And frankly, that would be my recommendation. Announce and home and kind of did some of this. They removed people from the streets. They quit doing the confrontation, and they also said that agents that misbehave would be punished. None of that was happening before Tom Homan showed up and gave a little more professionalism to the things that were going on in Minnesota. Minnesota. But, you know, you really. Since he showed up and removed him from the streets, you haven't seen a
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D
whole lot of Right.
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E
Of footage coming out of Minnesota.
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D
De masking has been a line for most Republicans. Is it for you?
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E
I think that there might be a time when a mask might be appropriate. If you're on the border and you're dealing, you know, in the thick of battle with cartels, maybe if you're in an elevator in a. In the. In the courthouse in Chicago, I saw one image of mask agents going in. It was three or four moms and 10 kids. And, you know, basically rounding them all up and being masked. Look, the bailiffs aren't masked. The Chicago police aren't masked. So I think in our cities, in areas where the other police officers are masked, there's no reason why one set of federal officials should be masked and another set shouldn't be. So I Won't say it's an absolute that no masks. But I would say when you're participating where other law enforcement isn't, I don't think it's anonymity, I think, leads to bad behavior. Interesting.
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D
What do you make of the nomination of Senator Mark Wayne Mullen? And did the senator from Oklahoma jeopardize his standing with you? With some of the colorful language he used to describe you last month, you felt the chairman a snake.
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E
You'll find out more if you come to the nomination hearing. I promise you there will be a good and fulsome hearing.
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D
Okay. Sounds like everyone sees him getting this job, though. Will he be confirmed in the end?
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E
We'll see.
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D
Okay. President Trump is on his way to Kentucky today. The affordability tour lands in Tom Massey's district. What are people in Kentucky telling you about $3.20 gas right now?
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E
You know, I'm a big supporter of Thomas Massie. I have campaigned with him, will continue to campaign with him. He released some material yesterday that was pretty extraordinary. His opponent, actually, when Donald Trump won the nomination in 2016, left the party in disgust. So it's ironic that the President is now supporting a guy who hated Donald Trump so much that he left the party, only came back into the party when Joe Biden became president. So there is a certain amount of irony there. And voters actually know this stuff. And this will be all over. It is all over television right now that his opponent basically left the party because of Donald Trump.
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D
Wow.
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E
So can you get over that irony? I don't know. I think a lot of people are going to say, well, what's up with this? You know?
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D
Right.
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E
But there's a lot of respect for. For Thomas Massie. I mean, look, he took an issue that the President had promoted, revealing the Epstein files. President was all for it. Thomas Massie took that issue and ran with it. An issue the President supported until the President didn't support the issue anymore. Think about the effectiveness of a guy who only had three Republican allies when it started and in the end passed it unanimously in the House, passed it unanimously in the Senate, and the President signed it. That is an extraordinary feat. So I think a lot of people see that Thomas Fact. Thomas Massie is quite effective. And I would say he's also the most fiscally conservative member of the House. It's a conservative district. I think he's actually doing pretty well.
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D
Well, indeed, you have a lot in common. And to your point, you will campaign for him for his reelection?
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E
Absolutely.
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D
Do you have plans to be on the stump anytime soon.
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E
I've already done two days with him. I have two days coming up in two weeks and we just added another two days. So I will spend a lot of time in the district. We're raising money for him and he will be outspent. They'll probably spend 20 to 30 million trying to defeat a Republican, which really is, to me a waste of money to try to beat a Republican. But they're also trying to beat the most conservative member of the House of Representatives. And the irony is not lost on a lot of people.
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D
You think he keeps his job, sounds like?
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E
I think he has a very good chance of winning. Won't be easy, you know, but I think he has a very good chance of still winning.
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D
Senator Rand Paul talking with us earlier on Capitol Hill. We should note the president is on his way on Air Force One to first Ohio, then Kentucky, where he'll be speaking around 4:30pm Eastern Time. Boone county, indeed, the home of Tom Massie, Kailey Leinz, the president on Truth Social I predict Representative Thomas Massie will go down as the worst Republican congressman in the long and fabled history of the United States Congress. He has a few examples to list there and goes on to say that Massie, who is running against a great American patriot in the Kentucky primary, will hopefully lose big. I suspect we'll hear a lot about that later on.
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B
Yeah, well, we did hear about that from Tom Massie himself, who posted in response to that on X. I predict President DJT will begrudgingly signed my beautiful Epstein Files Transparency Act. Oh, wait, that already happened. So clearly there's a bit of back and forth as you allude to, Joe. I imagine we're going to get quite a bit of commentary from President Trump about Thomas Massie in particular, even though he's purportedly going to be in his district to talk about affordability, as he is also doing in Ohio. And I would imagine beyond that, too, the president's probably going to straighten to the question of Iran, as he did when he was beginning his travels in
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D
the White House, a war that Rand Paul calls illegal. This is going to be an interesting, interesting bit of conversation later on today. And we should note, by the way, having spent some time with Rand Paul, we're going to be joined by Democratic Senator Alyssa Slotkin on the late edition of Balance of Power.
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B
Yeah, it'll be interesting to see how much overlap there actually is between those two on this issue, knowing that Senator Paul is kind of a lone Republican voice in being more critical of the war and specifically pushing back on the idea that the military needs more funding for it as we grapple with the notion that a supplemental funding request could be coming. So there is a lot to get into conversation.
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D
Well, we're, we're glad to spend some time with the senator, a conversation you won't see or hear anywhere else today, but right here on Bloomberg TV and Radio. Stay with us on Balance of Power. We'll have much more coming up after this.
- [18:58]
A
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 on Alexa from our flagship New York station. Just say Alexa. Play Bloomberg 11:30.
- [19:17]
D
The president has just left us. He's on his way outside of the bubble to Ohio and Kentucky, but made a bit of news before he left. Kelly, having spoken with Axios by phone this morning, the president, we alluded to this at the top of the hour, said we're practically out of targets in Iran. He had a very different approach when he talked to reporters in the driveway, suggesting that there's much more in store for the Iranians, who of course are making it clear that they're not interested right now in a cease fire. The president said, by the way, we have eliminated nearly all of Iran's mining ships there. I guess could be a couple left. They were inactive at the time. And he said, despite some reports indicating otherwise yesterday, Kelly, that no mining has begun. Iran has not begun mining the Strait of Hormuz.
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B
Well, and of course, that is a crucial question that needs to be answered, especially for the operators of these tankers, of these vessels that are considering transiting the strait and bringing oil or natural gas, whatever product along with them. The president said when he spoke to reporters that companies should feel safe doing this, that US Oil companies should. But that kind of speaks to the idea that this isn't necessarily up to President Trump. It is up to private businesses to make these calculated decisions around risks. And they might not necessarily feel safe, especially when there's been a bit of dispute about whether US Naval escorts are happening for these vessels. The White House House says no, despite what the Energy Secretary Chris Wright tweeted.
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D
We had for a second yesterday, for a second it was up and it was down, all within the confines of this hour, I believe, at this time yesterday. And in that video that he had posted and later removed, it was from an event that was held in Colorado, I guess, a couple of days ago. He said the United States is now buying into the insurance business. And that remains an offer by the president. We just haven't seen that enacted yet.
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B
Which all speaks to the costs of what's happening in the Middle east, which is something you spoke about with Senator Rand Paul as well, the idea that the White House may need to come and ask Congress for more, more money for this. So let's get into all of this now with our political panel. Bloomberg Politics contributors Rick Davis and Jeannie Shann Zaino are with us. Rick, of course, Republican strategist Stone Court Capital partner Jeannie, our Democratic analyst and Democracy visiting fellow at the Harvard Kennedy School's Ash Center. Welcome to you both. Rick, I feel like every time we talk to you, and we do so frequently, we're asking a similar question about what exactly the message is that President Trump at the administration is trying to send when it comes to a race on right now. What's your best guess?
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F
Well, I think they're in the declared victory mode. From what I can tell, the president has sort of been testing out a lot of different messages over the course of the last couple of days. What we heard as he was boarding flight earlier today is that, you know, he's gone through the list. He's, you know, we've destroyed the Air Force, we've destroyed their ground radar, we've destroyed their missile systems. I mean, you know, we've destroyed their leadership. He's like, we barely have anything else to target anymore. But then under his breath he'll say, but there are other things we can target. So at the end of the day, I think what you see is like a materialization of the administration sort of talking themselves into job done. You know, we did exactly what we said we were going to do. And we've disrupted Iran's ability to spread terror throughout the region and at home. And I wouldn't be surprised that we see a lot of this winding down over the course of the next week. In fact, I would be shocked if the pace continues as brisk as it is. And we've seen really significant bombing attacks by both Israel and the United States over the last couple of days. It's pretty clear both in Israel and in other parts of the Middle east that Iran has significantly reduced their attacks on those targets. There just simply aren't as many missiles being lobbed into these areas that there were in the early stages of this campaign. And that may indicate a level of weakness in the ability for Iran to counterattack. So lots to see happening over the course of the weekend. But I can imagine coming out of next Week and this weekend we see an administration in full victory mode.
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D
Interesting. Senator Chris Murphy has been busy on Twitter. Jeannie, of course, an important foreign policy voice on the Democratic side of the aisle. And he says, I was in a two hour briefing today on the Iran war. All the briefings are closed because Trump cannot defend this war in public. And he says of course he can't disclose classified information, but you deserve to know how incoherent and incomplete these war plans are. This is a multi post thread here. Maybe the lead, he says, is the war goals do not involve destroying Iran's nuclear weapons program. They confirmed regime change is also not on the list. And he says, okay, what are the goals then? It seems primarily destroying lots of missiles and boats and drone factories. The question that stumped them, what happens when you stop bombing and they restart production? They hinted at more bombing, which is of course, he said, says, endless war. Is that how you see this?
- [24:22]
A
I don't know how else we could see it. You know, we have a United States government that went in to Rick's point. There has been no clear objective laid out, but we do hear three things and their nuclear capacity or their ability to build nuclear weapons. Get rid of their ballistic missiles program and end their support of these proxies. To do that, you need regime change. And you can't just get rid of a regime. You need to get rid of that regime and replace it with one that isn't interested in any of those goals and by the way, is also friendly to the United States and Israel. Exactly the opposite has happened. We now have the Ayatollah son who has been named Supreme Leader. He is reeling from US Bombings and Israeli bombings that killed his wife, his child, his father and many family members. The President is on TV on Fox saying things like, well, I might talk to them again. Except, do we think that the new Supreme Leader is in any mood to talk to the United States? They did that after the 12 Day War last year and they got bombed again. So that seems to be off the table. Not only is this regime still going, either you have people rallying for it in the streets. You have ballistic missiles apparently still there. You have 900 pounds of nuclear enriched uranium over there that's got to be taken out. So any of these sort of objectives, as we've heard them, none of them have been achieved. And the President, for all of his sort of bravado and bro, talk about how well we're doing and we've destroyed them and we've done this and we've done that he can't point to one objective that he has achieved, and he can't even convince ardent supporters like Joe Rogan Rogan that any of this makes any sense, or we should be putting up with the pain at the gas pump and the loss of American lives because of what he decided to do. This is an enormous disaster for the president, hence his call with Vladimir Putin, who may be the only way and the only person who can negotiate potentially an end to this. That call he had yesterday.
- [26:27]
B
Well, when we consider the idea of regime change, Rick, Senator Lindsey Graham, who, of course has been a big proponent, an advocate for this action in early Iran, has clearly been frankly thrilled with what he has seen over the course of the last 12 days, has suggested this cannot be successful. You cannot have complete victories the president has said he wants. If the Ayatollah son effectively is still in charge, if that is who ultimately replaces the late Supreme Leader. How loud a voice is that in President Trump's ear? Knowing that, it does seem that Lindsey Graham has had a great deal of influence on this so far.
- [26:59]
F
Well, if you listen to Lindsey Graham, he'll tell you that he's been a big influence in Donald Trump's ear, and there certainly is lots of evidence that that may be the case. He's certainly getting a lot of blowback from MAGA superstars around the country who feel like Lindsey has sort of brought Trump along into the, you know, neocon hawk defense world that they campaign heavily against. Look, I mean, we have to constantly remind ourselves that Iran has been the biggest spreader of terror around the world, killing thousands of people, American Americans to boot, you know, for 47 years. And so, you know, we're not dealing with a regime that has any good track record. And if you go to Israel today, you find every opposition politician who don't have any love for Bibi Netanyahu, praising him for the gallantry that he has shown in trying to extinguish an existential threat to that state.
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D
So.
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F
So when you look at the various audiences at work here, and certainly Lindsey Graham is sensitive to the security of Israel, you wouldn't be surprised that he would be such a cheerleader for this kind of an initiative.
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D
Rick, Jeanne mentioned the new Supreme Leader, the new ayatollah, who is reportedly not only mourning the loss of family members, as Jeannie mentioned, but he's trying to heal from injuries sustained in one of our strikes in the early going here, including injuries to his legs. Reportedly, he's alert and sheltering at a highly secure location with limited communication based on your experience with the American and Israeli militaries. Rick, is this an individual who's going to see the end of the week? Can he even go outside?
- [28:51]
F
Well, I don't think there's any hesitation based on what we've seen so far with these strikes of this magnitude to not target him. He is just as much a target as his father was was at the time. He's just as opposed to, you know, Iran entering the world community as his father was. And he stands between a population that's split on whether they want a religious regime or a secular regime. I'm hopeful that if there is a secession of military activity, regardless of whether the current supreme leader survives it or not, that we give a chance for the people of Iran to make some choices about who's going to run their country and not have have it imposed upon them by out of touch clerics.
- [29:38]
B
When we consider Jeannie, the future of Iran as well, how is the the sentiment about the US in particular going to be shaped by the Iranian fatalities we've seen, including a report suggesting the US thinks, an early report suggests it was our Tomahawk missile that hit that elementary school.
- [29:55]
A
Yeah, it's just devastating. And as opposed to taking responsibility for that horrific mistake which hear the president suggest that Iran had stolen Tomahawk missiles and had these precision missiles and shot them at a girls school and killing over 170 people, there's absolutely no evidence of that. If the US did it, it was an attempt to hit that navel. We should apologize and take responsibility. Horrific. And works against everything Rick was saying about the people on the ground wanting to work with us.
- [30:26]
D
Yeah, the President was asked about that. We should know in the driveway. He said he didn't know anything about that finding. Rick Davis and Jeannie Shan Zaino, thank you both for an important conversation. Stay with us on Balance of Power. We'll have much more coming up after this.
- [30:42]
A
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 City station. Just say Alexa play Bloomberg 1130.
- [31:01]
B
Return here to Balance of Power on Bloomberg TV and radio where we of course try to bring you the facts. And we never want to be alarmist, but I do want to raise call attention to some reporting that just came out from ABC News who has seen an alert or reviewed one that the FBI is warning police departments in California in recent days that Iran could retaliate for American attacks by launching drones at the west coast. According to ABC's reporting, there has been information acquired that as of early February of this year, Iran allegedly aspired to conduct a surprise attack using, and I'm quoting directly, Joe, unmanned aerial vehicles from an unidentified vessel off the coast of the United States homeland, specifically against unspecified targets in California. Now we should note this is just a report by abc. Bloomberg has not verified this, but we did hear from President Trump when he was departing the White House en route to Ohio and Kentucky today that he is not worried about an Iran backed domestic terror attack.
- [31:55]
D
I asked Senator Rand Paul, of course chairs the Homeland Security Committee, that very same question if the closure of DHS and the strikes against Iran combined to create more urgency, if he was hearing anything he knew of no credible threats or no increase in chatter even from beforehand. To your point, this was information acquired in February in the event that the US Conducted strikes against Iran. I can't imagine how an unidentified vessel off the coast of California would be out there for very long without us knowing about it. But this is a pretty scary report.
- [32:27]
B
Well, absolutely. And it does call attention to the fact that even as President Trump is suggesting the war may be over soon or we're running out of targets, even though he doesn't always necessarily stick to that language, that does not mean that Iran is willing to throw in the towel at this point or that it is done with its own retaliatory measures.
- [32:42]
D
The speaker for the parliament yesterday said they're not interested in a cease fire right now. I'll mention as well a headline just crossed the terminal, the idf. This is Israel, of course, detecting launch of missiles from Iran. They are working to intercept them as we speak. And this has been the the deal on a daily basis here since this all began. Just crossing the terminal now as we bring in the Voice of Patrick McHenry, I'm glad to say, and we've got a lot to talk about here that we carved out a good chunk of time for the former chairman, former Speaker Pro Tem, former chairman of the Financial Services Committee, I should note. Patrick McHenry and Bloomberg Politics contributor. It's great to see you. I don't even know where to begin here. So we may as well start with Iran since we're already talking about it. War powers are out the window. The president appears to have the green light from Congress. Will he get a blank check when he asks for a supplemental?
- [33:31]
G
That's the question for Congress. The war Powers resolution process is one one that is really mostly a partisan football. And this has happened from time to time over the last 50 years. The real question for Congress is on funding. Right. This requires the President to go make the case to the American people on a timeline and a set of goals. The goals can dictate the timeline. Right. But you have to have one of those public markers. Right. We currently don't have that from the administration, at least not, as Kaylee said, on a consistent, consistent basis from the President and from important cabinet leaders. That means that congressional leaders are in the dark about those goals and therefore the timeline they're going to be put to answering the question here on replenishing the munitions that are being used in a really substantial way and one of the largest actions we've taken since, I mean, since actually Barack Obama's first year in office. And so this is, it's going to be a large funding request. Congress is going to have to go through this. It will require a bipartisan vote in both the House and the Senate, which means the Democratic Party will have to have a sense of, a sense of the meaning and purpose of this as well.
- [34:50]
B
Well, we've heard from at least one Democrat here at Bloomberg. Joe spoke with your former colleague Congressman Wasserman Schultz, who suggested she actually would be open for supplemental. She thinks. Yeah. That the troops need to be supported effectively knowing that this is an election year, every decision by these representatives is being made with that in mind. Can Democrats really be seen voting against the troops if this comes down?
- [35:12]
G
No. And therefore it then exacerbates the divide within the Democratic Party. You have a very substantial anti Semitic wing on the progressive left that has now entered politics. You have some of that on the right, but it's much more predominant on the progressive left. This will be exacerbated by our coordination with Israel against our mutual enemy in Iran. You also have that question on the Republican side of the aisle, which is the divide between the anti interventionist MAGA wing that has had a substantial voice in the President's administration, namely with JD Vance and those that are OK with intervention to some degree. So that exacerbates the divide in both parties when you're going for funding on Capitol Hill.
- [35:56]
D
So with that said, it's likely to pass, it sounds like with the help of some Democrats. Does that take the place of reconciliation? Because every time we bring this up, somebody's got an idea of what they want to attach to it.
- [36:09]
E
Sure.
- [36:09]
G
I think reconciliation is going to be a great talk for, for Republicans for the next six months. I don't See it as a, a real fire drill. I think this is, it's going to be very difficult for, for the House to just pass normal pieces of legislation on party line votes, given how narrow the majority is in the U.S. house, the U.S. senate. I think Republicans are much more united in the Republic in the, in the U.S. senate than they are in the U.S. house. They actually have the same number of differential between their majorities, right. With Republicans with 53 seats in the, in the, in the Senate Senate and House Republicans with about 6, 6 vote margin currently. So it's a really tight thing to get legislation through the House. So reconciliation, it's a shirts and skins Republicans versus Democrat operation. It's going to be very difficult for the House Republicans to pull this thing together. So now the best case, and it's currently not best case politically for Republicans right now.
- [37:10]
B
I want to ask you about what we were dealing with at this time yesterday, which was, was the tweet that was then deleted by the Energy Secretary Chris Wright, that a US Navy escort had happened in a tanker had gotten through the Strait of Hormuz. For that reason we saw movement in oil prices. And I'm asking you this as the former chair of the Financial Services Committee, does that not smack of even if inadvertent market manipulation here? I just. When we know that there is so much vulnerability in financial markets right now to the developments around this conflict, does the administration not need to be much more capable, Careful?
- [37:39]
G
No, they mean to be very careful. I mean these tweets, tweets can have hundreds of billions of dollars worth of impact right now. Yeah, one of them, it says two things, though. One is that everything hangs on the Straits of Hormuz right now, economically, globally, our economy hangs off this narrow spit of water where you get the predominant source of energy for the world energy markets. The second piece is that these markets are not driven by fundamentals right now. They're driven by people. Pure emotion. If we have some sense of certainty timeline like President Trump gave us two days ago, there was a great calming of the market then. And anything that upsets that either for the for good or for bad has creates these wild swings right now. But over time, if we're talking about this in a month's time, the fundamentals will come to bear. And that is a really troublesome thing for affordability domestic, a troublesome thing for domestic politics in particular. But the tweet really shows two things really.
- [38:40]
D
Well, everything at the moment that we're talking about on Capitol Hill is on ice because of The SAVE Act. The president says he won't sign anything.
- [38:48]
B
Save America.
- [38:49]
D
Save America. There are a couple of versions. Thank you for correcting me on that. Save America act, he says is the priority. That's beyond, I guess, DHS even confirming a new secretary. I don't know know. But John Thune doesn't like this idea of the standing filibuster and doesn't think he has the votes anyway. Listen to the Senate majority leader talking about this just earlier. We don't have the votes either to proceed, get on a talking filibuster, nor to sustain one if we got on it. But that's just a.
- [39:19]
E
That is just a function of math
- [39:20]
D
and there isn't anything I can do about that. I mean, I understand the president's got a passion to see the.
- [39:25]
E
This issue addressed as we all do.
- [39:26]
G
Does he understand that, though?
- [39:28]
D
Well, we've conveyed that to him, but we will continue to make that argument. And they are. President was just asked about it as he was leaving the White House. He said, hey, John Thune's the leader. It's his job to get the votes. Does that mean Congress is shut indefinitely?
- [39:44]
G
Of course not. But the first thing I would say is Jonathan is such a master and how he responded. We understood what he said with his response without saying it. President Trump understood the subtle art of this. But I mentioned domestic politics at the end of this question about affordability and oil prices and everything else. The pressure point on Republicans right now is that we have a president that is underwater. This is. My friends on Capitol Hill have this challenge going into midterm election year. The president's numbers do not improve from January through Election Day. That's been the case for the last 50 years. And public opinion surveys, no matter how popular you are, unpopular you are in January, February, your numbers do not improve by Election Day of a midterm. So now we're in this case where that is a problem for Republicans. Donald Trump's underwater. The economic. The view of the American people on the state of our economy and their economics, which is much more important than the state of GDP growth or anything else that is highly negative by the American people. Oil prices will exacerbate this. So we need other sets of things to point to to. My friends in the Republican Party need other things for the American people to think about rather than their pocketbook, because they're not happy with their pocketbook. And the big fight here is on immigration. Donald Trump's secret sauce to the coming into the White House the first time and the Second time has been on immigration border security. He's trying to get the band back together and that's what the SAVE act is all about. To stoke what was a powerful tool that they lost because of ineptitude by DHS and how they handled things in Minneapolis and a few other states. They're trying to get that back together and get the political advantage on immigration back. And the SAVE act and the fight on the SAVE act is one mechanism to do that. A valiant fight that will not go much of anywhere in the U.S. senate.
- [41:33]
B
Well, perhaps not unless Senator John Cornyn has his way. This guy was almost the John that was the Senate Majority Leader. He's out with an op ed in the New York Post today noting that, yes, historically he has always supported the filibuster in that 60 vote threshold. He says leaders must take stock and adapt when the reality on the ground changes. He says after careful consideration, I will support whatever changes to Senate rules that may prove necessary for us to get the Save America act passed. Is that just a lot of words for saying, President Trump, please endorse me in my reelection campaign.
- [42:05]
E
That's.
- [42:05]
G
You've summarized it. That would be. Put that into any AI and you're going to get out out the key here. Yeah, politics are a fickle thing, but let's just step back. Why not a bit?
- [42:17]
A
Yeah.
- [42:17]
G
So Republicans, there's this talk among many Senate Republicans, they want to end the filibuster for voting access. What did Democrats want to do at the beginning of the Biden administration? That's their first piece of legislation was to rewrite state election laws and federalize them now and by the way, undo the filibuster in order to for that one narrow thing. And now Republicans are talking about the same thing long term that does in the filibuster when both parties are trying to rip it apart for their own domestic politics, their own political case and what they view as their their ability to win the next election. I think this really shows that these rules in the Senate are tenuous at best.
- [42:57]
D
Wow. So a lot of efforts are running into the wall here. And next week it's an election year.
- [43:03]
G
This is what happens election year.
- [43:05]
D
So what happens to the Department of Homeland Security? There's a new secretary at hand. Rand Paul just made pretty clear he's going to have maybe a bumpy confirmation hearing at least, but everyone sees him getting confirmed. Does that grease the skids on reopening the agency?
- [43:20]
G
It does. And it enables Democrats to get enough space and time so that they can actually have a sensible vote and come to a sensible outcome. I think Mark Wayne Mullen is a is a great choice by President Trump for a couple of reasons. One, he does meet Trump's objectives for Department of Homeland Security and immigration generally, number one. Number two, he has good relationships on both sides of the aisle in the Senate and the US House. He showed that as a, as a friend of mine at the US House, that he could talk to anyone, no matter the party, no matter the disagreements. And he is in that way, a moderating voice for really what has been a politically perilous and fraught debate on immigration. I think that will not enable Democrat officials to actually do something rational, fund the department, especially if there's any risk like we're hearing with this report on California.
- [44:11]
B
All right, Mr. Chairman, always great to have you, of course, a Bloomberg Politics contributor now, but the former chair of the House Financial Services Committee, Patrick McHenry, here with us on the early edition of Balance of Power.
- [44:23]
D
Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already, Apple, Spotify or wherever you you get your podcasts. And you can find us live every weekday from Washington, D.C. at noontime Eastern at Bloomberg. Com.