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- [00:00]
Joe Matthew
Support for the show comes from Public. On public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index with AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year. You can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc. SEC Registered Advisor. Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete Disclosures available at public.comDisclosures.
- [01:12]
Bloomberg Host
Bloomberg Audio Studios Podcasts Radio News. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app Listen on demand wherever you get your podcast, podcasts or watch us live on YouTube.
- [01:34]
Joe Matthew
I'm Joe Matthew in Washington with our Eyes on the Truth Social feed. President Trump, still overseas, in fact met a short time ago with Vladimir Zelinsky, which we're going to discuss with Bloomberg's Tyler Kendall. But we begin right now with debanking and the red headline on the terminal President Trump suing JP Morgan Chase. In fact, he just posted a version of the story on Truth Social with the headline Trump sues JP Morgan Chase and CEO Jamie Dimon for $5 billion over a alleged political debanking. And we remember, of course, that this has been a big issue for President Trump going back to the campaign trail when he singled out Brian Moynihan at a public event, excoriating him and bank of America for those allegations. And we'll note, by the way, that Brian Moynihan was not invited to the big soiree with the President in Davos on Wednesday evening. We'll get to some of the geopolitics coming out of the World Economic Forum with Tyler in a moment, but we do want to start here. Tyler $5 billion. Have we seen any reaction from JPMorgan CH because this would fulfill kind of a long running narrative from the president.
- [02:37]
Tyler Kendall
So they didn't immediately return Bloomberg News's call for a request for comment. But we had heard from them before denying that they've rejected business on ideological grounds. Now, no doubt JPMorgan Chase was likely expecting this because actually over the weekend, President Trump had posted on Truth Social saying that in the next few weeks he was intending to file this suit. He had already advanced his claims and his allegations that the bank had restricted his accounts related to January 6th. Now, this has been, as you mentioned, an ongoing issue for this president. I was thinking about this when the headline crossed the last time I had actually seen Jamie Dimon here in Washington. I caught up with him on Capitol Hill last year after he met privately with Republicans on the Senate Banking Committee. The chair, Tim Scott, as you well know, had called them onto the Hill, all the big bank CEOs, to talk about this very issue. So it is something that we know that the administration has been following closely on. But of course, it also comes against what's been a broader backdrop of perhaps escalation, I think it's fair to say, between Jamie Dimon and President Trump in just the past few days, Right. Jamie Dimon's criticism of how the administration has been pressuring the central bank, he's really rallied behind Fed Chair Jerome Powell. But then also in just the last day, when it comes to President Trump's proposals to cap credit card interest rates, I think the quote was that it would be an economic disaster, in Jamie Dimon's words. And this is something that the president's making a big plank of his affordability platform.
- [04:06]
Joe Matthew
Despite all of this news that you just summed up so well, Tyler. JP Morgan shares up $4, a little more than 1% right now, so investors don't seem too concerned about anything, at least in the immediate term. What the president is also discussing today in Davos is geopolitics. Today, Ukraine. Yesterday, Greenland. Of course, it seems like a long time ago already, because the potential for a breakthrough in Ukraine is upon us once again as Steve Witkoff and Jared Kushner make their way to Moscow. President Trump meeting with Vladimir Zelensky. Here are the two from earlier. They're meeting with President Putin today. As you know, the meeting was good with President Zelensky. We'll see how it turns out. A lot of people being killed. Last month they had 30,000 people killed. 30,000, mostly soldiers. And it's really a war that has to. And we are actively working to reach solutions, real solutions. Today we met with President Trump and our teams are working almost every day. It's not simple. The documents aimed at ending this war.
- [05:10]
Rick Davis
Are nearly, nearly ready.
- [05:13]
Joe Matthew
And Russia must become ready, too. Now this all, of course, following President Trump's unveiling of what he is calling his board of Peace before a big crowd in Davos, some 20 nations signing on. But let's start with Ukraine. Tyler, unless you can stitch these two together, I don't know if the Board of peace would be involved in Ukraine. This seems to be about something larger than just Gaza. But what could these meetings bring in the next 24 to 48 hours that would be different than any of the other meetings we've seen?
- [05:41]
Tyler Kendall
Well, perhaps one of the connections that we can pull to stitch them all together is that there has been raising concerns that some of the issues over the past few days have actually distracted from what is expected to be progress when it comes to the talks in Ukraine, most notably Greenland, with the Ukrainian president himself, Zelensky there accusing European allies, the redhead on the terminal was that he tore into allies because they get distracted by other issues. It was a pretty remarkable speech from the Ukrainian leader. Now, in terms of the border peace that also tied into Ukraine because we know that Russian President Vladimir Putin was invited to go and that has also stirred some concerns from our allies and Ukraine itself in terms of what the talks this week could potentially yield. As you mentioned, the president's special envoy, Steve Wyckoff, his son in law, Jared Kushner are headed to Moscow. And we learned today that there is a potential for trilateral talks, not at the leadership level which we've all been waiting for, that would signal really substantial progress, but on the technical level. And that is considered to be progress in the right direction that us, Ukrainian and Russian officials are all going to get in the same room in the following day. A special envoy, Steve Witkoff, told Bloomberg Television earlier this week that they're about 90% of the way there. We keep hearing that from administration officials because they have made substantial progress when it comes to the security guarantees. Yeah, that's been a really big sticking point. But, Joe, two other things that we need more concrete details on. One, what does the rebuilding process in Ukraine look like, the reconstruction process, where is that money going to come from? And to still big questions about potential territory concessions by Ukraine and what is on the table and what the sides are willing to accept.
- [07:25]
Joe Matthew
Great job, Tyler. Thank you so much. I appreciate the reporting. Tyler Kendall, Bloomberg Washington correspondent with a lot of crosscurrents coming out of Davos and a pleasure to spend some time with The Chairman of the House Homeland Security Committee at this moment, Congressman Andrew Garbarino, Republican from the great state of New York, is with us live from Capitol Hill. Mr. Chairman, welcome back to Bloomberg TV and Radio. Do you feel like something might be different this time, that we might be on the precipice of a breakthrough, or are we still humoring Vladimir Putin when it comes to Ukraine?
- [07:54]
Congressman Andrew Garbarino
Well, I just, I hope, I agree with the President that whatever, whatever happens, we need to solve this war soon and hopefully get some peace in Ukraine. I think we really, you know, there's been so much bloodshed and there's just so much trouble happening with the Ukrainian people. They deserve peace and they deserve our support and I'm willing to give it to them.
- [08:21]
Joe Matthew
Well, I'd love your greater takeaways on Davos. This has been one heck of a 48 hour news cycle. Mr. Chairman. My goodness, yesterday we were wondering in the morning if we were going to be about to invade Greenland. We've moved on apparently to quite a number of other things. We keep hearing these references to a new world order. How would you describe it?
- [08:43]
Congressman Andrew Garbarino
Well, look, and you know, back to Greenland, you said there's some good news coming out of, out of Davos. A president said no, no troops on the ground there. He's working with Naito to come up with a solution. And I honestly think I understand where the President was coming from here talking about the importance of Greenland. China and Russia have been showing a lot of aggressiveness in the Arctic. And I understand as Homeland Security chair, the need to protect the homeland. And Greenland is in a very peculiar place. And making sure that China and Russia don't have the free run of the Arctic is very important. So I understand where the President was coming from about mentioning Greenland's strategic positioning. And I'm happy that we are going to work with other members of NATO and Europe to make sure that Greenland is protected as well as the European continent and the American continent.
- [09:43]
Joe Matthew
Does this make Naito's stronger? Does it weaken Naito? We were told at the outset of this Davos World Economic Forum that the future of Naito was at stake. That was the Danish Prime Minister. How do you see it?
- [09:56]
Congressman Andrew Garbarino
Naito is extremely popular and important and has a lot of support here in the US on both sides of the aisle, Republican and Democrat. I don't think this was going to be the end of NATO that would have been plagued right into our adversaries hands. We are, everybody who's in NATO is stronger because we are a part of NATO and I actually hope we can grow NATO and bring other countries in because bigger alliance, the stronger we are and shows that we're all on the same page and we can, we can do whatever we need to do whatever we can to show that we to our adversaries, that they can't take advantage of us and pit us against each other.
- [10:38]
Joe Matthew
Well, it's really interesting to hear you say that before we move along and I'd love to ask you about some domestic issues. Should Ukraine be one of those members or is that a bridge too far?
- [10:47]
Congressman Andrew Garbarino
Listen, if, if you, I think the reason Russia invaded Ukraine is because Ukraine was not a member of Naito. And if that's something that the other NATO countries are willing to consider, it's something that I think we should all consider. But again, to gain entry into NATO you have to have the support of other NATO countries. So that's something that is up to the NATO, the NATO states to decide.
- [11:09]
Joe Matthew
Well, I want to get right to the center of your attention here as chairman of the Homeland Security Committee because I'm guessing you know more than most about what's about to happen with the funding bills specific to the agency, the Department of Homeland Security, because there's been a bit of an argument between Democrats and Republicans about adding language to put some controls or directives around the way that ICE conducts immigration enforcement. Body cameras have been floated. Some other ideas like training when it comes to de escalation. This was seemed to be coming to a boil last week. Maybe it's more of a simmer right now. This is the speaker of the House, Mike Johnson talking about this just recently. Mr. Chairman, listen to the speaker and we'll have you respond.
- [11:51]
Joseph Welch
Hey Democrats, if you have a problem.
- [11:53]
Rick Davis
With ice, which many of them do, of course, irrationally, you should not take.
- [11:57]
Joseph Welch
Down the appropriations bill because there's all.
- [11:59]
Joe Matthew
These other areas of Homeland Security that are essential.
- [12:02]
Rick Davis
You know, Bill, you spent a lot.
- [12:03]
Joe Matthew
Of time down on the border.
- [12:04]
Rick Davis
You saw the abuses of the last four years. We've got to correct all that. And you have to fund the Department of Homeland Security to keep us safe.
- [12:10]
Joe Matthew
This is not a game.
- [12:11]
Rick Davis
We can't do a CR on Homeland Security. Think of what will happen.
- [12:17]
Joe Matthew
So I guess my question is, will this end up in a continuing resolution or will there be a deal on Homeland Security funding?
- [12:25]
Congressman Andrew Garbarino
Well, we'll know that answer in about an hour when the bill hits the floor. I, I think there will be, I think, you know, there was a four way agreement amongst the appropriators and the leadership, both Republican and Democrat that helped draft this Homeland Security appropriations bill. I think it will pass with bipartisan support. It might not have overwhelmingly bipartisan support, but it still will have bipartisan support. And I agree with the speaker doing a continuing resolution on the Homeland Security bill alone just gives more power. It takes it away from Congress and gives it more to the administration. And I think, you know, we don't want to shut down the Department of Homeland Security by not passing anything because then you're shutting down the Cybersecurity Information Security Agency. You're shutting down. We're not going to be able to pay our transportation security officers at the airports. I mean there's a lot of. FEMA is another agency that would be affected. There are a lot of agencies that fall under the Department of Homeland Security that don't deal with ICE that would be affected by a shutdown for the department. So I'm hoping the bill passes. It is a negotiated four way agreed upon bipartisan bill and I hope it passes in about an hour.
- [13:39]
Joe Matthew
You're not expecting a shutdown though, right? I mean your worst case scenario is a CR for Homeland.
- [13:44]
Congressman Andrew Garbarino
I listen, worst case scenario is probably a shutdown for Homeland, but I don't anticipate that happening. I anticipate, I really do hope that everything does passes today and it all gets passed in the Senate next week and the President can sign it before the 30th. But again, you know, if a CR has to happen, it just gives more power to the administration to move money around, which is not, you know, what Congress wants to pass appropriations bills. This is what we want to do. This is what we all work very hard to do. And it is very important to get this bill, this bill across the finish line because it's not just about money and funding agencies. There are extensions, there are authorities that are being extended under this bill that are very important to Homeland Security.
- [14:29]
Joe Matthew
Let's go to New York for a couple items. Mr. Chairman, a judge in Manhattan has ruled that Congresswoman Molly Attakis district on Staten island is unconstitutional and should be redrawn. I know this is going to an appeal, but are you concerned about this?
- [14:44]
Congressman Andrew Garbarino
Yeah, absolutely. I mean it's amazing that the Democrats sue on maps that they just approved overwhelmingly and was signed into law by a Democratic governor and a supermajority in both the Democratic supermajority, both the assembly and the Senate. But I imagine there'll be an appeal. The judge directed it to go back to the independent redistricting commission, I believe to draw maps by the 6th you know, this is not the normal process. Our constitution actually prohibits mid decade redistricting. So I don't know how this is going to last as well as petitions start soon in New York to get on the ballot. So if this case is ongoing, I mean I know there's precedent, there's federal case law precedent that would stop any redistricting once petitions are out on the street and the nomination of candidates is happening. So I don't know what's going to happen. I don't know how they could limit it to just one district because they developed these census tracts and everything to make sure every congressional district in New York has the same exact population. So this is not something that can be done by the February 6 deadline that the judge put in his order yesterday. So I anticipate an appeal. I don't think there'll be new districts politics but I find it laughable that they're suing on maps. The Democrats are suing on maps that they created last year.
- [16:12]
Joe Matthew
Well, we'll find out together where this is going. I appreciate your weighing in on it, Mr. Chairman. Lastly, I want to ask you about your 911 responder and survivor Health Funding Correction Act. Will this see action on the floor if that aforementioned DHS funding bill does not come together the way you want?
- [16:33]
Congressman Andrew Garbarino
Yes. Luckily the, the fix for the 911 World Trade center health program is, is in the other government funding bill that we're also taking up today which has a lot of bipartisan support and it's, it's a four way agreement that would not have been possible without the speaker, without Senator Gillibrand and my other colleagues in New York. It is a win for the survivors of the 911 terrorist attacks and for all who were there on the pile the days and weeks after who have gotten sick. We have for, for a decade and a half we have made advocates unfortunately come back down to Congress to beg for money. It is not right. This is, this is care that they deserve. This is care that they've earned. And I'm very proud to have this bill being passed today.
- [17:23]
Joe Matthew
Congressman, thank you. Andrew Garbarino, the Republican from New York Chairman, household man, security only on Bloomberg. Stay with us on balance of power. We'll have much more coming up after this.
- [17:36]
4imprint/Okta Advertiser
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- [18:34]
Bloomberg Host
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station.
- [18:49]
Joe Matthew
Just say Alexa play Bloomberg 11:30 Greenland was so yesterday. Jack Smith is so today. We've got our eyes on this testimony on Capitol Hill. They just brought in the pizzas. We the pizza. Big stacks of the pizza boxes going into the Judiciary Committee. So we're going into overtime or something. You know who was spotted on the Capitol today right outside the hearing room? Jack Smith. Inside the hearing room, House Judiciary and Stewart Rhodes is hanging out in the hallway. The founder of the Oath Keepers, previously convicted of seditious conspiracy, sentenced to 18 years in prison, of course until the President pardoned him. The President is posting, by the way. He's got to be watching this Jack Smith testimony. What else are you going to watch other than balance of power? Deranged Jack Smith is being decimated before Congress. He says it was over when they discussed his past failures and unfair prosecutions. He destroyed many lives under the guise of legitimacy. Jack Smith is a deranged animal, he writes, who should not be allowed to practice law. If he were a Republican, his license would be taken away from him and far worse. Hopefully the Attorney General is looking at what he's done, including some of the crooked and corrupt witnesses he was attempting to use in his case against me. The whole thing was a Democrat scam. A big price should be paid for them and what they have put our country through. Indeed, Jack Smith talking about some of the witnesses and the vile death threats that he describes to election workers to defend the phone record. Non disclosure orders. Here's a taste of his testimony from earlier today. Prepared remarks from Jack Smith Listen, I am not a politician and I have no partisan loyalties. My career has been dedicated to serving our country by upholding the rule of law. Throughout my public service, my approach has always been the same. Follow the facts and the law without fear or favor. I made my decisions without regard to President Trump's political association, activities, beliefs or candidacy in the 2024 election. Things got pretty chippy from there, at least with Republican members of the panel. You know how this goes. It was a partisan affair and it's, by the way, still ongoing. We assemble our political panel to start with Rick Davis, Bloomberg Politics contributor. Our Republican strategist, Rick is a partner at Stone Court Capital. And Jeannie Shanz Zaino is with us, Bloomberg Politics contributor and Democracy visiting fellow at Harvard Kennedy School's Ash Center. Jeannie, what is the purpose of this exercise? The president wants the attorney general to, I guess, file charges against Jack Smith. Why is the committee got him up there today?
- [21:54]
Bloomberg Host
Yeah, Joe, you know, by the way that the White House, the president, wherever he is at this moment, have a split screen with J6 so he can, you know, criticize Jack Smith and balance of power with Joe. Matthew, that's how you keep ending up on Truth Social. So he's watching.
- [22:13]
Joe Matthew
With you, Jeannie.
- [22:16]
Bloomberg Host
It is perplexing because you would imagine that the last thing the White House would want to do right now is draw attention back to January 6th, draw attention back to the election loss of 2020. And yet they keep doing this. Of course, the House tried to hold these hearings in secret, which they did in private, I should say, but Jack Smith asked that they be held in public. And so now we are hearing once again names like Cassidy Hutchinson and talk about, you know, the police officers who are there in full force who were, you know, have been very critical of the president. So, you know, I'm not sure why the White House or Republicans want this. They want to try to paint Jack Smith as dirty, politicized, a Democrat doing the bidding of Joe Biden. And yet he is calm, cool and collected. He knows this case. Forward him back. They haven't been able to lay a glove on him in terms of evidence to show that he has somehow done anything but his job as a neutral prosecutor.
- [23:18]
Joe Matthew
Well, I've got questions about the direction of questioning here by the Republican led panel. But Rick, I'm just curious broadly what you think about what Jeannie just said. Does this actually help the administration to drag Jack Smith up there and tell this whole story all over again?
- [23:34]
4imprint/Okta Advertiser
Again?
- [23:36]
Rick Davis
Yeah, I think this is a combination of the president's kind of stubbornness with the facts of the election in 2020 and wanting to continue to sort of prosecute that. And then secondarily, I think the members on the Hill see this as doing no harm, excites their MAGA base in their districts. And for them, it's, it's not talking about Greenland, it's not talking about Jeffrey Epstein. I mean, like, the plate is full of things that they're trying to avoid. And this is probably the least toxic of all those things to their reelection efforts. So I agree with Jeannie. I think they're sort of marking time on this. It makes no sense to spend time on an issue like this when they've got a pretty full agenda and they're still struggling to get the budgets done. But, but they are in an election year. And more and more we're going to see hearings like this that have nothing to do with policy, nothing to do with Congress and making laws, and a lot to do with trying to get reelected in November.
- [24:44]
Joe Matthew
I should mention, Jeannie, that former Vice President Mike Pence is going to be with us this evening for the late edition of Balance of Power. And I suspect he's got some thoughts about this whole conversation that's underway on Capitol Hill. The president's been talking about this a lot, though, 2020. Rick's right. Of course he talked about it, you know, for the last many years. But most recently, it's been coming up almost on a daily basis. And he even got to it at Davos yesterday. You heard his speech. He talked about the fact that it's now been proven that 2020 was rigged. And he says, I have breaking news, quote, people will soon be prosecuted for what they did, unquote. Do you know what he meant?
- [25:23]
Bloomberg Host
You know, Donald Trump cannot let it go. We know that he spent yesterday, as you mentioned, at Davos talking about this. He mentioned Joe Biden, Ripp, repeatedly. He cannot remove himself from the chaos. He is determined to keep pointing to this. He has also done it several times in interviews recently. I'm thinking of the New York Times interview he did a few days or weeks ago as it is now, where he talked about, well, you know, perhaps I should have had the National Guard seize those voting machines. So he can't control himself, he can't help himself. But none of this is good for either Donald Trump or the Republicans or his brand. He these members of Congress in the House Judiciary Committee today have an audience of one that is Donald Trump. They are doing the bidding of Donald Trump, who they know is watching them and of course, balance of power. And they are going to try to make sure that he is happy with what they have to say, because of course, force, the last thing any of them want is to be primary. To Rick's point, of course they want to energize their base. But the sort of mind numbing thing about this is the way for Republicans to do better in the midterm is to focus on things that matter to voters. And that is, number one, the economy, number two, security and immigration. And yet they seem determined to look back. Looking back is never a good way to run an election. And yet they have to do this to appeal to the head of their party.
- [26:58]
Joe Matthew
You know, Rick, a big part of the controversy in today's testimony with Jack Smith had to do with his effort to obtain phone records of Republican lawmakers. And we've talked about this before, Lindsey Graham's out for blood on this one. When he was asked about it, Smith said it's common to pull such information when investigating a conspiracy case, including attempts to interfere with a lawful transfer of power. He said there were some Republicans they looked into and realized there was nothing to be found there and so they dropped that portion of the investigation. As somebody who spent many years working in the Senate, how common, to use his word, is this?
- [27:37]
Rick Davis
I don't think it's common. You know, these are extraordinary circumstances. And certainly, you know, the investigations as a result of January 6th were pretty wide when it came to folks on the Hill. And that's because it was an event that actually occurred on the Hill. And so I really think it's more a one off. I honestly would hate to believe that the Justice Department, whether it's through a 702 or some kind of a judicial act, are listening on congressional telephone calls. I mean, that would be disturbing. I wouldn't say that that's something that's normal. And I doubt if there's a member of Congress who thinks that's a good idea. It also, it's bad enough that we got to worry about Russia and China spying on us all the time. We got to work. The last thing we want is the Justice Department doing the same thing.
- [28:36]
Joe Matthew
Well, all this is taking place as the House Oversight Committee votes Jeannie Shan Zaino to hold former President Bill Clinton and former Secretary of State Hillary Clinton in contempt of Congress after they refused to appear. As we talked about last week in a closed door deposition related to the investigation into Jeffrey Epstein, where I guess we're doing the whole rogues gallery series of stories here in this conversation, three Democrats voted with Republicans. Jeannie, what's going to happen to the Clintons?
- [29:07]
Bloomberg Host
I don't think we know yet they have very good attorneys. They have a ground to stand on here legally. But I think as we take a step back, what is most disturbing about this is not, not what the Congress is doing to the Clintons, but the fact that they are handling the Clintons in a different fashion than they are handling other people similarly situated vis a vis the Epstein issue. So I think that is where the Clintons really have a leg to stand on. And of course, that and the fact that they offered and have repeatedly offered and given written testimony. Why is the committee accepting that from other. And that's not enough from the Clintons. But you know, I understand these Democrats voting with Republicans on this. I think Democrats have long said, and rightly so, we need to know what happened in the case of Jeffrey Epstein. I wish the Republicans were as focused on the release of the 99% of the documents from the DOJ on this issue as they were on focusing on the Clintons because that's much more important and nobody's died.
- [30:11]
Joe Matthew
By the way, more than 99% remain. Right. They said less than 1% has been released. East I, by the way, I want to clarify there were two separate votes here, Rick. The resolution holding Bill Clinton in contempt received nine Democrats. So I guess that tells us where the couple stands within the Democratic conference in the House. Now this sets up a full House vote on whether to refer contempt findings by the committee to the Justice Department. That'll pass. Right.
- [30:43]
Rick Davis
And I think that you got to sort of read the room if you're the Clintons. I mean, when you have that many Democrats saying come on in and talk to us, you really wonder why not? The more we talk about Jeffrey Epstein, the worse it is for this administration, it seems because they certainly act like they don't want to talk about this stuff. And I think that it's long since past due that the Clintons have already said everything they're going to say about this. So why not say it one more time.
- [31:11]
Joe Matthew
That's Rick Davis and she is Jeannie Shan Zaino. Stay with us on balance of power. We'll have much more coming up after this.
- [31:21]
4imprint/Okta Advertiser
Finding the right promotional products can feel overwhelming. But with 4imprint, it can be easy. They call it 4imprint certainty, which means the process is stress free, straightforward and backed by real peace of mind. Not sure what promo products to order. Order, no problem. You can get free samples, product guidance, even free help with your logo so everything can meet your expectations. Need options? They've got thousands, including branded apparel, drinkware, outdoor and all the tradeshow essentials. And when your order arrives, it's backed by their 360 degree guarantee. That's four imprints promise your order will be packed with care, show up looking great and right on time in a rush. 4imprint has quick turnaround options too to help you hit your deadline. Whether you're prepping for an event or just refreshing your promo lineup, 4imprint helps you get it done. Head to forimprint.com to explore. That's 4imprint.com 4imprint4 certain.
- [32:20]
Bloomberg Host
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg business app Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [32:36]
Joe Matthew
Thank you for being with us here on Balance of Power on Bloomberg TV and Radio. We've had a long running conversation on this program about Pentagon procurement and the emergence of some really fascinating technologies that have changed the way Washington is looking at defense. It's a conversation we've been looking forward to with Joseph Welch, who joins us in studio now executive director of U.S. army Transformation and Training Command. He's a civilian operator in the Pentagon, but the equivalent of a three star. And Joseph, it's great to see you. Welcome to Bloomberg TV and Radio.
- [33:06]
Joseph Welch
Thanks for having me.
- [33:06]
Joe Matthew
We talk about AI a lot and when it comes to two use cases, people look at chat, GPT or what search results they might be getting at some point. You're going a lot deeper with this technology to actually harness the technology and procurement for weaponry. How is it changing the way that, that we look at weapons procurement?
- [33:26]
Joseph Welch
Yeah, I think absolutely we've got to be using AI, right? Our adversaries are going to be using it. It's like any other evolutionary or revolutionary technology. We've got to take advantage of it. And that's true in our weapon systems. It's also true in the way that we, we buy things with our weapon systems. Really the power of AI is in our data. Right. And the major initiatives we've got underway now are really freeing our data from the siloed systems that they exist in today so that we can apply these AI tools and we can give our commanders the ability to make faster, better decisions on the battlefield adversaries.
- [33:59]
Joe Matthew
Now is the Pentagon, I don't know if you can answer this. Are you working on, do you have your own AI? Is there like a DOD LLM out there that you're using or are you taking from private companies who are expanding this technology?
- [34:10]
Joseph Welch
Yeah, really, what we're doing with our reform efforts with procurement, is looking to leverage commercial as much as we, we can. Right. So anything from AI to cloud technology, communications capabilities, because that gives us sort of a market efficiency in driving our costs down so that we can get this capability out more quickly with the budget that we have. So absolutely, we're doing that.
- [34:30]
Joe Matthew
Fascinating. A lot of people watch the United States, as the President described it, knock the lights out in Venezuela a couple of weeks ago. This brought to light our ability to affect the battlefield using cyber. I don't know if you were part of that or if AI was part of that, but this is a new wrinkle on the way that we're approaching, for instance, an invasion or an occupation.
- [34:58]
Joseph Welch
It certainly is. The threat environment is incredibly complex. You talk about cyber, there's also space, there's electronic warfare as we're seeing in Ukraine. All these different dimensions are coming together very quickly. And another challenge, and back to AI, is that the amount of data that is out there, that needs to be processed and understood both for ourselves to be able to conduct operations, but to understand our adversaries, we need to move through those cycles faster than we ever have before. That's really why our buying practices needed to fundamentally change in a new environment.
- [35:28]
Joe Matthew
Is the end game no people on the battlefield or in the airspace?
- [35:34]
Joseph Welch
It's absolutely not. No. We absolutely need human judgment and experience involved in complex situations.
- [35:39]
Joe Matthew
So this is to augment what our troops are already doing?
- [35:43]
Joseph Welch
It absolutely is. If you think about, you know, the cognitive burden on our commanders, on our soldiers, our troops right now, in terms of all the information coming at them, the decisions that they have to make, increasingly faster AI advanced tools are to enable them to do those jobs better, to clear the, the battlefield for them, if you will, so that they can make those human based judgments consistent with our laws and our values.
- [36:06]
Joe Matthew
When you start talking about the use of AI in the battlefield as opposed to in the procurement space, we're hearing wild stories about Even what the F47 with the ability to fly with its own fleet of drones. You have almost your own squadron with one man in the cockpit of an airplane. They can then communicate with ground, ground forces, which is talking to people back home. To what extent is AI stitching all of this together?
- [36:30]
Joseph Welch
It's AI. It's also a lot of other commercial tools that you may be familiar with. You know, if you think of your, your phone or your tablet, it's on wi fi, it's on cellular, it goes back to wi Fi. Very seamless. When you Think about the apps that are on your, your tablet, how they can seamlessly work together, share and exchange data. They're simple and easy to use. Like that is the experience that we're delivering to our soldiers to enable them to conduct their mission effectively the same as you or I use our kind of technology in everyday life.
- [36:56]
Joe Matthew
Interesting. And to the extent that you're working with private contractors now, are you using the same companies that we're familiar with? I mean, do you get on the phone with CrowdStrike or Palo Alto, or are these defense contractors that are not household names?
- [37:12]
Joseph Welch
No, we work with, you know, many, many different companies, increasingly more commercial based companies. I mean, obviously we've got a unique mission within the army, within the Pentagon, but the concerns that we have, you know, over security, for example, you know, banks have similar concerns, Internet service providers have similar concerns. And so, by and large, we're working with commercial entities and tailoring what we need for our unique military operation.
- [37:34]
Joe Matthew
Really interesting. Is it your job to buy Blackwells and Rubens? Do you have to go to in video and get these same AI chips that the, that the private sectors is drooling over?
- [37:44]
Joseph Welch
Yeah, absolutely. We need AI chips. Right. The question is whether do we need them, you know, inherently within the military, or can we take advantage of those in a commercial setting? You know, there are circumstances where we need capability, you know, that's disconnected from the cloud or from anywhere else. We have a lot of contingencies that we need to plan for, and we're going to need chips like that in order to enable disconnected operations on the battlefield.
- [38:04]
Joe Matthew
That's fascinating. So that means. So the Pentagon has data centers is what you're seeing.
- [38:08]
Joseph Welch
We have less data centers than we used to. Right.
- [38:10]
Joe Matthew
Really?
- [38:11]
Joseph Welch
Yes, we do.
- [38:12]
Joe Matthew
Because they are, they're more efficient or because you don't need as many.
- [38:16]
Joseph Welch
Because commercial.
- [38:17]
Joe Matthew
Same question.
- [38:18]
Joseph Welch
Because commercial providers can do that with some added layers of security. Really what I'm talking about is when we are completely disconnected, we have no way of getting back to a data center, whether it's ours or commercial. We still need to give our soldiers the ability to conduct their missions and do that in a digital fashion.
- [38:32]
Joe Matthew
Well, you've got an interesting situation. As I mentioned, Your Executive Director, U.S. army Transformation and Training Command, knowing that the Defense Secretary, Pete Hexseth, has promoted reforms in acquisitions and procurement. What's it like still for you to walk into a room of top brass and maybe some of the gray hairs who are in the Pentagon to see say that we need. We don't need this weapons system to go to war, maybe with China. We need this piece of software to protect ourselves. Are you being well received?
- [39:03]
Joseph Welch
Absolutely.
- [39:04]
Joe Matthew
We know that this is required.
- [39:06]
Joseph Welch
The reform efforts that I'm seeing, and I've got more than 20 years of experience working in procurements. I mean, this is really a once in a generation change in the way that we're doing business. Right. We used to not buy software anywhere like the rest of the world does. And today increasingly we're doing kind of the Silicon Valley model. We've got a minimum viable product, getting it in hands of our soldiers as quickly as possible, iterating, improving it, and then scaling it immediately. It's vastly different than the way that we built systems in the past.
- [39:31]
Joe Matthew
Yet we have a trillion, or I guess if the President gets his way, a trillion and a half dollar defense budget for the first time. Is that because we need all of the above? I would expect that technologies like these would be streamlined, creating efficiencies and maybe making defense less expensive.
- [39:48]
Joseph Welch
Yeah, I can't speak to the entire top line increase. I can tell you in the area that I work within information technology, there's a concept of tech debt, which is that you are so far, you know, in the past, in, in, in the core technology that you had, that you really need to reset yourself up to a modern reset.
- [40:03]
Joe Matthew
Absolutely, yeah. Tell me more about that.
- [40:05]
Joseph Welch
So, you know, the army digitized for the first time in the late 1990s. This is the same time the rest of world, the world was entering the digital era. The rest of the world has moved on. You know, by and large, our soldiers, the equipment that they're using, still has a lot of its capabilities that are, that are rooted in that time.
- [40:21]
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- [40:22]
Joseph Welch
If you consider an 18 year old who walks into one of our recruiting stations today, they don't recognize it. The iPhone is older than that person. Right. So that's the scale of the gap.
- [40:30]
Joe Matthew
That we're talking about. Don't say that. And then they sit down in front of this old DOS machine and they say, how do I work this? Right.
- [40:35]
Joseph Welch
So not for much longer.
- [40:36]
Joe Matthew
Okay, well how much longer? What's your timeline and what are your goals?
- [40:40]
Joseph Welch
Yeah, so our goal is to rapidly advance the state of technology. As I say, retire all of that tech debt, get modern capabilities that you're familiar with from your phone, your tablet. Give our soldiers the same kinds of things. Because the underlying portions of that technology, the availability of the data, the ability to work together, it's already exists commercially. We've got some unique missions, but we're starting from the point of commercial. That's what's going to let us scale fast.
- [41:04]
Joe Matthew
Imagine conducting procurement in the largest office building in the world. That's your job, right?
- [41:10]
Joseph Welch
Yes sir.
- [41:10]
Joe Matthew
I'm glad you could come to tell your story and we'd love to hear more as some of these technologies are identified. Joseph Welch, US Army Transformation Training Command we really appreciate the insights today. Thanks for being with us on Bloomberg.
- [41:21]
Joseph Welch
Thanks sir.
- [41:21]
Joe Matthew
Anytime you can cross the Potomac to come see us, that would be a good thing. 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@bloomberg.com.
- [41:41]
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