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The Russian response to Ukraine's use of US provided attack EM's missiles across the border, striking offensively against Russia, which prompted a reaction from Vladimir Putin lowering the threshold for a nuclear strike in response to a broader range of conventional attacks. Now, the US response right now is no response. As I mentioned earlier, it recalls the movie War Games. The only way to win is not to play. But it's pretty hard to not play when things are unfolding
before your eyes like this. And that's where we want to start our conversation with Chuck Fleischman, the Republican congressman from Tennessee's third District, is with US live from Capitol Hill right now. Congressman, it's good to see you. Welcome back to Bloomberg. I'm supposed to ask you about this
funding deadline, and we'll get to that. I have a lot of questions about the Lame Duck, but you have an important viewpoint on this story as co chair of the Nuclear Security Working Group and from your position with your specialty and energy, I know you're focused on this closely. How important? How dangerous is this development today that you're seeing coming out of Russia with a new nuclear doctrine.
This is very dangerous.
The rhetoric from Vladimir Putin over the past several months, including today, has been very dangerous in terms of threatening the use.
Of a nuclear weapon.
This should be condemned universally across the world because we cannot have that kind of talk coming from any of the nuclear leaders in the world. Russia has a nuclear arsenal, sure you. The United States has the best, strongest nuclear arsenal. I fund it through the Department of Energy, the NNSA.
We are well prepared, but we want to make sure that we lower the temperature and have a strong statement that there can never be the use of a nuclear weapon, even a tactical nuclear weapon, a smaller one on the battlefield. It would escalate beyond what we could just even fathom. It's ridiculous, it's wrong. It must be condemned.
What do you make of the response, the non response, if you will, from the US Congressman. And how worried are you that Vladimir Putin will try to take advantage of the remainder of the Biden administration to do some damage here before Donald Trump is in office.
Well, I can't wait for January twentieth to get here. This is why I believe that President Trump will get in sit down with Zelensky and with Putin and bring this horrific situation, this sad chapter in world history, to a close. But the reality is, we've got to be very careful day to day. We do not want this to escalate, to spread, and God forbid, we do not want to see the use of a nuclear weapon on the battlefield or anywhere else. That's why we have a
strong nuclear deterrent in our country. That's why we have built that up. But for Putin to engage in this type of rhetoric is wrong.
He needs to pull it back.
Well, do you think this strengthens the use of the attack of strengthens President Zelenski's hand if he is about to approach the negotiating table with Donald Trump and Vladimir Putin, Assuming that happens because when we look at the map of territory that's been occupied by Russia, that seems to be a lot to ask for the Ukrainians. In fact, they say they won't entertain handing that landover, whether it's the Donbass or Crimea.
What do you think, Well, there's absolutely no question that on the ground, if you look at the Ukrainian map that the Russians have made tremendous gains across the country, there's been.
A tremendous cost to them.
Their casualties are high, they've gotten even higher.
This has not been.
An easy war for Putin. His losses are horrific, so he's probably looking for an exit strategy.
I will say this.
Ukraine has lost a lot of land. There's probably going to have to be some type of a compromise. I think the only person with credibility to get both parties to the table is Donald Trump. The rest of the world has basically been engaged in a very sad spectator sport. Trump will probably put this to an end quickly. But I don't know what that compromise looks like. But we have got to stop the carnage.
Well, Congressman, you're back in Washington with your colleagues here with the to do list in the lame duck session, and I would love to get into some of the asks, beginning with funding the government. You know everyone's going to start running their countdown clocks. Tomorrow is one month out from December twenty and the lapse of funding. There is a debate right now about whether you should clear the decks for Donald Trump by extending, by kicking the can
well into next year. Some say March, some say September. Others say no, Donald Trump should have a hand in running the next budget that comes to the nation.
What do you think, Well, I think we need to hear from President Trump on this. I'm very solicitous of his thoughts. The fiscal year began for our country October first. We have a continuing resolution, as you alluded to, to December twentieth. By that time, we either have to have a budget in place and a deal or go into next year. It'd be my vote to basically get it done this year.
President Trump's going to have a lot on his plate with budget reconciliation, with taxes and other issues that the nation.
The border has to be addressed.
We don't want to necessarily have this appropriation situation on his plate.
Unless he wants it on his plate.
So the reality is, the sooner we get a budget done, the better clean it up and let President Trump go into a new, clean administration a new year. However, if President Trump feels differently, we'll be glad to entertain that.
Okay, So, if it we're up to you, would you prefer March or September? And would that continuing resolution include the millions of dollars the hundreds of millions that the Biden administration asked for to clean up from the hurricanes that partially impacted your state.
Well, certainly we need disaster relief. I don't know what that passage looks like. President Biden put forth a letter today to the Speaker of the House in that regard. Ultimately, I think we need some type of disaster relief, but that would be in terms of a supplemental addition to the budget. My preference would be get a deal done on the overall appropriations package by December twentieth.
There's some problems with that.
Practically, though the House and Senate are one hundred billion dollars apart, the Senate is much higher. I don't know whether or not Senator Schumer would deal. He'd be a fool not to deal, giving what we're going to see with Republicans in charge of the House, Senate and White House next year. But once again, I think the sooner we get a budget for our country, the better. I would have preferred to see a budget September thirtieth, going
into October first. We didn't get that, so I would take December twentieth, but if not, we'll go into March.
That's the view from a member of the Appropriations Committee. We should note, with your interest in energy, Congressman and your position in Congress, I would love to hear from you on Donald Trump's pick for the Energy Department. Everyone is obsessing over a lot of other picks, but not
so much Chris Wright. He's the CEO of Liberty Energy, said to be an innovator when it comes to fracking, and someone who will look to undo the Inflation Reduction Act and some of the incentives that came along with it. Is he the right pick for the job?
Well, I applaud President Elect Trump for this choice.
I don't know Wright. We have reached out.
Hopefully I'll be able to speak with him because my subcommittee, the Energy and Water Subcommittee, will fund the Department of Energy, which includes the NNSA, which has the nuclear arsenal, but also all of the energy endeavors. So I do look forward to meeting and visiting with mister Wright, as well as Governor Burgham, who's going to chair the Energy Council. He's going to have Interior, but he's also going to have this special new executive.
Branch Energy Council.
Ultimately, I'll be responsible for funding or not funding those endeavors. But a good choice looks like an oil and gas person. He's got good competence, he's got good business experience.
I was also pleased to see that he tends to be pro nuclear. That's my space in Congress.
I'm the most pro nuclear power congress person in Congress. I'm looking for somebody with whom I can continue that great work that has been bipartisan by Cameron and has gone through several administrations to promote American.
Nuclear I've been seeing a video that mister Wright said there is no climate crisis and we are not in the midst of an energy transition either. It's a quote that has been repeatedly used over the past couple of days since Donald Trump mentioned his name. I won't try to relitigate the climate element with you here, but when we talk about energy transition, he's presumably talking about green
will he in fact bring an energy transition back to nuclear? Congressman, you just brought this up, and we know that the great need for clean and renewable energy here and in this case, uninterruptible energy from a nuclear source for the data centers that are popping up like weeds all over the country will have to be addressed in this next administration. What would the new Energy secretary do and what would you do in Congress to help him to that end?
Well, I thank you for that question.
I have worked with the Obama administration, the Trump administration, and the Biden administration on a pro nuclear portfolio. All three secretaries major Secretaries of Energy, whether it's Monice Perry or Grand Home, have worked with me on those endeavors. So we have moved forward this bipartisan and by caramel support for that. I would expect that to continue under Secretary right because I know that President Trump is infinitely pro new nuclear, so that is important.
So it's going to be a continuation.
Of the funding model I have out for Fiscal twenty five, built on Fiscal twenty four, it's a good, solid, pro nuclear portfolio. Nuclear energy will be part of clean, carbon free, reliable, resilient energy. So I think we're going to continue to work in that direction, build on what we have. America has moved into the space. We're strong in this space, but we do need to get better. Our foes are good at it, our friends are good at it, so we need to continue to get better at it.
Donald Trump is on his way to Texas for the big SpaceX starship launch. We're going to carry that here on Bloomberg around five o'clock and our remaining moment, Congressman, from your perch on the Science Committee, how important is this flight test to succeed? For Elon Muskin, for NASA to continue their planning to go to Mars.
I had the privilege of meeting Elon Busk when President Trump brought him to our conference last week, and of course, what did I speak with Elon about nuclear energy?
I gave my card and I said, let's talk nuclear But.
I applaud Elon with what he's done. I wish him every success in his endeavors. In space, and I think NASA and the country and the world can learn from what he's doing. I applaud him, I compliment him, and I wish him future success.
All the chopsticks are going to be waiting. Congressman, we'll all be watching together. Chuck Fleischman, Republican from Tennessee with US Live from Capitol Hill. It's good to see you, sir. Thank you for the insights today.
On Bloomberg, you're listening to the Bloomberg Balance of Power podcast kens just Live weekdays at noon Eastern on Applecarplay and then Roudoo with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa Play Bloomberg eleven thirty.
Donald Trump is headed to Texas today. You might have heard me mentioned with Congressman Chuck Fleischman on his way to Texas Brownsville for the big launch. This is SpaceX Starship. Five pm Eastern time is the start of the launch window. We're going to carry this for you. This is the latest flight test that you heard Donald Trump talking about.
Remember the chopsticks. On the last one, the booster comes back down, they catch it at the pad all that's supposed to happen, and the weather is looking good, So between five and five thirty pm Eastern time, you know, you can always count on Bloomberg to bring you these launches. This is a big one that you've got the President elect there with the buddy in chief, Elon Musk, all
watching the launch. And a lot of this, of course has to do with our return to the Moon, with our return to Mars, and each stage, each flight test is critically important to stay on track. So we're gonna have a lot more from Texas a little bit later on today, as reality may be setting in at mar A Lago, not about SpaceX or Elon Musk, but about Matt Gates headline of the New York Times. Gates may not be confirmed, Trump admits he's pushing him in others anyway.
Maggie Haberman Jonathan Swan reporting that Donald Trump has been on the phone, specifically calling senators to pressure them, knowing that we may have even odds here in getting Matt Gates, the now former Florida congressman, approved to run the Department of Justice. It's where we start our conversation with our political panel. Genie Shanzino is back with US today, senior Democracy fellow with the Center for the Study of the
Presidency in Congress. Of course, Democratic analyst Bloomberg Politics contributor, and Lisa Camuso Miller, Republican strategist, former RNC communications director and host of the Friday Reporter podcast. Prepare for a great conversation. Great to see both of you. Hear Genie your thought on this. We've been talking about Matt Gaetz since last week when the name first dropped.
Here.
Donald Trump is hearing all the same stuff that we are, but is now appealing directly to senators.
Will it work, We don't know yet.
You know.
The reality is is that these allegations, particularly for somebody who is nominated to be the Attorney General of the United States, the chief law enforcement official, whether these allegations are true or not, and of course he denies them, these are disqualifying. I mean, think back twenty years Tom Dashel loses the nomination because he didn't pay taxes, you know, Bill Richardson, That's how it used to work. Now we've got somebody who is accused of these you know, crimes.
They are true, and again he says they are not these would be disqualifying. But the reality is you've got members of Congress who say, or the Senate who say that they want to give the president's nominees a fair hearing, and we'll have to see if that's true. But the reality is is that Donald Trump, here's what we're all hearing, and that is these are disqualifying allegations, less.
Than even odds of being confirmed to the Senate. The line and Maggie Haberman and Jonathan Swan's column Lisa Enter Elon Musk, who is not only supporting Matt Gates, but he takes to Twitter to x and writes he is the judge dread America needs to clean up a corrupt system and put powerful bad actors in prison. Gates will be our hammer of justice. How comic book is this going to get in the next.
Couple weeks, Well till we're definitely on another side of things, There's no question about it. And the thing about this nomination is that I think we're all waiting to see. Right there are definitely a lot of questions about whether or not Matt Gates can be confirmed, But also too, don't forget that we're living in a very different time. Donald Trump has got the control of the Senate, he's got control of the House, but he also really likes to win, and so to me, I think that he's
hearing everything that we're hearing. I think he's still very much behind Matt Gates as a candidate for attorney general. He's going to do everything he can to see that he can make that happen. But also too, he's not going to go far enough. He's not going to go so far that he's going to lose that nomination himself and have to go back to the drawing board. So I think a lot of things are up in the air. Like Jeanie said, I think we just don't yet know,
so we have to continue to watch. But I do think that there are a lot of things in his favor that are happening, and that is that he's got people like Elon Musk, and he's got, by the way, the support of the base of the party really behind him.
Right.
I had someone tell me the other day that even the folks who aren't really paying very close attention to Matt Gates are saying that they're in face of him because he is an outside of the box candidate and so that too, is something that has to be fueling Donald Trump's thought process as it goes through and as he continues to make bone calls to the US Senate about confirm it.
Now. Of course, the Ethics Committee is going to meet tomorrow about whether or not to release this report. Genie Speaker Johnson says no, it would set a horrible precedent for former members, even though there are some instances where this has happened before. But the top Republican on this committee, the chair, Michael Guess, says he doesn't care, and the panel will act independent of whatever the speaker says based on when they meet the ranking member. His Democratic counterpart,
Susan Wilde, says she wants the report out. So we can all agree this is going to happen, right, whether it takes place publicly for the committee or the lawyer is out there talking on behalf now of four women apparently connected to Matt Gates or as you put yesterday in the FBI report. So this information will be available to senators who make this decision, right, Oh.
It absolutely will be. I mean the FBI check alone, they're going to be able to pick up as much, if not more, quite frankly than was picked up in the House Ethics the House Ethics Committee. We don't know if they'll release it, but don't forget there's ten members of the committee, twenty eight or twenty nine staffers, the ranking member on the Democratic side. You just mentioned wild lost reelection. You know, what's to stop any of these
people from releasing two journalists? You know parts of this or in full. So I think we get it out here. But I think part of the troubling aspect of all of this and whether we're talking about you know this nominee Matt Gaetz or Peter Hegseth in DoD as, we are not talking about qualifications to run these departments. All of the focus has been on these allegations of sexual misconduct than otherwise obviously disqualifying. But it should also be
distinguished that these are massive departments. I mean, the DoD alone eight hundred billion dollar annual budget. What qualifications does somebody like Pete Hegseth have to run that department? Two million people? He'd be responsible for that the DoD employees. Maybe he has those qualifications, but we don't care about them or talk about them because all of the focus once again has been on these you know, sort of really troubling allegations, disqualifying but not having to do with
the qualifications of these individuals. And that's not to mention Tulci Gabbert or of course maybe the worst defender RFK Junior, who has, you know, zero qualifications in the area of health and human services. A good attorney on environment, but not health in human services.
You start to wonder if back Gates the best thing that ever happened to Pete Hegseth or our FK Junior, Lisa, considering the fact that heg Seth reportedly paid to settle a sexual assault case. Lisa, you worked for a Republican speaker in Denny Haster. You know how this stuff works. When Mike Johnson says, I don't want the ethics report released, what does that mean? When the chairman says we're going to do it anyway.
Well, Joe, there used to be a joke in Washington. I don't know that it's still the case. But if you want a story told, tell somebody on Capitol Hill. And it certainly is the case. I mean, these kinds of things definitely have a way of making themselves into the conversation. But you know, and I'm reflecting on what Genie said, I'm reflecting on sort of the way we've
covered Donald Trump for all these years. The truth is that I think we're falling in the same We're falling into the same trap, and that is that, yes, there is a process for confirmation. There is a process that involves the FBI, involves background checks and all of those other things, and ordinarily those are disqualifiers. But look, in a resounding way, the American electorate voted for Donald Trump and put him back in office in charge of the
biggest in the biggest job there ever was. So to me, we also have to reflect on the fact that this is sort of a continuation of a conversation we probably need to be having, and that's what is it that's qualifying and disqualifying in these jobs in this day and age. Do I think that we should refer back to the way that they can once we're absolutely and Jeanie and I and you Joe have been watching this long enough to know that that's the way that this business is done.
And thank goodness, there are processes in place that will hopefully catch some of these candidates that perhaps aren't the best qualified for these jobs. But also too, let's not fall into the trap of following all of the side noise and the outside noise that's conflating the fact that Donald Trump is still fighting for all of these candidates, and so far his record has been pretty good over the course of the last couple of months and years.
So I'm glad you said all of that, Lisa, finish the thought, then, what are the chances that all three heg Seth Gates, RFK Junior are confirmed? Because Donald Trump says he's got the mandate to make that happen.
You've heard me say it too. I think the rules are different. I think the playbook is different, and I think that you know, if Donald Trump has his mindset on getting these people into place, He's going to do what he has in his power as the President of
the United States to do that. At the horror and the shock of all the people inside of washing in DC, including myself, who are concerned about these people as candidates that should be in these roles, and so to me, I think that the chance if there's I mean goodness knows,
my crystal ball is as clear as anybody's in this town. Joe, But I'll say this that I think that it's very possible that we could see these kinds of people get into these roles more readily than ever before in the history of the United States.
Yeah, well, all right, Jennie.
What role do Democrats then play on the committees that are having these hearings. Do Democrats throw their hands up and say, you know what you want this team, go ahead, let's see where you are in two years, clear them? Or is there going to be a real throw down, a real fight by Democrats knowing that they will likely be confirmed anyway, Well, they.
Will continue to be the loyal opposition. I think you look at the Judiciary Committee. Poor ninety one year old Chuck Gresley is the incoming chair of that has got to manage this, and you're going to see Dick Durbin and the Democrats. They are going to call if Matt Gates comes to a to the Judiciary Committee, they will
call witnesses. They will make this a spectacle. They will make Republicans go on the record and say they support somebody who is charged with sex with an underage woman or girl, who has paid for sex, who has used illegal drugs, all of these allegations. So these are going to be hearings of the kind you know, just think back to Clarence Thomas Anita Hill. That's what they will do, and that's what the Republicans are so so not looking forward to. That's one reason why some of them want
the report to come back, come out. They're hoping that they can avoid having to go through this hearing. But these will be hearings for all of us to watch and all of us to see. But again, what we won't be talking about is what Donald Trump is saying he's going to be doing, including yesterday that he will use the US military to deport people who are here illegally.
Regardless of what you think about immigration, the use of the military domestically, that is an enormous change in the way we run this country, he said on truth Social yesterday, Absolutely true when somebody posted he would do that, and that has sort of gone sort of under reported, under disgust, under you know, like just imagined what would that would be like, the US military out in full force because of the you know, the real, real nasty allegations we're
hearing on the other side, and that has should be balanced. We should try to balance both of them. But I'll tell you, if these hearings come to fruition, there will be no balancing. We will all be all in on Matt Gates because it's going to be wild.
Oh I got yeah, just wait to cover these hearings. This is a great panel and a really smart conversation. I appreciate Lisa Camussa Miller and Genie Shanzano. Thank you so much both for the insights.
You're listening to the Bloomberg Balance of Power podcast Ketch just live weekdays at noon Eastern on Evo, CarPlay and then Froudoto with the Bloomberg Business app. Listen on demand wherever you get your podcast a. Watch us live on YouTube.
We'll have tabs on the markets for us throughout the hour here as we cover politics from Washington, DC. We saw a bit of a swoon in the market earlier with the news from Ukraine using the attack of missiles provided by the US offensively against Russia, which is announcing a new nuclear doctrine, though it does seem that the markets have settled a bit since then turning to the
matter at hand in Washington. That's the transition, of course, in the looming confirmation battles for some of the more controversial figures who Donald Trump has named, beginning with former Congressman Matt Gates, tapped to run the Department of Justice to be the next Attorney General. As Kaylee mentioned, Congressman Sean Caston, a Democrat from Illinois, is leading a letter from House Democrats urging the Ethics Committee to release its
report into Matt Gates. Knowing that the Ethics Committee will be voting on this matter tomorrow and that the Speaker of the House, Mike Johnson, has called on the committee to keep that report under wraps. Congressman Caston joins US now live from Capitol Hill. Congressman, it's good to see you. This report seems to be the worst kept secret in Washington.
Do you know what's in there?
When it keep Matt Gates from being the next Attorney General.
So the report has not been released. The Ethics Committee, by tradition, keeps a tight hold on these things. We've seen the leaks that have come out as you have. We've seen the stories about people saying that seventeen year old girls were drugged and statutorily raped at parties by
Matt Gates. We've not seen what's in the report. The Ethics Committee has the authority to release that report, and I think what scares a lot of us is that we saw the last time that the Trump was in the White House that he not only surrounds himself with sexual predators, people who are credibly accused of sexual assault, but suppresses that information. Remember he suppressed the FBI investigation into Brett Kevinaugh. Remember that Donald Trump himself is an
adjudicated rapist. And so if we don't compel the release of that information, we have no guarantee that a Republican led Senate will actually care about whether an attorney general in the United States has been accused of sexual assault. So we need to get the information out there. We need to make sure that the Senate has the tools to fulfill their advice and consent function, and then make sure that we put public pressure on them to ensure that they do.
Well.
Of course, we should note that the former Congressman Matt Gates has denied any wrongdoing amid these allegations, and even attorneys for two of the alleged people that had relations with Matt Gates have said their interactions were consensual. But Congressman as we consider this here knowing that the Speaker has said this would set a bad precedent. As mister Gates is no longer a member of the House of Representatives,
is there a precedent concern here? Could the House Ethics Committee in the future be used in a way that it was not intended to if this is done.
Look Number one, the House Ethics Committee does have a history in past years. They have real reports after members have come out. Number two, Make no mistake, Matt Gates is an extremely smart guy. He is also less than completely honest. All of us understood that he resigned early in order to avoid this report coming to light. If he is nervous about what's in the report, that speaks volumes.
And with respect to mister Johnson, I would simply point out that mister Johnson told us when he was running for Speaker. If you want to know what I believe, just read the Bible when Jesus said, what you do unto the least of these, you do unto me. I wonder who Mike Johnson actually is thinking of by the least of these. If you have somebody Donald Trump raped a woman, is Mike Johnson going to look out for that or is he going to be a rubber stamp?
Does he care that there are credible challenges as against Matt Gates. I wish this didn't sound partisan. I wish that we trusted the Republicans in the House and Senate to defend the least of these. But the fact that somebody is saying I am innocent, trust me, and please don't disclose the.
Little dubious congressman.
We heard from Elon Musk, who of course is playing a pretty big role in the transition of this administration. Apparently we'll play a large role once the administration is often running. He says that Matt Gates, quote is the judge dread America needs to clean up a corrupt system and put powerful bad actors in prison. Gates, he says, will be our hammer of justice. That's a direct quote, going on to say that the allegations that we're talking
about here quote amount to less than nothing unquote. How would you respond to Elon Musk?
Look, Elon Musk is not an elected official. Elon Musk is does not represent anybody, and hardly I think is a voice of reason in our society's I mean, he said that his own goal is to go live on Mars. Okay, fine, the only reason we're talking about Elon Musk is because he's rich. We have a separate question. Do we want the Attorney General of the United States to be somebody who has a dedicated commitment to ensuring that the law applies to every American equally without preference. That seems a
very low bar. If your view is that the Attorney General's job is to be some comic book figure that is out to implement retribution, whatever that is, that is a deeply anti American idea.
Congressman, we may care about Elon Musk because he is the richest man in the world, but he also happens to be a massive government contractor, including agreements between his company SpaceX and NASA. We're expected to see today and the President elect is expected to attend the launch of a heavy rocket, the sixth Starship launch, which of course is integral to NASA's efforts to hopefully one day get
back to the Moon and then maybe to Mars. And I wonder how concerned you are about Elon Musk's more active role, it seems with this transition, with the President elect knowing that the government was reliant on him for many such endeavors.
You know, I think there's a larger conversation there that is the concern about our campaign finance system in the wake of the Citizens United decision. What our the government that our founders intended the government that our laws were designed prior to Citizens United, is you had to disclose if you were spending money to elect political figures. There isn't Amolliment's clause in the Constitution you cannot be independently profiting, and we've hidden all that in the guts of our
campaign finance system. A functioning Congress going into the next term, given all the circumstances you just described, were the richest person in the world put hundreds of millions of dollars to elect someone into government and is then running to
get those contracts. A Congress fulfilling its duty as a check and balance, would have robust oversight, robust investigations, robust subpoenas, and if in fact SpaceX is the best technology to provide those needs and it's a fair and competitive bid process,
there's nothing to worry about there. But I think we are all concerned having seen what happened in the last Congress that the leadership in the Republican Party is so petrified of making Donald Trump angry and so unwilling to stand up for those constitutional principles that we have to ask this question of is their corruption happening in the light of day that will be allowed to continue, which ruins this beautiful American Republic that all of us benefit from.
This is bigger than just Elon muskett is the question of, like, do we want to make sure that there is no cash for favors in our politics? Congress has the ability to oversight and protect against that.
I hope that we do well.
Congressman, knowing that Elon Musk will have the ear of the president, do you find as silver lining potentially in what he might steer Donald Trump to when it comes to climate change, when it comes to the development of electric vehicles, for instance, and is there an opportunity to collaborate on nuclear when this new Congress and this new administration begin.
We'll see, I, you know, speculating on an unappointed, unconfirmed person who's whispering in the ear of a political figure, I'm not sure that's hugely productive. I don't think that that Elon Musk's involvement in politics is because he wanted to convince Donald Trump to leve electric vehicles, right, So,
you know, I think that's a third order question. I do think that a lot of us in the in the energy community are broadly concerned that the last time Trump was in the White House, he fought to raise the price of oil. You will recall he called the Saudi's and said, I need you to curtail production to raise the price of oil because it's hurting our oil manufacturers's. He's got voices in his head who are saying we were losing market share in the United States. Coal consumption
United States is collapsing, Oil consumption is flat. They want to export because they can't compete in the United States. What we really need in the White House is someone who is committed to competitive markets, to making sure that the lowest cost technology wins. And what all of us know is that if you have a solar panel on your roof, you don't pay for electricity anymore. If you have a transmission wire that can connect your cheap electricity to a higher, higher priced part of the grid, then
markets work. And I think what we also know is that the Trump administration is going to work very hard to raise the price of energy to protect the oil and gas sector that can't compete, and that's not only bad for the climate, it's also.
Bad for the economy.
What influence Musk might have with electric vehicles, I think is a third order impact beyond that larger question of the stress that our economy is going to feel under your Trump administration.
Well, Congressmen, before we can get there to the incoming administration, there is this session of Congress to finish out in this spending fight that needs to be fought. Obviously, we're facing a deadline here of December twentieth. In what form do you expect ultimately a shut down a version will take And where does one hundred billion dollars in request of disaster relief fit into the picture?
Well, I think we all hurt.
Johnson say this week that he wanted to do a short term continuing resolution that would put the disaster package in there. What we've all struggled with through this whole session is that there's a war within the Republican Party between itself. I think it's Freedom Caucus would like to oppose any spending package. The more sort of main street ends of the Republican Party would like to negotiate this
in good faith. If I had to guess right now, I'd say that they punt until the next Congress through a CR But we'll see. I think they're having a lot of fights within themselves on how.
To get through there.
And you know, we've basically run this entire year on a continuing resolution, arguably the last two years on a continuing resolution as a result of the fact that the Republican Party, particularly in the House, has struggled with governance, and so we just keep limping along and kicking through last year's priorities of the year before't priorities.
I expect that.
Will continue through this turn, but I would love to be pleasantly surprised.
All right, Congressman, we appreciate your time. That it is the Democrat from Illinois shancast In joining us live from Capitol Hill.
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We Mark on this Tuesday, one thousand days of war between Russia and Ukraine, and this deep into this conflict, things do seem to be escalating. After the US granted Ukraine permission to use US made weapons for longer range strikes into Russia, and Ukraine took advantage of that newly granted privilege by striking a military base in Russian territory, leading Moscow to respond with threat regarding nuclear weapons, putin signing a decree allowing Russia to fire nuclear weapons in
response to conventional attacks, including things like drone strikes. So at a time in which this feels like it's getting a whole lot hotter, we heard from the Ukrainian President Voladimir Zalynski about a path toward this being over.
We must push Russia toward just every blow and every thread from Russia must be met with it for sanctions, but Sultan days, it has been crucial to radically reduce Russia's ability to fund its war through oil sales.
Speaking to the European Parliament earlier today, quite the reaction from Sergei Lavrov, the Russian Foreign Minister, reacting to the use of those attacks missiles that Kaylee just mentioned quote, we will be taking this as a qualitatively new phase of the Western war against Russia, and we will act accordingly unquote. That's where we begin with Bloomberg's David Goura, who's still in Riotation Arrow where they are just now wrapping the G twenty summit, Joe Biden's last G twenty David,
this is the topic on the ground there today. What are you hearing.
President Biden making his way to the airport. He has done with this summit, but those words from Sergei Lavrov had a seismic effect on this summit while it was wrapping up today. Everyone was listening. Indeed, it move markets when he spoke about the changes to the Russian nuclear doctrine, in the fact that he saw the move as escalatory. You know, it's interesting the White House didn't immediately confirm this. I watched an interview yesterday that Jake Sullivan, the National
Security Advisor, did with the PBS News Hour. He wouldn't confirm that the US was giving those missiles to Ukraine and allowing them to use them explicitly. Of course, we did see that overnight. We had confirmation from Russia, but not from Ukraine, and I should say. Vandrier Zelenski wanted to be here for this event, wanted to make his case for continued multilateral support of his effort to fight off Russia in his home country, and that request for
infredation was rebuffed by President Lula here of Brazil. But this has come up over and over again on meetings on the sidelines and really shaped the last day of this session. There was a pivotal bilateral meeting this morning between President She of China and Olaf Schultz, the Chancellor of Germany. As we've been talking about, Chancellor Olaf Schultz had a conversation with Vladimir Putin a few days ago, and he was briefing world leaders, including President She about this.
But there is this variable here.
That looms large, guys, sort of what President Biden is able to do in terms of setting policy allowing for the use of these ammunitions and weapons, and what's going to happen in just a couple of months time when he leaves the White House and President Trump comes back.
All right, Bloomberg correspondent David Geras still live in Riodasian era for us, Thank you so much. Now, as we consider the words of Sergei Lavrov today. He also said that we are strongly in favor of doing everything not to allow nuclear.
War to happen.
At the same time that this nuclear oriented a decree was signed by the Russian President. So I wonder to what extent we take those words at face value.
I don't know how you square those two. There are questions about whether this blo US might be an attempt to take advantage of this lame duck session that we're in right now in advance of Donald Trump taking office, But this is something that we can only wonder right now. Remarkable though, to think that President Zelenski waited only hours after Joe Biden gave him permission to use those missiles.
Yeah, pretty incredibly quick in terms of action here, though. They had been waiting for this kind of move from the US administration for this permission to be granted for some time. So we wanted to get into all of this with Kelly Grico. She is a senior fellow at the Stimson Center and expert in the weapons of war. Kelly would love to hear from you on just what you make of the escalatory nature it seems we've seen from both sides in just the last twenty four hours.
How does Ukraine respond to the threat of Russia saying if you strike us again, we could use a nuclear weapon. Does that mean this might be the first and only time the Ukraine used these attackers in this way.
Yes, well, thank you for having me. I will say that I'm not surprised by the Russian response. They had sign earlier that this could actually be the response. Over the summer, they had discussed that they were revising their nuclear doctrine to lower the nuclear threshold for conventional attacks, and so what we saw today was essentially a confirmation of that, signing the order that it is now official policy.
I think, you know, it's interesting here we're playing a very dangerous game of chicken on both sides, essentially to see which side's going to blink first and stand down. Whether you know, my intendency is to think that the Ukrainians will be likely to try to call Putin's bluff. I think the question will be whether the Biden administration and also European allies are prepared to call his bluff in this way, or we'll see it as perhaps this is a step too far and it's worth backing down.
Well, I'm struck by the response, which was a non response by the US. It's like Joshua and wargames. The only way to win is not to play. Kelly was at the right angle for the US government today.
Yes, I think it was because it does allow for especially if we side to back down and that maybe this is going to be a one off. I think it allows us to do it in a way that it creates some ambiguity, so we don't have as much of a reputational cost if we decide to revise this policy.
So if we've never confirmed that we authorize this, that these were actually you know, the attackers that we're used, and it doesn't happen again, it's sort of an easier way, I think, to manage a reversal of the policy without sort of you know, taking a reputational hit. So I think that was very smart.
Well, and when we consider the US's decision making here to allow Ukraine to use these weapons at longer range and strike Russian territory, that's not necessarily being granted by all allies of Ukraine alike Kelly, Germany for example, and the Chancellor ll Off Sholtz still incredibly reluctant to allow Ukraine use of their Torus long range missile systems. There's been a lot of talk about that in the last
few days. What would providing those weapons to Ukraine mean differently or is this kind of exactly the same scenario wise is the US decision on attacks?
You know, it's exactly the same, and you know the Germans have been much more cautious than what they provided. But I think it's worth noting that even our French and British allies that have been i would say more forward leaning and providing longer range systems to the Ukrainians have still not provided permission to use those weapons on Russian territory. And I think Putin's nuclear threats will certainly probably cause them to pause that and rather than follow
suit with the United States in that regard. But I think the really important thing here to mention is that none of these long range systems, because they're only available in very small numbers, are likely to actually transform Ukraine's You know what Ukraine accomplish in the war right now, It's in a very tough position, largely because it lacks sufficient manpower to hold the front, and it's being gradually pushed back by the Russians, and these long range strikes
are not going to change that reality. And so you know, you do have to wonder is it worth the escalation risks here given what it can actually accomplish militarily.
Well, I guess i'd ask you that what kind of damage could President Zelenski do? What kind of ground could Ukraine gain with the use of these weapons in time to strengthen its hand at the negotiating table, realizing that's a pretty short window it looks like for when Donald Trump comes into office.
Yeah, I actually don't think this is about Ukraine gaining more ground. I think it's actually an attempt to try to save ground that Ukraine has, and particularly the Curse region where Ukraine went in in August and captured this Russian territory and this surprise operation and the Russians are
gearing up to it seems take back that territory. There's about fifty thousand troops in the Curs area, including North Koreans, and so I think part of the decision here was to try to allow the Ukrainians to be able to conduct these long range strikes in the Curs area only so that they could hit supply depots, ammunition storage, any concentrations of troops to try to disrupt those Russian operations, and hopefully if Ukraine and can hold on to that
Cursk territory, they could use it as a bargaining chip at the negotiating table.
Kelly, I want to ask you about another development today, the IAEA saying that Iran has agreed to stop producing uranium enriched to the level at which it's required for nuclear weapons, that's sixty percent production level. They say they've implemented measures aimed at stopping the increase of iron stockpile.
But I wonder just the status of the stockpile as it is, even if they're taking these steps, Kelly, how much does iron already have at its disposal if it wants to move forward with weapons.
Yes, I mean most estimates that I've heard from you know, nuclear experts that blotch Ran closely, is that they're very close, probably you know, months away, if they wanted to from being able to have sufficient amounts and be able to create a nuclear weapon. I think what it's a really interesting signal that they're sending kind of extending in olive branch in some ways. And you know, it's interesting this hap comes after the reporting we heard about Mosque meeting
with the Iranians. So it's an important signal and I'd be curious to see how the Trump future Trump administration reacts.
Well, considering the potential impact of the future Trump administration and seeing the ceasefire struck in Lebanon that was framed as some sort of a gift for the incoming president. Do you see all of the hot wars Ukraine? You can add what's happening in Israel to the list here potentially resolving or at least advancing to the next phase under a new White House.
Yeah, I mean it is really something to watch, isn't it that we've been We've had these wars, certainly for the last year to very active wars, one in Europe, one in the Middle East. The Ukraine war course has gone on longer, and right as it's whinding you know, Biden's administration is winding down, a lot of these parties are now thinking that they're better off negotiating knowing that
the Trump administration is coming. And so I think, what are something here that we should be thinking about as the United States, about whether we have actually inadvertently perhaps enabled these wars to drag on because we haven't really provided any restraints or not very many restraints on our allies in these wars, and whether that really served our interests and served you know, either Israeli or Ukrainian interests.
And so it is quite remarkable that we might actually see at least some kind of freezing of these conflicts pretty soon into a Trump administration.
Some big questions to answer, Kelly. It's great to have you back. Kelly Grico, Senior Fellow at the Stimson Center. Thank you so much for the insights and analysis as we track what's happening in Ukraine on this thousandth day of its war with Russia. I'm Joe Matthew alongside Kaylee Lines in Washington. Thanks for being with us on Balance of Power as we transition to the economy next, an important conversation with Joe Lavorgnia live from New York here on Bloomberg TV and radio.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon Eastern on Apocarplay and then roud Otto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
I'm just realizing this sast Tuesday. That means we're officially now two weeks since election day. Two weeks that for Joe Matthew myself felt more like two months.
Possibly they know two years that goes for a nation.
Yeah, because a lot has happened since we learned that Donald Trump would become the president elect, as he has wasted no time filling out what his second administration will look like. But he is spending time on one role in particular, maybe more time than he first intended on Treasury Secretary, after a lot of infighting has played out quite publicly.
Yeah, this has been quite remarkable to witness. We're still not done. We don't know who will be the Treasury secretary, but we do know who will not, and that's because Howard Lutnik, who was said to be on the short list of course, co chair of the transition, has been named Commerce Secretary. That's the most recent one that we got here, according to reports. And Nancy Cook has been driving a lot of our coverage here on the transition for US from Bloomberg here in Washington, our senior national
correspondent for politics with us at the table. Nancy gets great to see you. We've got to be getting close to the big one here, right for Bloomberg at least it's the big one. Usually you see Treasury come first because that's the less controversial pick. Why is it so hard this time?
There has just been a tremendous amount of infighting over the Treasury pick that.
Is really delayed.
And so a week or so ago, Scott Besson, who I know you have had on the show before, was relea seen as the front runner than Howard Lutnik decided, you know, he is running the personnel side of the transition. He decided he wanted the job for himself and told President Elect Trump that. And basically there's been sort of a lot of infighting within the transition team over who's
going to get that post. Trump has grown tired of the leaks, tired of sort of the back and forth on this, and is now considering a whole new roster of new candidates who have not been involved in the infighting. So our reporting shows that he is supposed to meet with Kevin Walsh, who was a Fed governor, tomorrow. He's
also supposed to meet with Mark Rowen of Apollo. Senator Bill Haggerty, who has been another guest of the show as in the mix and so really he's the pool has expanded as the infighting sort of dragged on for the week.
Well, and it did make me wonder when Bloomberg has reported this as well, though Donald Trump of course hasn't yet made it official that it could be Howard Lutnik
for Commerce. If there's been so much jocking between the two, if they're both to serve in the administration together working toward economic goals, that that might create some strife internally if they actually have to work together in that capacity, And I wonder if that actually means that if Lutnik gets a formal cabinet role, that Bessett can't get one.
Well, we reported yesterday that they had offered Scott bessen they'd spoken to him about the both the Treasury position, but also there was talks about putting him in the White House at the National Economic Council, and so you know,
they have floated different jobs for him. I think it's unlikely that the two of them both end up in the administration at this point, but again, the Trump team has not officially announced Latin it yet, and so I think that, you know, we won't be totally sure until we see that come that announcement come from them directly.
National Economic Council or Council of Economic Advisors, the two agencies, if you will, or the two groups inside the White House advising the President's been suggested, might actually have more influence, play a greater role in the administration because they're in the White House with Donald Trump, which is exactly how he operates. Does that make.
Sense, Yeah, I mean, well, Treasury secretary is its own cabinet position. You know, you have a plane, you have a staff. You know, you're seeing a sort of more of a principle and a peer, I would say to the president. But the National Economic Council, you have to remember, in Trump's first term was led by Larry Kudlow, who
was one of Trump's favorite people. You know, he was in the running for Treasury Secretary as well, but sort of took himself out of it because he's a Fox News commentator and I think didn't want to disrupt his life to that example, But that role when Larry Kudlow occupied it, and even Gary Cohen before that, you know, was a real powerhouse. Because your office is in the
White House, you're sort of in all those meetings. My question really for the economic policy making this Trump term is that it was so riddled with infighting last time, particularly in the trade space, over what to do of tariffs, what to do on the policy towards China. You had some people who wanted, you know, tons of tariffs, some
people who wanted more free trade. So I will be looking once Trump announced his economic team sort of where the fissiers are, particularly on how these different players are going to view trade well.
And that makes the role of USTR very important. Right one of these who it doesn't get the Treasury position potentially get that one instead.
Us TR is really an open question, and I think where Robert Leithheiser ends up as an open question. You know, our reporting shows that he does not want to go to USTR again, even though that's a role that you know he did quite well and effectively in the first Trump term. And so I don't think he's going to get Treasury secretary. He doesn't want USTR again, Where does he land because he has been such a Trump ally. Same thing with Linda McMahon, she is the other coachair
of the transition. We know Trump has interviewed her for commerce. If Lutnick actually ends up getting the official nod for commerce, where does Linda McMahon go. So there's a lot of real loyalists in the Trump or, but who may end up without jobs?
Fascinating, Well, we know Nancy Cook will be covering all of it for us as the piece is move about the board here Bloomberg National Politics reporter Nancy Cook, and we want to talk more about this kind of economic team and frankly, what kind of policy it is they're really going to be pursuing once they are assembled and turned back to Joe Lavornia, He of course served in the first Trump why House, a Special Assistant to the President and chief Economist at the National Economic Council, and
is now chief economist with SMB Nico Securities. He's joining us from New York. Joe would love to just get your take on how you're watching all of this play out. As Frankly, some of the names that Nancy just told us seemed to be in contention here, like Kevin worsh might actually have some conflict with Donald Trump when it comes to the approach around policies like tariffs, for example, What do you think?
So I thought Nancy did a very good job reporting, But to me, I don't see it as infighting at all.
I actually think it's healthy debate.
And the press, I think, sometimes treats anything that mister Trump or President Electrump says as catnip, and I think you've got a lot of healthy debates, and so I think the infighting thing is very much overhyped. I could tell you that when I was there, and this was during the pandemic, there wasn't chaos, and that.
Was typically the adjective people use.
So I think we have to be a little bit more careful in terms of I think how we describe things, but in terms of the people, I mean, the president certainly has a great list of people who could take the role. I think what you're referring to as it relates to Kevin Worsh as a paper position he had back in twenty eleven, the world has totally changed since then. So whether it's Kevin Worsh or Scott Bessen and complimentary roles,
I think the nation would be well served. But I think the point is that the President elect is making a very thorough, thoughtful decision on who we want, and we have to applaud the fact that he's moving with patients and thinking about it.
Joe, thank you for that, considering all the motion here and the commotion and the reporting that you may or may not think is totally accurate, at least describing the mood at mar A Lago. You've been there. You know what this is like. You were chief economist, National Economic Council. Are you loving sitting back here watching what's going on from your perch or are you actually in conversation with the transition team about taking on another role of this new White House.
Now.
I'm lucky that I get to be an outside observer and have some insight into Washington, and most importantly, the markets are moving and it's making my day job more fun and interesting.
It's great already, but we're making it great again. Poor pun but you know what I mean.
But no, it's it's pretty interesting in terms of what happens. And I do think you know the people that the President is considering for Treasury, I think what's important is they're not folks that I think would be market negative by any means, and the President needs to put someone there who can articulate as policies, be a spokesperson for the markets, and do it in a way that inspires confidence.
And I think what you're seeing now with the equities close to their all time highs and the market and treasury market, you know, basically not selling off further, I think right now is a vote of confidence that over the president picks will be someone that investors are largely comfortable with.
Well as we consider the markets here and the public companies that trade on them, Joe, we did get some news from the CFO of Walmart, who told CNBC today that if Donald Trump implements the tariffs as expected, Walmart will likely have to raise some prices. I know we've discussed this with you at length, but this points to the inflationary concerns many have, Joe, and I wonder how many price increases you would expect to see.
So I think what's very important is, again, as I said this, like, maybe there's five pillars of trumpnomics. One of them certainly is the tariffs, but also part of that is lower energy costs, and the energy share of the economy is larger than the imported goods share of the economy, and energy prices are down, has a more multiplicative effect, and that impacts other goods and prices, and
lower costs actually can reduce the inflation rate. A tariff theoretically would be a one off increase in the price level, so it's not inflationary. Moreover, what we saw from basically the twenty seventeen to twenty twenty period is that producers largely, if not fully, absorbed that pricing. So to sound a bit like an economist, that depends on implementation.
But I think people who.
Are fixated on the tariffs as being inflationary and hurting, I think are missing the bigger picture and what President elect is trying to do, because it also involves a deregulation, which is growth enhancing, lower tax rates on the corporate sector, and the intention is to increase productive capacity and supply,
which lifts productivity and actually with lower inflation. So I don't like when people just fixate on one little narrow piece and don't look at the possible effects, the second and third order effects that tariffs may have that actually are not destabilizing or inflationary really in any appreciable way.
I'd like to ask you about Donald Trump's pick for energy Secretary Chris Wright said to be an innovator when it comes to fracking. This is drill, baby, drill, right, assuming he's confirmed, Joe, what will it mean for oil prices in say, the first year of Donald Trump's administration, because the President elect has made some big promises lower energy prices by half.
Yeah, I mean, the thing is we're going to get lower energy costs at I don't know where prices go. A lot will depend in part on the global economy and what the President decides to do with Iran in sanctions, so it's not just a US phenomenon.
But I do think there is going to be a very.
Concerted effort to get energy production higher, to get gasoline prices back. I believe they average only around two fifty a gallon under President Trump's first term. So if you can get prices down at the pump, that's savings that immediately go into middle and lower class pocketbooks, and people appreciate because again they could spend money in other goods and services.
So energy costs are likely to fall where they go.
I'm not sure at this point, but yes, you're correct. The drill maybe drill mantra will be a day one initiative, and you'll see President Trump, through executive order increase leasing and use of federal lands, exploration of offshore drilling. All those things will come back into the fold. Well.
We also expect that the President elect, pretty soon after taking office, could use his executive order powers to address the border and migration. He confirmed yesterday reports that he'd looked to use the military to enact the mass deportations or get those underway that he said he would on the campaign trail. How quickly do you think that would start to resonate in economic data?
J I don't think that immigration actually has had as big an effect on the economy as people think. It's not as if the people who are coming over illegally are answering a government questionnaire as to whether they're working. And I'd argue that the president's potential policies already have worked to slow foot traffic, and of course border security implementation will be much stricter, so you'll see the crossings
come down. What happens beyond that, I can't say, but I don't think this notion somehow we're going to get this leftward shift and the labor supply curve and of all this inflation, I think is very misleading. You saw under Trump's first term, you saw immigration and border crossings fall to a deminimus level, and yet you had very little inflation, and you still had very good real wage growth.
So I don't think this is going to be a factor impacting the larger economy of the labor market in particular.
Joela Vorgna, SMBC NICO Securities America, a veteran of the first Trump White House. Joe, it's good to see you. Thank you for the insights as always, fascinating conversation, Kaylee, as we wait for the next big one, of course commerce to be official, but also treasury. This is something we might be waiting the rest of the week for. It sounds like. Thanks for listening to the Balance of
Power podcast. Make sure to subscribe if you haven't already, at Apple, Spotify, or wherever you get your podcasts, and you can find us live every weekday from Washington, DC at noontime Eastern at Bloomberg dot com.