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We're joined now by Congressman French Hill, Republican from Arkansas, a really good person to talk to for a variety of reasons. Congressman, I want to get into this proposal it's coming from the White House, but first I have to get your takeaway from the CPI report that came out this morning, two months in a row that looked not too bad. What does that mean in your view for the Fed's September meeting and the broader monetary outlook.
Well, Jack, it's good to be with you. Thanks for the invitation to be on the program. Yes, I think we saw the continuation of the trend that inflation is high. It's above the Fed's goal of two percent. It's stubborn, but it's not increasing, and therefore I think the FED will be cautious going forward. I don't see rates coming down, so, as I said after the June report, I think you'll see rate short term rates remain high. We want to finish the job. We want inflation beaten because it's a thief.
It takes from every one of our families. So I don't expect rates to go down, but their rate, their rate of increases, I expect to slow. So we may see a pause in September based on other data that's said.
Considers, I've got to ask Congressman about the political angle. We heard the following comment from President Biden on the politics of inflation. Let's take a listen to what he had to say, and I'll want your reaction. I believe the words word for word from the President was that inflation's coming down. But Republicans have to find something to blame him for, and they'll find something. Is is that the case? Are Republicans moving away from inflation? Is a
political liability for Democrats? Or is this? I mean you just mentioned inflation is still high. What is the political angle there?
Yeah, I think inflation's high, and I think the reason for inflation is that we had two accommodati of a monetary policy coming out of the pandemic. We didn't take our foot off the gas by raising rates and stopping the one hundred billion dollars of bond buying soon enough, and you combine that with Joe Biden approving ten trillion dollars in extra spending for the next ten year budget windows. So we're running a one point six trillion dollar deficit
through this month. That isn't even through the full fiscal year, where the original foretest was to have about a one point five trillion dollar deficits for the entire fiscal year. So federal spending combined with two laxed monetary policy has produced this forty year high in inflation. It's stubborn, it's tough. The Feds taking the right steps, but they're in the face of this accommodative fiscal spending by the Biden administration.
Well, let's talk more about accommodative fiscal spending because there's a proposal. I think we're going to see something formal today, but our colleagues of Bloomberg have reported request coming for more funding. What's your response to that proposal?
Bottom line is where are Republicans on this. Republicans support kicking Russia out of Ukraine and supporting Ukrainian's effort for sovereignty and freedom of their country. And we've seen that in a number of votes over just the past few weeks. We're overwhelmingly the Congress is supportive of the fight in
Ukraine and to kick Russia off their sovereign territory. With that said, because of these huge, unprecedented spending deficits of Joe Biden now pushing well over one point seven one point eight trillion dollars per year unsustainable, you do find Republicans saying, look, find that money that twenty five billion
dollars from reallocation inside the existing budget caps. Don't just take the easy way out and do a supplemental So, I think the issue is less about Ukraine wildfires, supporting Taiwan and more about doing it inside those budget caps that President Biden agreed to with Speaker McCarthy.
So do you see this as an attempt not just to address those needs for Ukraine and Disastery, but an attempt to circumvent the debt limit deal? Is the debt limit deal being undermined already?
I think you could argue that Jack and I agree with Jordan's reporting on the Senate seems less concerned here
they've gotten all their appropriation bills out of committee. But I want to express my view that a majority in the House supports Ukraine funding for Taiwan funding for disasters, but with two trillion dollars annualized in extra spending, more than we were spending in twenty nineteen, a majority in the House in the Republican Conference believe we ought to try to get that twenty five billion dollars funding through those budget caps, not just take the as I say,
the easy way out of a supplemental. But Jordan laid it out. You've got senators that disagree with that. So this will be an important debate when we go back to intercession in early September.
And I should ask specifically with an eye on disaster aid, because I know FEMA's Disaster Relief fund is running low on funding. It's projected to run out of money before the end of the fiscal year. We saw the deadly wildfires in Hawaii. Do you believe that what we are seeing in Hawaii and the damage and destruction there, could that possibly lead to a greater request. I'm curious if there's a possibility that twelve billion won't be enough for FEMA? Is that the case?
You know?
I'm not sure about that, Jack. I think we need to hear from the Governor of Way local officials on Mali as to what they think their local resources and the need for fem assistance to be and then hear that report back. So I would hesitate to take that hypothetical. But look, it's a new disaster. It'sjorinly wasn't in the plan and considerations of the people who made the current request.
Now a little more broadly, Congressman, I have to ask, I've always got an eye. On September thirtieth, and earlier this summer, we heard comments from Representative Bob Good saying Republicans should not be afraid of a shutdown. Let's listen to what he had to say about this.
We should not fear a government shut down. Most of what we do up here is bad anyway. Most of what we do up here hurts the American people. When we do stuff to the American people while promising to do things for the American people. Essential operations continue, most eighty five percent is mister Bigs has just given me that number continues. Mostly American people won't even miss if the government is shut down temporarily.
So I know Congressman french Hill and Congressman Bob Good are not necessarily the same person. But Congressman Hill, do you see an appetite for a shutdown? And do you agree with that assessment of the effects of a shutdown?
Well, I think the Congresses and the executive branch have had a number of shutdowns, many since the nineteen eighties, and I don't think that's You've seen the government not keep doing its essential services to a majority of the people, and they are typically resolved in in a short period of time. So I understand where Bob Good is coming from, but look, government shutdowns shouldn't happen. We ought to get our job done. We ought to get the appropriations bills
passed on time. We ought to do a continuing resolution. If we need more time in order to debate of this. We know what the budget cap should be. We should hit those caps. And so I would hope that Congress on both sides of the capital, both the Senate and the House, can get our work done, get a plan in place, and avoid any kind of a government shutdown.
Have House Republicans given the Senate perhaps a stronger hand in negotiations by not quite marking up their appropriations bills to the limits set in the debt limit deal, but rather under it.
I think the answer that question is yes, But I'm disappointed that we broke for the August congressional recess period with only one bill having come across the House floor. We could have gotten more of those bills across the House floor. You're right, they were marked in committee at a slightly more conservative level in terms of total spending than the budget caps deal, whereas the Senate marked their
bills under Democratic leadership pretty much at the cap. So I think that allows us to have a good, solid negotiation on a bi cameral basis on twenty twenty four spending, and we ought to work toward that. So if we want maximum negotiating clout, though, Jack, we need to pass all those bills across the House floor, and that will give us the maximum negotiating clout to the answer to your question.
Now, Congressman, I should ask aside from the September to do list, I'm curious about the activity of the Oversight Committee, the allegations made about money going to President Biden's son, Hunter Biden, and his business associates, and the idea that seems to be taking hold, at least among House Republicans that this could be considered effectively a bribe to the president.
Do you see anything worthwhile in what is coming out of the Oversight Committee, especially given the references from Republican leadership's Republican leadership to the idea of an impeachment inquiry? Does anything rise to that level?
Look, I think what we need to do in our Judiciary Committee on how to reform the FBI and in the Oversight Committee under Jamie Comer investigating the corruption allegations towards Hunter Biden and the Biden connected family and associates.
We need to do the homework. We need to have the hearings, we need to have the testimony, we need to collaborate the assertions in and around those allegations, and do our homework, because this is exactly what the American people did not see during two the Trump impeachment, particularly in and around the Russia investigation by Muller and the impeachment an investigation around the Ukrainian phone call. That's the irony of this is that we want to do our homework.
So my view, as one member of Congresses, Let's let the Judiciary Committee and the Oversight Committee do their work. Let's see where the trail leads and then follow it appropriately.
Thank you so much. Congressman french Hill, Republican from Arkansas, with insights on the inflation CPI report, on the upcoming request for more funding for Ukraine, and everything else on Capitol Hill. Coming up, We're going to go to our panel Jeanie Sheen, Zano and Rick Davis for more. I'm Jack Fitzpatrick. This is Bloomberg.
You're listening to the Bloomberg Sound on podcast. Catch the program live weekdays at one Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and 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.
Well you heard it from the Congressman french Hill out of Arkansas. Insistent to make the point that House Republicans also not just Senate Republicans, but House Republicans also support Ukraine. That is relevant given the fact that the President is asking for twenty five billion dollars in additional funding. Thirteen billion of that relates to Ukraine. Twelve billion is disaster aid.
I'm Jack Fitzpatrick sitting in for Joe Matthew today and I'm here with Bloomberg Politics contributors Jeanie she and Zano and Rick Davis love to get their analysis on I think an interesting interview with a House Republican in french Hill. First, guys, I want to touch on his take on the CPI report, acknowledging this could lead to a pause in the rate increases when the Fed gets back and meets in September, but not a drop, and still saying that this is
still high. It's not a good thing for President Biden. Rick Davis, I'm curious what you make of the political risk response to the CPI reports we've seen for the last two months. Is this less of an albatross politically for President Biden.
It's certainly starting to sound like Republicans and Democrats are starting to say the same thing about the future of the FED and their interaction with rates and what the political net effect is going to be. Because french Hill, I mean, he could have been Joe Biden talking about the fact that it's great that we're seeing stability in inflation, but more work to be done. I mean, it sounds
like right out of the White House talking points. I would say there are other Republicans who are focused on, you know, shelter costs and those continuing to go up and be high and tend to politicize that a little bit more. But I do think some of the airs out of the tire when it comes to the inflation being such a political hot potato.
I don't know if this necessarily makes the phrase bidenomics a winner, but a Genie, I've got to get your take is that is that a winning phrase? If inflation doesn't doesn't spike back up again, if unemployment doesn't start to spike, if this is as soft a landing as we could have seen, given everything we've seen lately, what does bidenomics mean and how effective is that phrase politically?
Genie, Well, we've heard the President and his surrogates out on the stump just this last week and before he was on vacation trying to tell us what it means. We've got signs up now across the country telling us about the investments that they made under this, you know, idea of Bidenomics. And I do think the good news on inflation, or at least the positive news when you put it into context, is something that does help the President here, but you know, the White House knows, the
campaign knows they have a long way to go. The poll numbers on Biden, as it pertains to the economy have never been good. The inflation news is of course very welcome, provided that it stays. And they've now do got to do the really hard job of telling people
across the country what all those investment mins mean. In You're a great interview with Representative Hill, he just mentioned the fact that it is in part due to the amount that was invested into the economy in an effort to get us out of the pandemic, that accounts for the economic challenges we're facing. And that's something that Republicans
will continue to say. And Biden has got to make the case why this was necessary, why when it didn't happen in eight we suffered, and why we are going to be able to have this soft landing that he's been promising, or at least the Fed's been promising.
Well, that's an important point, Genie, because there is not even just in a political sense, there's a fight happening over fiscal policy. And the Congressman did say, okay, Republicans want to help Ukraine. We want to respond to natural disasters, but if we have to give an extra twenty five billion dollars, we should offset that. So you're finding twenty five billion dollars in cuts elsewhere. If people like friends
shall get their way, that is not what the president wants. Rick, do you see that as a realistic outcome or is the easiest path for Congress just spending more and allowing emergency spending without getting into offsets.
Well, I thought Jordan Fabian really laid it out well. And you know, there's a difference between the Senate's view of this and the House's view. The Senate has already finished their appropriations work and they've done it within hitting the budget caps, which is a really good sign that there's a mark out there. Right. Okay, we've got the budget caps in the House too, but they haven't done
the work. As french Hill pointed out, they've only passed one appropriation build before the break in August, and so they've got a lot more work to do to catch up to where the Senate is. So they can't actually say they're going to come in under those budget caps until they actually do it, and then that goes to a conference. The fact that we have budget caps and has already been agreed to, is a huge step forward
in this process. The Senate said, hey, we want to deal that if we are going to fund Ukraine, we're going to do it outside the budget caps. And so the Senate believes within the Senate they have a different point of view than I think our House conferees would have. So yeah, there'll be a negotiation. But I actually think there's a pretty reasonable number that the Biden administration put down, only thirteen billion for Ukraine at least that's what we anticipate,
and more for disaster assistance. Disaster a systems tends to get attention, right, that tends to be outside of most of the budgeting process once you've got FEMA numbers set in the appropriations bills, And clearly the disasters in places like Hawaii right now are going to draw attention. And I would imagine support in both the House and the Senate.
But the bouncing ball will be certainly in the Republican caucus in the House of Representatives Ukraine funding, and I was impressed by Frenchhill's almost shermanes statement that we will support Ukraine funding. I think that'll be an interesting conversation they have when they caucus.
Yeah, I should ask Genie, do you buy that? Do you think that Frenchhill is entirely speaking for House Republicans or he's maybe trying to will something into existence with regard to a different wing of the House Republican conference on Ukraine.
Yeah, the word turn that came to my mind was wishful thinking to a certain extent, because we just saw seventy Republicans in the House vote against it. And you know, I have no question in my mind that Representative Hill and many in fact, I think he's right that most Republicans in the House are supportive of Ukraine, are supportive of the funding, you know, and many hope to get offsets.
But the reality is they are facing hardliners, and you played the clip by Good there's people like Chip Roy, many other members of the Freedom Caucus rather for whom you know, spending without dramatic cuts elsewhere is just a
non starter. And for Democrats this is really Republican on Republican violence, you know, as Rick was just talking about, this is going to be Republicans in the Senate versus some of these Republicans in the House, and they're going to have to battle this out, and of course they're gonna have to if the House moderates hope to get this done depend on supports from Democrats, And you're already hearing set democrats. Some of them say yeah, we may help.
We've done it before, we'll do it again. Others saying, on you know what basis, would we have any incentive to help here. So it's gonna be a sticky It's gonna be a sticky situation when they get back. And I think we're looking forward to a whole bunch of continuing resolutions to try to get some of this important work done.
Yeah, I'm curious what you guys think is the real deadline. I mean, September thirtieth is the deadline that Congress often ignores. Rick If one, I'm curious, do you think there's likely to be a shut down? And two are you worried about September thirtieth or do you think this gets kicked into December and that's when it gets messy.
Yeah?
I thought Frenchhill handled that question particularly well. You know, he obviously says there's there's been a history of these shutdowns and government hasn't you know, fallen apart in the process, but that we have a lot of other options, right, and we actually need to pass our budgets in the House to catch up up to where the Senate is, and we always have a continuing resolution as an option. So he's laying out a lot of different frameworks that
are acceptable in the budget showdown process. And aside from actually shutting down government, I actually think it's only a small portion of the Republican Caucus who actually think a shutdown is a politically viable option, and so I imagine that it's not a widespread sensibility. But they're tight on time. I mean, as you've pointed out, they've got a budget let's due at the end of the month of September, and they have not made much progress on these appropriations
in the House. So it's really on them to get their work done.
Well, that's a story today, and as we've just mentioned, for September, for all of September, you can be on pins and needles as to the threat of a shutdown. And of course today that request for twenty five billion dollars in additional funding coming out from the White House being sent to Congress. We're going to stick around with
this panel Jeanie Sheen, Zano and Rick Davis. I call him our all stars to discuss this major ProPublica story, essentially saying that the issues with Clarence Thomas were not just limited to Harlan crow That's coming up.
You're listening to the Bloomberg Sound on podcast. Catch us live weekdays at one Eastern.
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Thirty eight destination vacations, including private flights, some on airplanes, some on helicopters, some on seven thirty seven's That's essentially the major takeaway from the latest story by Pro Publica about Supreme Court Justice Clarence Thomas. There was some news already about his close relationship with Harlan Crowe and the expensive travel that he was treated to due to that, but the latest story adds three more people with backgrounds
at Berkshire, Hathaway, Blockbuster, waste management, background in oil. Essentially, there are there are four very wealthy friends of Clarence Thomas, according to the latest Pro Publica story. I'm Jack Fitzpatrick looking forward to discussing this with our panel of Bloomberg Politics contributors Genie she and Zano and Rick Davis. This this adds more to a theme that had already been raised about what kind of travel and what kind of I don't know if you would call travel a gift,
but expensive travel certainly paid for by wealthy friends. To what extent is that okay? And at what point do you get into an ethical conundrum? Guys, I'm curious. I guess I should start with the simplest question, because there are there's all sorts of talk about a code of ethics, et cetera. Rick Davis, did Clarence Thomas do something wrong according to what we've learned about his friendships and travel with wealthy businessmen?
Yeah?
I mean you can debate all day long. You know, were these his friends? Were they you know, acquaintances? Did they have an interest in front of the Supreme Court? But I think the one thing most people that I've talked to on Capitol Hill, especially in the Senate, agree upon is the lack of transparency and all of that is what's disturbing. I mean, just setting aside the vacations and the time and the cost associated with those things. One flight would have cost, you know, over one hundred
thousand dollars to charter the same plane. It's mind boggling. But the fact that none of this is actually being reported, you know, with people who work for the country on the government payroll, even if they're Supreme Court justices, I think are one of the issues that really starting to stress out even the most ardent defenders of Clarence Thomas and the Supreme Court and these kinds of events.
Genie, what does this say about you know, a lot of courts have an official code of ethics. The Supreme Court does not have something like that. This is I've heard lawmakers raise this, but there seems to be some hesitance for Congress to dictate to the Supreme Court how they should govern their own ethics. Does this kind of thing, I guess, move the needle in terms of possibly someday having something more formal set for ethics for Supreme Court justices.
Yeah.
And this piece is so stunning. It is a well sourced piece of journalism. Everybody should read it. It is a mind boggling to look at what he was doing. You sort of wonder how he had time to be ruling on the Supreme Court amidst all of these trips and the question of does it move the needle, I think it does move the needle, but of course the
needle doesn't have to be moved too far. At this point, the Democrats and the Senate Judiciary Committee have been working towards some kind of ethics reform to make these disclosure requirements, to pass legislation in this area to strengthen those, because what the defenders of Clarence Thomas tell us is, of course the rules are murky, and they do have a
point on that. The rules are a little murky. For instance, staying in people's homes may not require disclosure, as they say in the article, and yet flights, cruises, and other things do, so they do need to tighten those. But the problem is Republicans in the Senate and I am certain the House are opposed to that. So legislation unless Democrats take control of the House is not going to
be in the offing. And we already know where the Chief Justice stands because he responded to the Senate Judiciary Committee in the spring saying that they believe that they have disclosure rules that are necessary, and Justice Alito followed that up with the Wall Street Journal saying that he doesn't believe that Congress even has a constitutional right to talk about what another branch coequal as it is does, and so for those reasons, I think even if they
pass legislation, the Supreme Court would likely brown on that. So I don't see something moving forward any further than it is right now given the situation.
So as important as it seems, maybe this is something to keep an eye on in the long run. Let's shift to politics for a little bit. I do have to ask you guys about Joe Manchin, who said on Happy Kerkovaal's radio show earlier today, his word was absolutely he would absolutely think about switching to becoming an independent rather than the most moderate or most conservative Democrat in
the Senate. You know, Rick, given your history working for a maverick in John McCain, I have to ask, do you see the flirtation with an independent bid by Joe Manchin as a political necessity? I mean, could he possibly win reelection in West Virginia again as a democh?
You know, I think it's very difficult. I mean, look at the jam that Christen Cinema, who did switch to become an independent, is having in Arizona. I mean, there's not a single poll out since she did that that indicates that under various scenarios she could actually win reelection. In fact, in most, if not all, the polls I've seen, she ends up third out of three, with the two
major parties doing much better. So I don't think West Virginia's politics is significantly different in the sense that there is no organized independent party, there is no organized infrastructure around there, and people don't have a history of pulling that independent lever. And so there's an education and a
process question that he'd have to address. And my own view, I'm a big proponent of the two party system, and you know, working to reform the Democratic Party is probably a lot more politically sustainable then venturing out on your own. But then the question is is he doing this to run for reelection or is he doing it to look for higher office? And that would change the dynam right.
Rick real quick at because the Iowa state fairs coming up and former President Trump will appear with some Florida Republicans, I just have to ask, I don't know if Iowa is what it used to be with an eye on Trump, Does Iowa matter all that? Much.
Yeah.
I mean it's gonna matter, probably more than usually because there are so many people who actually have affixed their political future to it in the presidential campaign. And so regardless of whether Trump wins or loses the Iowa contest, the question is who comes in second and third is gonna still matter and that'll matter to people in New Hampshire.
Coming up, I want to keep our panel around to ask about Alabama. Yes, interesting pulling out of Alabama of all places. It's not just a red state. It certainly is a red state. But we'll get to that. Thanks again to our panelist Genie Sheen, Zana and Rick Davis. Stick around for a few more minutes. I'm Jack Fitzpatrick. This is Bloomberg.
You're listening to the Bloomberg Sound on podcast. Catch the program live week days in one Eastern on Bloomberg Radio, the tune in alf, Bloomberg dot Com, and 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.
The Department of Justice says that a January second, twenty twenty four trial date would in their words, vindicate the public strong interest in a speedy trial regarding attempts to interfere with the twenty twenty election. I'm here with our Bloomberg Politics contributors Jeanie she and Zeno and Rick Davis. Curious what you guys make of that. I guess, for one,
based on what we know about this case. Jeanie, do you think it's likely that they get that or is they Is this wishful thinking by DOJ to try to move through this case as quickly as possible?
You know, I do think that they have a strong reason to try to move through it. I also think the judge is probably going to listen to what Trump's attorneys say and split the baby, so to speak. So
I don't suspect they'll get a January second start. But what this does mean is we are looking at a really severe collision between the election calendar January fifteenth being the Iowa caucuses and they ramp up from there and these trials, because he is facing already five trials in seven months, and that doesn't include this one, and then of course what happens next week in Fulton County in Georgia. So it's going to be a collision course for sure.
Very briefly, Rick Davis, as we try to juggle all of these legal challenges in the minds of voters, and what kind of political threat it is for the former president? Is it the twenty twenty issues, is it the January sixth issues? Is it the classified documents issues? I mean, what is or are any of those a true political drawback for him?
Oh?
I think they're all a distraction in general. As the public learns more about each one and they'll take a different approach to them. But right now I think a lot of Republican voters are saying, Wow, how much of a distraction is this? And is it going to allow Joe Biden to slip the news and get reelectric?
Genny she and Zano and Rick Davis, thanks so much for your insights.
Thanks for listening to the sound On podcast. Make sure to subscribe if you haven't already, at Apple, Spotify, and anywhere else you get your podcasts, And you can find us live every weekday from Washington, DC at one pm Eastern Time at Bloomberg dot com.