We bring you news and analysis every day on the Sound on podcasts, but now you can get the latest news on demand whenever you want it. Subscribe to Bloomberg News Now to get the latest headlines at the click of a button. Get informed on your schedule. You can listen and subscribe to Bloomberg News Now on the Bloomberg Business app, Bloomberg dot com plus Apple, Spotify, and anywhere else you get your podcasts. Search Bloomberg News Now and subscribe Today.
You're listening to the Bloomberg Sound on podcast. Catch us live weekdays at one Eastern on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, or listen on demand wherever you get your podcasts.
Kevin McCarthy is out. The race for Speaker begins again. Welcome to the fastest show in politics. This day after the Speaker of the House was ousted for the first time ever in American history, and we're already naming names on a possible replacement, with one week until the Speaker's election and just about forty five days until a possible
government shut down. We are joined this hour by Congressman French Hill, the Republican from Arkansas, still in the Capitol today, and brings us his view on what happens next with analysis from our signature panel. Bloomberg Politics contributors Rick Davis and Genie Shanzano are with us for the hour. We're live on the radio, on the satellites, and on YouTube, where you search Bloomberg Global News to find us here
in studio. Welcome to this Wednesday edition of Sound On, where we're hearing the term uncharted territory a lot again today.
On this vote, the Ya's are two sixteen, the nay's are two ten. The resolution is adopted without objection. The motion to reconsider is laid on the table. The office of Speaker of the House of the United States House of Representatives is hereby declared vacant.
How about it drops the gavel? Who never heard that before? Happened late yesterday round four thirty in the afternoon Washington time. It was later that evening that the ousted speaker made clear his intentions not to try this again.
I will not run for speaker again. I'll have the conference pick somebody else.
And that's where we begin with Congressman french Hill, a Republican from Arkansas, joins us. Of course, we talk frequently about financial matters as a member of the Financial Services Committee, but congressmen were in a different world today, and I sure would love your take on all of this. I know that you were not a fan of what Congressman mac Gates was up to. The language that you used in an interaction with him was widely publicized. I know
that you wanted to keep Speaker McCarthy in place. But now that this has happened, can your Republican conference coalesce around another speaker in just a week's time.
Hey, Joe, it's great to be with you. That's essential if we want to counter of the bad policies of Joe Biden, if we want to be on equal footing with Chuck Schumer's Democratic control Senate, we need to rally behind a new leader in the House Republican Conference that can lead us and represent us and represent the millions of conservative voices that elected a Republican House in twenty
twenty two. And I know we'll do that. I think there's hard days ahead of us, there's a lot of work ahead of us, but I believe over the next week the House Republicans will coalesce around a new leader and be able to move forward, and we need to move fast because of the forty five day period we have before November seventeenth to try to complete a spending deal with the Senate.
Well, what do you think we're in for here? Would this next week long conversation that you're having within the family prevent what we saw in January where it's fifteen rounds the wild West on the floor? Is your intention to coalesce around a speaker before it gets to voting.
Exactly.
I hope that members will reflect on what a terrible day yesterday was where the wishes of ninety six percent of the members of the House Republican Conference were not honored by aid of their colleagues, and that we reflect on what that's done to the strength of the conservative movement in the House and leadership of House Republicans on these issues, and come back together either Monday night or Tuesday and begin a series of meetings that will allow us to move forward with a new speaker.
Well, this is interesting, Congressman, because we are hearing named Steve Scalise. Not a surprise to hear the Majority leader's name floated. Jim Jordan also apparently is officially running now for speaker. I spoke with him along with my colleague Anne Marie, just two nights ago. This was Monday evening on the balcony of the Cannon House office building right where you are. Here is how this part of the conversation went. Congressman, you're on a lot of short lists.
You went through this at the beginning of the year when it was a fight for speaker. Of course, Kevin McCarthy survived to believe it was fifteen rounds. Yeah, But as long as you're on these short lists, would you stand to be speaker if you want.
I don't want to.
I don't want to be speaker. I want I want Kevin Artthy to be speaker. I want to focus on the job.
If you were asked to serve your country in that role.
Well, I want to focus on the job I have. I think I'm serving the folks in the fourth disc of Ohio. That's my main job is to do what I told them I was going to do when they gave me the privilege to represent them, their families, their business, our communities across West central and North central Ohio.
So Congressman Hill, if he didn't want the job, two days ago. Do you trust his intentions? Now?
You know? I do.
Look, Jim Jordan's a very capable leader in Congress, cheering the Judiciary Committee, chairing the Subcommittee, a special select committee on the weaponization of the federal government. He's been a great voice and leader in the conservative movement, not only in the House but across the country. But he was a firm supporter of Kevin McCarthy. He rejects what took place on the House floor yesterday, and he gave a
tremendous speech in favor of Kevin yesterday. But yesterday was yesterday, and we now need to think about the future.
Would you vote for him for speaker?
I think he's an eligible candidate for speaker. Personally, I'm waiting over the next few days. I want to hear from my colleagues. Talk to my colleagues, because we have a tough decision to make. We need a leader to carry us through the next election, which is a presidential election, and counter this Joe Biden agenda and make sure all the Republicans in the House are on the same page. Joe, we have a lot of work to do, and we don't have time for any more Shenanigans like we've had this year.
Well, we heard some pretty flower language on the floor yesterday when it came to describing the intentions motivations of Congressman Matt Gates. Now that this has happened, there's been talk of expelling him from the Republican Conference. I don't know how exactly that would work. Congressman. What's going to become of the gentleman from Florida? Now?
Well, I'm glad we're in a couple of day cooling off period, Joe. I think members have gone home to their families and to their districts to reflect on what's happened over the past few weeks, and particularly yesterday. McCarthy was a solid leader of the House Republicans. He scored a lot of victories, led us to some major wins, and the assertions made that he's not good on spending, not good on the border, not good at negotiating with
Biden is all poppycock. Nobody buys that, and that's why I had the support of ninety six percent of the Republican Conference. So that's why I think you need to have people reflecting over this weekend and coming back together next Tuesday. For a family conversation about where to go forward.
Well, nothing would keep I'm assuming a Congressman Gates from doing this again. If the next Speaker, for instance, were to put up a cr and maybe get some Democratic votes, I guess I'm just curious. Do you think he should be in the family, Should he be serving on committees as a Republican member.
I think this is for the conference to decide. Look, if people say they want a speaker to lead us, that they'll buy into and keep and pledge allegiance to in the sense in the most positive sense, not in a dictatorial way. But we'll work together to counter the Biden agenda going into a present sidential election year and let Speaker that woman or that man serve until after the election in twenty twenty four. I think that would
give confidence to people to support a speaker. Let's lead the charge, and then we can revisit who the Speaker of the House is the Republican leader after the election in twenty twenty four. We need some certainty here in our leadership.
How about a speaker french Hill.
Gosh, I have a big job on the House Financial Services Committee, the Foreign Affairs Committee, the Intelligence Committee, and I love that work, and I'm going to stick with it.
Let's talk about the backdrop here, Congressman, and that's against the potential government shutdown we were looking at November seventeenth. Here, does this process does the ouster of Kevin McCarthy make it more likely that we will shut down next month?
Boy, this is such a good question, Joe, a smart question and a very troubling question for me. Let's assume that the House Republicans can elect the speaker next Tuesday or Wednesday.
We've lost five legislative.
Days of about sixteen legislative days that are scheduled left to complete this work. One of the assertions by the rebels in Matt Gates's corner where well we're not getting these spending bills done on time.
Well, guess what.
Ejecting the speaker makes that even tougher, because you can't go to the House floor and do any business of the House without a speaker decided. So we're putting more pressure on the process, weakening the hand in my view of Republicans, because that November seventeenth date is charging at us. This week, we would have done two appropriations bills, and we would do two more the next week, and then
we would start conferencing these bills with the Senate. And that's what we need to be doing in order to get a good conservative spending position of the House, negotiating with the Democrat control Senate.
Well, you stayed in town. Where'd everybody go, Congress when you could be working on this right now?
Well that's why I'm in town, and I am working on it right now.
And the whole I wish was here today, but they're not.
As you know, the Democrats were going out to California to the Feinstein meeting. I mean, I'm sorry, I beg your pardon, missus Feinstein's funeral, and a lot of the House members were meeting today in preparation for that election that we'll call for next week.
Well, let's push this forward a little bit. You and I tend to talk about the economy when you're on there's a great concern that the hard landing scenario is looking a lot more likely as student loan payments resume, as interest rates creep higher. Yeah, a government shut down to that and an auto workers strike. Congressman, we could be talking about a very different economy a couple of months from now.
What's your view, you know, Joe, that's been my view. I've never been a full soft landing person. The cause of the steepness of the interest rate increases, that was the largest most steep increase in short term rates since nineteen eighty.
It has a lagging impact.
So I think we're just now feeling theer initious effects from those monetary policy issues. And as you say, there's some other consumer related issues and on the supply side, particularly a UAW strike or more bad decisions regulatorily from the Biden administration. So I'm very cautious about the economy right now, and I think people have been lulled by that.
But when you combine economic worries and what I've seen in the response to the deficit spending two trillion dollars and no idea of how to get spending under control, you see the ten year rate pushing five percent.
Those are concerning signs to me.
Well, that absolutely is the five percent handle here is looking pretty scary for the stock markets, for all of the markets. Congressman, does the Fed need to stop down and take another look at this? Considering the lag effect of these historic interest rate hikes, This idea of higher for longer is spooking a lot of folks right out of the market.
Right.
Well, we've got to be concerned about financial stability, bank health, market reaction, but we're also concerned about getting inflation down to the two percent target. I know where how cautious and prudent the chairman pal is. But as I've said on this show for over a year now, almost two years, the activities of fiscal stimulus and runaway spending by Joe Biden is making the attempt to rein in inflation tougher
for the Central Bank. They cannot do it together, Amity schlays and I wrote an op ed of the Wall Street Journal about that about.
A year ago, warning of this.
And so if we don't get spending under control, we've got a fiscal crisis.
If we don't, as you say.
Watch the negative consequences of steep interest rate increases, we may have some instability crisis in the market. So this is a tough position for the Federal Reserve chairman, but he's up to it, and I'm counting on him reading the data and making the right recommendations.
Yeah, I know this week's jobs report is going to play into the future here quite a bit. We've got a breaking news headline. Congressman from punch Bowl, Steve Scalise, says he will run for speaker. I'm guessing that you heard this or maybe you expected this to be coming. Weigh in on that as you choose, But looking forward to next week's speaker election and considering the transition here, what will be the future of Matt Gates's ethics investigation under different leadership? If any.
Well, I'm not sure. I mean, that's really up to the House Ethics Committee. They operate in a very independent manner, independent of the views of individual members of Congress, to assess any assertions or allegations there. But Steve Scalise, our majority leader, has been in leadership now for years. He's
been a very capable whip. He's been a capable majority leader, so it doesn't surprise me that he's tossed his hat in the ring for speaker, and now you have two to publicly address candidates that's got the talent and leadership ability to be I think high quality leaders.
In the Republican Conference.
But we'll have to wait and see what our collective members think is in the best judgment.
Of the House Lastly, Congressman, do you want to see a rules change that might make it more difficult for Matt Gates to tip over the cart all by himself like yesterday.
You know, we've had that rule of vak the chair with one member offering it for one hundred years. The only Speaker who didn't face that constraint was the one and only Nancy Pelosi. So there are a lot of members that would stick with that tradition. But in a modern world, I think that'll be the subject of strong debate inside the conference and an important issue for candidates running for speaker. What's their view on that? Should they would they support a House rule change? And how would
the members vote on that? And would members be bound by a vote on that? For example, you're not supposed to offer a motion to vac without the approval of the House Republican Conference, But I don't believe any of the eight followed that House rule.
You know, we had a conversation with Mike Lawler, your colleague from New York, a Republican lawmaker who won in a Biden district. As were frequently reminded, he threatened to take the gavel throw it at Matt Gates hid him between the eyes. That comment has gone viral on social media, and I wonder if you share the sentiment.
Well, I think my views on what happened last week are pretty well known and pretty well covered. I don't know that throwing gabbles is the way to build comedy inside the House Republican Conference. We need to remember what
the mission is here. We need to be taking this battle to the American people to end the Biden administration's failed policies on the border, economically, in national security policy, and elect a president that's a Republican and re elect our House and good members like Mike Lawler and God Willing reelect a Republican Senate. That's what we need to do. We need to be focused on that, not throwing gavels at each other.
Very diplomatics today, Congressman, I appreciate your time.
I'm doing the best.
I'm trying to earn a new place and also keep the show a little more family friendly than last week.
Well, thank you, I appreciate that very much. Congressman Frenchhill, Republican from Arkansas.
With us, you're listening to The Bloomberg sound on podcast. Catch the program live weekdays at 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.
You have two official announcements for Speaker, Jim Jordan, who told us the other night he didn't want this job, and Steve Scalise. They're both going for it. We have a speaker's race, and we're joined now by Jeanie Schanzano and Rick Davis, Bloomberg Politics contributors. Rick, the news has been fast and furious. Around this time yesterday, we knew that Democrats would not back Kevin McCarthy. He is no
longer Speaker. Patrick McHenry is in place as acting Speaker, and we heard from french Hill a bit earlier this hour. Looking ahead one week to a speaker's election, will Republicans have coalesced around a candidate by then.
Well, I think that's one of the reasons you're seeing people announce right now is because they're having a trouble getting communications. People are en route back to their districts, some stuck around Washington. They have these presentations today. Some of the candidates are afforded time with the Texas delegation twenty five members strong, probably the biggest single coalition Republicans from any one state. And so the clock was taken.
And I think that Jim Jordan's a great example, told you two days ago, you know that he didn't want to be speaker. A day ago, right after the vote, he said he's going to leave that to the caucus. And today he announces he's a candidate for speaker, so that other members know that he's actually interested in the job, and he doesn't have to call him all individually to
tell him that. This is a difficult communications problem for these people who want to run, because they've got four days until they make a presentation to the caucus, and none of them want that to be the reason that they're going to win.
They want to already lined.
Up votes, and then Wednesday's the vote, so you know, the clock is really ticking down to the eleventh hour already.
And you can see.
Why Congressman McHenry, the speaker pro tempt gambled everybody out and said go home till Tuesday, because there literally would have been no time if they'd gone right into a speaker's election so well, caught us by surprise. Yesterday makes some sense today.
Fascinating take from Rick Davis, Geenie, what did you make of the president? First of all, he sounded exhausted. I don't know if that had anything to do with the events in the past twenty four hours, but the dysfunction always concerns me. What would this mean for his agenda?
I think the President is going to continue to move forward and focus on the business of the people, and that's what he was talking about today. Student loan forgiveness. I've just been doing some work on this. The phones are jam packed for people who need to repay their student loans. It is a very, very stressful time. So while the chaos is consuming the Republicans in the House, this is what millions and millions of Americans, families, parents,
former students, current students are deeply concerned about. And that's what the President is going to be doing. And he ended with a question on Ukraine. And there is a big, big question looming over the speaker's fight, whether it is Jim Jordan, whether it is Steve Scalise or somebody else
who and they're all vying for this position. Are they going to make a concession on Ukraine funding which so many, an increasing number of Republicans the House are gearing for it, to tie it to the border security And if they do that, what position does it leave Ukraine in? You know who's happy about yesterday, Vladimir Putin and Moscow. We are seeing Eastern Europe move away from support for Ukraine,
and we are seeing that in the US Congress. That is an enormous, enormous concern for the United States, and the President is going to need to do a lot to shore up support for that, as are Republicans like Mitch McConnell who truly support this funding.
Well, let's get into this a little bit. I do want to ask you both about a little bit more about the Speaker's election next week. But the view from the White House is important here, Rick, the President couldn't keep secret that he was planning a major address on this. This is clearly what the conversation was in the room
before he walked out in front of reporters. But you've made the case that a couple of people up here who say, you know, not another dollar for Ukraine, do not compare to the majority of Democrats and Republicans who support this funding effort. How much of a challenge will this be for Joe Biden.
Yeah, I think he's actually doing the right thing, and I think the calculus that I'm hearing from this news is that he's got to convince the American public to be on his side, who then will help him convince Congress to be on his side for Ukraine funding. Part of what is happening in Congress is a realization that there's less and less support amongst the American electorate and that needs to change otherwise Ultimately that will undermine support
to Congress. And so going to a presidential speech, hopefully prime time, hopefully he'll have a little bit more energy in that speech that he just gave on student loans, he can be a layout compelling reason why it's in our national interests to see Ukraine victorious in this war of Russian aggression. And that will in and out but self add momentum to his effort for funding on Capitol Hill. A part of its parliamentary maneuvering, the House has got to figure out a way to operate on every issue,
not just Ukraine funding. But they do need to determine whether or not they can get a fair vote, an open vote for Republicans and Democrats who support this, an overwhelming majority to allow this fundy to move forward.
If Joe Biden's going to do this, genie, he needs to tear down this wall kind of speech. Is he capable of doing that?
Yeah? I think he is. You know, he has surprised us. It was not that long ago that many of us were surprised by the way he maneuvered, for instance, in the State of the Union to make Republicans agree that they weren't going to touch Social Security, Medicare, and Medicaid, and he did that publicly. So I do think he is capable of doing it. But I also think this is not just up to Joe Biden. Let's not forget again. Whoever runs for speaker needs two hundred and eighteen votes.
To get there.
Need to deal not with the majority of the Republican caucus, but with the hardliners who are going to demand concessions presumably again, and that will likely involve Ukraine funding. So it is Republican leadership we need to see in the House on Ukraine funding. And yes, it is critically important that Joe Biden tell the American people why this is in our interest and needs to say it over and over again. But Republican leadership in the House needs to
stand up and say it as well. Kevin McCarthy said it was critically important, and then what did he do. He bent to the hardliners to keep his job. And that is the fear as we move forward with another concession out of whoever is the next speaker going you know when this vote occurs next week or the week after.
Spending time with our panel, Genie Shanzano and Rick Davis, I want to hear from you both on the future of Matt Gates, and I'm going to just walk through a couple of moments over the past twenty four hours that might help us paint the picture here of what he is now looking at. Of course, the motion to vacate was successful. We'll start with Kevin McCarthy, the now former Speaker, said this whole thing was personal, and he makes a reference to the ethics investigation into Matt Gates.
Listen, look, you all know Matt Gates.
You know it was personal.
It had nothing to do about spending, It had nothing to do about everything he accused somebody of he was doing it. All was about getting attention from you. I mean, we're getting email fundraisers from him as he's doing it.
Join in quickly.
That's not governing, that's not becoming of a member of Congress. And regardless of what you think, I've seen the texts.
It was all about his ethics. But that's all right, I've seen the text. Yes, it was all about his ethics. Let's go to the floor. Congressman Garrett Graves, of course, an ally of Speaker McCarthy, helped to negotiate the debt ceiling deal. Outraged by Matt Gate's fundraising. What's going on in.
This country today, what's going on in this body where you have Freedom Works, Heritage, shipbroy and Jim Jordan say something's conservative and these folks say it's not, and they're right. And all of a sudden, my phone keeps sending text messages, text messages saying, hey, give me money. Oh look at that, Oh look give me money. I filed the motion to vacate using official actions, official actions to raise money.
It's disgusting.
It's what's disgusting about Washington.
It's what's disgusting. He's not holding back in this case, and Matt Gates did answer to those charges.
Listen, I take no lecture on asking patriotic Americans to weigh in and country tribute to this fight from those who would grovel and bend mee for the lobbyists and special interests who own our leadership, who have followed Boo all you want, who have followed out this town and
have borrowed against the future of our future generations. I'll be happy to fund my political operation through the work of hardworking Americans ten and twenty and thirty dollars at a time, and you all keep showing up at the lobbyist fundraisers and see how that goes for you.
Okay, Rick Davis, what do you think of Matt Gates here also being accused of preparing a run for governor of Florida? How does this wash out? Is he expelled from the conference? Can they do that? Will he lose committee assignments? What's next?
Sounds like we need a GOP therapist for that caucus.
I mean, it has only gotten worse.
And I think that press conference you know last night after the vote by Kevin McCarthy, now just Congressman McCarthy was really telling, I mean really through all these eight people who voted against him for the speakership under the bus talked about actually running primaries against him and said they are not conservatives. And if you want to talk about people who just did business with the Democrats, it's those eight people who just joined with the Democrats decide
who's going to be this next speaker. So, I mean, I don't know how you put this all back together. I mean, like you can't make these kinds of statements, Garrett Graves. Uh, you know, Kevin McCarthy, I mean, you know, you look at the reaction yesterday and it was hot, and these are these are not relationships that are going to get repaired anytime soon, and certainly not between now
and the next vote for speaker. So who in the in the caucus is able to have a conversation with these various factions in a way that is anything other than going to ignite them into all out war like they were in yesterday. So, uh, if Steven Scalize wants to be the speaker, and evidently Matt Gates thinks he'd be great, then the question is going to be if you are going to do business with Matt Gates, then how about the other two hundred and ten people who disagree with them?
So, I mean, I think you're really stuck in a bind in this caucus.
It will be seriously interesting to see who can prevail and how many of those ballots we suffered through fifteen with Kevin McCarthy. I mean, you better get out the mattresses because next week could be a long week.
We're going to be going to the mattress's Genie talk about the hot as Rick Davis puts it. Mike Lawler, the congressman from New York, who was not happy about this process and is obviously concerned about a difficult reelection. He joined us on Balance of Power last evening on Bloomberg TV, and I asked him about Patrick McHenry's slamming of the gavel, which to me might be the enduring
image of yesterday. I mean, he put his back into what I thought the gavel was going to break at the end of the session, and Mike Lawler suggested that he might have taken it a step further. If you're with us on YouTube, look at that. My god, I'd have to see a chiropractor after that. Here's Lawler.
The only thing that I would have done differently is flung it in the direction of one person. Look, he absolutely epitomized the frustrations of the conference and the American people. This is not what they elected us to do, to squabble, to fight amongst ourselves. They elected us to govern and we need to get Oh yeah, I would have hit him square between the eyes.
I would have hit him square between the eyes. We talk about the cage match with Elon and Zuckerberg, Genie, I mean Rick mentions a therapist. How about a fight club. Where do we get the anger out here?
I don't know, but you know, Lawler is a really, really interesting figure. He is from a Biden district. Of course, he's worried about his own re election bid, and he has been a voice of reason because from his perspective and the perspective of most Republicans who want to win and govern, this is the height of insanity. You know, You've got a president with very low approval ratings and what are you doing. You are showing that you cannot be trusted with one third of the government to govern.
And so all Joe Biden has to sit back to do is sit back and watch this chaos play out. You know, people talk about Joe Biden's age, but when you're looking at twenty twenty four and you are sitting in a suburban district or you are trying to attract independence and moderates and women, old is probably better than crazy. And this has been crazy crazy. So for Lawler, he knows where this is headed, and he has every right
to be frustrated. And I'm not recommending he engage in violence, but I wish you had been on with him later to ask him what he thinks about McHenry throwing this former speaker out of her office while she is attending the yeah for a senator. So you know, I'm not sure that's what the American people elected them to do either. Petty, petty, petty and crazy crazy crazy seems to rule to day.
I'm glad that you mentioned, by the way, the line of the hour so far, Jeanie Shanzano, old is better than crazy. I think we can put that on a bumper sticker, Rick, But talk to me about the eviction. I'm glad you mentioned this, Genie. The first move from the acting speaker is to throw Nancy Pelosi out of the so called hideaway. This is not her actual office, but the hideaway, you know, prize real estate in the Capitol.
And Stenny Hoyer got booted as well. They're pulling the furniture out of there while Nancy Pelosi is at a funeral in California. Is that the right move?
You want me to answer that?
Yeah, honestly, right, maybe maybe internal politics say that is a good move.
Now, I mean it was pretty random. Uh.
And and look, I mean this shows you just the level of anger and uh that exists inside the Republican Caucus. I mean, you know, McHenry was upset that his friend Kevin McCarthy had been just posed, and and and and Nancy Pelosi was piling on saying no way would she ever allow the caucus to vote for this guy.
To some degree was the bet he made.
Himself, Kevin McCarthy, because he basically gave the message to the Democrats that he didn't want their support.
So, I mean, it was a confusing day.
But the idea that you react to that by turning on the Democrats and kicking Nancy Pelosi out, you know, it's just a bad precedent. Uh. Former speakers have always been afforded to hideaway. It's part of the gentilneus genteelness of the House of Representatives. You don't want to see that go away just because people are angry. I think
everybody needs to just calm down. And I'm glad Speaker pro Tem McHenry actually told people to go home because the last thing we want is any more of that kind of thing happening today.
And well, I guess there's something to be said for it, though, Genie, I have to admit, look at what happened to Liz Cheney and Kevin McCarthy had a lot to do with that. Thrown out of the House, thrown out of the Republican family, and lost her job over it. Are we in a world in which Liz Cheney is punished more severely for what she did to stand up for the Constitution effectively than Matt Gates is for what happened yesterday.
We certainly are. I mean, I don't think we see any inkling at this point that Matt Gates will lose his seat over what he has done. He may be expelled from the conference. I don't see how they let him into those conference meetings. Then he goes out and he reveals all their secrets. So I do think it is very possible that this is the moment that we are in. And I think that is such an important point, Joe, because what are we seeing. We are seeing populism run
amok in the Republican Party. It is run by the Maga wing. And you know Jim Jordan saying to you two days ago he doesn't want the job. Now he's going forward. If he gets this job. It is another nail in that coffin where MAGA is controlling this party, and that is a problem. We've seen Mitt Romney leeve, We've seen Liz Cheney leave, Mike Pence making really important
speeches against it has gotten no traction. And Matt Gates is ruling this caucus even though it is against the interests and the votes of ninety six percent of his fellow party members. This is a very very dangerous moment for the Republican Party, and because they have the majority for all of us, and again it stretches around the world to Ukraine, and that is the most troubling aspect of all of this.
Something to think about. Rick Janey was kicked out of the leadership and eventually lost her job. What will happen to Matt Gates.
You know, it's hard to tell.
I mean, I believe Kevin McCarthy when he throws down the gauntlet that the Ethics Committee is working on this, But there is an investigation by the Ethics Committee into mac Gates, and I suspect they're all the members of that group are all under a lot of pressure to,
you know, get their job done. I would say all of this may be mood a year from now, like the next Speaker may have another very short tenure because at the rate they're going, the Republicans in Congress are going to convince the American people that they are crazy and that nothing gets done on their watch, and that they will be cast out like any good electorate would
do to a bunch of cowboys like this. And we don't have to worry about Jim Jordan being Speaker anymore, or Steven Scalize or anybody else, because it'll be a dark day and you know, Washington before Republicans can claim leadership of the House of Representatives by this kind of Conduct's.
Genie, right, Rick is old better than crazy.
I'd rather have a better set of choices.
You know, nobody loves crazy, no matter what age you're at.
Yeah, I guess that's right, man. This is why we have Rick Davis and Jeanie Shanzeno. Rick and Jeannie. I'm Joe Matthew. This is Bloomberg. You're listening to the Bloomberg Sound on podcast. Catch us live weekdays at one Eastern.
On Bloomberg dot com, the iHeartRadio app and the Bloomberg Business app, or listen on demand wherever you get your podcasts.
Here we are already with Kaylee Lines in Washington. Nice to see you, as always, Welcome back to the Capitol. You picked the perfect time to join us here. I know you were up covering the trial in New York yesterday. Not the Trump trial, we have to be specific about this going down, but the Sam Bankman freed trial each other, Yeah, which we'll have an opportunity to talk a lot more about. But we needed you back here. This has been a
wild twenty four hours, wild seventy two hours. I guess we thought that the government was going to shut down a couple of days ago.
Yeah, and wild seems like it's almost under selling it. Probably chaotic, yes, right, tumultuous, vitriolic could think of a few other descriptors. But yeah, that's where we are, Joe.
Two grown men want this job. They want to go there. Steve Scalise, whose name has floated every time you have this conversation, a majority leader. He's been in Republican leadership for a long time, but he's being treated for cancers, going through chemotherapy at the same time as Speaker's race is happening. I don't know how you do that. Then again, we've seen him recover from a gunshot wound. And then there's Jim Jordan, the Chairman of the Judiciary, who we thought didn't want that job.
Isn't that what he told you?
Well, that's true, Anne, Marie and I talked to the chairman two days ago. This was Monday, when everyone was celebrating the government not closing.
Before the motion to vacate even had been That's correct.
You're on a lot of short lists.
You went through this at the beginning of the year when it was a fight for speaker.
Of course, Kevin McCarthy survived. I believe it was fifteen rounds.
Yeah, but as long as you're on these short lists, would you stand to be speaker if you don't want to?
I don't want to be speaker. I want I want Kevin McCarthy to be speaker. I want to focus on the job.
And if you were asked to serve your country in that role.
Well, I want to focus on the job I have. I think I'm serving the folks in the fourth this reg of Ohio.
That's my main I don't want to be speaker, and I guess that's what you say, though, when Kevin McCarthy still has the job, they were allied. Did he know he was going to do this in just two days. There's no way we'll know that.
But you wonder, well, maybe he was hoping he wouldn't be in a position where he could.
Everybody was gaming this.
Everything's conditional, right, Joe, I don't want to be speaker, right if Kevin McCarthy is. If Kevin McCarthy is not speaker, maybe you answer that question differently. Clearly, he is considering. He is now in this race.
So we've got a week. I guess candidates will present their positions next Tuesday. To Patrick McHenry.
YEP votes begin Wednesday.
Votes begin Wednesday, and boy, it's anyone's guest, I asked, as french Hill the Congressman from Arkansas earlier if coalescing around a candidate might prevent another fifteen rounds. And that's their hope right now, is that what happens in the next week makes this nice and clean on the floor next Wednesday. But then there's reality.
Well, and there's the consideration that a lot of members of Congress are going home if they haven't already. So what are they going to be doing between now and next week when they have to come back to vote? And you know, there was a meeting with the Texas Republican delegation.
Yeah, now you were down there for that. What'd you get out of there? Anything? Did they run past you?
Well, all of the Texas delegates have representatives have decided not at this time to say who they are supporting for speaker. They agreed to that as a group. So none of them were answering that question in the hallway. But it was interesting. Congressman Michael McCall said that not only Scalice and Jordan said that they were running that. Kevin Hearn, the Congressman, told them that he was going to get in there too.
Well, that's news.
We haven't actually gotten the letter to college.
It's not official official, but that's coming.
Apparently that's what was suggested, but really no real sign. And I was speaking with Congressman Pete Sessions, of course of Texas, and I said, as any of them, are any of them going to be able to get two hundred and eighteen votes? And he just looked me dead in the eye and said, well, that's the question, isn't it.
That's why I still say I don't know. They would be remarkable. After a round after out of that's not happening. This guy named Kevin stands up this drafted they pull me back in. I don't know, Terry Haynes, maybe I'm dreaming. We were talking about this on the radio this morning. Everybody says what they mean until they don't mean it anymore.
Are we actually ruling out I know he says he's not going to run, but are we ruling out Kevin McCarthy in a world in which no one else can get to to eighteen?
Good afternoon to both of you. I'm glad Kayley's been sprung from purgatory here and he was back in Washington meetso particularly you know two things.
Thing.
I'll get to Henry in a second, but you know they're gonna run because it's a loose analog to like running for president, right, they're people that are actually credible presidential candidates. There are people that want stuff, There are people that want to be cabinet secretaries, and you know, so people get in for all kinds of reasons. And so you know, you know why Scalisee is in. I mean, Jordan, I don't know, you know, I mean, I don't think he can get there, but but you know he can.
He can get some stuff out of Scalisee or somebody else or whoever's running. So you know, they're all jockeying in that sort of way. Now, you know McHenry is you and I talked this morning on daybreak. I think McHenry is a real dark horse here. There are not a lot of people who are trusted by both sides, and he's got a he's got a real facility for being able to listen and come up with good compromises.
He was McCarthy's lieutenant in the whole debt ceiling fight, and you know he has the ability here and may end up being the reluctant guy. So you know, we had a ways to go.
Well, well, and Terry. Congressman Garrett Graves, who of course is very close, was very close to McCarthy and along with mckenry, was one of those key players in the dead Sealing talk. Suggested to Bloomberg reporters earlier that mc henry might be needing to stay in that seat through November seventeenth, when that Continuing Resolution expires and we could potentially be staring down the barrel of another government shutdown.
Does all of this just make that pretty much a guarantee at this point.
I wouldn't say it's a guarantee there is, but I see the logic, and mister Graves is a very savvy guy. The thing is with the speakership is that and I say, this is somebody that was involved in the continuity of government plans twenty years ago and helped to set up the system that we're now seeing. The temporary speaker existed, you know, in case a bomb dropped on the Capitol, or you know, there was you know, something else happened.
It wasn't really envisioned for situations like this, but what it was envisioned to be was a it was a temporary stopgap for as short a period of time as possible. So you know, the onus has been in the Parliamentarians. I think we'll tell the Republicans that. So the onus is really on the Republicans to come up with a with a real candidate that can get to two eighteen as too, as soon as possible. And that's reflected in McHenry's own time frame where he wants a He wants
to vote next Wednesday. Now all that said, you know there might be a number of different candidates. McHenry may want to be out out like not really do it, and he really doesn't want to do it. So we're in a situation, I think where where there could be a prolonged period of time and if it and if something doesn't happen within a week or two, at the very outside, for stability purposes alone, you need somebody to be in that seat. So it may end up being McHenry through the November seventeenth.
Yes, fascinating. It's because you were a part of crafting that continuity of government plan. That's in part why we
wanted to talk to you today, Terry. I just wonder how much wiggle room there is in the powers of this acting Speaker, this protempt speaker, particularly if this becomes protracted as we consider the idea of a possible shutdown, could there be an agreement between an acting speaker and the Conference that would allow him to have more powers to introduce legislation dectually act as a speaker.
I don't think the theoretically, yes, Joe. In reality, I think that is almost impossible. The Speaker's powers are what they are, including constitutional You know, the only the Speaker of the House is the only constitutional officer in the House and represents the entire House, so you've got that, But you know they're not going to be in as long as the speaker is the temporary speaker. The speaker
pro temporary formally is in that position. You know that person has many of the powers of the speaker, but due to his now his temporary status, he doesn't really have the ability to compel much of anything. So I think I think McHenry starts from a pretty weak position and would find it difficult to impossible to build out strengths as you suggest in order to in order to expedite the work of the House. Not impossible, but I think right now it's unlikely.
So on the subject of the work of the House and when it realistically is going to be able to get done, knowing we are up against that November seventeenth deadline, Congressman Michael McCall, who, as I was mentioning to Joe we caught up with in the hallway earlier, said he's pretty worried about a shutdown, that this whole thing is just going to get a lot harder now that Kevin McCarthy is gone. Where do you put the probability of a shutdown come November seventeenth.
Terry, I was, as both of you know, I was early two months early in telling people that a shut down with seventy percent likely, way before most people got there, you know, the moment that McCarthy was vacated out of his position, I told markets, I thought the shutdown likelihood was eighty percent. The difficulty to me is, i'd say ministerial, and I've said that, I've said that before, but is you know, the House is not really going to It's not going to be able to do its work as quickly.
They're going to find difficulties getting to the floor. Technically they can get to the floor and pass rules to put things together and all the rest, but they're going to be in a practical sense, they're going to be hamstrung by not having a speaker there. It's going to make it that much more difficult to referee disputes and get things to the floor and be successful on the floor.
So so you know, I think this this puts a new weight W E I G H T on the House's ability to do its business, and that alone, I think justifies a ramped up and more negative look at it.
Also probably a wait, W A I T if this is going to take a while for them.
To be able to do these guys, you guys work that out in advanced very mode. We're very The headline, I know you're amazing. The headline on your client note. Yesterday this went out at five in the afternoon. Everyone's waiting, what does Terry you think about this house speaker? Ouster markets negative market c Washington incompetent to govern? Terry? Does this ensure a downgrade from Moody's.
I don't think insure as I think my gut is they'd probably wait until November seventeenth. The way they put it, the way Moodies put it out there was that they saw downgrade possibility should there be a shutdown. So assuming they think the same, and I have no reason to know what they think right now, but assuming they think the same, well then you know, should there be a shutdown, then uh then you know, I think that's probably likely er than not. Yeah, I mean, because they've already telegraphed
that very short, very shortly. I mean, you know what I've said all along is that you know, it's it's this is kind of interesting Washington small ball, but what markets see is very different. What markets are already spooked by is out of control fiscal Uh no, no sense of when there when the Washington's going to deal with debt and deficit. And now you know that that's ramped up even more and uh, you know, so that's a danger.
And compounded with that is is the idea that you know, I mean, French hill Aside and who's a very astute guy and gets it. Somebody like French Aside though uh, Washington's oblivious to everything that I just said, get it at all. And and you know, the John Farah was asking me yesterday about something that French said to surveillance, which was you know that the you know, kind of the right to be I think the right to be reckless or you know, had gone. And you know, did
I think that was the case? And I said absolutely, you know, but Washington has, you know, for a generation, lived in this world where they can deal you know, they can deal with fiscal things kind of recklessly because there's no consequence well you know, coming down the pike, our potential real consequences, and those consequences are being stoked by what they're doing right now.
Well, Terry, speaking of what's happening right now, I want to get your take on a headline that just crossed the bloomberg. The minority leader in the Senate, Senator Mitch McConnell is speaking to reporters and he said the next speaker needs to ditch the motion to vacate. There's been a lot of talk in the last twenty four hours about maybe needing to change this rule where any one
individual can trigger this. Do you think there's a real probability of that happening or could we be, say a couple of months from now, talking about ousting another speaker, whoever that may be.
I think in the I think in the next congress, uh, dealing with that differently is likely. I think in this congress, it's very unlikely. In this situation, it's very unlikely. And the reason is it really comes down to hubris.
Uh.
You know, the Gates faction.
Uh.
You know, it has a lot of hubris going right now. And I'll look forward to the five o'clock interview and watch that very closely.
But the.
But you know, I know you're waiting for it too, Joe, But the uh, the situation is, I keep going, I keep thinking about how Anne Marie is going to handle this. I know how you're going to handle it. But it's like you know, and real dig right and as you will.
Different the best tease of all time.
You know, I'm very much looking forward to seeing it. But the uh and see how he justifies himself this time. But you know, the hubris at this point will be such that, you know, any news speaker won't have any more rope than the old speaker did. And for a couple of reasons. One is they feel, like you know,
that maximizes their leverage. And secondly, to the extent that this is personal between Gates and McCarthy and my moone of you is that it is what you get is a situation where they back off and all the same they back off the single vote nakate, then it looks like it actually was. It's an additional additional proof.
Terry Haynes. Email me your questions from Matt Gates from Pangaea Policy. Terry Haynes on 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 play Bloomberg eleven. As we feel our way through the woods here, uncharted territory is what I keep hearing, and I'd say that's fair. After all, it was the first time in history a speaker of the House was ousted. Kaylee lyons, we've got one week to figure out potentially who the next speaker is, or at least what the
field looks like. Maybe that's a better way to put it, having gone through what we did in January with fifteen rounds, remembering people can be drafted or nominated right there on the floor. That's how Donald Trump got in the mix last time.
It's very true. And I do have that question about Kevin McCarthy because he said he's not going to run. That's right, But could that mean that people still nominate him even if he's not, like Jim Jordan and Steve's glee saying I'm actively running for this. I'm going to pursue it. They could just you know, it's like a shove.
I threw this up in the air earlier today. It was it was batted down. But I'm glad that you're open to this idea because if we go through, you know, fifteen ballots, nobody can get to two eight. And Kevin's sitting back there. I know he said this.
Will not run for speaker again. I'll have the conference pick somebody else.
But imagine the cameras zooming in on him watching all of this, the sentimental music starts playing, somebody nominates him. I don't know. It's entirely possible, isn't it.
But could even he get to eighteen if there's eight.
Who votes, Well, there's a fair point. Maybe no one can. We'll just operates a.
Very real probability.
Can we do that for a while? Lester Munson is with us now, of course, co head of the international practice at BGR Group, but it's spent quite a bit of time on Capitol Hill, in both the House and the Senate. Lester, it's good to have you talk us off the ledge here. Kevin McCarthy says he's not going to run. Do we have our field? Is this going to be Jim Jordan versus Steve Scalise?
It seems like it's Jordan versus Scales to me. But what if they can't get to the requisite number of votes? That opens it back up. I don't think you can really rule out any thing at this point. I don't know if that keeps you on the ledge or gets you off the ledge, but I think we're in for a lot of chaos in the near future.
Well, Lester, as we talk about the requisite number of votes, is anyone who can get support of some of these hardliners, some of which Austin McCarthy, even those that didn't vote to oust him still had voiced a lot of disappointment with him in not advancing the conservative policies that they wanted. Can you get those people and also get the moderates? Is this even really, really possible.
You know, I think some of this stuff is so personal and so idiosyncratic, going member my member, they almost have each one has different reasons for doing what they're doing, and so can Scalice be the person who rises above all of that stuff and get enough support from the Republican Conference to become speaker? Maybe can Jordan do it? I do think it's less likely Jordan can do it, but I wouldn't rule it out.
This.
You know, Kevin McCarthy did some amazing stuff in just the few months he was speaker, a lot of things people didn't think he could do, but we all kind of knew that he was going to this judgment day was coming based on the number of people who were skeptical of his speakership and how thin a majority he had at the end of the day. The reason Republicans are in this position is because they have such a small majority. If that doesn't change this, this is just going to keep ongoing.
The closer you get to the sun here, though, when it comes to allies of Kevin McCarthy, the more problematic this could be next week, right, I mean, Steve Scalise is not too many shades away from Kevin McCarthy when it comes to policy, and he's certainly been an avid supporter or was of Kevin McCarthy as speaker. So if you're a Matt Gates, are one of these ten Republicans who didn't like McCarthy, would you like Scalise?
Well?
I think I think Gates has specifically said he would he would think favorably about scalise candidacy. But but does that matter to the other voices or are there other voices within the conference that that don't like Congressman Scalise.
There it just takes five really to oppose the nominee for that nominee to not become speaker, and then we're back where we were in January, where no one member can get a majority of the votes of those who are present on the floor at that time, and so we're going to all be going back to doing math. So who can who can get you know, the Republican Conference enough enough of those votes only lose two or
three votes and get to be speaker. I don't think we know yet, and it's it's not it may take a few a few turns, you know, times around the block to figure out who's going to prevail. Here, this this could drag on for a few days.
Well, we've seen it drag on for a few days back in January when it was Speaker McCarthy trying to get this done. It took four days, fifteen rounds, as we all know quite well. And no knowing that this fight is going to go down within just weeks of November seventeenth, when government funding is going to expire, Lester, is the House going to be so focused on its own internal dynamics that the regular business just does not get done.
Well, like, yeah, for a long time. Yeah, Because because you can't do anything on the floor until you have an elected speaker. So the demands of the kind of the chaos caucus here, which is we want votes on the individual appropriation spills, which by the way, is kind of a sensible thing. Strangely, you can't do that until
you have a speaker. So the longer time they spend on picking a speaker, the less time they have to do the things they say they want to do on the floor before we run into the time limit on the currency area and the other kind of tick and time bomb here is ad Ukraine. At a certain point, we're we're going to see a date emerge where we really where Congress is really going to need to act or to keep that pipe line of assistance going to
Ukraine to sustain the effort against Russia. And so there's there are multiple complicating factors here, and the more time they spend on selecting the speaker, the harder those other things are going to become.
We're going to be spending some time with Congressman Matt Gats a little bit later on today, Lester, what would you ask him?
Well, I think I think you might want to ask him, how does he is he willing to compromise on any of his issues in order to get done the things he wants to get done? In other words, at a certain point, don't you have to trade? Don't you have to go for the good, good solution rather than the perfect solution. Are you willing to support a candidate for speaker who will do the things that you say you want to have done, even if you don't agree with that person on every single thing? Like, is there any
compromising you at all on these issues? Because if you keep insisting on the one thing, you're not going to get the other thing. So at what point does that are you willing to compromise to balance out the things that you're asking for.
I look forward to seeing how he answers that question. Lester. Just finally, because if you're watching on YouTube, you see Lester has a Chicago Bears pillow in the background. Lester, I'm a Broncos fan, good and I think last weekend maybe the only game we will win this season potentially. But he did beat you, guys. I'm very sorry for your loss.
It's hard to be a Bears fan today. It's also hard to be a Republican these days. But you know we will. We will soldier on.
Only Lester could get out of that so smoothly, Lester Munson with apologies, Kayley Lines, well done. I'm Joe Matthew in Washington. 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, d C. At one pm Eastern time at Bloomberg dot com.