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Jim Jordan fails again. Welcome to the fastest show in politics, as the Republican from Ohio falls short of the votes needed to become Speaker of the House in a second round that is just now ending. We're joined ahead by Congressman Seth Moulton, the Democrat from Massachusetts, with his view on the role that Democrats may play in resolving all of this, what it means for funding for Israel and the US strategy in the Middle East, with insights today
and analysis from our signature panel. Bloomberg Politics contributors Rick Davis and Gdi Shanzano are with us for the hour, so let's get right to it as we join you live from Washington, and with me at the table is Bloomberg Politics editor Laura Davis. And Laura, it's great to see you. Thanks for coming in at a very busy mon This is just resolving now on the House floor, and it appears Jim Jordan is having a worse day today than he did yesterday. Twenty two members of the
Republican Conference voting for someone other than Jim Jordan. Is his nomination or trajectory for the speakership dead.
It is looking like it is heading that way. He came off the floor and didn't say what he would do in terms of future plans. He did convince a couple members to vote for him, but net there were more that voted against him this time, so things are not trending in the right direction. The real question is if not Jordan, then who. There's other names that have
been floated out there, Kevin Hearn as one example. But one of the factions we really see hardening against really any Republican is a lot of New York lawmakers are banding together and saying we're not going to support anyone that doesn't agree with expanding the salt the state and local tax deduction, which is a total blast in the past.
Kind of about a.
Right field, but this has been a long standing issue in the House in these high tax areas, you know, southern California, New York City area, I remember those. Those are the areas that make the majority for the House for whichever party's in charge, and they really like this tax deduction, very important to a lot of Bloomberg viewers.
And readers as well all the time.
So this is kind of becoming the undercurrent of you know, who can be speaker, You got to support this wonky tax deduction.
Wow, if it comes down to salt, that is kind of funny considering the level of dysfunction that we're witnessing right now. To your point, though, if it's not Jim Jordan, who is he going to get a third round, a fourth round? How much patience is there to keep doing this.
The reason there were so much patients with McCarthy is because they one, he showed progress on every step. He also had a lot of good will built up on the party. He had raised money for a lot of these people, Jim Jordan, and frankly, any other person that could be put up doesn't have that kind of same respect among the base of the party and so there's less likely to be demand to go, you know, do
dozens of votes. So we'll see, the House is not yet annound if they're going to hold a third vote or if someone else is going to jump in the race. It's very up in the.
Air right now.
It's totally up in the early Even lawmakers that we're speaking with off the record have no apparent idea of what's going to come next, which has been the case for days. Lord, it's kind of an incredible environment that we're in here as we then consider the next option, which is going with what you got Patrick McHenry Speaker pro tem. The idea would be to make him, I guess formally elect him as Speaker pro ten, which would give him the effective powers of a full blown speaker.
That would take some Democrats to make it happen, though, wouldn't it.
It would, And one of the things that's being discussed right now is, you know, how long would he have the more full powers. Of course, you know, the government is set to shut down a month from today, so that's a key date that people are looking at. There's also the White House ascending over Israel Ukraine from a package of aid later this week that they're expecting, so there's a lot of stuff on their plate. But Democrats are going to want something in return in order to
vote to put up the votes to support McHenry. There are certain things that they could you know that McHenry could offer, you know, bring up certain bills. You know, Ukraine could be that they play here. But there's things that they that they want that they're not going to get. You know, Democrats are not going to get more seats on various committees. You're not going to get a larger budget.
Those are the kind of things and it just will depend away on you know, will Democrats get enough to h to have ten members or so go ahead and cross the aisle.
Amazing stuff. I appreciate your joining today, Laura. Next time we speak, I suspect everything will have changed, because that's the routine that we're getting used to here. She's Bloomberg Politics editor and whether us here live on Bloomberg Sound On. Great to have you, Laura, and thank you as we ad the voice of Congressman Seth Moulton. Even with the action happening on the House floor, the Democrat from Massachusetts is taking some time for us right now. Congressman, it's
good to see you. I guess i'll pick up here. There a lot of things I want to ask you about that we were just discussing with Laura. But this idea of a deal with Democrats to give Patrick McHenry the full powers of House Speaker. Is that something that you would help out in.
Well's certainly something that I would consider. Obviously, the details of.
The deal matter here. We don't want to just give the.
Reins to someone who's going to run away with all the horses, but he's I think this is something that's being actively discussed.
I discussed it as recently as.
About ten minutes ago on the floor of the House, because we need to get the House back to functioning. I mean, what we're witnessing right now, Joe, is a nationwide Republican civil war, you know, playing out across the country in a party that's led by an indicted insurrectionist, and it's coming to a head right now in the House of the House of Representatives in a way that's just frozen.
Congress.
We are powerless as a United States Congress. That's never happened before in American history. And we saw in Israel what happened when what happens when your adversaries see political dysfunction at.
Home, they might attack.
So what's happening right now, this civil war in the Republican Party, it's actually a serious risk to our national security. That's why it's so important that we come up with some solution even if the Republicans can't manage to nominate a speaker who could actually get the votes.
Well, my goodness, how many rounds do you think we're in for here? It looks like patients is running thin in the Republican conference. And I know, Congressman, that you're not in the room for those conversations. But a lot of folks are saying Jim Jordan's bid for speaker is already dead. Do you agree?
Well, I certainly hope so.
I mean, Jim Jordan is one of the most extreme members of Congress, not just the Republican Party, just of Congress writ large. He's not passed a single piece of legislation in the entire time he's been in office. Think about that, completely incapable of working.
I want you to qualify that for us if you can, Congressman, because we keep hearing that. Tell our listeners and viewers what that actually means. When you look across the island you see a member who's never passed a bill, what.
It means is that he spends all his time doing something else, so taking, you know, actually passing legislation, which I mean many would argue is our job in Congress takes some work. It takes some work building trust with your colleagues, both in your party and across the aisle. We've been on this show before talking about my bill to establish nine to eight eight as a nationwide mental health hotline. I had to develop trust with a Republican colleague, a veteran Chris Stewart from Utah.
We had to work very hard to.
Get it through the Committee of Jurisdiction, to get it through not only the House but the Senate, and then signed by the President. That all takes time and effort. Jim Jordan's never done that, or at least he's never done it successfully. He's literally he's been here a lot longer than me. He's never passed a single bill that he has authored. And yet look at how much time he put into trying to undermine the election.
That tells you a lot about Jim Jordan's priorities. He is so extreme that a whole.
Bunch of his Republican colleagues won't even support him.
Some folks say, you're talking about the chairman of the Judiciary Committee, and that is a slightly different and more specialized role, and he is, in fact very busy. Of course we know that he's busy on an impeachment inquiry into Joe Biden. Congressman, where does that go? Is it on ice right now without a speaker or can you give us an update?
No one knows. I mean nothing.
I mean we're literally doing nothing. Nothing is happening right now in Congress. It's a perilous situation to be for our government, for our country. That means that we can't respond to an emergency. We can't do anything to support Israel in this war, or to continue supporting Ukraine in THEIRS. We can't even pass a simple resolution that just says, hey, we support you.
I mean the most basic things. And by the way, to your comment.
About Jordan being his new job as Judiciary committee chairman, most chairman of committees have ask a lot of bills because that's what your job is as a committee chairman as well.
So most people who get that job.
Have done this, and most chairmen managed to pass a lot of bills while they're in that position.
We're spending time with Congressman Seth Moulton of Massachusetts. You're talking about urgent business, urgent needs, which brings us directly to the situation in Israel. I'd like to ask you about a couple of elements here, Beginning with this one hundred billion dollar request for funding that the White House is cooking up for not only Israel, but Ukraine, Congressman Taiwan,
and border security. Do you support that approach considering that the government is set to shut down in one month and there's no leadership in the majority.
Yes, I think President Biden is doing the right thing to put this package all together and send it to Congress. But of course what we should be doing in Congress is receiving the President's outline and then debating it and amending it, you know, passing this through committee. I sit on the House Armed Services Committee. We debate funding packages
all the time, really down to the details. So we're confident that we're spending American taxpayer dollars well, that we're investing not just in these wars overseas, but fundamentally investing in our own national security by supporting democracies around the globe.
Those are important debates to be.
Having in Congress, and of course, once again, we can't have those debates. We can't pass this legislation, even if the President sends us a package until we get a Speaker of the House.
Well, we consider funding for Israel. You wrote an op ed for CNN with the headline Net and Yahoo needs an endgame, and you reflect it on your own service. Congressman. Most people are aware that you're a combat veteran. You serve four tours as a marine in Iraq, and endgame is meaningful to you based on your experience. This whole trip that we've seen the last twenty four hours with
President Biden has seen a real shift in sentiment. His summit with Arab leaders has been canceled, bait over who to blame for the blast at this hospital, and this is a real political challenge for him. To what extent is he addressing endgame on this journey to Israel.
Well, what I understand, and I just was on the phone with a former Secretary of Defense just an hour or so ago, is that there are a lot of conversations going on behind the scenes with Israel trying to share with Israeli leadership all the lessons that we've learned over twenty years of war in Iraq, in Afghanistan, and we had some successes those are often forgotten to history, but we had an awful lot of failures that we
know well. One of those, of course, was going into Iraq and going into Afghanistan with no plan whatsoever for what happens next, what happens the day after you so called defeat the enemy. Right, We had a very successful invasion of Iraq, remarkably successful it went. It couldn't have gotten better in so many ways. And then a few
months later an insurgency came. I went home from that first tour in Iraq after the invasion, literally to march in victory parades, and then a few months later I was back fighting a vicious insurgency that had started after my marine unit left. So there are a lot of lessons for us to share with the Israelis. But my big concern, and the reason why you know the title of the op ed is about the endgame, is that I have not heard Prime Minister Nenyahu or any other
Israeli leaders articulate any ideas for this at all. They all say they're going to crush Hamas. Okay, that's going to be very hard. We can go into why that's going to be hard. But even if you succeed what happens next, because if you just go back to the status quo, you're.
Just going to have more terrorist attacks.
I mean, if you leave Gaza a smoldering mess after you crush Hamas, you're just going to recruit more terrorists to the cause. You're actually gonna put yourself in a worse situation than you find yourselves today. So this is very concerning and it's going to be very difficult for Israel to get this right.
President Biden spoke today in Israel about the lessons learned from nine to eleven. It was really something and I'm guessing this hits home for you personally and the experience that you're sharing here, because he talked about some of the overreach that the US was responsible for following nine to eleven, and his advice was to not be consumed
by rage. How worried are you about overreach in this case, Congressman, where Israel moves to defeat Hamas but also creates a new generation of terrorists.
Well, I mean that's the question. I don't think it's quite that simple.
I think that Israelis have every right to be enraged, and frankly, they have every right to kill the perpetrators of this vicious, barbaric attack on innocent Israeli kid, it right, I mean, that's how you have to respond to some acts of terror, taking out what we call the irreconcilable terrorists, the terrorists you're never going to convince to behave differently.
Who just want your death and destruction. You have to take them out.
We had to do that ourselves in Iraq and Afghanistan once that insurgency started. Now, by the way, I get the fact that the insurgency started largely because of our presence there. You can argue that the situation in Israel is a bit different with this attack on innocent Israeli
kids in their beds. But the bottom line is that, you know, taking out terris is part of the equation, but then you have to win over the rest of the population because if you don't do that, you run into this problem that we call terrorists mass and General Stanley McCrystal, the famed American general, he estimated it was ten to one. That means that for every innocent is every innocent person, innocent civilian that you kill, you recruit
about ten terrorists to the cause. And so Israel's got to be very careful because every time they have an accident, they you know, they try to take out a terrorist, but they end up killing some civilians.
You know, they might take out one terrorist and recruit ten more, and that puts them on the wrong side of that equation.
Congressman, I know you need to run in a moment, but with the time we have left, you've actually fought this battle. What are Israeli soldiers in for when it comes to house to house, door to door as we keep hearing and fighting an insurgency in Gaza.
It's a great question, Joe, because we've just talked a lot about the risks to this mission of killing innocent civilians, and the humanitarian crisis in unfolding in Gaza right now is just terrible and it's heartbreaking to see. I mean, Israeli kids are innocent in this little Palestinian kids are innocent as well, and no one wants to see them. We haven't talked about what you just put out there, which is what is this going to be like for
the Israeli kids? Those really kids, right like eighteen nineteen year old soldiers who are going to be sent into this built up city and the answer.
Is it is going to be devastating. It's going to be incredibly difficult.
In my op ed on CNN, I shared a story of fighting in the urban environment in Iraq and how difficult it was just to take over one small two story building.
And you look at Gaza.
The buildings are ten times as high, you know, ten times as many, five times as many people as we saw in these Iraqi cities.
So I mean the mission that Netnya, who is giving to these young israel these brave Israeli kids, is.
Massively difficult, and I think that has to be part of sobering discussion about about what we sho what they should really do.
Here.
Congressman Seth Moulton, we appreciate the time, as always, democrat from Massachusetts on the Armed Services Committee, speaking through his experience as a combat veteran.
In her.
Rocket's good to seize her, and I hope that we'll stay in touch as we find our way through this speaker's race. Patrick McHenry just gabbled out the session. Jim Jordan has lost the second round, and we move into this day further without a Speaker of the House. I'm Joe Matthew. 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 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 played Bloomberg eleven thirty.
It is not getting any easier for Jim Jordan. In fact, the Congressman has lost the second round, and it was worse than yesterday. The House, at now one twenty three pm Washington time, is already in recess.
No person having received a majority the whole number of votes cast by surname. A speaker has not been elected. Pursuant to Clause twelve A of Rule one, the Chair declares the House in recess. Subject to the call.
Of the Chair.
The House has no speaker. As we assemble our panel, Rick Davis and Jeanie Shanzano are with us Bloomberg Politics contributors. Great to have guys both of you back today. We live through one round without you yesterday and now number two Rick Jim Jordan lost twenty two Republican members. That's two more than yesterday. How many tries will he get.
Oh, I think it's two and done one. I don't think he wants to go through any more of this than he has to. He will continue to lose votes from what I can tell, in any subsequent round. And so I think he even said so today he's going to take a pause. They're going to probably have a caucus meeting and try to figure out what to do. But this is a caucus in utter disarray. It'll be
really interesting to see what comes out of this. There's obviously a lot of energy behind trying to find a deal to extend powers to Patrick Mahin, mckenry, the current Speaker pro tem Nuke Gingrich, and former Speaker Bayner came out yesterday pushing that concept. Democrats like Seth Moulten we
just interviewed. I think it's a good idea. So if we can't find a candidate that can get two hundred and seventeen votes, and I don't think we can in the Republican side, then that may be the next you know, possible.
Well, pretty remarkable here we are, Genie. A day later, everything has changed again, and Seth Moulton, as Rick references, says, he was talking about Patrick McHenry and maybe a deal involving Democrats to give full powers of the speakership to Patrick McHenry ten minutes before he joined us. Is that where we're going?
You know, that seems the best and maybe the only path forward at this point. You know, things are bad. I'm listening to this vote and somebody is nominating Candace Miller, and I think, who the heck is Candace Miller. She's the McComb County Public Works Commissioner. I mean, that's how bad things have gotten. I've never heard of her. God
bless Candace Miller. She got a vote. So they do need to seriously consider Republicans and Democrats joining together, extending McHenry's powers so that they can move forward with the business of the people. Representative Multon made such an important point to you. Not only are they frozen, but God forbid, there is a crisis in this country. They are absolutely unable to address it. And haven't we learned anything for watching what has happened is Israel over the last several days,
several weeks. A government in chaos is terribly dangerous, and that is what we are at this point, and the entire world knows it, So give mckenry the powers, move forward and do the business of the people and sort out your business Republicans when you can, Well, what.
A deal like that include Rick? Or would there be a timeline on it? Would this be Democrats saying, great, do whatever you have to do. Let's get a cr let's fund the government, Let's get these supplemental requests for Israel and Ukraine and get it done in the next ninety days. Say or is this open ended in which he could become speaker permanently?
I'd start where you finish. It would be nuts to do anything but make Patrick McHenry speaker. Right, if he has a limit on his powers or his term, he'll be shackled by the same dysfunctional Congress.
It can't occur. Elect a speaker.
If we're going to open the door and Republicans are going to do a deal with Democrats, it needs to be for a permanent speaker, and it needs to get rid of things like these motions to vacate for one person, and it needs to be able to function as a true Congress. No limits to the authority other than what was prescribed for the speaker. Anything short of that I think is an elixir to make dysfunction even more crazy than it currently is. And I think the American people
have sort of had enough with this mess. Once the Republicans make a decision that they're going to entertain Democratic votes to elect a speaker because they can't do it themselves, you need to have some kind of permanence to it.
Does that become a power sharing agreement? Genie? What would Democrats need to pull the lever on this?
You know, I think something we heard today, in fact, when Representative Aguilera was introducing Jim Jeffer. I think one thing they will ask for is when this consideration of funding for Israel comes up that it includes Ukraine. That's going to be a hard pill for some conservative Republicans
to swallow, but moderate Republicans will be there. I do think they are going to ask for things like that that they can and should expect that McHenry, if he does indeed become a Speaker pro tem with extended powers, would be able to offer them because otherwise there's no reason for them to go along with this deal. But those are the kind of things I think we would
likely hear about. And you know, I think for Democrats, they feel like keeping somebody like Jim Jordan out of the speaker chair is a win in and of itself. This is a guy that many people feel supported an insurrection against the United States. As Moulton was just telling you, it's somebody who's been in Congress, never passed a bill. His entire focus has not been on governing and legislating.
It's been on derailing, it's been on stopping. It's been on being a the king of oversight and investigation of anything democratic. And that's not any way to do the business of the people. And I don't think Republican moderates or Democrats are going to go for it. That's why they feel like this keeping him off of this chair or out of this chair right now is a win for them.
For our listeners and viewers who are just joining us, here is what Congressman Seth Moulton told us about this idea of elevating Patrick McHenry to formally elect him. I should say a Speaker pro tem with the powers essentially of full speaker well.
Certainly something that I would consider. Obviously, the details of the deal matter here. We don't want to just give the reins to someone who's going to run away with all the horses, but he's I think this is something that's being actively discussed. I discussed it as recently as about ten minutes ago on the floor of the House because we need to get the House back to functioning.
The headline on the terminal Rick Davis Jordan says he's not dropping out. So I guess I go back to my original question here. How many rounds will the conference let him get or does he end up being talked out of this in the meeting later.
Yeah, it's it's hard to tell. If the caucus took a vote right now and said who do we want to nominate? You know, same thing we did on Tuesday, my guess is he'd win that vote. There's not a there's not a strong opposition to him like a McCarthy or like a scalise at this stage, remembering that Scalisee beat him on that vote, only to withdraw later that day. So he has such a tenuous future as a candidate for Speaker that I suspect the caucus at this stage
is prepared to say just let's wait a minute. So I think, regardless of what Jim Jordan says his future as a candidate for Speakers is limited. I don't think anybody and the Caucus is anxious to see another vote taken within the next twenty four hours that would test the limits of his strength as a candidate. My guess is he would lose even more votes than he lost between the last two rounds. So I think it's going to be up to the caucas to say, just hold
on a minute. You know, we've got to break this impass. They've only got twenty days before funding for the government shuts down. Twenty business days. That's not a lot of time to come up with a budget. They originally said, the Republicans that they wanted to pass all these spending bills, these appropriations bills. They haven't passed one since then, and it's been two weeks. So we're entering an existential crisis where we don't have a government that can actually pass
a bill that's going to fund the government. That will result in a shutdown, not because of choice, but because of lack of functionality.
Yeah, when Rick Davis says that you should be nervous, Genie, we're out of time. But do you think how came Jeffrey is already talking to Patrick mckenry.
I do hope so I don't know why they would wait any longer. I think they should have been talking over the weekends. So let's hope they are. We've got to get beyond this chaos. This chaos helps nobody, all.
Right, Rick and Genie, stay with us. The President of the United States is in Israel right now. We still have a lot more to talk about when it comes to the visit in this attempt to fund Israel. That all comes back to the speakership here in Washington.
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.
The President of the United States delivering a message today in Israel, even as we go through this speaker race in Washington, d C. No ground invasion yet, and Joe Biden took the time in a bilateral meeting with Benjamin Nett and Yahoo to urge restraint, talking about the lessons learned from nine to eleven. He also addressed the matter of the hospital blast that killed hundreds of Palestinians in Gaza city. Of course, this became a blame game yesterday.
First Hamas blamed Israel. Then Israel pointed to a terrorist group based in Gaza. President Biden spoke to that today from Tel Aviv.
Based on the information we've seen to date, it appear as a result of an aerrant rocket fired by a terrorist group in Gaza. The United States on US equivocally stands for the protection of civilian life during conflict, and I grieve, I truly agree for the families who were killed or wounded by this tragedy.
This reassembl our panel. Rick Davis and Genie Shanzano joined Bloomberg Politics contributors. Of course, Genie, this trip got a lot more difficult over the past twenty four hours. The bombing of the hospital led to a series of events. And you know, we don't have to connect the dots on all these, but the fact of the matter is a summit of Arab leaders was canceled. Has now cut his trip short. He'll be back in Washington, we're told, or at least on his way back tonight. Talk to
us about what you've heard and seen so far. As the ground shifts beneath his feet.
Yeah, Joe, you said even before this horrific incident at the hospital yesterday, you had said, prior when we heard the President was going to be going, that this is a high stakes trip for him, and boy has it been. I mean, he is really walking a very fine line. I think so far he has done the best he could. But when you think about it, what is he trying
to do. He's trying to support Israel. He's trying to negotiate some type of hostage release literally rather humanitarian aid, and most importantly, perhaps trying to deter Iran from using its proxy to expand this war. And all the time, it's like this is a ticking time bomb because Israel is going to go into Gaza and the President is trying to help lay the groundwork so they can enter without Iran using its proxies to expand this war. It
is a very very difficult needle to thread. I'm not sure anybody could make that happen, but the President and Blincoln they are certainly trying. And I have to to say very dismaying to hear what the King of Jordan had to say Egypt not opening their borders to these refugees from Gaza, even though you know Jordan eighty percent of that population is Palestinian. He says it's a red line. Don't ask me why he's speaking for Egypt, but he says for both Jordan and Egypt it is a red
line they won't cross. And so these people, the humanitarian disaster is only going to escalate.
Rick, I guess there's no turning around once people know you're going, which the presidents still have made this trip as the summit was canceled around him.
Yeah, look, I think this summit is going to be a canard or the Arab community. They're reacting to false information that they're getting out of the west, out of the Gaza strip from Hamas, who you know, have a reputation for lying. The Defense Department came out with a report that says from their evaluation and this is satellite technology, this is all the kinds of abilities they have to track these kinds of missiles, that this was a missile
launch by Hamas. I mean, like this is this is a crying shame that the Arab community would believe Hamas a international terrorist group versus Israeli and US intelligence and defense ministries they're going to look bad in the process. It's unfortunate. And one of the foreign policy people for one of the Arab communities I forget who said, well, we're not going to attend this, We're not gonna have
this summit because it's not going to end the war. Well, it certainly would make the war more palatable and and some of the suffering. And I guess in this case they've chosen to side with hamas On on the lies rather than trying to end some of the suffering.
Biden's broken through that he was.
Able to get humanitarian assistants agreed to get through. So he's gotten what he wanted to get done, which is relieve some of the pressure inside guys on the border. And so yeah, I think he's getting what he wanted done without the cooperation of his Arab allies.
Like for you both to listen to what he said as he referred to the aftermath of the nine to eleven terror attacks. This takes a minute, and we'll hear from both of you. This is Joe Biden today and Televion.
You can't look at what has happened here to your mothers, your fathers, your grandparents, sons, daughters, children, even babies, and not scream out for justice. Justice must be done.
But I caution this.
While you feel that rage, we consume by it. After nine to eleven, we were en raised in the United States. While we sought justice and God justice, we also made mistakes. I'm the first dress president to visit at Israel in time of war. I made wartime decisions. I know the choices are never clear or easy for the leadership. There's always cost, but it requires being delivered, requires asking very
hard questions. It requires clarity about the objectives and an honest assessment about whether the path you're on will achieve those objectives.
Genie, First of all, he sounds exhausted, which has been a bit of a theme recently. But how important is that message and to what extent can Benjaminett and Yaho take that to heart?
Yeah?
You know, he and beating Netanyah who It was stunning to see them both together, obviously both looking terribly exhausted and of course beating it. And yeaho not acting solo anymore. He is part of this triumvirate, if you will, this war cabinet. And we understand there is some division in terms of how they move forward, which may be part
of the hold up. But you know, I am really struck by what Biden had to say because that sounds very, very similar to Obama's deputy National Security Advisor Ben Rhoades. He's been talking about this over and over again. People said he and Obama were, you know, one in the same if you will, on foreign policy, and he has been saying the same thing the President just said. So I hear the President channeling this message. It's an important message.
But again, just to echo your important conversation to Representative multon what does that actually mean? You promise to destroy Hamas what then you leave a power vacuum? And the President is asking the right questions, But what are the answers? Not that the President has to give them, but Israeli is going to have to give them, and I don't think we've heard those. Yeah, and that is terribly concerning.
Rick. I'm sorry we only have thirty seconds with what we just heard from Joe Biden. Will Israel be consumed by rage?
No?
I think Israel will extract their call it revenge and their top priority will be to get the hostages back, and hopefully the two can coexist without too much civilian penalty crisis.
Great analysis from Rick Davis and Jeanie Shanzano.
As always, 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.
Welcome to our two of bloom Sound On. I'm Joe Matthew in Washington, where we're just now reacting to the latest failure of Jim Jordan in his quest for speaker. Welcome to Kaylee Lines, who's just back from Capitol Hill. You are up there in the midst of all the ruckus. You're gonna have to get your own office up there at some point soon. But it got worse, is kind of the headline here. It's twenty two voting for someone other than Jim Jordan.
Correct, he did pick up two votes that he didn't have yesterday, but then he lost four votes that he had yesterday. So when you add it all up, net net two votes worse than the first time around. And the question now, Joe, is what happens next. Jim Jordan spokesperson said, he's not going to drop out of the race. But do they go into conference now, do they hold a third vote? Do they just go home and take a breather. It's anyone's guest.
At this point. Well, that is true. I'm sure that they don't even know themselves. Rick Davis was telling us that this bid for speaker is dead, that Jim Jordan will not progress from here, but that doesn't mean they won't give him a third round. Maybe they come back around later on. It's just not looking good in terms of his momentum. Seth Moulton with us a little bit earlier.
I want to play for you what he said, because we talked about this idea of Democrats getting involved in elevating or empowering Patrick McHenry to be a real boy and have the powers of speaker. He says, they're already talking about it. Kayley, here's Seth Moulton.
Well, it's certainly something that I would consider. Obviously, the details.
Of the deal matter here.
We don't want to just give the reins to someone who's going to run away with all the horses, but he's I think this is something that's being actively discussed. I discussed it as recently as about ten minutes ago on the floor of the House, because we need to get the house back to functioning.
Ten minutes ago. That was a half hour ago, while they were voting. He was having that conversation.
Well, it's interesting because just a few moments ago on the steps of the Capitol a Republican Congressman Brian Donalds from Florida who says he is all for Jim George and he will continue to support Jim Jordan for as many rounds of votes as it takes he thinks Jordan will get there. Is very opposed to the idea of expanding the powers of Patrick McHenry in pro tem, and I think he's not the only Republican that feels that way.
It's just a question of are there enough Republicans you could join with Democrats to make this happen, and we just aren't totally sure, as has been so often the case in recent weeks.
Joe of the numbers, I mean, really, it is something we're waking up every morning with no idea what's going to be in place by the time we go to bed, and that's why sound on is essential right now, and that's why it's essential to stay in touch with. Libby Cantrell, who's been writing about all of this, joins us now from New York. Pimcost, head of US Public Policy. Libby, welcome back. It's great to have you here as we
consider the idea of empowering Patrick McHenry. You wrote about this in your most recent note to clients, which have been flying lately, which we're always keeping an eye out for your most recent thoughts on this because it's pretty important. Is this something the market would be comfortable with? Is it the best case scenario? How do you see it?
Yeah, I mean I am there. There's been there's been a lot of material, needless to say, to write about Joe. Yeah, I think the ultimate I mean are kind of our view is that the ultimate result, kind of endgame here is likely some sort of compromise where Protems Speaker McCarthy actually gets elected, and as you point out, he may not be able to do that with just Republican votes. That might mean that Democrats will have to vote for them. And need to be clear, it's not necessarily for a
permanent speaker position. It's just too effectively give him more authorities in his current feat and the House rules as you all know, when people's eyes blazed over, but they're actually important that an appointed speaker ProTem can do very limited things. However, an elected speaker ProTem can basically function as for you know, for all intents and purposes, just a normal Speaker of the House, including really importantly bringing legislation to the House floor. However, I do think it
may take a while to get there. I do think Republicans are likely inclined to exhaust all options on the table. That may include a representative Jim Jordan going for a third ballot, we'll see, but it also may include, as you mentioned, some other folks being nominated to the floor and sort of going through this again. So it feels like all, you know, sort of arrows are putting in the direction ultimately of a speaker ProTem being elected and
as a result having more authorities. But it may take a while to get there, and I get I don't think this is necessarily an ideal solution for many Republicans, so it will try to avoid it if possible.
Well, Libby, is this kind of like a continuing resolution, but instead of being about funding, it's about being who has the gavel, Right, you just give a set date that Speaker McCarthy can or Speaker mckenry Speaker pro Tem mc henry can act with more powers, and then eventually you are still going to have to deal with getting someone permanently the gavel and that's still going to be just as hard. However, many days or weeks from now.
Okay, it's like that's a very apt analogy that that's exactly what this is. It's basically just to buy more time for the Republican Caucus to sort of coalesce around you to one one Candida, and that may ultimately be a Speaker pro tem mckenry. He's well liked among various different factions within the GOP caucus. He is actually well liked on the other side of the aisle as well, So you know, that could ultimately be sort of the
resolution here that he becomes the permanent speaker. But it again, it may have to kind of go through this sort of first step in order to get there. But I don't I don't want to prejudge this because, as you guys have pointed out, there is. There are a lot of moving parts here. It does seem like just talking to folks on the hill that Republicans don't want to kind of go towards the speaker ProTem enabling them enable mckenry.
It's sort of a first first step, though I think there will be more steps in between now, now, and.
Then and every time. If you're with us on YouTube, you see Patrick McHenry just dropping that gavel with the force of nature behind it. I don't know if he's going to break that thing if he ends up getting it for real, Libby. But let's back up to what's actually happening today. Your note to clients made it pretty clear Jim Jordan's speaker bid is likely toast. Is that still how you see it after round two?
Yeah, I may should have softened that a little, but it is it is, And yeah, I am honest. I'm not pulling any punches here, and no disrespect to Representative Jordan. It just it is difficult when you go on a second ballot and instead of gaining votes, you actually lose net votes. And as Haley points out, by it, while he gained two folks, he lost four, so net he lost two, meaning that he's twenty two, you know, votes away, pretty difficult to sorry eighteen votes away from getting that
magic two seventeen. That's a pretty big hole from which to dig out of. And then, you know, Joe, we've talked about this before, if he were to try to dig out of that meaning kind of twisting arms, what deals does he have to make, what promises does he have to make? And that could get him very much in the same situation that former Speaker McCarthy found himself. And so it doesn't feel like a very clear path
to getting those two seventeen votes. So at this point I would say that, yes, his speakership chances are probably are probably toast.
Yeah.
Libby Congressman Womack, who has voted against Jordan, told our colleague Jack Fitzpatrick earlier today that what Jordan and his surrogates need to understand is that this isn't like January. In January, the holdouts were holding out because of policy concerns. Now they're holding out because of concerns about the individual himself, Jim Jordan. It kind of feels Libby like all of this is personal, and it's personal for everyone who was tried and failed to be speaker at this point.
Yeah, I mean as you as you as you guys know, I mean the Speaker of the House plays you know, lots of important functions, but one, you know, really critical function is a fundraising one. Speaker McCarthy was an incredibly productive and successful fundraiser on behalf of the Republican conference in the House. Folks would very gladly invite him to their districts. I think the hesitation Kylee and kind of
this is where the personal connection comes in. And then do you think folks they're they're hesitant about Representative Jordan coming to those districts that kind of are purple, if not lean blue, particularly here in New York or in California. And so I think there's some reticence about kind of the person and some of his votes and some of his tactics previously, and how that would kind of go
over with the with their own donors. So and then I think that other folks do have with a personal issues with him, just in terms of how you know, Representative Jordan may have navigated the whole when Steve's Police was nominated. So yes, there are its fews abound, and needless to say, but again I think from kind of a market's perspective, as we've talked about, because mostly noise,
mostly noise. But I do think as we get closer without a resolution, I think folks do start getting kind of nervous that things like the government funding though and what have you are just going to go by the wayside, and that may increase the chances of a government shutdown.
So that keeps the market on edge, of course, And when you zoom out here Libby, the news on the other end of Pennsylvania Avenue is just as difficult with President Biden landing in Tel Aviv in a much more complex region than it was even twenty four hours earlier, with the summit of Arab leaders being canceled, the blast in the hospital, the President trying to deliver a message of restraint while also supporting Israel at the same time.
It's getting pretty complicated here. There are a lot of concerns as we look at the oil market about what could happen in a widening war when you when you consider both of these and we can drill down on the President's trip a little bit more if you like, but the dysfunction on the hill, the situation the administration of the US is involved in two aircraft carriers steaming into the Eastern Mediterranean. What does the market think?
Yeah, and this is it basically just adds yet another layer of risk. I mean, clearly the market has been distracted with lots of things. Uh, the fact that yields, treasure yields have backed up so much, the fact that their folks are concerned about kind of a natural buyers of treasury bonds not necessarily showing up to auctions. And then you kind of lay over the sort of the domestic dysfunction with the sort of geopolitical tail risk, and
it is a lot for the market to digest. You sort of see the bond vigilanti diet again today kind of rearing their their heads once again, while yields are are continuing to back up. I think that the real concern, of course for the markets, both from a risk perspective but also from a commodity's perspective, is if there were an expansion or a broadening of this conflict. I mean, obviously it's on a humanitarian level just through tragic all
the way around. But I do think kind of the markets that the markets really care about is whether there is sort of more direct confrontation of course, between between the US and either HEADBLA or or Ron directly. That is when the markets I think will start getting would get very very concerned. I think that still seems to
remain a tail risk. It seems that you know, folks are being very careful in their language, very careful about who was responsible for those tragic terrorist attacks and then what have you, particularly as it relates to Iran's role. But you know, this is I think yet another tail risk for sure that the market would have to sort of sort of have to price in, uh, if you if you will.
Yeah, And we know that there are things that markets don't like libya An uncertainty first and foremost is at the top of that list. So we have uncertainty with the geopolitical situation, uncertainty domestically, and yet you don't really seem outside of perhaps oil markets, we see much reflected in the markets. Yet do you think they're reading this correctly at this point given the risks known and unknown?
Yeah, I mean, you know, oftentimes you do see your duration rallying, sort of interest rates acting, the treasury rates acting sort of as a safe haven. And we did see that for you know you for a few days last week, but that is again sort of rewinding or reversing, as you know, folks start focusing on other things, including the strength of the economy with the retail sales and
what have you. This week that we're surprisingly strong to showing that the consumer remains incredibly robust here in the US. So I think it's sorted into a question of what markets are focused on right now. I think they're much more focused on domestic economic data. They're much more focused on what the Fed is saying. We're gonna have a lot of Fed speak this week. Chairman Powell will be making some remarks also this week. I think folks are
really going to be focused on that. But all the other stuff, I think it's kind of noise until it's not right. It's noise until it actually matters. And I think the same thing goes for just the dysfunction or disunity on Capitol Hill that its debts it or doesn't matter until it does. I think the markets are just assuming it doesn't matter. But again, as we said, if you get closer to that damage backdown deadline, it may it may view it just you know, not as much noise, but more as a signal.
No, we've got a month ago to chew on that idea. Libby, it's great to see you. Thanks for the analysis. As always, it's our pleasure to have Libby Cantrill from PIMCO. You mentioned Kaylee Steve Omack, who made very similar remarks to CNN earlier today that you mentioned. He was giving the Bloomberg earlier about you know, time to give up the ghosts. Here's what he.
Said, nobody in America can get to seventeen right now out of the Republican conference. If that becomes apparent to everybody, then at some point in time, we're going to have to work across the aisle try to figure out what it's going to take for us to be able to get a speaker elected and then get the ball rolling in Congress once again.
So it's on to Patrick McHenry. It sure seems like, but we have to remind our viewers, at listeners, our friends here unsound on that literally anything could happen this afternoon. They're not even back in that conference meeting yet.
Yeah, we don't know what will happen over the course of the next hour, day, week. It's just incredibly unpredictable at this moment, and to his point, we don't know if anyone can get two one hundred and seventeen votes. Patrick mcginny, possibly he may not included knowing he was a very close ally of Kevin McCarthy and helped negotiate that debt sealing deal that got everybody mad at him in the first place. And ultimately, you know how.
That lan that thing, Kayleye slammis so hard. Sam put that thing on repeat for our viewers on YouTube. The wind Up the pitch, Long fly ball to left field. I'm Joe Matthew with Kaylee Lyons. This is Bloomberg. 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