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Welcome to the Thursday edition of Bloomberg Sound on Little Friday. We're glad you're with us here as America recovers from the final Republican debate and for that matter, Trump town hall before we get to Iowa. And we were watching, of course, so you didn't have to. And we'll be walking through some of the highlights and low lights over the course of the hour. Here. The only thing hot, it seems in Iowa or New Hampshire right now are
the microphones. Just ask Chris Christie. You heard this as he prepared to make the big announcement that he was dropping out of the race, not to be a spoiler. He was being honest on a mic wired up behind the scenes before he came out the podium. A lot of folks seem to have read this. Few seem to have heard it. Have you heard what Chris Christie said about Nikki Haley? Remember the whole idea was here, He's
got double digits in New Hampshire. He drops out those voters sixty five percent of them according to the CNN UNH survey. May just jump on board Nikki Haley and then we've got momentum in a real race. Except he doesn't actually believe that.
Yeah, I mean, look, she spent sixty eight million so far just on TV. Spent sixty eight million so far, fifty nine million by Desantus and we spent twelve. I mean, who's punching above their weight and who's getting a return on their investment?
You know, And she's going to get smoked.
And you and I both know it. She's not up to this.
She's going to get smoked. You and I both know it. She's not up to this. Did it matter what he said? After that? That's where we start our conversation with Andrews. Smith. I've been looking forward to this, and if you're a listener of this broadcast, you've heard mister Smith before. He is the director of the University of New Hampshire Survey Center and knows the landscape in New Hampshire as well
as anyone. As I mentioned the CNN UNH poll that came out earlier this week made a lot of waves Andrew, it's great to see you. Welcome back to Bloomberg Radio. I wonder what the thought was? Great to have you the thought in New Hampshire. As Chris Christie, apparently a darling of New Hampshire, decided to drop out of the race, did he cancel out his message with the off mike moment?
No, I don't think so. I think it is a one day story. It's important to remember that Chris Christie is not beloved about New Hampshire Republicans. In fact, since we've been measuring favorability ratings and some other numbers, he has by far the lowest favorability rating of any of the Republicans running in the New Hampshire primary, including h Aatha Hutchinson. And we see that sixty percent of likely
Republican primary voters have an unfavorable opinion of Christy. And then a poll that we did back in November and earlier polls were seeing fifty to sixty percent of New Hampshire Republican primary voters say they wouldn't vote for Christy under any circumstances. So he had a very hard ceiling on his attempts to grow his support in New Hampshire, and it really wouldn't have mattered how much money he spent.
He was pretty much kept just by being the person who's been attacking Trumps for so long.
Well, so it sounds like he was just looking at his own numbers and came to grips with reality. Is that fair?
I think that's a fair assessment of it. He really has no chance in any of the other early primary states, certainly not in Iowa. He's been banking his entire campaign essentially on New Hampshire and he hasn't really gotten much of anywhere. It's also important to remember that voters in New Hampshire, despite their being campaigns are going on, are
just really making up their minds right now. Exit polls have shown historically that upwards of forty five percent make up their minds over the final weekend of the race, and upward to fifteen to twenty percent make them their mind on election day. So he's I think he's seen that he doesn't really have an avenue in New Hampshire because of that hard ceiling of unfavorability. He certainly doesn't have any capacity of doing well on Iowa or South Carolina.
The next race or even Michigan. So he had to do well in New Hampshire or get out, and I think he read the cards and said it's better to get out before I lose more money in this game.
So is this advantage Nikki Haley? I referenced your poll from earlier as we consider second choices, sixty five percent of Christy's supporters said that they would turn to Nikki Haley if he was not on the ballot. Is that a number you expect to see turnover?
It's kind of hard to say, because you know, again there's a week and a half left, and we'll see what happens in Iowa if de Santis stays in, if the Santis drops out, how big or not Trump's margin is in Iowa. So there's still some things to happen between now and election day. But if you think overall about the Republican electorate, we've had a consistently forty percent or so people in New Hampshire that have been behind Trump, and we're seeing eighty to ninety percent of them say
they definitely decided who they're going to support. So I think Trump's got his base there, but I don't think it's going to grow that much because people know who Trump is. They're not waiting for anything new to hear from Trump that's going to make them lean his way. So we have about forty percent for Trump, about sixty percent who aren't necessarily for Trump, and those are the voters that all of the other Republican candidates were going after.
Haley seems to have done that. I think the best job of threading the needle of not attacking Trump and so as not to tick off the MAGA base, but also to let people know that she's the alternative Frump. And I think that Christy dropping out. His supporters aren't necessarily you know, big Hailey supporters, but they know that they're not Trump supporters, and they're going for the person who's not Trump, and I think that right now is Haley.
And that's why she's likely to pick up most of the support that Christy has well.
And that would be a pretty big deal. If your poll has Donald Trump just single digits in this bred, she's within single digits of Trump. You add the Christy vote, he's at double digits, and we've got a real race here.
Andrew, I think so. I think that again, it's important to remember voters in New Hampshire don't make up their minds until the end. They're really just starting to pay attention. Now you've got that block of people that don't like Trump, that are and probably aren't that politically engaged, who are really starting to pay attention to this race. So she's peaking at the right time, and I think she could
make it close. This has happened before, if you go back to two thousand and eight with John McCain who peaked at the very end of that race. Hillary Clinton coming back and peaking in New Hampshire in two thousand and eight on the Democratic side as well, this is not an unusual sort of Phenomenon the flip side of that is Ron DeSantis a year ago was leading this race. He had forty three percent and Trump had thirty percent.
He peaked way too early before the race really got engaged in before voters were paying attention.
You'll be glad to know Rick Davis, who's on our panel every day, will be following you and has some pretty interesting insights having managed John McCain's campaign in New Hampshire. Andrew remember the crying moment, the emotional moment that Hillary Clinton had you're referring to her kind of last minute
turn to her benefit in New Hampshire. Does Nicki Haley, or by the way, we haven't even mentioned a guy named Ron DeSantis, do they need a moment like that because they're going to come flying in New Hampshire the minute the Iowa caucuses are over, and they'll have a week to make a difference, basically to your point with those late decision makers in New Hampshire. Does Nicki Haley need to have a human moment, have a catalyst like that that'll get people's attention.
I don't really think so. If you remember that two thousand and eight cycle with Hillary Clinton and Barack Obama, there were already only two candidates, Obama had come off of a win in Iowa, and there were only five days between Iowa and New Hampshire. The things that happened with Clinton were that there was that debate on Saturday night where the moderator asked her why she was unlikable
and how did that make her feel? And she said hurt her feelings and Barack Obama said snarkily, mail you're likable enough, Hillary, And then she had that humanizing crying moment there and it really galvanized support from republic from Democratic women to say, oh yeah, she is being picked on again. This is sexism again in the party. Let's go for Hillary here. I don't think we have that
dynamic going on this time around. It's really Trump versus the non Trump, and I think Iowa is going to make the decision for DeSantis as to whether he's in the race or not after Iowa, because his polling numbers here in New Hampshire declining. He's now in fourth place in New Hampshire even behind Vivek Ramaswami or is a good place excuse me. He's behind Vivek here, So he doesn't have much of an opportunity in New Hampshire. I think to grow his support, it's been declining for a year.
And if he doesn't make an extraordinary showing in Iowa, I think his campaign has to make the decision to pull the plug.
Wow.
You do wonder in the next week how much of this field is going to clear out. Emerson is out with new numbers today as well. As we spend time with Andrew Smith at the University of New Hampshire. It looks in New Hampshire like this in this poll, at least Trump forty four, Haley twenty eight, and then Christy twelve. DeSantis is in single digits. How much noise is in
these numbers. You've made the point several times Andy that people make this decision late in New Hampshire, and you've got the unpredictable nature of forty percent of voters being independent. How much stock do you put in any of these polls of the week or so out.
I've been doing pulling in the New Hampshire primary for a long time, and historically polls have been wrong as often as they've been right, because voters make up their mind so late, because so many people tell us that they're going to vote but they actually don't turn out. Is always the most difficult thing to estimate in any election,
but especially in a primary election. New Hampshire. We have same day registration, so anywhere between ten and fifteen percent of the electorate or people that aren't even registered, and those people are often missed by other polls who use lists of voters who've been previously registered to vote in the state. There are a number of other methodological issues
that make polls quite different in the state. So as a polster I would tell anybody about primary polls, use them as a very fuzzy gauge of where the election is at any time.
I hope you're going to meet up with us when we're up there, or meet you in Manchester, right, I'm looking forward to it. Excellent, This is great Andrew Smith. He's the director of the Survey Center, University of New Hampshire. A great conversation. Thank you for the insights, Andrew. Think about this conversation that day we go to vote in New Hampshire. We'll see how much has changed in just
this limited period of time. As we assemble our panel, Rick Davis, the afore mentioned alongside Genie Shanzano Bloomberg Politics contributors, I'll start with you Rick, Since your name came up a little while ago, you've had a little bit of time to think about the impact of this Christy departure. What is it mean for Nicki Haley?
Yeah, I think it's exactly what Andrews said. You know, the vast majority identify her as their second choice who sit on Christy on the ballot yesterday? Remember too, that's with Christy in the race, right, So sixty five percent say, you know, if something else changes, we'd be willing to go and sit on Haley's ballot. Now that he's out of the race, that number could go up. It's unlikely to go down because you know, the consideration is that at the time he was still in the race. So
it's all upside for her. And I think definitely adds to the notion of momentum, which is even more important than pulling in money right now, because New Hampshire is a momentum state and as he said, you want to peek you know, next week.
That's kind of leaving a scratch and ahs when it comes to the polls, right. I mean, this idea of momentum is abstract enough, genie that it's very difficult to quantify. When I look at a UNH pole that shows True ahead by single digits today, an Emerson poll he's ahead by what sixteen points?
Here?
USA today, Suffolk had him up by twenty Do any.
Of them matter?
No?
I think Andrew is right, and it's you know, I think people should listen to him when he says many voters in New Hampshire are just now starting to pay attention. You know the news today about a dropout. I bet you many people in New Hampshire are focused on Bill Belichick rather than Chris Christy, to be honest, right, And so you know, the reality is is that while we watch this day in and day out for voters, they are just starting to pay attention. And I think this
thing can move. That said to imagine that it moves twenty thirty points. And you know, when you look at some of these polls that have Trump that much ahead, that's hard to imagine. But anything can happen. So I think a lot rides on what happens in Iowa and the momentum Haley can get out of there, if any, to move her into New Hampshire. I mean, that's really her path forward.
You heard the hot mic remarks at the beginning of our conversation. Here here's what he actually said on the microphone a few minutes later.
Because I want to promise you this. I am going to make sure that in no way do I enable Donald Trump to ever be president of the United States again. And that's more important than my own personal ambition.
Okay, that's great, but Rick, he says she's going to get smoked, which one does he believe.
He's a politician, He doesn't believe anything he does what the pollsters tell him to do. Now, that's a very cynical view, but it's not too far off the marth. I mean, he's a lifelong Paul. I mean, you know what he says in public and what he thinks in private, even off of a hot mic, you can't trust any of it. It's obviously not in his interest to have Donald Trump president again, because I have no doubt that if Donald Trump's president, he will find some way to
go after legally Chris. So it's in his personal self interest, professional self interest to see somebody else win. If he's cynical enough to get out of the race one day and hope it helps her and say at the same time, you know she's a loser. It's that that's just who he is. There's a reason he's got so many negatives.
I guess.
Well, I'll tell you what Trump on the Fox News last night says he's liking Chris Christy already a lot more. We'll walk you through the debate in the town hall next with Rick and Jeannie. 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 play Bloomberg eleven thirty.
We were watching, so you didn't have to this split screen night. Did you see either of them, the final
Republican debate or the Trump town hall? You know, he skipped them all, including last night, the last debate before Iowa to go on Fox News this time of counter programming the whole thing, which you might suggest was a pretty good strategy after what we saw last evening on the stage on CNN Ron DeSantis, Nicki Haley boy not fans of each other going for broke here, spending the first hour beating each other up, the second hour going
after Donald Trump and Nicky Haley did go there. On the twenty twenty elections, said it out loud.
That election Trump lost it, Biden won that election, and the idea that he's gone and carried this out forever to the point that he's going to continue to say these things to scare the American people are wrong.
So reassembled our panel, Rick Davis and Genie Shanzano, come along, Bloomberg Politics contributors. I'm sure you were both up late going through the highlights and the low lights here. Why don't we start with the debate then we can move to Donald Trump's escapade last evening Geenie, Nicky Haley had
an important moment there. I don't know what the ratings look like or how many people may or may not have been influence, but to actually share the stage with Ron De Santis and go at it, that was probably the chippiest debate that we have seen yet in the cycle. Did it make any difference?
No, you know, the words that kept coming to my mind were really aggravating. I mean, they both did fine. All they did was fight with each other. I did the split screen thing, and you had Trump there basically on an infomercial, very subdued, very calm, and then you had those two going at each other. You know, you played that clip from Nikki Haley. She didn't really get to the criticism of the faraway front runner until the second half of the debate.
That's right.
And you know, I don't know what you guys found, but like this idea liar, liar pants on fire, you know desantislies dot com. Anybody under the age of like, you know, I don't know fifty. I felt like it was like retro because nobody looks at websites like that anymore. That was like in eight when Obama was running and we were all applauding that they had a website for their paign. You know, she didn't do anything really groundbreaking. She kept repeating that, and of course Ron DeSantis was fine,
but I don't think he made any headway. So I just thought the winner here was Donald Trump, as it has been throughout all of these debates.
Well, I'll ask you both about Trump's performance here. How about Ron Desantish last night? Rick, it was interesting watching him go through the motions one on one. That's not something that we've had a chance to witness yet, very rehearsed in a lot of cases, going for the money line,
trying to get the applause line, and so forth. He even fell into his remarks apparently like kind of had a brain wave and thought he was debating Gavin Newsom at one point, as he called her the governor of California.
Listen to this back and forth in the state of Florida, were ranked number one for economy of all fifty states by SANBC number one education. She was ranked number fifty in education when she was governor of California.
Well, I think that that was actually from his prep from the Haven New some debate on Fox Rick, how did he do?
Yeah, Look, I mean it was really rehearsed, right, I mean, like I think the easiest night where the moderator is Jake Tapper and and they just they just stood back and let these guys go at it, and it was really all just talking points. I mean, I don't think I've ever heard a debate where the word liar was used in every single sentence and a little exhausting. I mean, like I kind of give tropes to Donald Trump because like, at least he only had an hour town hall and
you didn't have to suffer through another sixty minutes. I mean, like one hundred and twenty minutes of that stuff was more than any voter in any state will.
Ever want to watch.
So you're right, no telling who watched how they were impacted by that. They didn't distinguish themselves poorly. They look like professional politicians, you know, beating each other up. I don't know how that helps either one of them in Iowa. And you know, I'm not exactly sure how any of that helps Nicki Haley in New Hampshire since that's your top focus. But the bottom line is, I agree with Geenie, you know, good night for Donald Trump.
So it was a tree that fell in the political woods on CNN, on Fox, and I am assuming that a lot more Republicans saw that. Rick to your point, that would be the viewing habit. It was an attempt at normalization, at least in my view linees like I'm not going to have time for retribution or this one. On the dictator, here's Trump.
I said, I'm going to be a dictator for one day. We're going to do two things. The border, we're gonna make it so tight you can't get in unless you come in legally. And the other is energy. We're gonna drill, baby, drill. After that, I'm not going to be a dictator. After that, I'm not going to be a dictator.
So that's what had been said.
So you were pressing no, no, and Fortas picks it up. So I said, I'm going to be a dictator for one day. They cut it, they go I'm going to be a dictator. They cut the rest of the sentence. Now, no, no, i am not going to be a dictator. I'm going to manage like we did. We were so successful.
I Am not going to be a dictator. Rick interesting here as Donald Trump is apparently listening to his advisors.
Yeah, my guess is they pulled that and it was not a pretty picture to voters. Regardless of whether it's one day or you know, every day your presidency, American voters don't want a dictator at all. And so walking that back the way he did, I'm not exactly sure it was very convincing. First of all, I said, yeah, I'm definitely going to be a dictator for the first day, but then again, I'm not going to be a dictator. And he blames the media, which, by the way, to
most Fox viewers, they don't consider Fox the media. They consider that the truth teller. And you know, maybe that works for the crowd that was tuned in, But what a cake walk for Donald Trump. I mean, you know, the people asking questions, each one started out with how great Donald Trump is. And by the way, I'm almost embarrassed I have to ask you a question.
But here you go, well, you know what issue they
did get into. Really interesting, Genie. This is a recurring theme this week, and it's a theme that started here at Bloomberg, I dare say, because the idea of being afraid to talk about entitlements has been a big concern here in Washington, you know, as we nibble around the edges of the budget, and our interview with Nicky Haley has been coming back again and again and again, and her stand on potentially raising the retirement age was referenced in both of those shows.
Last night.
It came up by Ron DeSantis in the debate, and Donald Trump brought it up in the Fox Town Hall. Let's listen to what he said.
DeSantis wants to cut social Security and Medicare. Nicky Haley wants to cut Social Security and medica Nicky Haley wanted to raise the age, okay, from sixty five to seventy four?
Seventy four?
Did that come from? That was from our interview with Nicky Haley on the twenty fourth of August. To the point now where not only was Donald Trump ready for that line of attack last night, Rick and Jeanie, but it has apparently been put into an official ad a Trump campaign ad that dropped this morning in New Hampshire here he.
Is was to secure retirement. Nicky Haley's plan ends.
That social Security Medicare, How would you manage the entitlementsged? Okay, So from our interview here on Bloomberg, Genie, does that mean that this in fact will be a major issue on the campaign trail? We're going to forget about it after the primaries.
Whose boys did we just hear on that ad?
Was that you jail? Yeah, I'm afraid.
I'm glad to hear that. Trump and his team and everybody is listening, and it's a really important issue. And we heard it to your point in the town hall. We heard it in the debate. There was an extended discussion by DeSantis and Nicky Haley arguing back and forth about the very issue that you asked her about way back in August. And now they have her on tape, and you know, economically, she is probably right to raise this.
We do have an enormous problem, but everybody from DeSantis to Trump to Biden knows politically it's a loser, and so that's why they keep bringing it up. And of course I think we will hear Joe Biden bring it up as well. If potentially, and it's a big if you were to see somebody like Nicky Haley, you know, win the nomination. I mean, this is Rick Scott all over again, and they are just waiting to on her for it.
Rick Scott all over again. Rick Davis makes me think that this will not be an issue on the campaign trail when this goes to the general.
Yeah, you could just tell that Nicky Haley really tried to walk it back, conditioning, conditioning, the comments she made to you in that interview. My guess is we're going to see you in other campaign commercials besides just Donald Trump's before the end of this. But that's only if Nicky has any life after New Hampshire. So let's hold our breath and hope that Joe becomes an issue in the general election campaign.
God forbid, we don't want to become the story. Rick Davis and Genie Shanz no great analysis, and they're going to be back with us after we tackle some issues with Jared Bernstein. I've been looking forward to this conversation as well because we've got important news today and I haven't even gotten around to yet. And that's consumer prices. You've been hearing about it throughout the day on Bloomberg CPI day with data showing inflation up more than expected,
and we want the view from the White House. As always in a chance to spend some time with Jared Bernstein, of course, chair of the White House Council of Economic Advisors. He's with us as you can see on YouTube from the White House North Lawn. Mister chairman, it's great to see you. Before I ask you about CPI, I wonder your thoughts on this conversation about the retirement age, about
managing potentially reforming entitlement, social Security and Medicare. Is that something that the administration plans to weigh into.
I think we already have in the sense that our budget continuously extends the solvency, Medicare, social Security. These are critical programs that this prison has not only pledged to protect, but has continuously provided proposals to do so. Now, look, I mean one way to do this is to continue to pursue his fair taxation agenda. Not a dime of higher taxes under four hundred thousand AGI, but he has
a robust agenda to enforce fair taxation. Part of that by the way is blocking people from millionaires and billionaires from evading taxes by making sure that the IRS is adequately funded. And what have the Republicans done. They've actively worked against that funding, tried to cut it, and in fact have extracted reductions there in some of these budget deals. That's basically a shadow tax cut for tax evators. And that's not okay for wealthy tax evators, and that's not okay with this president.
At some point, though, the retirement age is going to have to be lifted, Jared, isn't it. We're living longer. It's just a different world now.
Look, social Security is such an essentially important program for our seniors, and it is one of the most effective, efficient programs we have. We're going to continue to protect it, to bolster it, and to make sure it is there for generations to come.
Maybe you'll end up in a Trump ad as well.
Jared.
I wonder on this CPI day, how are you feeling. I'm looking at the headlines here. US inflation accelerates, tempering case for Fed to cut rates. US inflation picks up as goods prices halt month's long decline. I could keep going. Here is the moral of the story that this matter of inflation, the trajectory does not in fact move in a straight line. Because we were talking about goldilocks a couple of weeks ago, jareded, how do we decipher this one?
Yeah, that's exactly the right way to tee that up. Any month can bump one way or the other. And I know, Joe, I've emphasized this in our discussions. We at the Council of Economic Advisors make a point out of never over emphasizing a particular month. And in fact, by the way, if you look at the pace of a headline CPI inflation over the past three months annualize, it's still one point eight percent, and that's because the
last three months were zero point one point three. So do the math and you get that kind of underlying trend remains the friend of those who want to see inflation continues to come down. You mentioned goods prices. I think the unsnarling supply chains is very much baked in the cake, and we saw goods prices continue to be very low. So look, I mean inflation, core inflation very important to the FED. Core inflation of course hit expectations.
The point three was expected. Point three was delivered. So we see that prices continuing to ease, job market remaining strong, and the combination of those two delivering real wage gains, which we also learned about this morning. And that's a trend, not a blip. We've seen real wages up about a percent over the past year, and they've been rising now for a while, very important to our working families.
I've talked before as well, Jared about the last mile that it's in fact, you know, it's that last ten pounds that are so hard to lose. Here are we going into the most difficult part of this inflation battle.
I mean, I think we'll have to see. I certainly understand those arguments. I mean, one question there is is there more room to run on the economy supply side. Can we continue to improve supply chains and can we continue to see labor supply increase, especially among prime age workers. And I think the answer to both of those is yes. So I'm not ready to sign up for you know, this last mile argument, though it's something we're of course going to be keeping a close eye on.
Okay, that's fascinating. Do you worry about the impact of what's going on on the red seat Jared, you've referred to supply chains and goods prices here, and we're looking at these massive tankers going all the way around Africa because of this security threat at the moment. Is that going to reach consumers at some point?
Again, this is something that whether it's our national security our economic team monitoring extremely closely. Operation Prosperity, as you know, is a coalition effort in effect to help escort ships and keep commerce going in the region. Now, I think the important thing there is to just cut right to the punchline and look at the impact on gas prices. At least thus far, it's been a very limited impact. I woke up this morning and the national gas price
was three dollars and eight cents a gallon. It was below three dollars in thirty states across the land. And remember in June of twenty two that price peaked at north of five dollars a gallon. So that's been very welcome to American consumers at the pump. It's also helping to keep consumer spending strong, and that's been at the core of our recovery. So limited impact thus far, but very much of course on the watch list.
I'm spending time with Jared Bernstein, chair of the White House Council of Economic Advisors, here on Bloomberg. I'm sure you're dialed in on this potential for a tax deal on Capitol Hill. Jared, I'm kind of amazed that we're even having this converse right now when we're not even sure if we can fund the government, or dealing with the border, or so many other issues that we could
talk about. But apparently we are on the verge of a deal between the Democratic led Senate and the Republican Ledhouse that would restore the child tax the enhanced child tax credit, in exchange for more friendly business taxes. I wonder if the White House is in favor of this, if you have a sense of the contours of what the economic impact of that might look like.
Well, I think it's a really important practice not for the White House to comment until the President goes first when it comes to ongoing negotiation. So I'm not going to give you a White House readout. What I will say is that President Biden has consistently supported a child tax credit expansion, much like the one he put in place in the Rescue Plan. Now he's talked about the
importance of paying for that. And again that takes us back to a tax agenda that injects a significant fairness into the code, particularly for those at the top of the scale, and particularly for those who want to evade taxes by giving the irs the resources it needs. But look, the child tax credit reduced child poverty in half, and then it expired and child poverty went way back up. It is one of the greatest investments we can make in this nation to have as low a child poverty
rate as possible. And what we learned from earlier versions of that debate the numbers I just cited, is that the child poverty rate is a policy decision, and our decision is to try to keep that as low as possible, and that certainly connects to a robust CTC.
Well, there was a lot of concern about the expiration, of course, the Child's tax Credit. We talked a lot about as well, the expansion of covid ERA funding for child care programs, the childcare cliff they called it. We went over that cliff, Jared, and I wonder if the landing has not been as hard. Forgive me if I'm using the wrong expression here is some had feared.
Well, maybe I would probably hone the expression a little in the following way. Just the way that was constructed, it was more of a phase down than a cliff. But look, the bottom line is still relevant. We really want to make sure that anyone who wants to join this labor market and work the desired number of hours and weeks they want ought to be able to do so. And especially for caretakers who are of course disproportionately women,
that means adequate access to affordable childcare. I would call this, In fact, President Biden would call this one of our more important pieces of unfinished business as we go forward. Again, we have robust proposals in our budget, fully paid for, to expand access to affordable childcare. And it's not just an important micro issue for people at the kitchen table, which is what this president cares so much about. It's also helpful to the macro economy by boosting labor supply.
Well, this is remarkably happening at the same time, as I mentioned, we talk about government funding. Next Friday would be the beginning of a shutdown if this doesn't work out, And I know that Speaker Johnson is under immense pressure from his right flank in the House to not do a continuing resolution. Jared, I'm just wondering if you see the odds of a shutdown rising and what economic impact that would have.
I think it's really hard to put odds on these things, but I think the people who watch it closely took those odds pretty far down when it looked like there was, if not an agreement a proposal from Speaker Johnson on the top lines for the appropriation bills. Let me put it this way again, these are ongoing negotiations that I
don't want to lean into from this particular podium. But what I will say is this, you and I have just had a good, robust discussion of all the things that are going right in the US economy, low unemployment, inflation, easing, real wage gains, actual cost reductions in key areas of consumer spending, whether it's gas, milk, red eggs, airfares, TVs,
and so on. The idea that we would want to kick the ball in our own goal with an unnecessary government shutdown when the when, when I think majorities on both sides want to avoid that is absolutely counterindicated right now. So I just am urging anyone who is in that in those negotiations to uh to avoid that that possibility.
It's like a recurring nightmare.
Jared.
It's always a good and robust conversation with the Chair of the White House Counsel of Economic Advisors, Jared Bernstein. Great to see you, sir. Thanks for joining us always.
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Welcome to our two of Bloomberg Sound On. I'm Joe Matthew alongside Kaylee Lines. How many days to Iowa? Five four four and we've got nine days to a possible shutdown. I'm still really compelled by how all of these are going to smash together over the next week. Iowa shutdown New Hampshire or is it Iowa motion to vacate New Hampshire.
Good question.
We're going to be in early States while some wild stuff is going on.
Here in Washington.
Wild indeed, I mean it's already happening. It's already wild. It could potentially get more wild as we get closer and closer to a deadline. That is what tends to happen. The clock starts ticking louder and faster. But if you're Mike Johnson right now probably figuring out how you can fund the government and keep your job, or is that simply not possible? These are two binary outcomes, or.
Is your name just still Kevin, because that's what it feels like. We'll talk more about that with Kyle ahead, because you might have seen Chuck Schumer is not waiting around. He's starting the cloture process on a cr today. So we'll talk a little more about potentially being jammed by the Senate as we all try to recover from our debate hangover. Was that an exercise in futility? I don't know if we've seen ratings yet, but I just don't feel like that moved the needle for a lot of people.
Well, we heard a lot of what we had already heard from Nikki Haley and Ron DeSantis to a large part, at least when it comes to contrasting them with the current front runner, Donald Trump. I think the question is did one of them succeed in getting farther ahead of the other, if not getting closer to Trump? Did one right gain in one lose.
I don't know that Micky Haley is waiting around for all the Christie voters to show up for her, so it might have just been a wash of a night. Kyle Condick joins us from Sabado's Crystal Ball at Kaylee's alma mater, the University of Virginia. Kyle, it's great to see you. I'm sorry if you had to endure all of that as well. I'm sure you did. Did it make a difference?
Probably not. You know that we've been waiting for some posts New Year's Day more Iowa. A couple couple came out today Suffolk and then Iowa State just dropped one a few minutes ago. And Trump's over fifty in both of them, and Haley and Desanta's are you know, close to each other. I've but very far behind Trump, you know, in the fifteen to twenty percent range. I think they were tired at fourteen in the Iowa state poles. So you know, I mean, maybe we're in't for some sort
of huge surprise here on Monday night. But you know, all of the indicators are that we have so far is that Trump is going to win this thing going away.
Well, Kyle, do we need to redefine what surprise actually means when it comes to Iowa? Because sure it would be absolutely astounding if Trump didn't win, But could the surprise actually be in the margin? How close to him is enough that even second place feels like massive news.
So the Trump campaign has noted accurately that of all the you know, contested you know, non incumbent Republican Iowa cocauses and over history, the biggest margin of victory is is twelve points, and so they're sort of setting the bar like, hey, we win by more than twelve points, that's good. I personally, don't you know if they wouldn't
buy like thirteen and fourteen. I don't think that that's some sort of impressive performance given what the polls are showing now, which is more like he's up by like thirty points. You know, what is the difference between a good performance and a bad one? I don't know, maybe that's like forty percent or something like that, which actually, you know, given the polls, he's consistently but over fifty
forty percent would seem maybe not that great. So there is you know, there are maybe there's maybe a higher bar for Trump to impress in Iowa, but if he matches the polls, he will have done that. I also think it's probably fair to treat Trump differently than you would a normal non incumbent race because he is sort of like a quasi incmbent given that he's the you know, he's aiming for a third straight Republican presidential nomination and
has already served the term as president before. So I don't know where i'd put the number necessarily, but you know, just just matching or slightly exceeding that historical you know, twelve point margin, that probably is not good enough to be impressive, and in fact, I think would probably be disappointing if it's close to that number. Again, given what the polls say.
Well, of course everyone's banking on a surprise in New Hampshire because it's New Hampshire. Of course, it's not a surprise if you're expecting it. But after Chris Christy dropped out of the race, Kyle, I wonder your thoughts on the impact it could have on Nikki Haley. We've seen polls that show Donald Trump and Haley within single digits.
This would make up the difference there, but we also heard from Christy himself, hot Mike, She's not up for this, She's going to get smoked, which Christie is right.
Look, I would not be surprised by Haley winning in New Hampshire. I think she frankly needs to win New Hampshire to really to really justify staying in the contest. Frankly, you know, her home state of South Carolina votes like a month after New Hampshire, and so you kind of enter like a little bit of a dead period. There are contests in Nevada in early February, but there's a caucus that's actually awarding the delegates that Donald Trump's probably
gonna win easily. And then there's like a beauty contest primary that Haley's competing and she's not competing for the delegates, which she'll probably win comfortably. I don't know what you really do with that. So after New Hampshire, the focus will really go go to South Carolina. But again Haley, the coalition Haley is building is kind of kind of centered on more moderate voters. You know, a lot of independence can cross over and vote in the New Hampshire primary.
It probably will and probably incline to support a candidate like her, particularly with Chris Grissey out.
Of the race.
You know, if Haley can't win there, and let's say Trump wins Iowa and New Hampshire, I don't know if there's much of a rationale for anyone else to even continue given that. You know, I guess at that point, the only real threat that Trump would be some of these legal matters he's dealing with. But he would have you know, he would have basically stopped DeSantis in Iowa and stopped Haley in New Hampshire. But again, I could
I could definitely see Haley winning New Hampshire. But that's not enough to make this thing a real horse race. I think Trump would have to lose South Carolina too in order for you Weeks to go into Super Tuesday and say, hey, this thing is really opened up.
Well, Kyle, doesn't it matter who else is in the race at that point? Do you think we could see a further thinning of the field between Iowa in New Hampshire? If Ron DeSantis can't actually get number two in Iowa, do you think that means he's out?
It could?
I mean, it's you know, it's a decision. It's up to him. Although you know, you have to look at like whether he would have the resources to continue, et cetera. But you know, he has banked everything on Iowa, and I think he you know, his polling has suffered certainly in New Hampshire. If he can't finish ahead of Haley in Iowa, he's certainly not going to finish ahead of
or in New Hampshire. So I you know, I think it might be it could potentially be curtains for DeSantis if if Iowa doesn't turnout in some sort of positive kind of way for him.
What do you make of this? I don't mean to sneak up on you with a Kyle this No Labels news that we're hearing about just in the last hour here Larry Hogan is stepping down from the No Label's board in what some see as made maybe the best indication yet then he too plans to run No Labels itself, separately being reported as in touch with allies of Chris Christie. Is this just noise or are we going to have a third party candidate?
You know, I find that difficult to handicap. Actually had not heard about the Hogan news until you just mentioned it. You know, he would be sort of the logical person to run. And you know, look, I think from the Democrats perspective, you know, a Chris Christy or a Larry Cogan heading a No Labels ticket, I mean, that's probably bad worst news for Joe Biden, it is for Donald Trump because they have appeal to the kind of like lapsed Republican voters that may more naturally be Biden voters
as opposed to Trump voters. And I had to head matchup. So you know, I think it's also possible that No Labels just just sputters out and doesn't run anyone. But you know, that's that's one of the one of the many wildcard's interesting that like the primary season is actually is not that exciting, but there's a whole lot of other stuff about this twenty twenty four election that is
exciting and interesting thing. And the potential roster of third party candidates is part of that, which is against still up in the air. And you know, these candidates would have to get BAID access or No Labels is trying to get ballid access for their person if they run someone. So that's one of the movement pieces here.
Well, there's also moving pieces in the background, Kyle Joe and I were just discussing it here in Washington. We're in this big showdown over spending. We're facing down a potential government shut down with the knowledge that the Speaker of the House, Mike Johnson, has a very close relationship with the former president. And I'm conscious that I may be overthinking it here, considering I from where I sit pay very close attention to the twenty twenty four race
and to Congress when not everyone else does. But could Trump be damaged if there is a government shut down and it's perceived as him having some influence on that, because this could be happening while people are making choices in primaries.
I doubt it in the short term. I mean, look, if we have like an entire year of chaos in the House, and maybe you have like a government shut down in late summer or in the fall, which I doubt Republicans would allow it to happen.
But I mean, who knows.
The Republican conference in the House just seems basically ungovernable. So I don't think that this stuff matters in terms of the actual twenty twenty four presidential election. I mean, look, I mean we have you know, the presidential candidates, who the nominees are, they end up becoming basically the leaders
of their respective parties. I think that a lot of the election results kind of flow from what happens in the presidential race, and so I don't think that the again, that the chaos in the House is all that meaningful. Certainly meaningful for the operation of the country though, and I guess you know see why the certainly why the markets would care about it, and why people who follow
this stuff closely would care about it. But in terms of political impact, I'd say probably not much, at least in the short term.
You wonder to what extent Donald Trump has his thumb on the scale in the House, though, Kyle, with the Speaker talking to him on the regular, you talk to him and Joe Biden apparently yesterday alone, and we're hearing so pretty loud noise from the Freedom Caucus here, and you wonder to what extent the discord is being fed by the former president.
It's quite possible. I mean, you know, the former president demands total loyalty, but he doesn't necessarily give it back in return, and you know, he's been sort of a chaos agent in the past in terms of his dealings with uh, you know, with with with with Republic, his fellow party members, and you know, in in in the House and the Senate. So you know, I doubt, I doubt that the former president is being a constructive player and trying to resolve these things and quite possibly the opposite.
Finally, Kyle, we only have about forty five seconds left. But what a shutdown make it change the odds of how many seats may flip in terms of the House majority come November, because we got to consider the down ballot here too.
Again, in the short term, I don't really think so. But again, you know, it's quite gospel that you'd have this sort of volatility continuing throughout the year, and I would think that would probably help Democrats on the margins. But again, I think we're still far away from that potentially being important. You know, there's such a churn of news and stuff that I just think these things can be easily for good, even though I don't want to
downplay they actually have clear real world importance. I just don't necessarily know if they're going to be dictating election outcomes, you know, here in January, looking ahead to November.
Well, Kyle, it's good to see a Kyle Knack at Sabaga's Crystal Ball where he's managing editor at the University of Virginia Center for Politics. We thank you as always, Kyle. Stay in touch. We'd like to talk to you once we get some actual voting to discuss. It is kind of crazy to think about that on Monday.
It'll be real, real numbers four days away.
Yeah, and we'll be there for it. The weather is another matter. We'll talk about that later this hour too, because that'll be another point of history in Iowa with Kaylee Lions. I'm Joe Matthew.
This is Bloomberg. You're listening to the Blomberg 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.
Yeah, I've really it's become a habit now, a daily thing where I'm watching the local newscast, the local weathercast specifically, but it's the local stations in Des Moines that have really attracted my attention and for them, even for them, this is going to be really bad. We've talked about the cold. Yeah, but it's getting colder.
I don't even know if we can describe this as cold. It seems like an inadequate description for temperatures of negative twenty and wind chills of they get thirty to forty degrees fahrenheit.
Mind you yes, biblical. A Wall Street Journal reporter tweets Nikki Haley talking about the weather today quote, it's going to be so cold. I don't even know what negative fifteen is. I was complaining when it was cold in Iowa in October. Are you ready for the latest? KCCI channel eight des Moines.
Snowfall them mount six to nine inches over parts of western and northern Iowa six or nine to twelve inches for places like Fort Dodge over toward Humboldt, Iowa. Falls down toward Ames and Marshalltown six to nine inches, and the metro. We're gonna be on that cuss there boat where we can higher amount tomorrow. And then the bitter cold settles in coming up on Saturday, the snow flurries.
It's possible by Saturday evening we drop below zero and we stay below zero for air temperatures all the way into Tuesday afternoon.
The whole time we're there, literally, so it's gonna be below zero tomorrow I guess by the time we get there Saturday, and it'll stay there for the duration. How are we gonna get there though, there's another snowstorm tomorrow.
I don't know. Cross your fingers. Joe, bundle up.
You mentioned something about hypothermia.
Yeah, apparently if we're outside for longer than ten.
This is for caucus goers as well.
Post Yeah, that's when hypothermia could set out, so we are not adiquately prepared. Okay, Yeah, so run.
That's basically we'll just not spend much time outside. Yeah, we'll let you know how awful it looks tomorrow, I guess, because this could impact turnout. It's not just about Joe and Kayley. 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.