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I'm Joe Matthew in Washington. Glad you came with us. We didn't think this would be the story that we'd be telling today. So much for the relief rally on Wall Street because they actually got it done. This is the moment all but one expert we talk to on Bloomberg said would never happen on this vote the tree hundred and thirty five then age are ninety one two thirds being in the affirmative. The rules are suspended. The bill has.
Passed, and with that objection, the motion to reconsider.
Is laid on the table. How about it? Three thirty five to ninety one. That was the House late Saturday. Next door the Senate followed up very quickly and with something like I believe thirty two minutes to spare. President Biden signed it into law. Only one person told us it would happen like this, and we're going to have time to talk about motions to vacate Ukraine funding, backroom deals and so on. But listen to Sarah Chamberlain on the twenty sixth of September on Bloomberg.
I do not think we're going to have a government shutdown.
You don't think.
I think what the Senate put out today is going to be helpful. I think the Republicans would negotiate to try to get as close to that as possible. And I think the last possible minute we are going to we're going to see a.
Lot that was on balance of power last week, myself and Anne Marie hor Duran. By the way, the reason why Sarah knows this is because she's in the room for these negotiations. The president and CEO of the Republican Main Street Partnership joins us right now. Sarah, you were correct. A lot of folks did not see this coming. How did Kevin McCarthy pull this out?
Kevin McCarthy pulled it out with a lot of help from the Republican Man Street Partnership members. Absolutely, the Republicans wanted to do this as a straight up Republican vote. They tried, they did their best. There were just some absolute holdouts. So the members of Main Street, there's seventeen of them that live in Biden's districts. Biden won their districts over overwhelmingly, so they had to make a deal.
And they had gone to Kevin and said we're gonna have to deal, and he at the last moment he did it. I was I'm sorry he did it. I'm sorry he was forced to do it his own party. But I think for the American people, it's absolutely the right thing to do.
Of course, it did take Democratic votes. That's why Matt Gates is threatening a motion to vacate. And that shouldn't come as a surprise to anyone. Before I ask you about that, are you allowing yourself a moment here, Sarah, A little I told you, So.
No, I've just kind of moved on to the next thing. I am unique because I am the CEO of an organization that has ninety members versus a pundit who talks to people and tries to gather information. I do sit in the room with the members, so I do. I kind of have an inside information. So I'm not really as good. It's just I have different insights.
Well, that's right, because you're bringing us behind the scenes here, what's the conversation about Ukraine? Because Matt Gates went to the floor today and I should let you hear his actual words. This idea of a motion to vacate, he says, will hinge on what Republicans learn about a so called secret deal on Ukraine. Here he is a short time ago on the floor of the House.
So mister Speaker, just tell us, just tell us what was in the secret Ukraine side deal. What commitments were made to President Biden to continue the spending of President Biden in exchange for doing things for President Biden. It is becoming increasingly clear who the Speaker of the House already works for. And it's not the Republican Conference.
He says, it's Joe Biden. Sarah Chamberlain, do you know anything about a secret deal on Ukraine?
I do not, and ads are I probably would know it if it existed. I just really think that's Matt Gates's talking, trying to justify potentially recalling Speaker McCarthy. But I have no knowledge of a secret deal at all.
That's important here because the matter of Ukraine will need to be dealt with, and so will this mutiny. I don't know how many folks, how many members Matt Gates has on his side here, but he has made clear he will file the motion to vacate this week. Sarah, will the Speaker survive?
So right now I believe you will. I absolutely do think you will. I have to be honest with you. I have not got an update yet on how many members will be going with Matt Gates. The thought is there's between five to seven. So if that is all there are, then Speaker McCarthy should survive. But I really want to emphasize I don't know who wants this job. I mean, it is probably the worst job in DC,
if not one of the worst in the country. So if he does, if mac Gates does succeed in recalling speaker McCarthy, who is going to step in and take this place. The country needs a speaker, The country needs to get things done. Your earlier segment talked about potential recession. We have to have the government functioning if the United States is going into a recession.
So you have it from Sarah Chamberlain, President's CEO of the Republican Main Street Partnership. Thank you for guiding us in the right direction. Sarah, We're lucky to have you and I appreciate your insights today. As Sarah refers, there's a very important story that's on the terminal that you can find yourself here. But we're going to talk about it with Mark Zandi. Why a US recession is still
more likely than a soft landing. Remember we have spoken with our analysts at Bee at Bloomberg Economics, including Anna Wong, who set a government shut down, a strike in Detroit, both of which at the time looked inevitable. One hundred dollars barrel oil and the resumption of student loan payments all come together to form a recession in this country just as we're flying into a presidential election cycle. Gladness say, Mark is with us now. The chief economists at Moody's Analytics.
Mark Zandy, many thanks for joining. It's good to see you. Mark. We avoided a shutdown. How about we start with the positive here, But there's no sense of what happens after November seventeenth. We were told that this would have corrosive effects on the economy. How worried about this? Are you still much less so?
Joe?
I think, you know, November mid November, I'd be pretty surprised at this point at the if lawmakers shut the government down. I mean, I think they realized that it's not good economics, but more importantly, it's really bad politics. And this is right before Thanksgiving and the holidays. I just don't see it. I suspect at this point they're going to come together and kind of sign on a deal that is very close to what they agree to back when they passed legislation to end the debt limit
to drama. So you know, you know, obviously things go different directions heres as we saw this weekend. But I'm feeling pretty good they were going to avoid a shutdown at this point.
Well, that's great to hear. I just listed off a bunch of other potential headwinds. For our economy though, And I wonder where your your head is on the soft landing idea. You've been allowing for this possibility since long before the markets came around on this. Now folks are feeling a little more downbeat, and the resumption of student loan payments is a big part of that. Marks something we haven't talked enough about.
Yeah, I Matt, the producer sent me the piece. I hadn't seen it before, right before this conversation. Took a look overly pessimistic in my view. You know, yeah, those are it's a scenario. Yeah, sure, I mean recession ods are high, and for the reasons that the analysis gave.
I mean, you know, obviously we've got the student loan payments kicking back in the UAW strike, We've got higher interest rates, higher oil prices, but they all kind of small potatoes, Joe, and the grand scheme of things, I mean, they add up to really something. So Q four is going to be soawt, but Q three is gagbusters. I mean I think GDP he's probably going to commit four or five percent, So you know, okay, and the economy's creating a boatloaded jobs. Businesses don't want to lay off.
They desperately don't want to do that because you know, they know on the other side of whatever this is we're experience, they're going to have problems with the holding on the labor and consumers are hanging tough. I mean, they're spending and based on the GDP revisions, I won't go down into the details, but those revisions were very positive. They suggest that consumers have a lot more extra cash than we thought they did. So yeah, I mean, you know,
recessions are real risk. You know, you look at history. If you live in a world of high inflation and a FED on the war path, you invariably end up in recession. So that's not a you know, an unreasonable forecast, but it's an unlikely one.
How about that. So well, listen, your optimism is is well, it's relative optimism, well received.
It gets some pretty bleak forecast.
I am, of course, I am, But a lot of folks think that a lot of folks have have counted out the con and you're not one of them. Mark. That's really what we're talking about here.
I mean why, I mean, the consumer is like rock solid, I mean, real consumer spending growth, the whole shooting match you know, everything is two percent ish on the nose, which is like exactly what you want, right, That's enough to keep the economy moving forward out without out of recession, but not so strong that it generates inflationary pressures. I mean, it's like, you know, you couldn't, I couldn't draw it on a piece of paper better than it's happening now.
And all the fundamentals look good, you know, jobs, unemployment, real wages are a rising, a lot of excess saving that service is low. Yeah, I mean, low income households are under pressure, no doubt about it. But middle income, high income households, their balance she's never been stronger. Stock prices are down, housing values are flat, but people are still a lot wealthier than they were when they're a lot wealthier than they were when the pandemic hit just
a few years ago. So I'm I'm hard pressed. You know, why would the consumer pack it in unless something happened now, thing's happened, right, There could be another shock. Something we're not you know that, you know, we're not for casting at this point, but so it's it's not again an unreasonable concern, but it's seems much more likely than not the consumer is going to hang in.
There is the FED done, I think.
So, I hope so, I mean, I don't think they need to raise races any further. I mean, inflation, sticking to script, is come in write in, you know, as the the shocks from the pandemic and Russian war fade, and they're increasingly the rearview mirror those. Inflation is moderating as as you would expect, and you know it's going to take another six to twelve eighteen months to get it back to target. But you know, I think that the interest rates where they are today is sufficient to
accomplish that. So and then, as I said at Q four, growth is going to be soft for all the reasons that the piece you know that you mentioned put forward. So it is going to be soft. So I think that'll be enough evidence less inflation to headed to target and slow growing economy be sufficient to forestall, you know, further rate hikes. I do think the FED has set us up for you know, much slower rate cuts when they start cutting late next year going into twenty twenty five.
But and that's one reason why long term rates are up, you know, over the last couple three weeks. But so I don't think they'll be cutting quickly, but I think that they're probably in the rate hikes are over.
Yeah, the higher for longer story gets interesting here. You're banking on a cut by the end of the year, I presume, Mark. What does that mean for mortgage rates? Have they peaked?
Yeah?
I think so.
I mean we're said, what seven point six seven seven point seven on a three year fixed that would be you know, consistent, you know, obviously with a four and a half percent ten year yield and a three innerd basis point three percentage point spread, which is very wide by historical standards for understandable reasons. So if I you know, if I'm right about the FED in growth, I think tenure treasure yields are probably close to a peak. And if they're at a peak, I think mortgage rates are
at a peak. Again, I don't think rates are going to come in fast though, We're going to be you know, higher rates for a long longer here, which means we will see home sales are already dead in the water anyway. This run up and rates isn't going to do any more damage there, but it could probably will result in some house price declients. Here, so it's been expecting that for quite some time. So I do think we'll see,
you know, some further weakness in housing. But hey, Joe, you know, the housing market, the single family housing market is the single most interest rate sensitive sector of the economy bar none. Yeah, and you know, it has held up pretty well. Surprising about in fact, housing in aggregate if you consider, you know, multi family activity has actually been effectively flat because the multi family market's been strong up to this point in time and offset the weakness
and single family. So net net housing has been basically neutral with respect to the economy, when if you're really going to go into recession, you'd expect housing to be you know, sinking housing and aggregate sinking you know, into the into the black hole.
Right. Yeah, I never had to buy a house in the eighties, but I'll wear the seventies for that man. But I'll tell you what, that seven sixth rate that you point out was the exact to the letter, the exact mortgage rate that we had the first time we bought a home in our family, and we thought it was a steal because we had heard about my god when you were growing up, they were eighteen percent. I always feel better when I talk to Mark Zandy. I
hope everyone does, the chief economist at Moody's Analytics. Thank you Mark, as always for sharing insights. We've got a lot to talk about with our panel, not just the economy, but shut down politics and what the heck happens after November seventeenth. Does Kevin McCarthy know and will he still be speaker? All that's ahead with Rick Davis and Jeanie Shanzano. I'm the fastest show in politics. 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 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.
Now that we've established the government did not shut down over the weekend, we look to the fallout here. Not only what will happen after November seventeenth, that's how long this plan goes for, but what happens to the Speaker of the House. Congressman Matt Gates made very clear on Sunday morning, following the vote on this continuing resolution that he was going for it, the motion to vacate.
I do intend to file a motion to vacate against Speaker McCarthy this week. I think we need to strip off the band aid. I think we need to move on with new leadership that can be trustworthy.
That was on ABC next Door on CBS, the Speaker Kevin McCarthy says, once again, bring it on.
He's more interested in securing TV interviews than doing something. He wanted to push us into a shutdown, even threatening his own district with all the military people there who would not be paid, only because he will wants to take this motion, So be it. Bring it on, Let's get over with it and let's start governing.
Speaking of TV interviews, we're going to be talking with Congressman Matt Gates later on today here on Bloomberg Radio and on Bloomberg TV when we get to Balance a Power, a special show we have lined up from the Hill and we'll be talking to a lot of the folks here who are making the decisions around this. And brought us to this point following weeks of on again, off again, negotiations.
Fast forward to today, Matt Gates on the floor of the House talking about a secret deal to fund Ukraine, and he says when he learns more about that deal, he'll have a better sense of who might vote for this motion to vacate.
Members of the Republican Party might vote differently on a motion to vacate if they heard what the speaker had to share with us about his secret side deal with Joe Biden on Ukraine. I'll be listening, Stay tuned.
Stay tuned. Indeed. As we assembled our panel, Genie Schanzano and Rick Davis joined Bloomberg Politics contributors off a wild weekend. Rick, I'll start with you on secret deals here, whether you think that's true or not. Sarah Chamberlain from Main Street Partnership told us earlier she's heard nothing about this, and maybe I should fill in a couple of blanks. It's
important here. This legislation that passed over the weekend includes money for disaster relief sixteen billion dollars, but no aid for Ukraine. That's expected to come up at a later time here in the appropriations process. Rick, what's Matt Gates talking about?
Yeah, look, I mean it's kind of hard to tell what he thinks is secret. The President has requested funding for the Ukraine. The Senate has included it in the various versions of the stopgap bill that they were promoting. Everyone has spoken out on this, and so to think that there's somehow, some hidden deal that's going to result in a vote in the House. You're going to get a vote in the House, Matt, and it's going to require you to get on the record for being either
putin or for Ukraine. And I don't understand what he thinks might be secret. Absolutely, there's going to be a vote on Ukraine. Aid I would point out that Mike Quigley, the one Democrat that voted against the Continued Resolution, did so because there was no funding for the Ukraine in that bill, so that everyone there expects it to happen. I don't understand what Gates thinks is not.
Going to happen. Well, And there's going to be apparently a vote on a motion to vacate as well here, Genie, probably a lot sooner than anyone gets to vote on Ukraine. The question remains, will Democrats take part in this exercise to either protect Speaker McCarthy or help to oust him. Which do you think it'll be. Yeah, I mean we.
Think there's going to be a motion to vakate. Gates was saying all weekend there would be an immediate motion to vkate. Then he goes on the floor today and no motion to vacate. So we're all sort of in waiting mode for this historic motion to vacate, if and when it ever happens. And you're right, it's gonna be in the Democrats' hands what they decide to do, and it is unclear at this point what they will decide. We heard people like Alexandria Cosio Cortes this weekend saying
she would like to vote against Kevin McCarthy. We've heard from moderate Democrats that they are more inclined to, you know, sort of stop and help end the chaos by keeping him there. But it's really gonna come down to what Hakem,
Jeffries and the leadership decide. And one interesting thing is Nancy Pelosi has said she would not vote to save McCarthy, but she will follow the leadership, so you know, but her advice to Jeffrey seems to be don't save them, and Democrats are not happy with Kevin McCarthy, not only the vote to impeach or the impeachment inquiry that he started, but going back to Donald Trump after January sixth, breaking his deal with Joe Biden, and then even on Saturday
jamming that bill through without giving them time to read through it. All of those things make them feel they can't trust him, and they may not want to work with him unless he's willing to strike a deal and make some concessions. But of course that's going to cost him support amongst Republicans. So it's really unclear at this point how he survives, except he's going to have to depend on Democrats to do that well.
And that's the point that Matt Gates was making yesterday. I find this really interesting. In his Sunday Shows interviews Rick, it was less about firing Kevin McCarthy and more about exposing him as one sympathetic to Democrats. Listen to how he put.
This, I actually think Democrats are going to bail out Kevin McCarthy. So this is an exercise to show the American people who really governs you and how that governing occurs. So I'm on a mission to change it. Where we're evaluating these bills independently. Kevin McCarthy is off making a secret deal on Ukraine as he's baiting Republicans to vote for a continuing resolution that doesn't include Ukraine.
All right, Rick, that was on ABC. He doesn't actually expect to fire Kevin McCarthy. That means that Republican votes are not there or Democrats are, which is it.
Well, his trading range for Republicans who are willing to kick out Kevin McCarthy is probably twenty to thirty votes, right, So it's not a lot of people that he needs to run around and talk to to see whether or not they're willing to exercise a emotion of vacate. So he's doing that right now. That's the reason he hasn't announced it yet, is he's talking to those twenty or thirty members saying, are you with me? Are you ready
to storm the blockade? And my guess is he's getting a lot of no's because in the sort of cooler heads of the moment, I think most of these guys who have been given Kevin a hard time realize he's probably sitting at two hundred votes for a speaker no matter what happens.
So of motion to vacate.
So it's highly unlikely that there anything's in a result other than upsetting Kevin McCarthy. And regardless of whether he uses Democratic votes or not, he'll still he'll be Speaker, He'll decide what committees you're on. He's going to decide what legislation you get to pass. So you know this, this is a gut check for those guys. I would remind everybody that they did not give Kevin McCarthy any choice.
They said no three times in a row in the week before leading up to the deadline for funding to every option they claimed to be four And so the same group that was tying him up in knots are now saying that he can't do business with the Democrats, which means that we don't want to do any business in the House of Representatives. I think the long ball here is Kevin McCarthy banking on getting stuff done. Whether he gets it with Democrats or not, is going to
be as Genie said, up to leadership. But they've now shown a big propensity to willingness to support him on this budget bill. And by the way, we've got another funding crisis coming up, you know, in the middle of November and those conversations for being had now. But when I look at this vote, three hundred and thirty five to ninety one, I'd say that's a governing majority in anybody's business.
Does it also mean that we won't shut down on November seventeenth, Genie, I don't know.
If you should bank on that. You might want to have your Thanksgiving dinner figured out in case we do. Joe Matthew, you know, I hope we do not. I hope that the next several weeks they are able to reach deals. But it was unclear. We heard Kevin McCarthy talking about tying border security to funding for Ukraine. It was unclear how that was going to work and what kind of support he could get on something like that.
We do no support for Ukraine as much as there is, or Ukraine funding, not support for Ukraine as much support as there is. It has gone down, and you even hear the Senate saying you're going to have to do a one big bill. You can't break it up. So it's unclear how he moves this forward. And the ninety he lost in his own cock on Saturday is telling. So he is going to have to rely on Democrats
for a lot of this to move forward. But the best thing he's got going for him, to Sarah's earlier point, nobody else is in the offing for this job, nobody wants it, nobody's near to eighteen votes, and so who else would there be but Kevin McCarthy.
All right, We've got a lot more to talk about with Jeanie and Rick as Gavin Newsom makes the appointment, The big announcement on who will replace Senator the late Senator Dianne Feinstein, just one of many other breaking stories that we're looking at. Here.
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 listening.
On demand wherever you get your podcasts. This was Gavin Newsom, of course, the Democratic governor of California, on the sixteenth of March twenty twenty one, asked about appointing a woman potentially for Senate here, of course, not knowing that we'd be talking about now the late Senator Dianne Feinstein, but should this opportunity arise? He was on MSNBC here, So, will.
You nominate an African American woman to restore the seat that Kamala Harris is no longer in the United States Senate? And do you have a name in mind?
I have multiple.
We have multiple names in mind.
And the answer is yes. The answer is yes, remembering, of course, that Kamala Harris had just left California to become Vice President. Fast forward to today and you have your answer. Indeed, it was yes. Gavin Knwso tweets I'm proud to announce California's new United States Senator, Lafonza Butler, who he writes, has spent her entire career fighting for women and girls and has been a fierce advocate for working people. As you'll read on the terminal, this is
the ahead of Emily's list. The funds of Butler, longtime labor leader as well ran the SEIU. As we recall some of her stylings on the podium, this was just last year, twenty twenty two. The funds of bout that.
Right now we know that right now is our time, and right now it is our turn.
It's our turn.
To build power like we've never built power before.
Connecting the abortion rights movement, with the labor movement, with the climate movement, with.
The Black Lives Matters.
Movement, with the Native American protection movement.
She will be the only black woman in the current US Senate. Let's reassemble the panel for their take. Genie Shanzino, was it the right call for Gavin Newsom?
I think it was. You know, he put himself in a bit of a buying twenty one when he made that promise. He was under pressure because of his replacement of Kamala Harris, and you know, he was facing three really beloved members of the House who are now in the race. He didn't want to tip those scales, and so to go with Butler was a smart choice. To do it quickly, to give the Democrats in the Senate
a governing majority, a smart choice. And also, I think importantly generationally, you know, Barbara Lee, certainly not happy today, was pushing for this appointment, didn't get it. But like so many Americans, people in California want a new generation of leader, and Butler does that. You know, she's in her fifties, she's energetic, she's young, she has a strong liberal record for all those things you just talked about. So it was a good move, and it allowed Newsom
to keep his promise. I think it's really important that Butler did not get talked into making a deal. She'll be a caretaker, so she could run if she decides to. I think the caughtoff would be December eighth. We'll have to watch and see if she's the fourth person in this race going in then as an incumbent senator, which does give her some advantage.
Yeah, a couple of interesting things here, Rick. She did not pledge to be a caretaker. She may well run for this seat. We'll find out about that. But she lives in the Greater Washington area. I believe Silver Spring, Maryland. Is that a problem?
No, I think they call it a carpetbagger. She's only a carpetbagger if she runs for office. Right now, she's just a good appointment, no guarantee that she'll run. K Newsom wasn't guaranteeing that she wouldn't. And I think it's kind of an interesting pick in that regard because there's obviously a big cast of characters on the Democratic side who want that nomination. You know, Adam shiff Barbaraly, Katie Porter.
They've all been raising a lot of money and they're ready to roll and introduce somebody new to the equation. I think, really destabilize it. So I wouldn't be surprised if she does become a caretaker. Kind of makes sense to bring someone from out of state who doesn't have a political lineage in California.
What do you make of this genie? And what does Adam Shift do when there's a call to have a woman of color in this seat? So many people were looking at him for a glide path to victory. How about now?
Yeah, I mean, you know, I think Shift definitely will stay in the race. As we look at the polls, now, you know, we do see that Shift and Porter are in the lead. Again, it's still early. Barbara Lee is behind. She's also behind when it comes to fundraising, we understand. So Porter and Shift really have the advantage from that perspective.
But to your point, there is a lot of there are a lot of people in California who would like to see an African American woman in that seat, and that does vode better for somebody like Lee or Butler if she does decide to enter this race. And you know, those are concerns that Schiff has to keep in mind. That said, he's a very popular member of the House delegation from California, and I think given his polling and fundraising, he stays in this race. It's an open primary in California.
That's another interesting twist on this that's going to make it a race to watch, so something to really see out there, and of course, whoever wins can if they serve the people well, be there thirty forty years depending on their age, and if they're able to you know, really serve the constituents well and get re elected. That's what we've seen in California in the past, so a very very powerful seat.
Is this shaping up to be the most expensive Senate race of the cycle? Rick, Yeah, it certainly could be.
I mean, there are some other hut states that could generate a lot of expense, but California, definitely, with the crazy primary that got the general election, will be a walkthrough for whoever the Democratic nomination is because it's become a one party state. But that does raise the ante when it comes to winning that primary. So yeah, I would anticipate this being a hugely expensive state, especially as more and more people get into this primary, including potentially Butler.
I guess it seems to me it's the story in the end, Genie that you can't deny is Gavin Newsom rising. We only have a minute left. He's going to be one of the president's chief surrogates if he's not drafted into a presidential election cycle. He's the man to debate Ron DeSantis. Apparently now this he's spending every day on the front page lately.
He really is, and you know, pooh poohing. I was at least these Republican debates. I'm really anxious to see the debate you just mentioned between DeSantis and Newsom. They're a new generation of potential leaders from both sides of the aisle.
Yeah, I'm kind of looking forward to that, Rick, how about you. This is one that we might actually want to sit down and watch them more closely.
It's got to be better than these two previous Republican debates that have been real scheezers. So yeah, I'm looking forward to that too.
With Rick Davis and Gdi Shanzano. I'm Joe Matthew in Washington. We've got a lot more to follow today. The government is still open. This is Bloomberg. You're listening to The Bloomberg Sound on podcast. Catch the program live weekdays at one Eastern.
On Bloomberg Radio, the tune in app, Bloomberg dot Com.
And the Bloomberg Business App.
You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.
Look who I found? Kaylee Lines is with us, and I've just got to stop down because we are real people here. Sometimes in the throes of this whole wonky thing about the government shutting down and what might come next. Charlie Pellett just said it. Did you see the images from the sphere last weekend?
Yeah?
In Las Vegas?
Pretty cool?
Oh my god, we thought the outside of this thing was cool. Producer James saw it and was blown away, like me, this is like, so you two is in residence there, residence see there, And I guess that's why we haven't had a chance. It's like the first concert there, so yeah, can we do a remote live remote?
Oh you're a great idea, but the show right on the stage the managers.
Yeah, I've got to see this sometimes. All right, So Vegas bound, when's the Nevada Caucus again find out James, Well, we've got a few things to talk about here. We thought we'd be doing a shutdown show today. We figured we'd be two days into a shutdown. The government is still open. YEP. No one's still exactly sure how that'll happen so fast to the point where the President, with I believe thirty two minutes left, managed to put pen to paper and sign this thing in a law.
A buzzer beater, I believe that is what they can show. Yes, and yeah, we're not shut down. We will stay that way until November seventeenth, which is maybe when we do this entire song and dance over again. My questions are, between now and the seventeenth of November, will we see actually something bipartisan coming together in terms of those twelve appropriation bills they're still going to need to be reconciled
between the House and the Senate. And also by that time, will Kevin McCarthy still be Speaker.
Of the House. All huge questions, did we simply prolong the shutdown? And will Kevin McCarthy have the gavel to find out? Both of those remain unanswered. Matt Gates did speak from the floor earlier today, but no motion. As I said earlier, here's how he put this. It's about a secret deal, a secret Ukraine deal. They want to find out about that before they vote. He has questions, so I got that about right here.
He is members of the Republican Party might vote differently on a motion to vacate if they heard what the Speaker had to share with us about his secret side deal with Joe Biden on Ukraine. I'll be listening, stay tuned.
I still don't get what the secret side deal is though, because they didn't get money for Ukraine, right.
I think what he's alleging is that there was some agreement that if they passed a continuing resolution, they'll come back around.
With the Ukraine vote, right, which has not yet happened, and.
The administration still wants.
It absolutely yes, and there is I think majority support for it, which is interesting here, no such deal. According to Sarah Chamberlain we spoke with about an hour ago Republican Main Street Partnership. She's the president, she was the only one who predicted this. Here she is on the twenty sixth of September, with this unbalance of power. Sarah Chamberlain on whether the government would shut down or not.
I do not think we're going to have a government shutdown.
You don't think we're not government down.
I think what the Senate put out today is going to be helpful. I think the Republicans would negotiate to try to get as close to that as possible. And I think the last possible minute we are going to we're going to sum.
Last That's exactly how it went. Called it, That's exactly how it went.
Yeah.
Uh, I wonder if Mick saw that coming. We've been talking to Mick mulvaney about this thing because we knew it was weeks in the making. YEP, A slow motion train wreck is what it felt like. Mick mulvaaney, what do you think about this last minute turn here?
No, you're being the mean to be Joe. You know, I didn't see that one. I was with everybody else that was going to shut down over the weekend.
So well, yeah, but I mean, what, so you woke up Saturday though, and that something was in the water. What changed?
I don't know. I got the impression because I was there all last week that this really was last minute, that something happened at the last minute that changed Kevin's mind and decided this was a better way to go forward. I don't think it was the Senate passing a deal. I thought he would really go into shutdown for a couple of days. Peven might have shut down of less than fourteen days is really politically it hurts, but there's no real application in the real world because everybody gets paid.
Right If people say, well, you don't get paid to go to work, you know, did you guys get paid today? Probably not. You're working today doesn't mean you're not. You're working for no pay. You're not gonna get paid to your next pay here. So I thought there'd be a short period of shutdown that is wrong. Be curious to see if this was just delaying the inevitable, if there's some larger deals cooking. I might have back to DC right now to see if I can find out.
Well, we look forward to hearing what you find out. But we had been talking about this. Mick is kind of a binary choice for Speaker McCarthy. Either he allows the government to shut down or he doesn't. He acts to avert it and then risks his job. And aren't we seeing the latter play out now? As a result of his actions this weekend.
You know, starting to come around to the idea that maybe Matt Gates is crazy and that this is really about his This the fact you're talking about him. He was on all the news shows over the weekend, He's been on TV today. He says he's going to file emotion. Then he goes to the to the well today to speak and everybody covers it. It might just be a big PR stunt, and I maybe it is that the outcome of the shutdown and the r have nothing to do with whether not Matt Gates is going to file
his motion. He might do it one way or the other regardless. So the real question is successful There's always folks seeking PR in Washington, d C. The question is are they, you know, are they successful accomplishing what they want to accomplish. I keep coming back to what you and I have talked about before, which is who else in their right mind wants the job? Who else could
get the job? There's a short list of people. I think Matt Gates mentioned Tom Cole, who I'd like, but they said he's not a fiscal conservative, and Tom Emmer, who would never take the job. I mean, who in their right mind would want to take the speakership under these circumstances when they could be the next one to having to deal with Matt Gates on the Sunday Talk Show. So I think you saw that in Kevin's attitude last week about just bring the motion, you know, get the
games over. I don't think that was his showing frustration. I think that was him doing the math and realizing that he's pretty secure because nobody else can win, and even if they could, they wouldn't want it.
Well, Matt Gates said yesterday morning in one of his several Sunday morning interviews that it wasn't necessarily about firing Kevin McCarthy, that he didn't necessarily have the votes because Democrats would come to his defense. Just to get into this more specifically, Mick, does he have the Republican votes? First question?
Two?
Separately, would Democrats otherwise come to his defense?
And I was reading some comments this morning in the press and there were lines like I wouldn't follow Matt Gates into a steakhouse and this is all about just Matt Gates getting clicks and running for governor, And those were comments from Democrats. So if that's the case, look that the support for Kevin has always been strong within his party. Never Kevin group was between five and fifteen, depending upon what vote you were looking at and so forth.
So that Kevin would support within the Republicans is critical. And Matt, I guess, is assuming that every Democrat would vote against him. I'm sure he's thought through the process here in mind. He said over the weekend he would file the motion this week. That's an important choice because politicians love to tell you the partial truth, of partial truth and nothing but the partial truth. And you could
file this motion anytime and not call it up. So in theory, Matt could could file it today and not ask that it'd be heard, and that would satisfy his promise to file it this week. There's all sorts of wrinkles here. I think the bottom line is that he doesn't have the votes to get Karthy kicked out of office, and he knows it.
Well.
It's going to come down to the issue of the Democrats, obviously. And I saw a tweet from of all people, Marjorie Taylor Green earlier. She posted a long threader. I guess it technically was an ex post. That's what we call them now. Mick and she was talking about how she thinks emotion to vacate is a mistake in part because it gives leverage to the Democrats. I'm paraphrasing her words here, but what do you think about that? Would a motion to vacate just give all the power to hawking Jefferies?
Well, what I guess, because keep in mind what would happen. Let's walk through it. I know this is inside baseball, but that's what the show's about. Right, you file the motion, you bring up the motion, there's immediately a motion to table. That's not the substance of the motion. So you're not voting right then to vacate the chair. You're voting to delay indefinitely the vote to vacate the chair. That's a procedural motion. And every single Democrat could vote to either
table the motion or simply abstain. Under both of those circumstances, the motion would fail and Kevin would still be the speaker, and the Democrats could look themselves in the eye and say they never voted for Kevin McCarthy for speaker. So you have to sort of walk through the process. And I think that's what Matt is Finally, realizing is that this has been great to sort of get a lot of attention, but if you want to kick the speaker out,
it can be really, really hard to do it. Don't discount the fact that it's easy for the Democrats to say, Look, I don't like Kevin McCarthy, but I don't think I want to play to Matt Gates's hand and bring Congress grinding to a halt. When we've got a forty five day cr looming over our heads, why don't we deal with funding the government and maybe later we can talk about the speakership, But right now, the most important thing is funding the government going forward.
Well, he says he's going to keep bringing them up. If it fails, Mick, he's going to do it again and again and again, maybe fifteen times, like we saw in the rounds of voting for Kevin McCarthy to become speaker. Does that create fatigue each time he files this motion potentially, or does it work to paralyze business in the House while we're trying to figure out how to avoid a shutdown?
You know there's another possibility, which is it puts him at great risk. Remember, in the background of all of this is this ethics investigation that was started under the Democrat leadership. And I will be the first to tell you that ethics investigations are extremely politicized. As an extremely low bar, it's easy sort to weaponize ethics investigations. But there is an ethnics investigation going on right now against
Matt Gates, now led by the Republicans. If that committee was to come back and find that in some type of violation of the ethics rules, that could lead to a motion to kick him out of Congress, it doesn't seem like he's making very many friends if those if there are Democrats who as saying that this is nothing more than a pr stunt and that they don't want to do anything to help Matt Gates, you can't imagine that the Republicans a very interested in keeping him around
much either. So this could actually backfire on him if the ethics investigation goes badly, I could get ugly quick.
Yeah, I am just anticipating more dramas if things weren't already dramatic enough. Just as we reflect on this saga between Matt Gates and Speaker Carthy that may or may not end this week. Because even if he's dealt a blow. He says, He'll continue to bring this up. How close we got to the edge in terms of the government shutting down? Is this house in order? Is this just literally what you and me and Joe are going to be talking about each and every week. A House of
Representatives that is barely functioning. I mean, do you see this changing?
It was always going to be tight anyway, Kayley, Right, because the margins are so tight. Keep in mind that, right, Democrats, only when Nancy Pelosi was in charge, she had a very small margin, and she was only ever able to pass things that had unanimous support because of it. Kevin is in the same boat. He's only ever going to be able to manage to pass anything that has unified Republican support because any handful of his members could shiftwreck a piece of legislation. So my guess is the same
as it was in the previous Congress. The stuff that has to get past is going to get passed. That means the NBAA is going to get passed, the FAA reauthorization is going to get passed, and the government's going to get funded in one shape or another. I don't think this is going to be a time we're talking about far reaching legislation. We're talking about proactive type of things.
This is going to be sort of waiting to the next election to see to see what the voters who the voter sent to Washington.
Well, so what's your crystal ball, say Mick mulvany, November seventeenth, does the government close or open?
You know what, I'm gun shy now because I got this wrong. I guess I take something.
I don't blame you. I wouldn't answer any of my questions either.
Yeah, I still think. I still think that it helps Kevin a little bit with the extreme right wing of his party. The freedom of cogguss people people like me. Okay, if you shut if the government goes into shutdown for a brief period of time, we don't like to hear things like if we don't do this, people aren't going to get paid. That's not factually accurate. If you close until for more than fourteen days, people don't get paid.
But when you start using Democrat talking points to make your argument, that can rub the right wing of the party the wrong way. So I think, you know, Kevin lost more votes than he wanted to. He lost ninety votes in the cr Keep in mind, it was an easy note vote for a lot of people because I knew it was going to pass. So I think Kevin's got a little bit of work to do with his right wing of his party. But I think he's got
forty five days to do it. I'm still putting the chances to shut down above seventy five percent in mid November.
Whoa wow, And then we're going to roll into Thanksgiving and it'll be weeks right, And if.
That happens, Yeah, Merry Christmas to all and to all a good night, Mack. I just had to smile to myself a little bit when he's talked about Freedom Caucus people being like you. Do you really think they're still like you? I heard a lot of talk on Capitol Hill about these conservatives not voting for conservative policies.
Oh no, keep on.
I think there's a new fact, there's a new faction now that the anarchist wing is different than the Freedom Coock ex fact, I don't even think Matt Gates is in the Freedom Caucus. Of course they don't publish the list, but you know, I saw Ken Buck the other day. Ken's a member of the Freedom Coccers at least he was when I was there. He's a very reasonable guy.
What did he say?
He said, Look, we need to pass these appropriation bills, at least vote on them. And if we can vote on all twelve, appropriation builds an I'll vote on a CR That's a reasonable Conservative position to take, and it's something that leadership can work with. Again, the Freedom Clarkers were designed to be the Conservatives that would play play hardball but could work with each other at everybody.
At the end of the.
Day, that group is still there, and that's the group I think that Kevin, we'll be able to build some build some capital with over the next couple of weeks.
Unreal. At least we know we're still alive here. It reminds us that we're alive.
Man.
How about the sphere in Las Vegas? Are you going? Did you see what that looked like over the weekend?
And I don't want you guys to talk it up too much because I'm trying to get tickets in November and that the sales out. I'm not even able to do that, So I don't think anybody should.
All right, we'll meet you there. How about that? Mick mulvaney we won't tell anyone. Boy, It's only Monday, Kaylee, I don't even know what to say here. I know chaos Is that what you said? Chaos rains. I'm Joe Matthew with Kaylee Lions in Washington. This is Bloomberg. Thanks
for listening to the Sound on podcast. Make sure to subscribe if you haven't all read 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