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We're talking politics here in Washington. We will get back to trolley a bit later on here. Not the most inspired session, but then again, we broke through some tough technical levels on Friday, and we'll keep tabs on this. It is a tough headline to wake up to today that the markets are back to where they were the day before the election. But maybe that's because we're waiting
for news. Isn't that the point here? And we're going to have a lot of news, by the way, not only in the next twenty four hours here as lawmakers get back to town, but also from the White House as we cover both ends of Pennsylvania Avenue. It's the big farewell tour this week. It starts today Joe Biden two pm Eastern, a foreign policy address at the State Department. You'll of course be hearing about that here on Bloomberg.
The big one though, is Wednesday night. That's the actual farewell address, as it's being billed by the White House Primetime Oval Office. They're treating it like it's the real thing. And then he'll continue at Department of Defense Thursday, and we'll speak to mayors on Friday. And of course we're all winding up to the big inauguration here. It's the thirteenth of January. We're almost there. Not that lawmakers are waiting. They were meeting with Donald Trump over the weekend on
the patio at Mar A Lago. We talked to many of them leading up to these meetings last week, the different factions with different priorities, and still some questions when it comes to sequencing.
By the way, you.
Might be reassured to know the House Ways and Means Committee is actually holding its first hearing on making the Trump tax cuts permanent. So, as I said at the outset, the gears are turning. The question is exactly what will be the approach. That's why we wanted to talk to Grover Norquist, of course a long time hand in this conversation.
We're about to have it all over again with making the Trump tax cuts permanent, and mister Norquist is already talking about it from his perch at Americans for Tax Reform, roughly two blocks from where we sit here at Bloomberg.
Welcome.
It's good to see you here in Washingtonuely, you are writing in an opbed that I caught in the Las Vegas Review Journal. Unleashing growth is the headline, and you're pretty blunt about this. I don't know if you're having conversations like these with lawmakers and what their reaction is, but you say two things very clearly off the top. To delay the tax cut is to kill.
The tax cut.
But more than that, if Republicans delay the Trump tax cuts, you say, they will lose the House. This window will be open for how long.
We really need to move and get something in the next four months. And you need to date when the tax cut continuation begins to January first of this year. And we've had two times this is not work. One was Trump's first presidency, which is why he and the Republicans who were here in twenty seventeen. That bill was discussed for a year. It didn't pass until December twenty
second of twenty seventeen. It didn't take effect until January first, and twenty eighteen, and then there was strong growth, very strong economic growth in twenty nineteen. But in twenty eighteen the Republicans lost forty House seats and control of.
The House because of the lagged effect in that coal process.
Well, if you're a small businessman or a large business and you're trying to decide, do we build another building, do we build another factory, do we hire one more person or ten more people, do we get a second truck? You know, just small decisions that add up. Well, if I don't know what's happening to expensing, I think, oh wait, because spencing expensing has been weakening, And unless I know that it kicks in this year January of twenty five, why would I make a decision. Why would I do
it now instead of waiting until later. So the delay means any strengthening of the economy would show up much too late to help in the election in twenty twenty.
It also comes to just certainty, right confidence. To your point, you're talking about business owners. We talk about that a lot here too.
It's bloomberg.
We also talk about people simply making investment decisions. This market starting to teeter a little bit was a rocket ship the day after the election, and some folks do point to uncertain year when it comes to policy. You've got a debt sealing matter hanging out there, you've got tax cuts, and we don't even have a funding mechanism for the government beyond March. So when lawmakers dig in here president will be in office in just days.
What should be the sequence and how do they get to this?
I want to deal with border policy, you want to deal with tax cuts out of the gate?
Is it one bill?
It will be one bill, and the path to getting to one bill it was always obvious that it had to be one built Two bills is much too confusing and everyone would sit there wanting to jump onto Bill number one. Okay, whoever was put in numbers to criticize it, you mean, or to move to say I want my project in Bill one. Not built too right, and it'd
be very confusing. We've been working those groups that are supportive of continuing the tax cut, and the House and Senate leadership in Ways and Means and finance, Jason Smith and Senator Crapo, they've been working together for a year on this stuff. So this is an awful lot of work done and the President is having meetings now, not three months from now, with the House and Senate to move these things forward. There's a great consensus on everything
should get done. There are a few issues that where people could go one of two ways. Compromises have been been put forward seven months ago, eight months ago.
Intercontinuing, what about the Thoon argument, John Thune says, one an early win, I can give you the border within days of Donald Trump taking off. It's going to take me a couple of months to write the tax legislation. Why don't we do this now? Take the win, and then we'll come back around because we get two swings at reconciliation.
Where's the problem there?
It's not a problem, but there's a better way to do it. The President's going to put forward about one hundred executive orders on day one. Many of those deal with the border. What went wrong at the border over the last four years was all executive orders. There was no change in the law between when very few people were coming in illegally to where millions were. Those were
all decisions by the Biden administration. In effect, executive orders, decisions by the presidency and the Border Guard, Order patrol, Border patrol system.
Just undo them.
Okay, the president made the bad decision, or if you want border security, he made ones that made this order less secure. Trump just return to the status quo.
You don't have to wait for legislation, is your point. Just let him do that. Start working, start right the tax bill.
And with the tax bill, you can find money in the Defense Department in various places to rebuild the wall. The walls largely built. They just left the doors open in the last four years, so doesn't take a lot of money to get that wall back up and going to where it was a pretty secure border as Trump left the White House. So these things can happen inside the tax bill. The tax bill will have spending cuts, but also some spending on defense and the border. That
will happen very quickly. But the executive orders can happen immediately.
Spending time with Grover Norquist, who says it's one big bill, as Donald Trump would say, one big, beautiful bill when it comes to border, tax cuts and the rest of the congressional agenda. Scott Bessen's going to be on the hill this week for his confirmation.
Here.
Yes, he has sat right in the chair you're in now to try to answer questions about how this cocktail of tariffs and tax cuts does not lead to higher deficts and potentially reinflation. You've spent your entire career trying to not taxes lower, and I realized that that is your focus. Do you worry about that seeing deficits increase or you believe that revenues will rise enough by growth that somehow it offsets the loss of revenue from cuts.
The cost of government is total spending, and it's not the deficit. The deficit is the tip of the iceberg. Okay, but what sinks the Titanic is the part of the iceberg under the water. I understand total government spending is what causes inflation, is what slows economic growth. So we want two things. We want spending to be as low
as possible, and that means reforming entitlements. We were within one vote then in the last Trump presidency when John McCain voted no on what would have block granted to the States Medicate that was a tremendous savings over a decade. Simply by saying it will grow with inflation, but not further than not faster than that. Huge says to be made in block granting the welfare programs, not social Security, not care, but the welfare programs. And there's more than
one hundred various means tested programs. Reagan block granted about one hundred of them when he came in, a lot of smaller ones. So that's a huge savings you can sell Fanny and Freddie. I mean there are a number of things. One of the things they want to do with more energy, at leasting more properties. There's a lot of cash to be earned that can pay for budget.
So you see some flexibility here.
I just want to make sure we understand before we're done growth, growth the most understand the.
Most important way to keep the deficit down.
A strung I read you, will the deficit be lower after four years of Donald Trump than it is now?
I think so, yeah, does it need to be?
It should be, and it can be both. We need more spending cuts and we need more growth.
Come talk to us when the debate gets real the ways it means that we start having a real conversation about this bill. Grover Norquist with us here on Bloomberg. Americans for Tax Reform.
Stay with us.
You're listening to the Blue m Burk Balance of Power podcasts. Catch us live weekdays at noon and five pm. He's durn on Apple Cockley and Android Auto with 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.
Back down here to Washington, where many members of the House Republican Conference has made their way back after spending some time in Florida this weekend. The Salt Republicans, as we've mentioned, having an audience with the President elect at mar A Lago, but others as well, Joe, including members of say, the House Freedom Caucus, basically groups of people within the conference who are going to have to try to find a way to compromise on.
Issues like specifically tax balls.
Must have been quite a crowd. I mean, I always wonder they get their own cabin when they go.
When that many people are there, because you had Main Street partnership there too, Cayley, and a lot of the questions that we've been asking you have not been answered in terms of sequencing, and that's where we want to start with Zach Cohen ahead of our conversation with Nicole Malia Takus, who's going to join us live from Capitol Hill in just a moment. Zach sets the baseline at Bluemberg Tax. Zach, you're a full time Salt reporter. We
want to know what's happening there. But also in the greater picture, will the Republican leadership in the House pursue one big bill here as we've been asking, or will take longer to write this tax bill, including elements like salt that are making things a bit more complicated than they were in twenty seventeen.
Right because before they can figure out what or how they're going to change the tax God, they got to figure out when there's business ongoing debate where you have House Republicans mostly on one side, set of Republicans on the other talking about do we include an extension of the twenty seventeen tax cuts that were pass during the first Trump administration and a first reconciliation bill along with things like board security and energy, military and defense spending,
or do we punt on that issue and deal with it later in the year. Congress is known to really only work when it's under a deadline. At the deadline that they're keeping in mind is the end of this calendar year when vas swats of the twenty seventeen tax cuts of job ZACH do expire. And so there's some thought that we compare that end of your deadline with some of the cuts that E La musk If vec Bamaswami are putting together at at DOGE as one way to offset the multi trillion dollar tax cut that would
be extended over the next ten years. I Republicans do indeed have the votes in bote, the House and the Senate to do just that. They have to work through some of the trickier issues like things like the state and local tax deduction, which I'm sure we'll talk about. Things like, you know, do they make any changes to the corporate tax rate? What do they do about these
expiring business provisions. These are all the things that are going to have to figure out in the next couple of months, and there's a difference of opinion on exactly how much time it would take to actually work out those details.
Well, so, when it comes to salt, specifically ZACH, which obviously right now is capped at ten thousand dollars, was there a firm discussion of numbers as we understand it at mar A Lago or was it just you know, hey, making it clear that lawmakers from New York and California and a handful of other districts want to see this done, and Donald Trump was like, Okay, yeah, let's think about.
It some more.
Yeah.
I think Trump on a very regular basis said he wants to try to lift the cap. I think eliminating it entirely is unlikely, just given how expensive that would be. But Trump, even during the presidential campaign said we should do something about the salt cap, which we should point out was included in twenty seventeen tax bill that he himself signed as a way to offset some of the other changes they have bade to the task Code to try to keep the trice tag down, and so they
come up with a couple of different ideas. The Trump economic advisors have talked about doubling the current salt cap
from ten thousand to twenty thousand dollars. That's something that people like Congressman Mike Lawler and Nickeol Loota, both from New York, have said is insufficient to helping some of their constituents, who, while making six figures is certainly as you know, in New York is basically a middle class lifestyle given how expensive how expensive it is to live there, and so Lawler has said, let's bost it to one hundred thousand dollars single filers, two hundred thousand for married couples.
That might be a bit of a stretch, so they may end up somewhere in the middle. I was talking to your next guest, Congressman Malia Takis over the week. She said they talked about indexing the salt caps, similar to how the standard deduction increases year over year without congressional action to account for inflation. So there's a bunch of different ideas on the table. The question is how do you get the two hundred and eighteen votes in the House and fifty one votes in the Senate off.
The MAT's little harder in the House, especially when you have fiscal hawks who are trying to keep the price tag down. Even Lindsey Graham, the incoming chairman of the Budget Committee from South Carolina, was saying, I don't want to be subsidizing high tax states places like New York, New Jersey, California, and so they're going to have to figure out some way to make both ends of their publican conference work and if they can, going to Democrats and try to work out some bi parisan deal.
All right, Bloomberg Tax Congress reporter Zach Cohen, thank you so much for the reporting and also for the perfect ties ahead to our next guest who is joining us now live from Capitol Hill. Republican Congressoman Nicole mally Takis of New York, who Zach just mentioned, is with us now here on Bloomberg TV and Radio. Congresswoman, welcome back to Balance of Power. You've obviously made it back safely
to Washington from mar A Lago. I know you told Zach and have expressed that really this is about getting to two hundred and eighteen and whatever number it is on SALT that can get the requisite votes. But is there a floor and a ceiling, some kind of parameter around what that number actually realistically could look like you could share with us.
Yeah.
Look, I think your reporter got it just right. At the low end, it would be doubling it from ten to twenty. On the high end, it would be one hundred thousand for individual I quite frankly think that is a little too high, in particular if we're looking to target middle class families. I think it could be really
more between the twenty and the sixty range. And this is just me knowing all the information I know as a member of Ways and Means and looking at the big piece, big picture, the big puzzle, knowing all the other pieces that need to fit into this equation. I think the idea here is to get some type of relief from the federal level. Four our constituents in New York, New Jersey, California, because their mayors and governors, quite frankly,
are abusing them, keep increasing their taxes. The property tax levy in New York City goes up year after year after year. It's the only municipality in the state that does not have a two percent.
Cap, and that's unfortunate.
This problem could obviously be resolved by our mayor and governor if they were just to freeze property taxes or lower the personal income tax rate, as President Trump did in TCJA in twenty seventeen.
But you have to remember there's the other pieces. You have the standard deduction that was doubled. You had the child tax credit that was doubled.
You had the Alternative minimum tax which went away completely for the middle class, which was really crushing them, and it actually prevented them from benefiting from salt.
So we can't have the AMT come back as part of this.
I've made that very clear, and so we're working with all these different pieces, not to mention the corporate stuff and the R and D tax credit and bonus appreciation, so many.
Other pieces that are going to be part of this package.
Fascinating Congresswoman that you're also exploring some more creative ideas here. The reporting that we're reading coming out of the mar A Lago conference quotes you to suggest maybe we increase the deduction. If your state freezes or lowers the tax rate, maybe the deduction goes even higher. Now, this is getting interesting, and I wonder what the reaction that you got was from your fellow lawmakers, from the President elect, and maybe even from Democrats who you've floated this to.
Well.
I think my colleagues actually really like that idea, because part of the problem is we want to give relief.
But if we give.
Taxpayers money back with one hand, and the governor and mayor come along and just raise taxes and take it with the other, that's a problem and the taxpayer ends up losing at the end of the day, and so how do we incentivize, how do we change.
Behavior, How do we hold the.
Mayors and the governors that are treating taxpayers like ATMs accountable?
And so we have to see if this can legally be done. That's the big question.
Can we let's say double this deduction and then say maybe it goes up, it.
Triples or quadruples if your state take.
Action to freeze put a cap on property taxes and freeze income taxes or reduce them. You know, these are ideas that we're tossing around. I've also said, maybe we want to limit the property tax portion of this deduction for primary residences, right so that could actually target the
people that truly needed. I think there's a lot of different ideas being floated around, and as a member of the Ways and Means Committee, we are obviously crunching the numbers, but we have to wait until the Budgets Committee gives us the top line and the reconciliation instructions to really figure.
Out how to put together this Rubik's cube. And that's you know.
In the meantime, we're doing the math and trying to figure out what our options are and we'll go from there.
Well as we talk about the kind of structure of reconciliation Congressoman, was there consensus built at mar A Lago this week und around the one bill or two idea? Is this still a live debate? What messaging was you? Were you, you and your colleagues delivering to the president elect? And what was he saying in return?
I think the majority of our membership, certainly all the members of the Houseways and Means Committee, want to see one bill. And if you saw what happened in the last week of session right last year, that's the reason why we need one bill. It's hard to build consensus when you have such a slim majority. And the last time they did two reconciliation bills, it was under Gingridge in nineteen ninety seven and he had a much larger majority.
You have to remember TCJA there were thirteen no Republican votes. We don't have that luxury.
We have one. We have a majority of one. So we have to build consensus, and I think.
The best way to do that is to put the different pieces that members care about together. The border security measures, the energy production measures.
Those will satisfy some of the border states.
The energy producing states, and you have the salt states, get something with our salt relief. And overall we support as a conference, we support tax cuts, we support border security, we support American energy dominance. So let's just drill down and negotiate with each other on those finer details of each of these and get one bill passed.
So we get to the two eighteen.
If you kick tax to the end of the year in a separate package, I very much fear that it will expire and America will see four trillion dollars in tax increases. We cannot afford to allow that to happen. It's too risky to do it later on in the year and not upfront with this first package.
Well, Congresswoman, that's as long as we've ever gone in a conversation. I think before you mentioned the border, So
let's get to it. There is a thought out there, and Grover Norquist suggested it a little bit earlier in the broadcast that Donald Trump's plans to issue some one hundred executive orders, many of them aimed at the border, will give you breathing room to actually craft a single bill that would include border security and the tax issues that we're talking about Is that the way you're looking at this. Let the President handle the border out of
the gate. We'll back them up with legislation when it's done being written here and our debate concludes on the hill.
Yeah. Well, you know, the Senate has made the argument that we need.
To do too, because we want to do the border wins early on. There's a way we can achieve that. First, as you say, the President can issue the executive orders, and he will do that to undo the policies of the Biden administration. But we've also passed legislation. Just the other day, we passed the Lake and Riley Act, which would require those who commit certain crimes to be detained and deported.
And we're working.
Through pieces of legislation that can get bipartisan support and the sixty votes needed in the Senate to get that out the door and put it on the president's desk for when he arrives next week. So I think we can score those border victories early and then really when it comes to the reconciliation, it has to have a fiscal implication, right, So we can't necessarily do Lake and Riley Act in reconciliation, but we can increase border patrol.
We can increase technology, we can put some things in there that would help with the deportation of criminals, and maybe adding judges to hear these asylum cases faster.
So I think we can achieve.
Both things here. And the bottom line is a president really just wants to get it done. I don't think he cares at the end of the day on whether it's one or two. I think he just wants to get the policies done that will get America back on track. We've made the case that it should be one bill, and I think he sees the merit of one bill. As I said, considering what happened at the end of last year where we had so much back and forth within our conference.
Well and part of that saga at the end of last year congressoman was a question over whether the debt ceiling should be lifted or abolished entirely before Trump takes office. How was that interplaying in the conversations this weekend. When is that going to happen, in what legislation and what could potentially be the Trade Office we've seen reporting that it might be debt ceiling in exchange for wildfire relief in California.
Well, you know, interestingly enough, a lot of members believe that the debt limit piece of this is probably the most complicated, because that's where you see the most friction in our conference. There are some members who never voted to increase the debt limit, and we have to understand that the debt limit is money that's already been spent that we're paying the bill. We don't want to prevent a default. So the responsible thing to do is to address that debt limit.
And do it before June.
I think we're just going to look for any vehicle where we can get it. It could be with disaster aid, it could be within the reconciliation, it could be within the government funding mechanism, the you know, the federal budget. So we'll see, we'll see what vehicle where we can get it. But it does need to be addressed before June. The sooner we can do it, the better. Let's get it out of the way. It's just the most contentious piece. And then and then get to the other real policy
issues that the Americans people have been waiting for. Right They want to get this economy back on track. They want to see the tax cuts extended and enhanced. They want to see our border secure and people who are here illegally committing crimes deported, and they want to see us lower those energy costs and produce more energy domestically.
Congresswoman, with regard to the border, while you're with us here in our remaining couple of moments, a warning from Immigrations and custom enforcement. Without emergency funding, they could be forced to release tens of thousands of immigrants, including some deemed to be public safety threats. We've talked a lot about the number of migrants being held in hotels, for instance, in places like New York City. Are you in touch
with ICE and with border patrol on this matter? Would Congress be there to prevent the release of people dangerous to Americans?
Well, I have not heard about this.
If there's an issue with the funding, because the funding is there for the next to the end of March, I think what they need to do is actually find a way to shift the funding so instead of housing individuals and transporting individuals into America's cities, were actually deporting them and repatriating them. And if there are committing crimes and they don't have legitimate asylum claims, I think that
we met with Tom Homan about this. I mean, particularly New York City has been destroyed, you know, by havoc being wreaked by illegal immigrants, gang members, drug traffickers, people who are bad, dangerous people. They've they've committed murder, they've committed robberies, they've committed all sorts of crimes in our city, and we need to get them out of our city
and our country. And so the question really has been how does the incoming administration legally Is there a way for them to shift some of the funny mondy money that has actually been used to provide incentives and house these individuals and give them free services to actually.
Remove them from our country.
And that's I think what the incoming administration is gonna have to address when they get there next week.
From New York's eleventh District, Nicole Malia Taka is great to see you, Congress women. We thank you giving us a little report from mar A Lago there, Kaylee, interesting to consider some of the options that lawmakers are facing or we're going to have more with our political panel on that matter. Straight Head Jeanie Shanzano and Chapin Fay, our Democrat and Republican, respectively, trying to find the way forward as lawmakers get back to town.
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Next Monday will not be an ordinary debut of the treaty week because it will be an inauguration, which happens to fall on Martin Luther King Junior Day this year, Joe. But that does mean we are in the final week here of the Biden administration before it becomes a Trump administration, and many of the individuals who intend to join that
administration have been nominated by the President elect. Are going to have a busy week leading up to the inauguration as they get ready to sit and be questioned drilled by lawmakers in the Senate beginning tomorrow with the Defense Secretary nominee Pete Hegsea.
More stressful than others, but quite a number here, Kaylee. We're all paying attention to the more dramatic potentials and some of the more bold faces here, but we're talking about thirteen nominees before eleven different committees.
This is going to be an extremely busy week.
The one everyone's talking about Pete Hegseth Department of Defense, that's tomorrow, but much more where that came from. We'll see Pam Bondi and Marco Rubio on Wednesday, right, AG and State Department. John Ratcliffe is CIA that same day, and on Thursday we'll see the man tap for Treasury, Scott bessen That's just the tip of the iceberg that
We've got a lot more where these come from. I suspect we're going to hear a lot about Pete Hegseth tomorrow, no matter what happens, as long as Elizabeth Warren shows up.
Yeah, she has a long list of questions for him as he spaced scrutiny when it comes to a number of his views and of course past allegations of sexual assault that he denies. She has a long list of questions for Scott Bessant, though, did you see that?
Just longer than PE's currently one page?
I mean, and some of them are like question, sub bullet, second sub bullet, triple sub bullet. He's going to have a lot to answer, not just in the hearing, but probably in writing.
Gives you a.
Chance to rehearse maybe some answers. Let's get our panel together. They're going to be watching all of this, and I do wonder if any of these could take on a different course based on the Q and A that we see in here this week. Gdi Shanzeno is with us, of course, our democratic analyst, political science professor at Iona University and Bloomberg Politics contributors.
She's joined by Republican.
Analyst Chapein Faye, founder Lighthouse Public Affairs.
Great to have both of you with us.
Chapin, Pete Hegseth surely knows that he's going to have some difficult questions. To Kaylie's point, Elizabeth Warren has already sent her seventy two questions to him. We're going to be hearing from Kirsten, jillibrand Joni Ernst. Who will you be watching tomorrow that could potentially change the course of this nomination.
We'll I'll be watching Pete Hegseth and how he handles it.
You know, this is their job and their prerogative to ask questions and tough questions of the president's nominees and in today's you know, can it change course from what we think absolutely in any second if you watch, you know, if you are steeped in you know, social media, congressional hearings like I am, you see all the time he gets served by these viral moments.
You know, AOC has many of them.
Senator Hawley has a lot of them on the constrict side, Senator Kennedy where they're sort of holding Biden administration.
Folks to the feet of the fire.
I think you'll see a lot of that in reverse once these hearings start, and it's up to the nominees to have been prepared, both of the nominees and their teams right to prepare, to be prepared and anticipate any difficult question and come up with legitimate, truthful answers to it. And if a nominee cannot do that, then that's a minimum threshold question. And if they can't do that, then they shouldn't be Trump's candidate nominee.
So we'll see all that play out.
I think the vast majority of them are going to have tough questions, but ultimately nominated. I think President Trump was elected with a mandate and he has, as was the House and Congress and the Senate, so as they do their jobs rightly. So they should keep in mind that the President should get a little latitude on.
Some of these nominees.
As long as there's not huge issues in their background, they should be confirmed. But again, that's what the process is for, and if things come out and it changes the nature of the hearing, then so be it.
That's on the nominees to be able to handle that.
Well.
So, Genie, obviously we have to see the hearing play out tomorrow. But it does seem that the feeling in Washington is that Hegset's chances are significantly better than they were in those first weeks after his nomination was announced. And if he is able to get through, does that still leave a door open for Republicans to potentially tank another nominee like Tulci Gabbard for example, or maybe RFK Junior.
It certainly does. But the reality is I looked back today, Kayla, you know, I love to do this. Since George Bush here, there have only been thirteen nominees who have not gotten through, and twelve of those were with drawn. Only one, John Tower was rejected. So Historically, you make it to this hearing unless you implode, or to Chapin's point, something comes out unexpected. You're going to make it through. And Republicans
are going to see that through. So you know what I'm going to be watching, certainly the nominees themselves heg Seth is our marquee person tomorrow, but also how Democrats perform and what they are setting up in terms of addressing the takeover of the Republicans of DC, and how they're going to do a Trump two point zero in a way that's different than they did in twenty sixteen, which was quite frankly not particularly useful for the party.
Well, so, Jennie, what will be Elizabeth Warren's mission tomorrow, Kirsten Gillibrand's mission? Are they trying to on a singular level, trying to derail these nominations or is it just about getting all the poison out, getting all the bad stuff out there so people can read about it.
You know, I think what they're going to do, Elizabeth Warren you mentioned, you know some of the Democrats. We're going to be watching Alyssa Slotkin, there's some other cy Duckworth, All of these folks are going to be trying to do what Chuck Schumer talked about privately, which is to poke holes strategically in Republican governance so that going forward, when things aren't working well for Republicans, if that happens, they can point back and say, look it, we noted this.
So I think that's what we're going to see. And again it depends on what happens in the hearing. But you know, somebody like Pete Hegseth, he's a smart guy. He's practicing, we know that, and he's good in front of both the camera and he's good at taking questions. So I find it hard to believe there's going to be a viral moment on his part, unless, of course, Democrats succeed and get somebody to testify against him, which so far we haven't gotten any inclination is going to happen.
Well, given our audience here on Bloomberg TV and Radio Shape, and I was particularly interested not just in Senator Warren's questions for Hegseth, but the laundry list of questions she has for the Treasury Secretary nominee Scott Besson, including this entire section on tariffs, including what tariffs do you.
Intend to impose on what timeline.
What products? What is the goal of this is raising revenue? Is it to pay for the tax cuts? Do you think Scott Besson can actually answer any of these questions? Honestly, when everybody is saying, oh, tariffs might just be a negotiating tactic for Donald Trump, no one really knows what he's actually going to pursue once in office.
I do think he can answer the questions.
I think he's going to be prepared and he's going to be totally aligned with what the President wants to do. So if it is a negotiating tactic, right, you'll see I think him allographing some of that, because it is. He is in a tight tough position, as you rightly
point out. But what I would say, what I'd also like to say is, I think what we're also going to see in Gi mentioned this somewhat, This is also a time for Democrats to establish themselves as sort of the chief antagonizer, right of the Democratic Party or the chief of the opposition. And so you're gonna see, you know, you mentioned Senator Jillibrand and Senator Warren when it comes to the Treasury that's something she cared very much about.
You're gonna see them auditioning for who's going to be the thorn in Trump's side, who the media is going to go to, you know how, you know how is Senator Schumer uh sort of running uh the opposition party, right, And you're gonna see all that. I think you're gonna see that even more so for Genie's point, I think I agree right that you know a lot of these nominees,
including except are going to get through. So you're gonna see the Democrats actually auditioning right to steal the limelight or to or to or to or to suck to you know, everything out out of the rooks like the air at the room.
So I think that's what you're also going to see.
But back to your original question about the Treasury sectary again, this is this is Senator Warren. This is what she cares about, and she has every right to ask tough
questions and she should. And I do think this is a good issue, uh to put the you know these nominee, this nominee particularly through his bases because it's something the general PubL I don't think has a really tight grasp on how tariffs work, why President Trump wants to use them in the way that he's using them, right, So I think there's a little confusion here that she can run into and get hurt, you know, if you're going to try and get.
Her narrative to take hold through these hearings. So I do think you're going to see, you.
Know, pay attention to a lot of who's asking the questions and what questions are being asked.
All right, Shape and Fay and Jeanie Shanzino our political panel today, helping us keep tabs of everything happening here in Washington.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm. He's durn on Apple, Cockley and Android Auto with 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.
Here in Washington, we are marking the beginning of the end for the Biden administration. This is the final week that Joe Biden will spend in the Oval Office, and he is using it in part to try to cement his legacy through farewell addresses. There will be a big one on Wednesday evening primetime eight pm Eastern from the
Oval Office. But before that, he'll be speaking actually at the top of the next hour two pm Eastern time on this Monday at the State Department, specifically on his foreign policy legacy, Joe, and certainly on that front, there is no shortage of events of circumstances geopolitically over the last four years for him to talk about.
Well, that's for sure.
It is hard to believe that a week from right now we'll be watching a parade. Yeah, imagine that a new president Donald Trump's worn in will be the president of the United States. They'll be in their luncheon preparing to go back down to the other round of Pennsylvania Avenue to actually move into the White House. And what will happen, to your point between now and then is going to be remarkable. We'll go through this altogether, or
there are some things we cannot predict. We know there's one they're hoping for in this White House, and that's a ceasefire in Gaza. Of course, Donald Trump has visions potentially in his mind as well as they intendem try to negotiate a ceasefire to see the release upon of hostages upon his swearing in.
Yeah, as Donald Trump has maintained that he would like to see the hostages have been released by inauguration day, or's promise pretty serious consequences. So it's kind of the story of an outgoing and income president incoming president trying at the same time to achieve the same means on the same timeline.
The shades of Carter and Reagan spent some time earlier in the Bureau today listening to Jake Sullivan, the President's National security advisor. He sat down in conversation with Bloomberg's Jenny Leonard to talk about this very matter.
Here's what he said.
I think the pressure is building for Hamas to come to yes. I think Israel also has achieved a huge amount of its military objectives in Gaza, and therefore they are in a position to be able to say yes. So there is a distinct possibility that we can get this deal done this week before President Biden leaves office. But as you say, we've been here before, We've been close before and haven't gotten across the finish line. So
I can't make any promises or predictions. But just this morning I was on the phone with Brett McGirk, who has been basically camped out in Doha. He's been there for more than a week working the details within the framework President Biden set out last year. I spoke also this morning with the Cuty Prime Minister and with one of the key Israeli negotiators, and there is a general sense that this is moving in the right direction. The question now over the next short while is can Hamas
get to yes? Can we get to a final agreement, and then can we begin implementing in the coming days. It's there for the taking. So the question is now can we all collectively seize the moment and make this happen?
Vice President elect JD. Van said yesterday it will probably get done a day or two before you leave office. Do deadlines like this specific deadlines help or hurt the negotiations? And does rhetoric like the one employed by President elect Donald Trump is it useful to get Hamas to yes?
I think deadlines can serve two functions in a negotiation. When they're imposed by one party, frequently a deadline can make the other party think, hey, if I just wait till the last minute, they'll give me everything. If they're imposed by the mediators. If the Americans, the Cutteries, the Egyptians all basically say let's focus the mining, get this thing done, I think they can have a positive impact.
And so I think the pressure building here towards the end of President Biden's term has been considerable and that that will help contribute to a positive outcome if we can generate that final yes from both sides. At the same time. This has been a circumstance in which President Biden gave direction shortly after the election to me, to Brett and to others on our team. Work closely with
the incoming team. Make sure we have a united front, we have a coordinated message, and we have tried to do that over the course of the last several weeks, as has the Trump team that's coming in. I think this is not a partisan issue. This is an American issue to get our hostages out and all of the hostages out, bring the fighting to an end, and surge
humanitarian assistants into Gaza. And I think it's how a transition should operate, and it's consistent with President Biden's worldview about his stewardship of this country.
US National Security Advisor Jake Sullivan in conversation with Bloomberg's Jenny Leonard in our offices here in Washington, d C.
Earlier today. Again, there is a week left to go of this.
Current administration before inauguration, and we'll see if a deal can be reached over the course of the.
Next I guess less than seven days.
We want to extend this conversation further as we await the foreign policy speech of President Biden at the State Department just a few minutes from now. In tern of retired for Star General Wesley Clark, former Supreme Allied Commander for Europe and of course was a presidential candidate in
two thousand and four. General, thank you so much for being here on balance of power when we consider the Middle East, specifically in the kind of bookending of the Biden administration with an Afghanistan withdrawal and the summer of twenty twenty one, now at the end at war in Gaza that has been going on for well more than a year, how much would being able to secure the release of the hostages to reach this agreement that has long been fought for right at the end of the
administration define the president's legacy when it comes to the Middle East.
Well, I think the president, if he can get the hostages released, I think there will be a great legacy for President Biden to leave. But I don't think there's any assurance that you're going to get the hostages released,
and we don't know how many are still alive. The problem is that from the beginning, from the October seventh attack on, it's always been the Hamas strategy to draw Israel in, to implicate the United States in this, and to use Israel's military force against Savillians because Hamas is using them as human shields, as moral shields, as a way of protecting its own path forward, and Hamas sought
to involve Iran and his blaw in its conflict. It's failed, but there's still diehards in a moss So who's in charge and will they give in? I hope they do.
Is it a help or a hindrance to have two parallel lines of communication underway right now? Generally this White House is clearly engaged and has been for months with regard to a ceasefire, But having mar A Lago involved as well means what.
Well, it's confusing, It's difficult. It depends really on what's going on on the inside that we don't have any access to. If there's really teamwork between the two groups, then that's fine. But in previous decades there hasn't been that teamwork. There's been jostling, there's been a partisan one upsmanship, there's been efforts to stall things and get credit for it and so forth from transitions of administrations, and so we just don't know how that's really going to work
out here. I'm sure if the hostages are released of tomorrow a President Biden will be very proud of it. But if they're released two weeks from now, President Trump will certainly take credit for it. And yet surely some of that credit belongs to President Biden, so there'd be some Joscelyn going on, even if they're working in the closest cooperation.
Well, so, when we consider what we've already seen general, which of course has been the destruction of vast parts of Gaza, obviously of Lebanon, as well as that front opened up between Israel and Hesbela, we have seen an overturning of Syrian dictator Bashar al Assad's regime, and still have questions about what the future will look like there can you just define the situation in the Middle East that Donald Trump will be inheriting and what decisions he
is going to have to make in fairly short order after taking the oath of office that could define the way the region moves forward in the US's relationship with it.
Situation in the Middle East is really best defined by the weakness of Iran for the first time in decades. Iran is substantially weakened by the failure of his Blah and also by the Israeli air strikes and the fact that the Russians haven't really come in and replaced all those air defenses yet so far as we know. Iran's also weakened because it's ballistic missiles and so forth really didn't have that much impact even when they launched them
in the hundreds, and so Iran is weak. This is the moment to change the balance of power in the Middle East. Lebanon needs to be freed from the grip of his Belah. Syria needs to become an independent country. Hopefully HTS is not going to revert to a pur Islamist state that's hostiled to its neighbors. Turkey is reaching out and something has to be done with respect to our Kurdish allies and the fifty so terrorists and family members that are being held in prisons and camps by
the Syrian Democratic forces. If terrorists are released, we're going to have a huge problem, just like what happened in Afghanistan when we released the Taliban prisoners as part of the peace deal that was negotiated by President Trump. So I think that I think President Trump has an historic opportunity. The window is open to go to Iran with an ultimatum, really is cough up the nuclear stuff, do it now
or face the consequences. The Iranian population is restive, they're ready for a change in regime by all accounts, we don't know what that would bring exactly. And the Iyatolas and the Mullahs there are in an historically weak position. So this is the overriding element that President Trump has to look at in dealing with the Middle East, Siria, Lebanon, Gaza. They're actually secondary to getting to the source of the trouble, which is Iran.
General Clark, the individual's Donald Trump is tapped to make up his national security team, will begin their confirmation hearings tomorrow by way of Pete Hegseth, of course, his nominee to be the next Secretary of Defense. And I'm sure you're aware of the conversation and the concerns that many senators, many Democratic senators it seems, have over his nomination. He has said, with regard to women serving in combat, that he is in fact open to this idea and supports
women who are serving in uniform. He is also pledged to stop drinking alcohol if confirmed to be the next Secretary of Defense. With what you know about that job, which is more than most Americans, I wonder if that should be enough to win the support of senators.
You know, he's he's served in uniform. He knows something about the army. He's been there, he's been on deployments, he's been in the National Guard. He's got a lot of characteristics. A Princeton graduate, he's not a dumb guy. He's got a lot of talent. So and he's loyal to President Trump or President elect Trump, and so all these things weigh in his favor. The senators are going to have to decide whether the other elements in his
background are disqualifying in some way. But I think on balance it always goes to the President elect, he gets his choice. So I think it's going to be difficult. No matter what some Democratic senators say about him and his attitudes, what he's written in books and so forth, I think it's going to be difficult to deny him
the nomination. And I would expect that when he gets in and he's confronted with the enormities of that job, the responsibilities, the details that have to be worked, the teamwork that's required in there, that a lot of the statements he made and so forth are going to go by the board. It's going to be a Secretary of Defense. It's got important responsibilities. Got to focus on that job.
General.
We just have about ninety seconds left here, but I would imagine when the President speaks a few minutes from now, he will be touching on NATO expanding under his watch, as well as the support his administration has provided for Ukraine. But a week from now, when Donald Trump takes office, can NATO and Ukraine be as confident the US will still be there to support.
I don't think Ukraine is confident yet, and they don't know what kind of support the United States will provide. But I will say this, the United States has provided good support, but not exclusive support to Ukraine, and the European Allies have actually provided more military hardware than the United States, and the money that's gone in it's gone to replenish our own arsenals. We could have done a lot more, in my view, we should have done a
lot more. And I hope that Trump administration will understand that if you want to cut a good deal to preserve and protect Ukraine in a sustainable way, you have to continue to support it. You have to have a strong front and that means some connection to NATO for security guarantees for Ukraine.
General, it's great to have you back, Wesley Clark, former Supreme Allied Commander for Europe. Of course, General Wesley Clark on Bloomberg TV and Radio. I'm Joe Matthew alongside Kaylee Lines in Washington, will be keeping tabs on what Joe Biden says in his address to the State Department.
Coming up shortly with what will.
Essentially be a series of farewell addresses, culminating with the big one, the Oval Office address in primetime to the American public on Wednesday, one that we'll bring you here on Bloomberg TV and Radio. Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already, at Apple, Spotify, or wherever you get your podcasts, and you can find us live every weekday from Washington, DC at noontime Eastern at Bloomberg dot com.