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The mission with has been laid out for the incoming presuming she's confirmed Secretary of Education Linda McMahon, and it has nothing to do with wrestling. His promise, of course, to dismantle the department, to get rid of the Department of Education and quote unquote send it back to the States is something that we want to explore with someone
who has run the department. As always, we try to bring you practitioners, people with experience, voices of experience here on Bloomberg, which is why we're glad to have Arnie Duncan with us today.
He was the US Secretary of Education in the Obama administration.
He's now managing partner at Emerson Collective, and mister Secretary, is great to have you back on Bloomberg. I appreciate the time, and I'm glad to have a couple of moments with you because we do have some questions, and it's clear to us that most Americans don't really have a great sense of what the Department of Education does. So if it were in fact remove or quote unquote sent back to the States, what would families, what would students lose?
Well, first of all, I think it's almost impossible that he's going to eliminate the Department of Education. I honestly think that's just another empty campaign promise. And the fact, as you know, that the vast majority of funding kid to twelve actually comes from the States and locally in local our communities and districts. So send it back to the States. That's where the action already is. But your questions are good. One, what does the department actually do?
And I'll give you a couple of examples. It works very, very hard to make sure you know, hundreds of thousands, millions of young children have access to high quality pre K and getting our babies off to a great starter is arguably the most important thing we can do. On the CAD to twelve side. Lots of funding for children with special needs, children with disabilities, that's desperately important, seven
point five million children. Lots of funding for children who live below the poverty line at the higher education side obviously does a tremendous amount to make college more accessible and more affordable. So sort of whether it's from babies too, you know, folks in college. Department of Education plays a critical role, and to remove opportunity from children from families obviously makes no sense to me. Whatsoever.
What would it mean for funding for disabled students?
Secretary, Well, it's you know, against seven point five million children with disabilities, and last time I checked, those are children whose families some vote Democratics, some vote Republican. It just doesn't matter. And to see that funding disappear. To make sure that children now have access to a free and fair public education. That did not used to be the case. Many local districts used to discriminate and keep
children with disabilities out of their public schools. It took the federal Department of Education and took the an invention at the federal level to make sure children had that access. To take that away, that's not going to fly with parents. That's not hurt children or hurt families. Honestly, it hurt
their publican party. So you know, my best advice to them would be to not even think about doing anything to hurt our most vulnerable children, whether the children with disabilities, children special needs, children who live below the pobby line. Those are the kids that need the best education we can revive them. They don't need something less than that.
Mister Secretary, I hate to interrupt you, but we have some breaking news that I need to mention.
I'd love for you to just stand by for.
One moment as I tell you and our audience that we have news on the former Congressman Matt Gates, who is apparently withdrawing his name from consideration to be the next Attorney General. Matt Gates on the ex profile, I had excellent meetings with senators yesterday, He writes that he appreciates their thoughtful feedback incredible support. While the momentum was strong, it is clear, Matt Gates writes, quote my confirmation was unfairly becoming a distraction to the critical work of the
Trump vance transition. He says there's no time to waste on a needlessly protracted Washington's scuffle. Therefore withdrawing my name from consideration to serve as Attorney General. He says Trump's DOJ must be in place and ready on day one at twelve, twenty seven pm Eastern Time. Matt Gates, the former congressman he resigned his seat for this opportunity, is no longer in the running to be the attorney general.
We're gonna have a lot more on this with our political panel, Rick Davis and G. D. Shanzano, or with us coming up here as we spend time with Arnie Duncan, the former Secretary of Education. You can weigh in on that. By the way, Arnie, I don't know if you choose to, but you've been through the confirmation process and there's been a lot of questions about some of the names that
have been brought forth. Does this tell you anything about the senators who are going to make the decision have been actually considering their next move here to see Matt Gates drop out this quickly, Well.
That obviously had to happen, and unfortunately he and frankly so many other potential cabinet nominees by President Trump on one commonality. One common theme is that many of them have allegations of sexual abuse and being sexual predators. And for me, it's just mind boggling. It's stunning that folks of this character or lack thereof are being considered a cabinet post, so that was the right thing to do. He didn't. He never had a chance. And hopefully again
maybe they'll pick somebody worse. And you don't know what's going to happen here, but to have someone who has broken so many laws that just preyed upon young girls having him somehow be the Attorney General of the United States, it boggles the mind.
Well, instant reaction from Arnie Duncan.
What do you remember from that experience walking the halls of the Senate meeting with senators? What happens when you go into these offices for the sit down.
Yeah, that's a great question, and that's what's so said to me. What I, honestly, you know, feel is that what present like Trump and others are trying to do is really to weaponize and politicize education. And I always say education should be the ultimate bipartisan issue or non
partisan issue. There's nothing left or right or Republican a Democrat about more babies having access to pre K and more kids reading at grade level, and raising high school graduation rates and trying to lead the world in college completion. So I worked with all of my Republican colleagues, UH
spent time with them, visited their communities. I think my confirmation, I think it was a unanimous and was felt very grateful that I had that kind of bipartisan support because I think people understood that there was nothing political about me or about my mission to give kids a better chance at life. And somehow we have totally lost that. It doesn't mean we don't have legitimate differences in terms
of policy disagreements. You're always going to have that. But I appreciated the chance to work with my republic and colleagues, congressmen, senators, governors. The confirmation process was definitely harrowe, and I was a new kid, new to DC and new to the ways, but was treated beyond fairly, thoughtfully, with consideration, and I tried to return that level of respect to the folks I worked with.
I remember that very well as a matter of fact. And you were kind to come visit us when I was working in satellite radio for one of your first town hall conversations. And how your life must have changed, and how the lives of all of these nominees will change, I can't begin to imagine. But while we have a
couple of minutes less left with you. I want to drill down a little bit more on what we were talking about, because while we did hear promises to eliminate the department, you don't seem to buy that, and I don't think Congress will either. We have some direction from the America First Policy Institute that has proposed changes on behalf of the Trump transition team, including stopping schools from quote promoting inaccurate and unpatriotic concepts unquote about American history
surrounding institutionalized racism. This is critical race theory. I presume they're referring to secretary. What would that mean by the direction of a Trump run Department of Education?
Right, and again, I just have to repeat myself. I hate the weaponization. I hate to the politicization of anything happening to two of education because it's so critical to our nation. What they do is they attack any three letter acronyms. So call it CRT, call it DEI call it SEL. They attack that. Those aren't the issues that people are worried about. What are the real issues. We have tens of millions of children who are very far
behind academically coming out of the pandemic. We have to help them catch up as fast as we can through high doses tutoring. We have kids that are productally appsent who haven't come back to school. We have to go find them, knocking doors, bring them in. We need to attract and retain the best teachers we can. This is a very tough time to be in education. We have to continue to raise high school graduation rates because if you drop out of high school today, you're basically condemned
to poverty and social failure. There are no good jobs out there for you. We have to educate our way to the better economy. We have to continue to make college more accessible and affordable. Those are the kinds of real issues that touch real parents and real children and real communities that whoever leads to the Department of Education should be focused on, not these distractions. They sort of manufacture fear about things that don't make sense instead of
spending time on things that do. And if you talk to parents, what are parents worried about today? They're worried about their children's mental health, they're worried about bullying in schools, and they're worried about school shootings. And whether you attack the department or just Manthelm Department do whatever. That has nothing to do with helping parents and helping children be successful. Vast majority of parents in America they don't care. They
could care less about the Department of Education. They care about their local school. They care passionately about their child. That's where the focus has to be, not on these political, made up, divisive issues. Really is disharm It's so troubling to me.
Well, I really appreciate your honesty and answering these questions. Lastly, what do you think of Linda McMahon at the top of the agency. There's no reason to believe that she will do all the things that Donald Trump suggests. But you've got someone with no background in education, remembering, of course, you ran the school system in Chicago before you had that job.
Yeah, I guess my bigger concern and obviously I don't know her, have never met her. But my biggest concern is that if you look at a number of his cabinet nominees, including starting with Matt Gates, these are not people who anybody can trust. And I really worry that he is very intentionally trying to create distrust of all institutions. He's done that with the media. He's done that with science, He's doing that with his cabinet nominees, trying to create
distrust in our own government. I worry he's trying to create distrust in our neighborhood schools, and that, unfortunately, is what authoritarian leader do is they try and sow distrust in any institution and become the only source of knowledge, the only source of truth. So again, I've never met her, don't have any sense. Obviously, she has no background to
do this job. The story was that she wanted to be the Commerce secretary, but the guy who he picked to do that gave him more money, so this was her consolation prize. I just hope she comes in, listens to children, listens to teachers, listens to parents, and does the right thing to help America. I always say our military is our best defense, but a great education system
is our best offense. I truly hope we don't lose the plot here because the consequences for our children, families, and nation would be extraordinary, extraordinarily serious.
Spoken from someone who's run the Department of Education. Arnie duncan appreciate your time very much. With Breaking News today from Washington, the former Congressman Matt Gates has withdrawn his name from consideration to be the next Attorney General. We'll have more from our panel next, Rick and Jenior on the way here on Bloomberg.
You're listening to the Bloomberg Balance of Power podcast kens just live weekdays at noon Eastern on Applecarplay and enroun Oo 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.
We do have a big breaker here and it's a redhead on the terminal. Matt Gates is out, of course. It's a Twitter announcement or X as we now call it elon Musk's platform. Brings us the news again. Matt Gates says he had excellent meetings with senators yesterday, but he's become a distraction.
Quote.
It is clear that my confirmation was unfairly becoming a distraction to the critical work of the Trump vance transition.
He says, no time to waste on a.
Needlessly protracted Washington's scuffle. And the scuffle was already well underway. It was at this time yesterday and we were talking about the Ethics Committee in the US House meeting at an undisclosed location to vote on whether to release its report into Matt Gates and the salacious allegations against him that he has denied. No resolution, no agreement, split down the middle. Report still under wraps, but there's now a Democratic led effort in the US House to have this
made public. Sean Caston who was with us just two days ago, Democrat from Illinois, that's some pretty strong words about Matt Gates and Donald Trump in our conversation.
Has brought a privileged resolution to the floor.
Easy for me to say that will force a vote, a full House vote on whether to make the ethics report public. Now that starts the clock. You remember how this works. We walk out here on balance of power on a two day countdown, So that means it's going to happen after Thanksgiving. Lawmakers will come back, they will vote on this. But maybe now it doesn't matter. We talked to by the way, no fan of Matt Gates.
The Congressman from New York, Mike Lawler, Republican, talked to us just ahead of the news of Mack Gates dropping out, just to get a sense of where people's heads were. This is a Republican again talking. Here's Congressman Lawler.
President Trump is certainly entitled as president elect to nominate whoever he sees fit to serve in that role, and the Senate obviously has the process by which to confirm. I stand by everything I've ever said about Matt Gates. I don't waiver in that belief. Do I think he's the right person? No, but ultimately that will be a decision by the Senate.
Well not anymore. Let's assemble our political panel.
Jeanie Shanzano is with a senior Democracy fellow, Center for the Study of the Presidency in Congress, Bloomberg Politics contributor, Democratic analyst, And I'm glad to say that Rick Davis is back with us today, Republican strategist, Bloomberg Politics contributor and partner at Stone Court Capital.
Rick. This was a quick one.
I don't know how this compares in history, but the withdrawal came within days of Matt Gates being announced.
What do you make of this development?
I think the key thing is he withdraws within twenty four hours after his meeting in the Senate yesterday, and we can only speculate that it obviously didn't go according to his plan. I think there was plenty of senators, probably more than he would need, to reject his confirmation, express serious reservations about his fitness for office, and I think that he took that literally and didn't want to
walk the plank. Senators were saying things like this is going to be much worse than the Kavanaugh hearings, which we all remember were sort of out of control screaming fest. So rather than put himself through that and wind up without a job, I think he's taken the best route and withdrawn. Now we haven't heard that last of Matt Gates. I mean, he withdrew from the House of Representatives last Wednesday, and now he needs a job. So it'll be interesting to see what Trump team comes up with next.
Does need a job, and I think they're going to need a senator in Florida if Marco Rubio is confirmed as head of the state Department. Jeanie, these must have been some pretty rough meetings yesterday. Unlet's Matt Gaye's got some phone calls last night? Or are you among those who think that this whole thing was a setup to begin with to get him out of whatever the Ethics Committee found in their investigation.
No, you know, I have no evidence to suggest this was a setup. It seems to be in keeping with the way Trump operates. And you know, to me, this entire thing, if it wasn't bad enough with it in the last few hours, as we heard that, you know, he's doing things like transporting women to New York City, going to see Pretty Women on Broadway, you know, the ultimate show and movie about you know, a hooker with a heart of gold, and he's paying these women on Venmo.
I mean it just it jumped the shark so long ago it became outrageous to think he could have survived in this contest, or that Republicans would would have wanted to put this thing out in the public. But you know, Rick is onto something. He needs a job, right He can skirt Senate confirmation if they put him in the White House. But don't forget he was elected to the House of Representatives. He only resigned from the seat he currently holds. He can move himself right back into the
House of Representatives. And you know he's a flame thrower, so he may not mind so much because as of now, we know so much of what was in that report already. If Ethics decides to pick it up again, he could be there to make republicans lives miserable. So he's got a lot of options. And it's certainly not the last time we've heard of Matt Gates.
Wow, a lot there from Genie. We just heard from Donald Trump. Truth social I greatly appreciate the recent efforts. I'm reading directly from his post of Matt Gates and seeking approval to be Attorney General. Donald Trump writes he was doing very well, but at the same time did not want to be a distraction for the administration, for which he has much respect. Matt has a wonderful future. Donald Trump says, I look forward to watching all of
the great things he will do. Does that sound like somebody who wants to bring Gates into the White House?
Rick Well, I think he has already made that pretty clear that he wanted him in the cabinet. There are plenty of sub cabinet level jobs that won't get the scrutiny that attorney general would have brought on to him. So yeah, I don't think they're going to just cut him loose. Frankly, he's probably more dangerous to Donald Trump without a job in the administration than he is with one. You know, that way they can at least keep track
of what he's up to. But you mentioned it earlier, there is going to be a vacancy, you know, in the United States Senate from Florida. You know that's certainly not out of the realm of possibilities that Matt Gates would show up in that same caucus that just beat him up yesterday. Won't be the first Senator that comes up there with some wounds, but it would be certainly a rock thrown against the glass of the Republican caucus in the Senate if he winds up A colleague.
Wow, Jeanie, this has taken the light off of Pete Hegseth. Today Hegseeth, the Secretary of Defense nominee is actually walking the halls of the Senate meeting with senators today as MATC.
Gates did yesterday.
And I look, I don't know about the timing here, but it's just last night that a police report came out from Monterey, California about his experience with a woman in twenty seventeen who accused him of sexual assault.
It goes further than that.
Genie, and I'm sure you've read this. The records release show the woman told an emergency room nurse that she may have been drugged and was then assaulted by a man she later identified as Pete. Hegseth, where are we going with this nomination? What are these meetings today?
You know he had he was in those meetings today. The report is very damning. He said something that at least caught my attention today speaking to reporters, when he was asked about that report, he said something like, as far as the media is concerned, I have been cleared. And it was that prefaces about as far as the media is concerned. That is very strange way to preface that. Of course, he wasn't He wasn't cleared. He just was not charged in with this. And he did then pay
off this woman. And you know, the question I think for Donald Trump and the transition team here once again is number one, did he tell them about this or did he pull the wool over their eyes? You know, it's one thing if he is not honest with say viewers on Fox News for those years he's on there. But it's another thing if he didn't tell the transition team.
Who of course, has put their own hands tied behind their back by not using the FBI to investigate and to vet these folks, So you know, it's all part of that. But I think the big thing about Pete Hegseth, even more damning if you can say that are equally damning, is his absolute lack of qualifications to run this department
by any stretch of the imagination. And that's true of many of these nominees, but Pete Hegseth and Matt Gates take the cake for that, and that's what I think Democrats need to focus on.
Well, it's it's crazy we're talking about this.
I even get a special background for it if you're with us on YouTube. Rick, So look, I'm running out of questions for you guys here. Yes, we have the police report, but we have something else. Maybe I should say it. We have someone else, Rick, someone actually I think you know named Jony Ernst. Pete Hegseth says women should not be allowed in combat. There are going to be some Republicans, including Jony Ernst, a combat veteran on the Judiciary panel, who have a problem with that approach.
Rick.
What is more challenging to heg Seth's confirmation the police report, which by the way, he denies the allegations, or his position, for instance, on women in combat.
Well, I think you acdically made to point Joe, it's his past position. You know, he wouldn't be the first Cabinet point e to go to his confirmation hearing and do a little bit of flip flopping. I was at a national security conference yesterday and this was addressed by a lot of the four stars that were there, and their point was, we can be genderblind and if you are ready for the job, you should fill it. And I wouldn't be surprised that that's the comments that he makes.
If he gets as far as getting a confirmation hearing, it won't be just Joni Ernzt going after him on these issues. This is a bipartisan approach to the military that has been frankly rewarded by enhancing our security with women in combat, and he's not likely to hold onto that stream if he wants to get through confirmation unscathed.
As we spend time.
With Rick and Jeannie our signature panel here, if you're with us on YouTube today, I'm now in the upside down. Oh no, look, we're back in Washington, Jennie, what's your take on this. The police report or the position on women in combat create a greater challenge to the nominee for sectif.
Can I have a third choice of all of the above and more. You know, you mentioned Jonie Ernst, and it's a great example. Let's look at Tammy Duckworth. She is a double amputee VET, and she is going to face this man who has said in the past, and we'll have to hear what he says if he actually gets to confirmation hearings that women shouldn't serve in combat. I wonder how that's going to go over with Senator Duckworth.
And you know, he can claim that these positions are in the past, so he will have to defend those. If he decides to waffle on them and change his mind, he's going to have to defend that. But there's far
more where that is. And I go back to the fact that Pete Worth, hegseth Rather, for all of his military service, has never ever shown the ability to run an organization as big as the Department of Defense in terms of the budget, in terms of the personnel, and so the qualifications issue alone is one that has to be addressed in addition to all these other things. And this is what's so concerning to so many people in the defense area, is the fact that he has absolutely no background in this.
Genie Shanzeno and Rick Davis, our signature panel.
You're listening to the Bloomberg Balance of Power podcast Ketch just live weekdays at noon Eastern on Apocrplay and then Froud Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
We want to get more on this now as we dissect what exactly has happened here and what it means, and turn to our signature political panel. Genie Shanzeno is what that. She's senior Democracy Fellow at the Center for the Study of the Presidency and Congress alongside Stone Court Capital partner Rick Davis. Theyre a Democrat and Republican analyst, respectively. Rick, I would love to hear from you here, just on timing.
While we all knew the writing might be on the wall with us, when it looked like it was going to be a steep uphill climb for Gates to be confirmed, he was just on Capitol Hill yesterday with the Vice president elect JD. Vance trying to fight the fight here. Why give it up when November is not even over.
Yeah, it was pretty precipitous.
We can only speculate that the meeting with the senators was not positive. If you saw Lindsey Graham's reaction coming out of the out of the Capitol last night, he was not particularly happy. And of course he would be the chairman of the Judiciary committee that would process that hearing in his committee. So I think he is a telling person who was by the way, up until the
end of yesterday strongly supporting Matt Gates and confirmations. So he's another one who's probably been injured by this since he leaned in so hard on it. The reality is it's a little unusual because also Donald Trump was making phone calls to senators, which is not an unusual into itself, but you would have thought he'd want to see how that meeting took place before he weighed in directly with the senators on that committee. So i'd say set back
for Team Trump on their transition. They're going to have to fall back. I have no doubt that they were up until this announcement fully prepared to charge ahead with his confirmation, and now they're going to have to fall back and figure out who else to put up Gudi.
There was a democratic led effort, I should say, is one, because it's still underway under privileged resolution to have a full House vote on whether to release formally publicly the Ethics Committee report into Matt Gates. Is there any point in pursuing that? As the Democrat on our panel, do you still want that to be made public?
I don't think there's a rush to do it. Certainly, the committee is going to meet again next week on the fifth, if they keep to that schedule, and you know, I think it's important that they do work together and respect the rules of the House, and so I don't think there's any real reason to rush that out. But again,
it depends on what happens with Matt Gates next. Where does he go, you know, does he fight Laura Trump to become Senator of Florida, Does he come back to the House as you were talking to Wendy about, does he get into the White House, you know, skirting confirmation by the Senate. But I would say, you know, for all of Trump's bravado in this process, and his attempts to try to skirt around the confirmation process and talk
about recess appointments and those kinds of things. It is to the credit of the Senate that whatever happened, they stood up and the GOP in the Senate and apparently were at least able to commit some gates that this was a no go. And that is a win for James Madison. So here here to James Madison for giving us these checks and balances, because it is a win for him and for all of us.
Well.
It might also be a win for Senator John Foon, the incoming Majority leader Rick, who was going to have to navigate what could have been a really tricky situation with this confirmation. And I wonder if this now opens a window for instead scrutiny and perhaps a little bit of pushback on the president elects from the majority in the Senate in regard to other nominees, thinking here Pete Hegseth or Tulca Gabbert.
Yeah, there seems to be a realization in mar Lago that these things could inure to the detriment of the president elect.
So pulling the plug this early.
On met Gates was I think a surprise to all, and I'm sure they are monitoring the media and the Senator's reactions to other controversial cabinet picks that you've just described.
So I think this is TBD.
The good news about the Senate is they weren't the ones who had to pull the plug on Matt Gates. Certainly some in the caucus weren't happy with this. They made themselves known yesterday, probably enough to thwart the nomination if it came to a floor vote. But the reality is they were able to see his nomination pulled by his withdrawal without actually having to spend any political capital themselves,
so they have plenty charged up the majority. Leader Thune is indicated that this process will move forward, different from some early indications that there might be a mass recess appointment of the cabinet.
So we're learning as we go along with this.
New Trump cabinet, and it seems to be more balanced with the Senate than I think many people many observers thought it might be.
It seems we're learning more about Pete Hegseth is well, Genie, and I wonder your thoughts on how this breaking news about Matt Gates, the reaction he apparently got in the Senate yesterday might inform what happens to Donald Trump's nominee for Defense secretary. It was just last night, interesting timing that a police report was made public. As we've been discussing about accusations by a woman that heg Seth, she
says sectually assaulted her. There is some new information in here, as the record show the woman told an emergency room nurse that she may have been drugged that night. This is something we were looking at in a vacuum until this Matt Gates headline broke today. What could this mean for Pete Hegseth.
You know, I think it is a reflection of the inadequate vetting that has gone on here, particularly in the case of Pete hegg Seth. I mean, it's you know, I can't imagine that they didn't realize about Matt Gates because that investigation had been going on in the house for so long. But Pete Hegseth, apparently the transition team was surprised to get this news about the payoff, and now yesterday the police report. So this is what happens.
And you know, Carl wrote said this yesterday. Inadequate reading rushing, disregarding people's qualifications first for revenge. All of those things have left a Trump team which had a pretty good first week of nominees with these really difficult nominees. And you know, I think it's going to fall on jd Vance, who is the sherpa. He was the sherpa of Gates.
He is now the Sherpa of Heagseth, to see what inroads they can make in the setting in the Senate rather, but there are very very many questions in the Senate and in the defense area about Pete Hegseth, not just this, but his qualifications and his views. All of those things are going to come through in a confirmation process. And the question for the Trump team is do they want to put themselves through this? If there were more particularly salacios, you know, things.
To come out with instant analysis to news that Matt Gates is withdrawing his name from nomination to be the next Attorney General. Geenie Shanzano and Rick Davis, our signature panel, thank you both so much. As we add the voice of a Congressman in Don Bayer, a member of the Democratic Conference in the US House. Don Bayer of Virginia Welcome back to Bloomberg TV and Radio. Congressman, I'm sure you have some thoughts about the day Matt Gates must
have had in the US Senate. But regarding the House, and I understand we're going to talk a bit later with your colleague Sean Caston, who had a privileged resolution to force a floor vote on whether to make public the Ethics Committee investigation the report into Matt Gates.
Do you think that should still happen?
Yes, I do, although there will be less pressure to do it now that he is no longer a candidate for Attorney general. But you know, Matt had alienated so many people on both sides of the aisle that we expected quite a few Republican votes to actually see the report. It's less important now unless he decides to come back. And he won the election. He resigned from this Congress, but he hasn't resigned from the next congression, so this may be not moot yet.
Well, so, Congressman, is it your understanding that he could just simply take that seat. Does he have to take the seat in order to then resign it? So does he have to show up on January third? Just what exactly is the proceduring.
Kaylee, good question, and we relied on Joe Morelli, who's the Democrat who leads the House Administration Committee, and he basically said, we don't know. We're not really been in this position before. But it's not clear that he can resign a seat that he's not been scorn into yet.
But if he doesn't show up, what happens then in any case, I think an awful lot of peace people think that whether he serves or not, that the people have a right to know what that ethics report says, and certainly that's the way I will vote to release it.
We did hear from the aforementioned Sean cast in a statement following the news of Matt Gates's withdrawal. While I welcome the news, he says it remains important that the Gates report be made available to the American people. If he's not serving in Congress, Don Bayer, why would that be.
Well? Part of it, Joe is the larger picture that we have. Pete Hegseth also credibly accused of rate. We have some I think it's in the double digits numbers of cabinet and sub cabinet officials that are circulating right now that have had charges a sexual assault, including RFK Junior, that this seems to be the new qualification for Trump cabinet.
I think the more we address this directly and hope with the clear message that we want people who are have high integrity, that treat women with respect each other with respect, should be part of what it means to be a cabinet member in this United States.
Well, and as we think about women here in particular, Congressman, I'm sure you've seen as many of us had the reports, the police reports specifically of the incident in twenty seventeen allegations of sexual assault regarding a different cabinet nominee, the Defense Secretary designate Pete Hegseth. Now that some of the scrutiny will be taken off of Matt Gates since he's withdrawn himself from consideration, it could put a greater spotlight
on that individual in particular. Do you expect he will face an uphill battle to send it confirmation over some of these very same issues you were just alluding to.
Very much so, kay Lee. And it begins with the sexual assault allegations.
Some of his.
Family pass. But it is going to quickly move on to the fact that a National guardsman with.
Service overseas, which we very.
Much respect, has never managed an organization more than thirty people. Moving on to one of the largest and most complicated organizations in the world. You know, when you move in somebody like Lloyd Austin or Jim Maddison, who have managed in the tens of thousands, the hundreds of thousands, that's a very different set of management leadership skills than what
Pete Hegsth has shown us so far. And what we mostly know of him is his advocacy for returning of Navy seal bad As to somebody who shot a handcuffed man in the back of the head and was convicted of murder.
I don't know anything about that, Congressman, but I do want to ask you about the looming choice for Treasury Secretary. Is this something that you're concerned about because it's taken so long, even though we're pretty early in the game here. But following the names that you've seen already, a lot of folks with the aim of torching the agency that they've been put in charge of have been named by Donald Trump, to the joy of many of his supporters.
Are we going to get a name like that for Treasury based on who you're.
Hearing, Joe, my great concern is that not so much that a Treasury secretary will try to tear down the US dollar, but rather that he or she will buy into the Trump commitment to ten and twenty percent tariffs on every one of our trading partners and sixty percent plus on the Chinese. We've already discovered the American people hate inflation, and yet he's about to do the most inflationary thing possible, which is drive up consumer prices all
across our country. It'd be wonderful if you would appoint a Treasury secretary who would be a constraint on really bad economic policy that's coming out of the twenty twenty five playbook and out of Donald Trump.
All right, Congressman, thank you so much for joining us here on Bloomberg TV and radio. We appreciate your time that as the Democratic Congressman representing Virginia's eighth district, Don Byer.
You're listening to the Bloomberg Balance of Power podcast Ken Just Live weekdays at noon Eastern on Applecarplay and then ron Oo 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.
Great to have you with us on Bloomberg TV and Radio. The Thursday edition of Balance of Power Live from Washington. It's been a pretty busy day around here with breaking news, and the more news breaks, the more.
Questions we have.
As we learned a little more than an hour ago, Matt Gats, former congressman from Florida, has withdrawn his name from nomination to be the.
Next Attorney General.
This was, of course, among the most controversial of Donald Trump's picks to fill out the cabinet. He resigned his House seat, as we told you, upon the announcement of
that nomination last week. And so there's a concerted debate underway right now, Kaylee lines about whether to release the Ethics Committee report, the investigation into Matt Gate's salacious allegations he has denied, and our next guest, who is with us, just a couple of days ago, brought a privileged resolution to the floor of the House to bring a full house vote to potentially force the release of this ethics report. We could still see this even though he is no longer in contention.
Yeah, and that's really what we want to get into now, as the clock has started on two legislative days, knowing that Congress is about to embark on a week long recess for the Thanksgiving holiday, what's going to happen when we come back in early December. So let's turn now to Congressman cast In Shawn Caston, of course, the Democrat representing Illinois sixth District, to put forward this privileged resolution. As Joe says yesterday, Congressman, thanks for coming back to
balance of power. If he is not going to be Attorney General, having withdrawn his name from consideration here, and if he is no longer going to be a member of the House of Representatives, why would this report need to come out if it's just a report looking into what would then be a private US citizen.
Well, look, I'd put the question to you or reviewers in any workplace, if if you and your office knew that there was someone in the office who had serious allegations of sexual misconduct, including sex with a minor, and that person resigned from their office, would you be satisfied working in that workplace if they said we're not going to continue this anymore. It doesn't matter. It doesn't matter what we know that would be inexcusable in any other office.
It was appropriate for it. Remember, the Ethics Committee was prepared to release this information in July because of the recess. They then punted that into a few weeks ago. They then punted again, and they now, based on their vote yesterday on a straight party line basis, the Republicans on Committee deadlocked with the Democrats and voted to punt again.
This information should come out. We will continue to push in our office to make sure it comes out, because the allegations are serious, and it is in the good of the House, and it is in the good of making sure that the American people trust that the households itself to account, that we know what's in this report.
Your workplace analogy having been made a congressman, I wonder if you're also concerned about Matt Gates serving in a different capacity in this White House, or maybe more so, if he were to show up for one hundred and nineteenth congrets to which he was elected and actually take his seat back in January.
All those things are possibilities, and we can't predict the future. All we can do is to make sure that we we make the right moral decision in the point we're in right now, and this one to me, to my mind, is fairly unambiguous.
Well, so as we consider the path forward here, we had understood the Ethics Committee was going to be meeting again on this matter on December fifth. The ranking Democratic member of that committee, Susan Wilde, said so herself. There's been Congressman, as I'm sure you're well aware, a lot of chatter in the last week about whether or not this is going to come out either way through formal
means or otherwise. Would it be your hope if the Ethics Committee can't find a way forward and your vote, your privileged resolution can't force this to happen, that this would leak out, or if the formal institutions of the House have made it not so, should it indeed remain a secret if that is what your colleagues decide.
Well, I think there's a series of questions there, and let's unpack each of them. The Ethics Committee report is done. Notwithstanding what mister Guest has said, remember that they were prepared to vote on this in July. There was no discussion if the report wasn't done, so the Ethics Committee can make all of this go away by simply releasing the report that they were prepared to release in July.
If the Ethics Committee is unable to do their ethical responsibility, then we can use the privileged resolution that we've introduced to compel the House to vote on that, provided that we have the votes on the floor. And it is tragic in the moment that we're in that we have to wonder whether the Republicans in the House will vote to condemn someone who's been accused of sexual misconduct. This
is the moment we're in, and that's unfortunate. The third part of that, if those things don't happen, should it leak. I'm not going to take a position on that. I think it would be better for us to use formal procedures, But we should keep in mind how we got to this point. There were there are multiple women, it's our understanding, who have come forth and testified anonymously to the Ethics Committee with the understanding that they were providing reports to
an Ethics committee that would keep this in confidence. That takes tremendous courage, right. All of those women are well aware of what happened to Christine blazey Ford when she came out during the Kavanaugh hearings, which is of course, only the most recent time in memory the Donald Trump send a candidate with allegations of sexual misconduct to the
Senate for confirmation. How much her life was upended by being public and if this information leaks out in dribs and drabs from other people, it makes it very hard to make sure that we that we protect those women and respect them. And the right way to do this again, the way we minimize that is by the Ethics Committee doing their job. That would be my hope, But we'll see what happens over the next few weeks.
We're spending time with Congressman Sean Casta, the Democrat, is leading the charge here to force the public release of the Ethics Committee report into Matt Gates, who, if you're just joining us, has withdrawn his name from consideration from nomination.
To be Attorney General.
Does that withdrawal, Congressman, change the vote count to the extent that you had a sense of support for this resolution for when you come back from Thanksgiving, does withdrawal of Matt Gates impact the outcome of your resolution? I?
Mean, obviously, this news has come so quickly, I've not had the time to talk with any of my Republican colleagues. I don't think it changes the calculus run of my Democratic College.
Did you have the votes before?
You know?
There were there were certainly Republicans that were were you know? I think I think one came out publicly, Derek Van Orden came out and said that he would support release the information. There are other privately who look at this is not betraying any confidences. There are a lot of Republicans who don't particularly care for Matt Gates. If this is purely about a personal question, I think that's an open question.
I think it is.
I think it's an easy question. I think the separate question of are there Republicans in the House who are prepared to take actions that would be oppositional to Donald Trump's desire? Even if Donald Trump's desire is to nominate someone who was alleged to have committed sexual misconduct, would
they stand up to that. I don't know, But to the extent that there's a tension between those points than one, I suppose could speculate that it would be politically easier for Republicans in the House to vote based on their feelings for Matt Gates rather than based on their fear of Donald Trump.
Well, Congressman, we appreciate you joining us on this and look forward to seeing the outcome here of this privileged resolution as we deal with this one piece of breaking news, but we've gotten some other breaking news within the last hour as well, I would love you to weigh in on. As a member of the House Financial Services Committee, the Chair of the SEC, Gary Gensler, has said now officially he will be resigning on January twentieth. For many, this
will not be surprising. Donald Trump had promised to fire him anyway. But considering your role in the Financial Services Committee, the idea that the SEC could be critical in these next four years and in forming the path forward for industries, including the crypto industry, what is your hope here on who will be selected to replace him, what kind of person that will be.
So first, I just to have tremendous respect for Chair Gensler. I think he's done has certainly done a lot of work as you all know during his tenure, and I think has been a very loud advocate for investor protection. There is always a tension, a healthy tension within the SEC between how far do you go towards investor protection and how far do you go towards maximizing access to capital markets. Everything you push in one direction hurts the other,
and vice versa. I would like to see anybody at the SEC who understands that balance and who frankly skews more to the investor protection side, because I've always felt that, you know, you part of public service or any position of powers to make, or that you're you're advocating for the people who aren't in the room as much as you are for the people who are, and the you know, the work that Gensler has done to look at for you know, for the the less sophisticated participants in our
financial markets, I think has been important. We'll see what happens on the Trump side, but I you know, I do I do fear that this is not an administration that has shown nearly as much commitment to investor protection as I would like.
Well, on the market side, it's a celebration certainly in the crypto market. We're getting closer to one hundred thousand dollars for bitcoin. Congressman, I know you're not necessarily guided by the markets on this, But what does that tell you potentially about the person who may replace Gary Gensler.
Well, look, the there is a huge problem and has been a huge problem in the crypto sector for a long time. That the structure of those those crypto exchanges and markets, the use of anonymous wallets, the use of mixers, the use of cross chain bridges. It is very easy to cover your tracks and has been very attractive as a result two folks who want to londer money, want to get around know your customer rules, want to get around finsend.
And.
Has also been been attractive to a lot of people who want to take advantage of less sophisticated players. To be clear, that's that's not saying that one cannot imagine a legal use case for crypto, but a lot of what the crypto industry has not liked about mister Gensler is that he has been pushing for a disclosure based regulatory environment that says, if you're going to buy and sell something of value, you need to have the same
types of protections whether whatever that is. And we can we can quibble about is this a you know, the Howie test and all those sorts of issues. But the crypto industry has clearly been pushing for a long time to move themselves out of a disclosure based regulatory regime at the SEC and into a purely market exchange based regulatory structure at the CFTC, and one can't assume that the advocacy for that move accrues to the benefit of investors who depend on those disclosures.
Congressman, we just have a minute left here, But obviously the current chairman of the Financial Services Committee will see his time in Congress come to an end at the end of this session. Is there someone you think would best work with Democrats on a bipartisan basis as the next chair of the Financial Services Committee? Is there a candidate you favor for that role?
You know, in general, I think the Financial Services Committee has done, in general, a very good job of avoiding some of the more you know, rancorous, vitriolic debates on some of the other committees. You know, I would say that virtually all of the Democrats on committees on the
Committee have a very good working relationship with Franchill. A lot of us have a good relationship with Andy Barr, A lot of us have a very good relationship with Frank Lucas, and we will certainly have our disagreements on policy issues, and some of those, of course will be animated. But I think all three of those candidates are are candidates who have a respect for the institution and a respect for the work of the Committee, which is important.
Congressman, it's good to have you back. Let's meet up after Thanksgiving and see how this FOC goes. Sean Casten, we appreciate all of your time this week, the Congressman from Illinois sixth 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.