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Therefore, the Honorable Mike Johnson of the State of Louisiana, having received a majority of the votes cast is Julie elected Speaker of the House of Representatives for the one hundred and eighteenth Congress.
There it is well at least half the room on its feet, as it's made of fisher Here Republicans of plotting following twenty two days of chaos without a Speaker of the House. Patrick McHenry enjoying his final moments as the keeper of the gabble in the Speaker's rostrum. Live
sound from the House floor here on Bloomberg Radio. I'm Joe Matthew in Washington as we spend time with our panel Jim Kessler and Lisa Camuso Miller and Bloomberg's Gregory Cordy with me in studio here on a day that I'm guessing tell me if I'm wrong, Gregory Mike Johnson couldn't have imagined even last weekend.
That's exactly what I was going through my mind. And his world's about to change. As we've said, he's now second in line to the presidency after Vice President Kamwa Harris. He has now instantaneously got a security detail that he hasn't gotten before. Because he is now in that line of succession, He's going to have to be read in on some of the nation's most sensitive secrets. Things he's never heard before. Things he's never heard before, the things
that he needs to know. Frankly, he is on the Armed Services Committee, but doesn't have particular background in intelligence in foreign affairs, so he will have to get up to speed on that we've been talking about. He's got to bring not only a fractured Republican conference together, but now he's got to reach out to Hakeem Jeffries, the Minority Leader. He's got to reach out to the Senate,
Mitch McConnell, and Chuck Schumer in the Senate. He's part of that gang of foreign now, and at some point he's going to pick up I would expect Joe Biden may already be lining up that phone call. That's one thing that we know that President Biden is very good about is making these sort of congratuatory calls. I would expect that to happen before the afternoon is over, to
introduce each other. And yeah, so this is now a guy that none of us knew much about just a couple of days ago, maybe even until last night, that now is going to be part of the regular conversation Washington d C.
Incredible stuff. Lisa, you mentioned having worked for the speaker. You've got a staff of about thirty five. When does the hiring begin?
Almost immediately. But the good news is that there's lots of really talented people on Capitol Hill that know how this works and know how the process comes to other And the great news for the new Speaker is that that those people are available and willing to help it make him be successful. And so that alone gives a lot of confidence to something someone like him, to know that there are great, talented people on the leadership staff that already can be very supportive to him. He's going
to have a seamless transition. That's the one thing I can be certain of because I know how talented those people are. They are the unsung heroes of the last three weeks that have been working day and night to make sure that this thing happened unsuccessfully a few times over. But it'll be interesting and I think it'll be a positive direction for the House going forward.
Him, Speaker Johnson is going to have to work with the leader next door, that would be your former boss, Chuck Schumer. How soon do these two get together?
I imagine it's going to happen very quickly, and there's some serious work that needs to be done. And you know, as we remarked on earlier, Leader McConnell and Leader Schumer, y're roughly the same place, same with Jefferies, same with Biden.
So in some ways it's four against one here. And you know, I think Mike Johnson's going to have to figure out a way to get his you know what he needs out of this, but also move these just critical spending bills and pieces of legislation forward at this remarkably critical time in the world right now.
All right, many thanks to our panel for a marathon session here. Jim Kessler at Third Way, Lisa Camusa Miller at RESET Public Affairs, many thanks for your insights and bringing your experience to us here. They're good friends of the program and awfully glad that you could be with us through this. Who knew starting an hour ago that we would experience all of this together, Lisa and Jim, many thanks to you and Gregory Cordy. We talk about hiring up here, setting up the office. Then is the
matter of actual business. What's going to be the priority a continuing resolution or the supplemental funding for Israel and Ukraine.
Well, I mean one thing even before that is the clock starts ticking right now of forty eight hours on a privileged resolution to expel George Santos, one of the low thorns in the side of the past African business.
It actually is under house rules, it's privileged, so it has to come to a vote at the time of a speaker's choosing, now that we have a speaker, but within the next forty eight hours, and of course you know this was a difficult problem for Kevin McCarthy because he relied on George Santos's vote, but his is a congressman from New York who's under indictment. We all know this saga, right, This is another one of the soap operas that we've had in this year in Congress. So
that's actually one of the first orders of business. Then we have a little bit of time until the middle of next month to pass a spending bill. So I would have to think that the supplemental for Israel and Ukraine takes top priority. But that's also politically tricky through those advanced as one bill, as the President certainly would like, because the support for Israel is a lot more popular than support for Ukraine, and maybe UKRAINI can come along
for the ride. But that's one of the issues that was forcing this chaos in the Republican conference is where these speaker candidates were on that question was a decisive factor that may have killed some of these previous speaker candidates.
Gregory many thanks for being with us here in the clutch as always, Gregory Cordy, great to have you, Bloomberg Politics reporter, I'm Joe Matthew and Washington as we bring you live to the capital once again.
Here.
If you're with us on YouTube, you've been seeing the House floor, Let's go outdoors now. Bloomberg's Kaylee Lines is just outside the chamber and I suspect we'll be talking to a lot of lawmakers in just a matter of moments. But she's ours first, right now, Kaylee, what's the vibe out there now that this is official.
Well, there's definitely a sense of relief, especially for all the reporters out here with me who have been at this now for weeks, Joe out here each and every day trying to figure out who the next Seaker of the House will be. But of course now we know it's Mike Johnson. We actually are expecting that he may speak to press later on. They're setting up a press conference just behind me, so we'll hear from the now
speaker himself shortly. But I would imagine and as we wait for more lawmakers to come down the steps, that there is going to be a bit of a sigh of relief that this battle is actually over. The House has a speaker and they can get back to the business of legislating.
Well, that's right to your point, though, we have to go through a few stages before we get to actual governance, and that includes delivering a message. This is going to be an outdoor news conference, Kaylee. Will there be a big crowd, will he have the conference behind him or do we have yet to learn all of these things.
We have yet to learn exactly who's going to be in front of the mics. What I can tell you is behind the mics, there is a lot of TV cameras, there's ropes going up, there are reporters crawling all around here getting ready to ask questions of now Speaker Johnson. So I would imagine the crowd is going to be
pretty big, as this is a historic day. The fifty six Speaker of the House has been elected after twenty more more than three weeks without one, and there's going to be some pretty pressing questions for him, given as you were just discussing, until about twenty four hours ago, a lot of people didn't even know who Mike Johnson was, and now the policy he wants to push forward is really going to matter, not just for what happens here in Capitol Hill, but for the country as a whole.
This is great behind the scenes stuff here, especially if you're with us on YouTube. Go there now, search Bloomberg Global News and check this out. You'll see Kaylee outdoors. I'm also hearing producers counting down on their live shots next to you, Kaylee. And this is the way it works. You can feel free to turn the camra tell us what's happening here because this is the gathering, the spontaneous gathering of reporters who come out of the trees practically for an event like this.
Yeah.
Well, actually, just to my right, Joe, Congressman Bob Good of Virginia is huddling with a few of my colleagues. Here. There's other ropes going on around me, so I'm afraid I might get moved here in a second. They're trying to establish a perimeter essentially just in front of the steps, to clear the way for where the podium is, where the speaker. Now speaker is assumed to be talking, and they're making gestures. So I'm just going to slowly start shifting to the side.
Please, don't get a rest.
You can see the road. Glad I moved, Yes.
Look at that. This is the real stuff. You won't see that on the cable news networks, you know, Kaylee, I suspect that staircase is going to be full of lawmakers in a bit. Do you have an ETA on the news conference?
It should be beginning shortly now that the vote has finally wrapped up. Once everything is gabbled and complete in there, we'll see how quickly around they will turn this around and actually bring them outside, and whether or not other members will be descending down the steps on their owner. If everyone's going to come out together as a conference, We're all staying tuned for that. Joe and I apologize for the taping sound. There's a lot of chords and plugs that know it to effort like this one.
Yeah, I'll let you leave this awkward situation, Kayley. Thank you for showing that too us. This is absolutely fascinating. You know, look, it's your backyard, but not everybody gets to see this every day. Just think of like these guys are going to be friends for life, these reporters who've been there for twenty two days, that Kaye will have to introduce me at some point to everyone she's met.
Thank you, Kaylee. I'll see you back here in the Bureau for Balance of Power a bit later on, and of course Kaylee will bring us some of the sites and sounds of what's about to happen on Capitol Hill. What a moment to have Libby Kantrill, the head of US Public Policy at PIMC. We've been talking about this for twenty two days and she's with us.
Now.
Your timing as usual is impeccable, Libby, we have a fifty sixth Speaker of the House. I don't even know what to ask you. First, Is the market signing a bit of relief for me?
I mean, at long last, right, even I think the markets haven't really been so focused on this, obviously, and this sort collided with a lot of other geopolitical and other issues happening, particularly in the US treasury market, So I don't think the markets have really been paying all
that much attention to it. However, as as we all know, not to kind of nerd out here a little bit, but we all know that the term premium in the US yield curve treasuries have backed up, and that sort of elusive term premium can include a lot of things, including just concerns about the governance of the United States, And so you know, you could argue that some of the backup and treasury yields that we've seen is at least in part due to these concerns about just the
ability of Washington to function. So I guess in that respect, you would think that yes, the markets would likely breathe a sigh of relief.
We can get into it.
But there's also maybe some clarity around how we move forward on the government funding question as well.
Okay, well, what do you think about that? Because Mike Johnson says he's willing to grab that third rail called a continuing resolution, and it doesn't seem to be a problem for the Conference the way it was for Kevin McCarthy. Can he actually do this?
And this is the great irony, of course, is that what got former Speaker McCarthy ousted was working with Democrats to pass that short term staff gap funding bill. And yet now I guess Speaker elect Johnson has indicated that's exactly what he will do as well, in order to
buy more time. Now, ironically or maybe interestingly, he did not representive Johnson did not vote for that stop gap bill back in late September, But to your point, he has indicated that he does plan on passing a stop gap again to buy more time for the House to pass those single subject appropriations bills, which I think is sort of a distinction without a difference for many people, for most people and the markets, but for many members
of Congress, particularly among the House Freedom co because that has been really a decisive issue for them. They have wanted to tackle appropriations, spending bills one at a time versus what is usual at the minibus are omnibus where bills are all sort of stuck together and passed at the eleventh hour.
So you know, we'll.
See you know again. His sort of fiscal record is one more of austerity. He has advocated for spending cuts in many different respects, and again he voted for a voted against that funding bill. He's voted against Ukraine funding several times as well. So this may not be a totally smooth glide path, but at least as of now, he is indicating that he will move forward in a way that certainly the markets will will appreciate.
The President of the United States is speaking right now along with the Prime Minister of Australia on the other end of Pennsylvania Avenue. They're holding a bilateral news conference that was set to start almost an hour ago. At this point, Libby, do you want to hear him address any of these issues? What does the market want to hear him say about a continuing resolution and about the supplemental budget request?
Oh about the President saying yeah, I mean, of course, you know, I think what the market's going to be more in tune to in terms of this meeting, you know, with one of our closest allies is probably around the question of China and sort of how we move forward together, you know, with Australia on that issue. You know, I think that the President has been very clear that he wants to avoid a government shutdown, that he will work
with anybody who is in leadership to that end. Now, of course, this is a bit of an interesting dynamic because the speakerl Lot Johnson, you did not vote to certify the twenty twenty election, so you know right off that that maybe puts things on a bit of an awkward foot. But you know, Biden is sort of a constant legislator at heart, and I think he will work with whomever he needs to work with you to get things to get things done, at least at least that's what people say, most likely.
Spending time with Libby Cantrell, head of public policy at PIMCO, with a Speaker of the House. It is actually official now, Mike Johnson voted to be the fifty sixth Speaker a short time ago in the House of Representatives.
In their tallies that the total number of votes cast is four hundred and twenty nine, of which the Honorable Mike Johnson of the State of Louisiana has received two hundred and twenty votes, and the Honorable Hakeem Jeffries of the State of New York has received two hundred and
nine votes. Therefore, the Honorable Mike Johnson of the State of Louisiana having received a majority of the votes cast as Julie elected Speaker of the House of Representatives for the one hundred and eighteenth Congress.
Yes, indeed, Patrick McHenry, don't be confused by what you're seeing on YouTube that took place a short time ago, making it all official. Hackem Jeffries, the minority leader and obviously Speaker Johnson now official. Libby, how important will it be for these two Jeffries and Johnson to show a united front or are we beyond that?
In Washington?
Well, I will just say that the Republicans seemed happy that they finally got to that threshold. I will just take you to commenting on that that latest clip that you played, they are I think that folks were exhausted and they were frustrated, and they just wanted to move forward. And that's one of the reasons why you Representative Johnson,
who most people don't know. I mean many people on the Hill don't know him very well, but certainly kind of nationally, he doesn't have the same profile that certainly former Speaker McCarthy or Pelosi and Pelosi had Joe. In terms of your question about how important it is for the two of them to work together, I mean, clearly, you you know, it's important to have a working, constructive
relationship with folks across the aisle. Johnson doesn't really he just hasn't been sort of in the leadership mix, so it's difficult to sort of assess at this point kind of what his approach will be working with Democrats. But as we have seen kind of painfully over the last few weeks, for many things, Republicans will need and Speaker Johnson or througher elect Johnson will need Democrats to to to pass things and to advance, you know, the entire
kind of Nations agenda, So it is important. I do think there is you know, poisoning of the well here, however, but you know, I think that they will both be side we'll try to kind of move forward. I do think there is a Republicans or of the sense of urgency among Republicans to sort of move forward, focus on legislating, focus on kind of the business of the day, and try to put this as far in the rear view
mirror as possible. And of course we won't know what the political implications of all of this is until next November.
Do you have a sense that this is a speaker who can finish the job or would suffer potentially the same fate as Kevin McCarthy.
I do not want to even imagine that we would be back here again. I think that they want, folks. I'm sure you don't.
I mean, this is you know, there are other things happening in the world, and this is not something that we've we've all been consumed with this, you know, so regrettably. But you know, I think that they I think folks will be incredibly reticent to use this the motion to
maake it again in this session of Congress. Now, Joe, as you as you well know, though, there's just not that much time left in this Congress because practically in an election year, you know, most both sides usually try to send their members home by kind of Midsummer to start campaigning and then only bring them back in the fall for kind.
Of muth pass issues.
So the sort of idea that this might be a really productive Congress of legislating, which I don't think we really had anyway, but certainly we don't have that now, just because we haven't even passed you know, funding bills.
There's the you know, the farm bill, there's the NDAA.
Then of course there's Ukraine and Israel funding as well, so they have a lot on their plate, and I would assume that, you know, not much more than kind of the bare minimum gets done gets done this Congress. The last thing I will say, which I think has been important to markets, that I'm not sure folks should feel hopeful is energy permitting reform. That was there's sort of a down payment, if you remember, in the debt sealing deal, with kind of a promise to address that
later in this Congress. I think that with all of this not nobody should be should be hopeful that there is a you know, big grand bargain on energy permitting reform. Now, you know, never say never, but at least at this point it doesn't it doesn't look likely.
Well, you point out in your notes of clients. Winning is easy, Governing is harder, and I'm sure he's about to get a sense of that if he doesn't already here with the just the daunting amount of work that lies ahead. Libby, what do you make of, if anything. I don't know if this is an issue for the markets or one for you on a personal level. The comments around his attempts to overturn the twenty twenty election.
Is that's something that will follow him throughout his speakership or is that an issue that's being excized as we speak.
Yeah, So I think that the kind of the read through for the markets or the economy is just if it has political implications come in twenty twenty four, and I think the way that it could, you know, potentially, and it's really too early to say. I think that, as you know, Joe, a lot haven't been Washington. Folks are so breathless about something, how this is just going to be sort of existential, and then they just move.
On and no one even talks about it again.
So, you know, I'm a little bit reticent about trying to drought too many political conclusions, but the market would care if there were political consequences. This particular if it makes the eighteen Republicans who are defending House districts in those districts where President Biden won, so basically purplish districts, if you will, if it makes them even more even
more vulnerable going into twenty twenty four. And of course, as we now all painfully know, you know, Republicans only have a five seat majority, and so they only need to lose five seats in order to in order to lose the House. And of course, again there's eighteen districts,
So I think that's kind of the tie in. If having a very sort of you know, work by zone amission conservative speaker who didn't vote to certify the twenty twenty election, does that make them, these moderate moderate Republicans from the places like New York and California even more vulnerable going into twenty twenty four, And does that make the House vulnerable to flip to Democratic control.
That will be an issue for the market, because.
Of course the Trump tax cuts among other fiscal issues will be up in twenty twenty five.
Well, I just imagine the fund that we're going to have fear. At least we know who we're going to be talking about for the next little bit here. Libby Cantrell, many thanks for being with us on this historic day. We have a speaker and of course the voice from PIMCO to back it up. It's great to see Libyan. Thank you as always for joining us here on the fastest show in politics. It's certainly moving today in Washington as we balance stories on both ends of Pennsylvania Avenue.
The breaker, of course, Mike Johnson is now Speaker. Johnson the fifty sixth Speaker and has the job officially, following a protracted process that went through three nominees before we got to this one.
You're listening to The Bloomberg Sound on podcast. Catch the program live weekdays at one Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.
If you're just joined seeing us, we have a lot to catch up on. We now have a Speaker of the House. It actually happened, Mike Johnson, Speaker number fifty six as official. He just spoke to the House of Representatives and will be speaking to reporters momentarily support from the full conference. Nothing like what we saw for Tom m or Jim Jordan, Steve Scalise, not a single no vote. As he moves forward with the message of unity here
in the Republican Conference, we'll see if governing will follow. Apparently, as Michael McCall told us over a week ago, congressman who chairs the Foreign Affairs Committee in the House, the first order of business will be bringing a resolution to the floor condemning the terror attack by Hamas against Israel
and supporting Israel as we move forward here. Separately, Joe Biden, speaking earlier today in a bilateral news conference with the Prime Minister of Australia, speaking to this request for funding and this is important because we've talked a lot about it through the guys of Israel and Ukraine. This is one hundred and six billion dollars he's asking for, and supplemental funds would also send money to Taiwan and to our southern border for border security. But Bloomberg Government reminds
us there's more to this as well. Inside that budget request also includes money for the Submarine Industrial Base as part of our alliance with Australia. Remembering this pact between the US, the UK and Australia to counter China's military expansion. This would help to pay for that, and it's something that we want to talk about, among other issues with Jennifer Welsh, Bloomberg Economics Chief geo economics analyst. It's great to see you, Jennifer, as someone who of course comes
out of the national security space. We're juggling a lot of priorities here, but they all seem to be when it comes to our defense. Included in this supplemental budget request. How important is that money for the submarine program with Australia.
Well, thanks so much again for having me on, Joe. It's a pleasure to be here. It's incredibly important. One of the challenges that Aucus has faced, and this was brought up during the press conference that President Biden just had, was the issue of Congressional support for it. And one of the main areas of concern for Congress has been the DIB issue, as you noted, and the problem there is that the submarine deal includes transferring Virginia class subs
to Australia. But right now the United States it's struggling to reach its goal of making two Virginia Class subs every year. You add on top of that the need to sustain our forces and to transfer to Australia, and there's a question there of whether or not we can do both these things at the same time.
Of course, we're asking for sixty billion dollars for Ukraine. We're asking for billions more in Israel. And the President did speak to the situation in Israel. Here's what he said, Jennifer, and we'll have you respond. This is Joe Biden a short time ago in the garden.
The anger of the hurt, the sense of outrage that the Israeli people are feeling after the brutally inflicted devastation by Hamas is completely understandable. Israel has the right and I would add responsibility to respond to the slaughter of their people. And we will ensure Israel has what it needs to defend itself against these terrorists. That's a guarantee.
Yep.
We're asking Israel to slow its role and in fact delay the invasion of Gaza. The headline on the terminal Biden asking Israel to delay ground war if it helps to free hostages. And there's been talk about a potential release of more hostages here. Is that what we're waiting for, Jenny. Are we potentially going to be in a world where there is no invasion of Gaza.
That's a really good question, and it does seem to be a fast moving target in terms of you know, Israel saying in terms of their plans for the ground offensive kind of changing day by day. More recently, they've kind of moved away from referring to it as an invasion and more towards an operation, saying that it's going to be a lot more targeted. And I think there's a couple of factors at play. I think certainly the
ongoing hostage negotiations are part of it. Certainly US concerns are part of it, and as part of an effort to avoid this from becoming a broader regional conflict and kind of stirring and rest across.
The Middle East.
But I think Israeli forces are also very concerned about having to fight on multiple fronts already they're taking incoming from Hasbela forces. I think there's some concern about whether or not they have the bandwidth, in particular air defense bandwidth, in order to manage additional incoming coming from Husbola, if they start to increase the scale of their attacks to take advantage of a ground offensive. And then there's the complexity of the ground offensive itself. Gaza is obviously a
very dense area. There's also the potential for many, many tunnels that we don't have great insight into, for Hamasfide to be hiding in. It could be a very dangerous operation. And I think the United States as well as other partners have been counseling Israel to really carefully plan that out and to plan out for what happens after the offensive. Their goal is to remove Hamas, but what happens after Hamas is gone?
A lot of good questions here, the presidents saying earlier today in the Rose Garden, what I've indicated to him by that he means, Benjamin Netanyaho is that if that's possible to get these folks out safely, that's what he should do. It's their decision. But of course Benjamin Netanyahu doesn't want to lose the US in this fight. How closely is he listening to Joe Biden, No, I would.
Say, compared to where we were soon after the October seventh attack, and where we are today. Again that ground offensive hasn't happened. It seemed to be on the bridge of it, you know, several weeks ago. Now we've seen Israel kind of budge a little bit on making sure aid is flowing into Gaza. We've seen them, you know, start to address concerns about civilian casualties, include coming out very clear on the nature of the hospital attack that happened last week. So I do think that Israel is
listening to the US. I think also US regional support has been helpful to sort of reassuring Israel, both the presence of US forces in the region as well as US efforts to try and line up regional powers to at least, if not at the very least support Israel, then to at least, you know, kind of decry the attack and not foment or add fire to the flame. So I think all of that is helping sort of take us down a steparate too, at least temporarily in
the conflict. But it remains to be seen, you know, where Israel goes from here, and I think the Biden administration is being very careful to at least publicly indicate that this is still very much within Israel's agency rather
than being directed by the US. That being said, I think behind closed doors, the US is very much counseling Israel to approach us in a way that is both good for Israel strategically and in the long term, but also helps further inflame avoid further inflaming regional tensions.
Jenny Welch helps to advise our Bloomberg Economics team here in Washington, and it's great to have you back, Jenny.
Thank you for the insights.
Jenny Welch at Bloomberg with us on sound On as we move forward here with a speaker of the house, dare to dream it's true. If you're just joining us, Joe Biden will soon be talking to speaker Mike Johnson. We'll let you know when that phone call takes place. Thanks for listening to the sound On podcast. Make sure to subscribe if you haven't already, at Apple, Spotify, and
anywhere else you get your podcasts. And you can find us live every weekday from Washington, DC at one pm Eastern Time at Bloomberg dot com.