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Ballots and Power on Joe Matthew alongside Kaylee Lines in Washington, where there's so much talk about the Doge. Kayleie, we all remember when Elon Muskin, the aik Ramaswami came to town. This has been a massive conversation and there are a lot of questions about, well, how could this become policy. We've asked a lot of those questions, Connecting the dots. Is it possible to cut two trillion dollars in government spending? As Elon Musk had said at one point? The Governor
of New Hampshire has the answer. He says, the mission of the Doge is achievable.
Yeah.
Writing a new opinion piece in the Hill today for models of efficiency, Musk and Doge should ignore DC and look to the States. And I'm pleased to say joining us live here in our Washington, d C studio is the new Hampshire Governor Republican Kristin, you know, is here with us on Bloomberg TV and radio. Governor, and nice to see you again.
Nothing like a governor coming to Washington.
Yeah, exactly your favorite town.
Well, and you don't necessarily speak kindly of Washington in this piece in tern fiscal functioning, My question, I guess is, if we're looking to the states, we're dealing with smaller numbers. Right, State budgets are measured in billions, whereas the US federal budget is measured in trillions, and they want to cut two trillion of that? Is that really realistic?
It's realistic, probably not tomorrow, and you know, structurally they're going to have to get into the big things that nobody wants to talk about, Social Security and medicare. Again, that is not likely going to happen tomorrow, unfortunately, but it has to be dealt with kind of the crux
of this pieces. As a lot of folks and you guys have discussed, in about eight years, one trillion in interest payments goes to one point eight trillion, right, just in interest payments, So Security, Medicare go, and solvent a lot about the same time. So you're gonna have kind of this perfect storm of financial crisis if Washington does what they typically do and wait till the last minute. That's not a solution, that's just reacting to the crisis.
Does is very interesting and this election is very interesting that it has created a very unique situation where you have an outsider in Elon, an engineer obviously very partial to engineers, as I am one myself, so he's not beholden to the establishment. He's all about fixing and big challenges and fixing and finding efficiencies in big systems, so he's ideal to do it. The key is, you, like anything as an engineer, you have to know how the system works before you can really figure out how to
tinker with it. Well, there's gonna be some low hanging fruit with potential executive orders, but you're gonna have to use political capital, and he actually does. He's an outside of Washington that brings political capital with him. When Elon Musk walks in your office and you're a congressman, believe me, you're going to listen, not just do whatever he says,
but you've got their attention. So if he uses that capital in the right way, and the best part about what they've done, which gives me a lot of optimism is they've put a time window on it, right, they got two years till July of twenty six to get this stuff done, get it all moving in the right direction. So and because it won't be some long lasting additional piece of government. But as I warned in the piece,
a lot of presidents have failed at this attempt. This is a highlight, pivotal moment for Trump for his administration. They can't blow it. And the last big piece here is Washington has to look to the states. Because states, especially Republican states, but really all states, they make tough decisions. They've found efficiencies. You know, one example I give is in Iowa, they went from thirty seven agencies to sixteen. Did Kim Reynolds get penalized through that, No, she got champion.
The voters thanked her for doing it. So what was traditionally seen as making tough decisions and getting politically penalized in the past, if you don't make those tough decisions now to Congress, you're going to get penalized. And that's what the Speaker has to understand. It's in his political interest to do the hard work that no one's been able to do before.
We can nibble around the edges here for a while, but to your point, long term, a balanced budget amendment should be reconsidered. There are a couple of them that have been proposed. They tend to not get as far as you want them to hear. But the question is can you do that and make it work without getting to You just talked about it. Social Security and medicare That's why this never goes any further.
So again, those things are going to become insolvent in very very short term, so at some point they're going to need.
To trust this administration to deal with it.
I trust this administration more than the next one, and I don't even know even who the next one is. And that look, Trump was elected not just on policy. He was elected to be a disruptor, to break that establishment mold as an outsider, and he's brought outsiders with him to do it. And he's got a lot of a very significant political mandate and more experience than he did even in the first term. So the wins are in the sales to get it done. My argument on
a balanced budgetment, it's so critical. By the way, forty nine states have balanced budget moments. We all live in those. I could tell you there's no state that's a bigger financial mess than California, right, But even they have a bounced budget amendment. I mean, they end up taxing their citizens and not handling it very well. But they are managed better on a fiscal basis than the federal government, and that should be a warning shot across the Republican's bow.
I want to return to something you were saying about Elon Musk, specifically that he might be uniquely suited to this role because of his nature of being a political outsider but still having political capital. He also has just normal capital. His worth went to four hundred billion dollars yesterday. Is there not some conflict of interest here you are worried about in him? Specifically, who has companies that contract with the US government having a say in this?
So surprisingly know and I'll tell you why, because he's so rich. I mean four hundred billion, a couple billion more here or there.
This isn't a guy that lives.
Extravagantly cares about the fate of say SpaceX.
Of course he does, but that's not doge right. So you can talk about Grant programs and all of this sort of thing. But this place needs a complete structural overhaul. And that's what he's actually really really good at taking on giant challenges. People didn't think there was going to be a privatization of going to space. He said, no,
we can do it, and he figured it out. So it's not all on him, but he provides the political capital, and in a way, because he's so wealthy, he doesn't have a direct financial interest in this per se that is appreciable to him at all. Everybody in DC does. Everybody in DC wants to keep their job. They're all elected official, they are all have a bigger conflict of interest to do nothing than to actually listen to someone like Elon and the recommendations that come out of this group.
You got to find efficiencies everywhere. I think you can.
What they're doing with defense is going to be great. Having an audit, I think that's very important. You don't have to lose a single gun, bullet or soldier just by becoming more efficient, creating more competition within what is kind of a cabal right now of contractors and contracts within the Department of Defense. I mean, you could save
one hundred billion there about. I didn't do the details, but there's about sixteen executive orders alone that I counted over ten year, one and a half trillion, just on Biden's executive wards, by the way, So there's a lot of low hanging fruit there. But structurally they're gonna have to to take up something more substantive at some point.
Doesn't mean it all happens tomorrow, and getting too A bounce A bounced budget amendment agreement basically says this, we're going to go forward in such a way that we eventually get to a balanced budget. We bring things back into the into the fold the right way. We make that compact with America that says your family has to live by a balanced budget, and so don't we That in itself will reinstore so much trust that Washington doesn't have.
They have it with governors and state legislators and mayors, but they don't have it with Washington. So it's in their political interests to.
Do the hard work.
Now.
I think it's gonna take time, of course, But you know what I hear, I get a little concern. I hear Republicans say, well, we're gonna cut that program and that program well, that sounds fine. You want to cut them, cut them, I don't care. But that's nipping on the edges.
That's political speak.
You need real structural of financial structural reform here, and now's the time to do it.
And this administration wants to advance the Trump tax cuts, make them permanent, likely add to the deficit in the process. Where do you draw the line how much is palatable until the cuts start to kick in.
So I think the cuts they have now and continuing them is very, very important because you need a growth
model here too. And what as you guys I think have talked about, there's so much cash being held by so many of these large corporations right where it's four and fifty billion just being held by Berkshire, Hathaway or whatever it is, right, and then you multiply that with all these other large because these companies were holding onto it because all the inflationary risk that comes with the regulation of a bit of the change or not change. If Kamala were to win of administrations, right, there was
so much regulatory inflation there. They were holding their cash because they didn't know where things were going to go. Hopefully with the tax cuts in this administration, private equity starts moving a little more, deal flow starts moving a little more, cash starts being released and.
Really promotes that growth.
So while we're making some tough cuts, while we're making the tough decisions, block ranting things back to the states. I mean, think about it. Department of Education is the one they talk about all the time. You can get rid of ninety percent of that bureaucracy, save tons of money, and still block rent the same money back to states and allow states have the efficiency of reinvesting those funds how they see fit. What's good for Massachusetts is different
than Minnesota, or Nebraska or New Hampshire. So let them decide. I can tell you as a governor, when we look at all these programs and all this money that comes from DC, there are so many strings attached. We have to say no to some of this money sometimes because it's so not in New Hampshire's interest to take the money because of all the additional attachments to it.
You block rerant things back.
Believe in the States, as you've probably heard me say before them founding fathers, they were wicked smith As we say in New Hampshire, they really were Federalism works States have done already done a lot of what DOGE is looking to achieve on a smaller level, to be sure, but a lot of it is just copy and paste. We've done the hard work. It's not some newfound crazy idea. It's actually Washington is the last one at the table to try to figure this out.
Well, you obviously are still speaking with us as an incumbent governor, but your term is almost done.
TikTok, twenty nine days August ticking.
So of course we're wondering what the future holds for you, and I do wonder, given that it does seem the American people delivered this mandate of more efficiency in government, more disruptions, not just with the election of Donald Trump, but with the Republican majority in both the House and the Senate. With that kind of Republican leadership mandate, does that make you rethink how much you want to be involved in politics in the next four years or no, twenty.
Ye maybe long term.
I would come back into thinks long is longer. Nothing I'm thinking about. I can tell you I do want to stay involved, and that's why I'm going to keep writing off eds and maybe do some media and all that sort of thing. I left to resume at the front desk for y'all. But you know, I'm economically driven, I'm a business guy. I'm an engineered That's why I'm
so passionate on the dose thing. And again I go back to governor, not just myself, but governors all across the spectrum have really done a lot of this hard work. I think that needs to be championed. We talk too much on the national level of just what happens in this bub DC, but frankly, the bubble of DC, both media and otherwise, is never talks to the real people
out in the rest of the country. That's why when around mid September it was clear to a lot of us that Trump was going to win handily, and it was like, well, how can you say that? How can you say that? The people that were questioning that were in New York and Washington, the rest of America was going Just talk to your neighbors. You could see it coming,
you could see where this was all going. So again, I like to keep that political itch scratch a more of an economics guy and a private equity guy and a market sky. So I'll stay involved somehow and I'm obviously. I think the first of the nation primary in New Hampshire is going to be really big with an open race in just four years, and maybe both parties about yeah, right, undoubtedly both.
I think you have a new cause. Though, if you read to the bottom of this op ed about the Doge, you write, by the way, eliminating daylight savings time big Well, let's not forget that. I could see you and Ed Markey joining together on this issue. You got to be kidne meed though it's dark till noon in New Hampshire. Know what, I'm fraid to New England that you're you're ready to do that?
Does anybody want to keep daylight saving time? Have we found that guy yet?
I don't know, Jesus, I think so, don't really what you want to?
Like?
See on the kids see so they can get on the.
School yester the morning.
Oh there's there's we can handle all that.
We can handle that.
That going back and forth is just it's antiquated.
It was created for farmers. It's just completely antiquated.
So the farmers of New Hampshire are talking.
And I'm listening.
I'm for one m listening, as is my successor Kelly aot.
She's listening to.
What's your advice for Kelly at the first challenge she's going to face when she comes in. We've only got about a minute left.
The advice is, uh, do right by New Hampshire first and foremost. Call the balls and strikes like you see him. If it's a Trump thing and he does right, give him credit. If Trump at the administration Republicans don't do right, call him out on it.
Right.
She has a platform as a governor, as someone who who understands how these things work and has is going to undoubtedly be working hard to keep that keep that lift for your die spirit strong to just call the balls strike. Don't over I say this, don't overthink the politics. Just do right by your state, right by your constituents, and it all work out in the end. The politics takes care of itself when you get stuff done.
Twenty ninety is you're going to be on an island.
What's the now, I'm getting a job. I'm listening to get a job.
A wealthy man I a as a civil engineer and a guy who ran a ski resort. Neither of those actually paid very well, so well looking for a real.
Job stay in touch with us. We'd like to keep this conversation going absolutely.
Thank you guys.
Great to have us, of course, Governor for now of New Hampshire, Christan Nunu, the Republican from the Granite State. Great conversation you'll only hear right here on Bloomberg TV and radio.
You're listening to the Bloomberg Balance of Power podcast. Can just live weekdays at noon Eastern on Apple car Play and then royd Otto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, just Say Alexa playing Bloomberg eleven thirty.
New York is a popular place to be if you are an incoming member of the second Trump administration, or at least a secretary designate. As we saw this morning ringing the opening bell at the New York Stock Exchange was President elect Donald Trump, and he brought along with him some of those who will comprise the most senior levels of his cabinet, assuming of course, they get confirmed, including the likes of Treasury Secretary Designate Scott Bessant. RFK Junior.
Was there others as well that we could talk about, but he of course was there because he was selected as Times Person of the Year this year, the second time that he has been awarded that, but he used it as an opportunity to make his case once again about what he intends to deliver for Wall Street.
The economy, I believe is going to be very strong. We do have to solve some problems. We have wars going on that we didn't have. We have a lot of things happening that we didn't have that would have never happened. They would have never happened, but now they have happened, and I want to get him solved.
Interesting if you're with us on Bloomberg Radio, to look at the cadre of officials behind Donald Trump. To your point, Kallie, it's interesting who was invited RFK Junior standing behind him, Scott Besant, We saw Kelly Leffler. Interestingly, Howard Lutnik was just off to the side. He was cropped out of
that image. And Brooke Rollins, I thought was interesting to pick for agriculture, reminding us of how close they are in the roles that they're all potentially going to play here when it comes to setting policy in the new White House. Gregory Coording is with us now Bloomberg Politics reporter at the table here in Washington. It's good to see you, sir, with the New York Stock Exchange display this morning. Speak to the optics here of this incoming president being there for the markets.
Yeah, I think this. We hadn't seen Trump in public for quite a while. Perhaps this is the most we've seen of him since the election, unless I'm forgetting something. But it was a moment for him because, on the one hand, he could go to the stock exchange and tut this remarkable year that we've had in the stock market, which he takes credit for not even being in office.
He has made the case. This is something he attributes to Scott Pisent is coming Secretary of Treasury, this idea that this stock market xuberance we've seen this year is entirely due to the fact that people predicted that Trump would win the election. We've crunched the numbers on that, and there's not a whole lot of statistical evidence that that's the case if you look at the poll numbers and
how they're correlated to what the market's done. But has been an extraordinary year, and he wants to sort of tout that but also he was in New York because he's the time Man of the Year, and that gives that's something that cover is something that he's always coveted. He's gotten it twice now when he was elected the first time and now the second time. So it was a good moment for him to come out and basket a little bit in the transition.
Well and talk more about things that we imagine a Wall Street audience is pretty receptive to, like say, lower corporate taxes. He talked about that fifteen percent rate once again. But we're reporting now here at Bloomberg that his team is considering a lift to the self cap, which many gathered there at the Nicey also care about, but only to twenty thousand dollars. And I wonder how that's going to go over.
Yeah, I mean, obviously there are people in the higher tax jurisdictions in this country, and the New York metropolitan area is one of them, which should say that the Washington DC area is also one of them, where people pay a higher proportion their incomes in property and state income taxes they had been able to write off on
their federal taxes. Trump's Tax Cuts and Jobs Act of twenty seventeen took away that deduction, or at least capped it at ten thousand dollars, made it really unfeasible for most people to claim it. Most people then took the standard deduction. This was a thornon Democrat side because who
lives in New York and Washington mostly Democrats. But when Trump was campaigning, he went to Long Island, where there's maybe a little bit more of a reddish tint than the city, and this is an issue there as well. He promised to do something on it. We'll see how this all mix comes into the mix, because he also promised no tax on tips, no taxes on Social Security benefits, no taxes on overtime. There's a lot that he wants to do in addition to extending the tax cuts of twenty seven.
That's for sure. Stephen Moore, talking to Bloomberg about this idea, by the way, said they're opposed to an unlimited deduction, which, as Kaylee mentions, is kind of the news here because that would amount to quote, the biggest tax cut for millionaires and billionaires ever unquote. So did they just find the number that they think could pass.
There is one sort of policy disagreement with this from the beginning is that, unlike other deductions, it's not doubled when you are married filing jointly. There is a marriage penalty to this salt tax cap that stuck in a lot of people's across so effectively doubling it to twenty thousand dollars kind of lets you perhaps that's the mechanism to do it, or maybe they just double it. But that was one I think legitimate policy question around the whole salt tax cap.
But unlimited wouldn't have been palatable too a lot of states.
I mean, OK, when you talk to people at the higher end, now, you know, the fact is that a lot of people on the higher end structure their income in such a way they don't pay a whole lot of taxes anyway. And you know, one thing that did benefit them was a sell tax cap, but they had other ways of reducing their income as well. We do get some data on how it's structured. Yeah, absolutely, people at the top of the top death style of incomes, not surprisingly got the biggest.
Benefit from it.
All right.
Gregory Cording, Bloomberg White House and Politics reporter, thank you as always for joining us as we consider something so important to our audience here on Bloomberg TV story that salt cap pretty much everything related to salt, I feel like always rockets to the top of most read on the terminal.
Gregory Cordy, Salt correspondent, H it's the best job in the room.
Yeah, function of the day read go on the terminal. You see what people are reading, and we certainly know our political panel is paying attention to these stories. To you joining us today, Rick Davis, Bloomberg Politics contributor, Stone Court Capital partner and Republican strategist, alongside Democratic strategist Brad Howard, who is founder at Corkoran Street Group. Thank you both
for being here. Brad, I would love to have you weigh in on this salt question because, as Gregory was just telling us, this is actually something that a lot of Democrats in blue states would like to see go higher. Is this Donald Trump's way of making sure he has the requisite votes to get whatever other tax cuts he wants through.
Yeah, And I was on My boss was a ways it means committee member, and we were part of the negotiations on a lot of the you know what we did in the Inflation Reduction Act and there was a big push for salt thin. If you recall, the problem with salt is that it's incredibly expensive once you repeal it.
And you know, I think when the Republicans did it in twenty seventeen, they thought they were doing a a I guess a dig at, like you know, high tax states like New York and California and trying to send them to states like Texas and Florida. So as a Florida member, you know, we supported the reinstatement of the tax or you know, getting rid of the cap there
or keep supported that effort anyway, like we're not. What I'm saying is that when you're from a low tax state, this doesn't really impact you, but the high tax state. So you talk about there's Orange County Republicans that lost elections over this issue. So it's a very real thing. And you've got this interesting bedfellows of Democrats and Republicans in New Jersey, in New York and California that are pushing this. And keep in mind, again one to four
seat majority that Johnson's got to do. You're not going to get a single Democratic vote on reconciliation none, because it's a purely partisan process. So I don't know how they put this together and compromise on this and keep it in and within a reasonable price tag.
Rick, you know the importance of this issue as someone who spends as much time as you do in the Washington, DC and New York City areas. What lines, however, will the Trump team find when it comes to all of these tax proposals. We can talk about salt all day long, but as Greg RECORDI reminded us, it was no tax on tips, on overtime, on so many other issues that when it comes time to sit down and talk about extending the twenty seventeen tax cuts, it could get to be a more complicated conversation.
No.
Yeah, because then you're talking about the deficit. And the reality is that Donald Trump campaigned as much on trying to reign in government spending as he did on these tax cut giveaways. Now maybe not, maybe he said more about tax cut giveaways than anything else combined, But the reality is all this costs us an enormous amount. As bad points out, this is massive budget impact. I mean, this is how he paid for a large portion of the twenty seventeen tax cuts was by putting a cap
on salt and reaping the benefits to the treasury. So how you replace that, especially if you are adding additional tax cuts beyond the core twenty seventeen tax cuts. And we've heard nothing really from the team around Trump about maybe excluding and letting fall by the wayside some of the twenty seventeen tax cuts to try and maybe upgrade the policy to be more relevant to tax reform than just tax cuts. And so it's a real problem for them.
They can't look like they've come into the office and spent hundreds of billions of new dollars on defense, hundreds of billions of new dollars on the border, tax cuts everywhere, and they wound up spending more into the deficit than Joe Biden did in his four years. And that would be a real problem for MAGA and the Republicans.
But that's the point of the doge, right Rick Gett, Elon Musk and the vacant there to recommend a lot of spending cuts that could help offset this.
Well, yeah, but if you're adding hundreds of billions of dollars to the to the to the pile, it's not just cutting this, but you know, making up for it in addition to the cuts that you're already planning on. Look, I mean in the budget today is the expiration of the Trump tax cuts twenty seventeen in twenty twenty five. So you know, it's a huge windfall right now for the federal government if you look at how you plan
for the next ten years. The more they take out of that planning for the next ten years, the bigger that deficit's going to get. And of course, you know, we haven't proven yet whether or not the dogs will work, and you can actually go find trillions of dollars in cuts.
Fair enough talk to us about the doge Brad Howard. You spent enough time in the House to see a couple of blue ribbon panels go by. What makes us think any of this will actually end up in policy?
Yeah, I think when you look at so it's not a real department. You know, it's called Department of an Efficiency, but it's not and you would have to create it by statute, of which Democrats could filibusters. So I don't see it coming to fruition as as an agency. It
may just stay this quasi kind of working group. There is a subcommittee under oversight that's going to come to fruition on the House side, but they don't really have much jurisdiction over the you know, able to introduce bills in this space because it's strictly kind of an appropriations thing. So you're going to see appropriators kind of balk their
heads at this effort. But you've got a pretty powerful duo in that Roaminswamy and Elon Musk, and with Elon Musk threatening to fund primary challenges against Republicans now who don't fall in line, they it's could have some real weight. We'll see the problem is that Democrats are very concerned that the Republicans are going to drive up deficits so high in the national debts, so high that they're then
going to demand or force spending cuts. And so essentially what you're doing is cutting taxes for the wealthy and multinational corporations, and you're strip You've already seen Republicans talk about cutting social security benefits, they're going to cut food stamps, they're going to cut all infrastructure dollars, they're going to
cut all this investment in green energy. So we really start to see massive deficits and massive cuts, and Americans are just left high and dry, and I think that's the concern when you have billionaires running the presidency.
I want to ask you both about something else. As we mentioned, the reason that Donald Trump was at the New York Stock Exchange today talking about these ideas around taxes was because he was selected as Times Person of the Year and sat down with an interview with time for an interview because of that, and in part they talked about the war in Ukraine, and Trump said, quote, I want to reach an agreement, and the only way you're going to reach an agreement is not too abandoned.
When he was asked directly if he would abandon Rick, what is that signal to you?
Yeah?
Look, I mean he's a negotiator, and he knows that Biden's in the process of chunking as much cash and weapons into Ukraine as he can get done between now and January twentieth, and that that's tens of billions of dollars on top of everything else we've already spent, you know, to get the number closer to one hundred billion. And Donald Trump sees at his leverage. And the point about his leverage of this shouldn't be mistaken is it's only leverage if you agree to suspend those payments or those
weapons shipments if there is peace. Right In other words, you know, it's great to say, hey, I've got you know, fifty billion dollars in the pipeline that I can cut off if you make peace with me. The problem with
that is it's cutting off that economic aid too. And so yeah, I think it's a positive in the sense that we've always thought that this would be the approach that Donald Trump would would make, is that you know, we've got all this work and effort and weapons and money going toward helping Ukraine beat back the invasion of Russia.
And that's a great negotiating position until at which point in time you give it away, and then the question is what guarantees did you get that Russia isn't going to play bad actor in the region Again, Brad.
Howard, we're just about out of time, so I'm going to set you up here. It's only a minute left. We're going to be talking later this hour with New Hampshire Governor Chris Sanunu, who is calling for a balanced budget amendment. He says it's time to reconsider the idea as somebody who has spent enough time on Capitol Hill to know better. Does it stand a chance?
Well, no, and here it's mainly the public opinion is there for it. My boss was introduced a balanced budget amendment when she was in Congress nearly every term and fought hard for it. The problem is a constitutional men requires two thirds vote in the House and Senate and then ratification among the states. The President actually has no
role here other than the champion to oppose it. H But when you look at the question is there's several bounced budget minutes out there, the real question is do you protect Social Security Medicare in those amendments or do you ban for instance, Republican BBAs with your bounced budget amnutes. They opposed tax increases, which you're gonna need to bounce the budget. Democrats opposed cutstant programs like earned benefits like
SOB Security Medicare. So there's never an agreement and it's an impossible test.
No easy answer. Brad Howard and Rick Davis, great panel, Thank you for the great conversation.
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I'm kiddy lines alongside Joe Matthew here in Washington, which was absolutely rocked a week ago Sunday by the news that President Biden was pardoning his son Hunter, despite of course insistence for an extended period of time that he would not do so, and it opened up a question as to what more pardons could be coming from this
president before he leaves the Oval office. We've of course heard rumblings about the notion that he could, for example, pardon the likes of former Congresswoman Liz Cheney or former Congressman Adam King Singer. But those aren't the pardons we got today, though we did get a lot of them, thirty nine to be exact, and nearly fifteen hundred sentences commuted by the President Jack.
It's a number that jumps off the page. And Donald Trump, I should say, Joe Biden pardon me made clear that he's not done. The quote from the President of the United States, I will take more steps in the weeks ahead unquote. We do have questions about what this means for the rest of course, the Biden administration and the incoming Trump administration, and Kaylee and I have really been taken since that Hunter Biden pardon by the work of
Kim Whaley with some of the best analysis. She literally wrote the book on this law professor at the University of Baltimore School of Law, author of Pardon Power, How the pardons system works, and why Kim, it's great to see you. Welcome to Bloomberg TV and Radio. I don't know if we're done yet, it's sounding like we're not. But these fifteen roughly one hundred people released from prison placed on home confinement during COVID was this an appropriate use of the pardon power.
It looks like this was to allow these folks to not be reverted back to prison in this moment. So the idea behind the pardon power is primarily mercy. That the president has a tremendous amount of discretion to assess what the conviction was, what the sentence was, and whether, in fairness it makes sense to lift some conditions of
that criminal conviction. So this does not, you know, I think, fall into a troubling pardon, although it's unusual for a president to do it in these numbers of course, Joe Biden had done it once before with non violent, low level marijuana convictions as well well.
So let's talk about a pardon then that many did find troubling, which was the pardon of his son Hunter, not just because of the fact that he said he wasn't going to go ahead with that, but also because of the unique nature of that pardon. He wasn't just pardoning him for the crimes he was convicted of, but essentially giving him a year's long period of time for which anything he did he could not be prosecuted for.
He was pardoned for Kim, and I wonder what precedent has now been said as we consider whether or not Joe Biden might look to issue a similar pardon to the one he gave his son.
Well, it was actually, I think longer, it might have been ten years. It's not unique, however, in that there have been presidents in the past that have issued general pardons without anything specific. For example, Jimmy Carter issued pardons for people who dodged the draft. The pardon is actually
quite vague. It doesn't identify any people in particular, and something more I tailored to an individual would be of course, Gerald Ford's pardon of Richard Nixon, which was not just for the crimes that were ready to go in an indictment against Nixon that wasn't actually filed against him, but it was ready to go, but any crimes additional crimes that he could have been charged with within that particular
time period around Watergate. I believe that the Biden part in the Hunter Biden what you're identifying as unusual was likely an anticipation of the incoming president, Donald Trump's promise to use the Department of Justice as an arm of retribution and to go after folks that he believes just should be should be prosecuted for having taken action that's
inconsistent with Donald Trump's interest. Now that's not Hunter Biden, but Hunter Biden by virtue of being Hunter Biden has definitely been had a target on his back politically in ways that other folks that engaged in the kind of behavior that gave rise to his plea deal, his plea deal as well of his conviction for lying on a gun application in Delaware about his drug addiction, and then in California some tax problems that he later paid back
with interest. These are not big, high level crimes of violence. But I think the concern across the board is what's the Justice Department going to look like under a second Trump administration.
Yeah, well, just the idea of these preemptive pardons, if we can call on that, has been getting a lot of talk around Washington. Some folks are raising their hands. Benny Thompson was asked about it, the former chair of the January sixth Committee in the House, concerned about being targeted. We've heard Liz Cheney's name banded about Adam Kinzinger. What would that mean for the precedent in this administration if Joe Biden went there.
So those people actually to the extent to which they were taking actions in connection with the speech and debate clause, there's arguably some immunity they already would have. I think the bigger concern really is the lower level folks that maybe participated as witnesses. You know, these documents, some of it is probably not even public that Donald Trump would then have access to that kind of retribution. But absolutely
this would be a precedent setting action. But my view is that it would be in response to a precedent setting plan for the Department of Justice. You know, arguably under Hoover, there was a JEdgar Hoover. There was the Justice Department used to spy on political enemies, famously Martin Luther King, for example. That was a you know, not a proud position part of American history. What Donald Trump and what looks like his cabinet it picks, seemed to
promise is widespread, potentially vindictive prosecutions. And for that, yeah, this is would be setting a brand new president with a lot of problematic implications around the across the board.
Well, so as we consider what future preemptive pardons might be given to, say members of the January sixth Committee, there's also the question of pardons for people who have been convicted of crimes on January sixth. Just today, in an interview published with Time, the President elect, who of course is Times Person of the Year, was asked if he would pardon all January six defends. He said yes.
When asked, you're going to do all of them, he said, I'm going to do case by case and if they were nonviolent, I think they've been greatly punished, And the answer is I will be doing that. I'm going to look to see if there were some that were really out of control. Keeping in mind here, Kim, that there are already hundreds of people who have been convicted or pleaded guilty to crimes related to their activities on January sixth, with the majority of those receiving some time behind bars.
But given there have been different crimes and different sentences here, can he just do this in a blanket way or will it have to be case by case, single names.
He could do it in a blanket way, or it could be case by case. The pardon power in the constitution's extremely broad. There's very few cases that have made it to the Supreme Court to narrow it or put
any limitations on it. And of course, in the Trump versus us Immunity case, where the Court created criminal immunity for presidents, it went out of its way to get out of black sharpie and underscore that the pardon power is extremely broad as far as the president's authority, you know, to answer your question on January sixth, that would be about, you know, lawyers crafting the language of a more generic pardon to be sure that it captures the folks that
Donald Trump would want to be included in that. I think there are over eighteen hundred prosecutions at this point. If he's talking about violent offenses, that kind of language sort of accepting maybe people from the part in if they engaged in violence, maybe that would be in there, or he could give a list. I think it's on
the Justice Department's website fairly straightforward to easy. But that kind of pardon I think is of a concern in a way that say, the Hunter Biden pardon was not because of the nature of January sixth and the violence
that was part of that. We have to ask ourselves with pardons, going back to George Washington, is a pardon being issued going to make the country less safe, either because that person will go on to commit crimes or because the pardon is being done in a self interested way, in a corrupt way, in a way to allow the president to commit crimes. Those are different categories I think of pardons than pardons under the traditional way for mercy that go back before the King of England, back to
the Bible. Jesus Christ was denied a pardon and that gave birth of the Christian religion. The whole idea is the criminal justice system, people fall through the cracks and there needs to be a fix survey done this summer, both Republicans and Democrats, a majority of both did not want to see pardons for the January six and people that participated in that because of the concern of violence around elections and an emboldening of the energy around what happened on that day.
Kim, you're writing in an op ed in The Hill today, say goodbye to federal protections and hello to Trump's advancing loyalist army. You're writing about Schedule F, which we've heard a lot about, and of course some of the names that could be coming into government here and the many that could be leaving as Donald Trump promises to drain the swamp. What would it mean for the Justice Department, for.
The SCHEDULEF for the Justice Department, That's a great question. There are scheduled officials within the Justice Department. And when I say that and explain in the op ed, what
does that mean. Basically, in the there was what was known as the spoils system that kind of took hold of the federal government early in the late nineteenth early twentieth centuries, where presidents just put their cronies and loyalists in across the board, populating the American federal government, and Congress responded that to that and said, no, we don't want that. That doesn't create an effective workforce. There's a lot of incompetence, and loyalists don't breed a democratic spirit.
So they passed a law and said we want competent, neutral civil servants, and that's pretty much been the standard since then. But there's exceptions. Those are called schedules that schedule a E and then F is what Donald Trump promises to add, which would be converting some of these folks into basically people that aren't protected by the other protections for the civil service workers and could be fired at will. But you raise a great question, which is
how will the Justice Department operate under Donald Trump? Number two? Will they be loyalists or they uphold the rule of law.
We all have to wait to find out. Kim, thank you so much for joining. Kim Wailey is author of Pardon Power, How the Pardon System Works and Why, also law professor at the University of Baltimore School of Law. Here on Balance of Power. Some quick breaking news to mention, Emmanuel mccrone's office says a new French premier will be announced Friday, morning, so we'll learn the replacement of Michelle Barniery. We'll have more here on Bloomberg.
You're listening to the Bloomberg Balance of Power podcast kens just Live weekdays at noon Eastern on Applecarplay and then roun 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.
One of the best pieces of news I heard today was that Jessica Roth was coming on. And I'm pretty sure I could talk to Jessica Roth about anything, but she is not here to talk salt. We have another big story when it comes to the pardons and commutations here out of the White House with my gosh, these numbers jumps off the page. When you start reading into the names though, and the justification, it might not be
quite as fun as it seems. The President, though, is commuting the sentences of some fifteen hundred people released from prison and placed on home confinement during COVID. He's also pardoning thirty nine Americans convicted of nonviolent crimes, and he says, well, he's not done yet. Co director the Jacob Burns Center for Ethics to the practice of law at Cardozo Law. Former federal prosecutor sd NY, Jessica Roth, It's great to see you, Jessica. Thank you so much for coming in.
This got your attention. Surely were these justified?
Well, it appears that they were, and were consistent with the way in which the extraordinary power entrusted to the president by the Constitution to grant pardons and clemency has been exercised. Obviously, I haven't gone through and looked at the details about every individual, but in terms of the reasons that the President gave for granting his power as he did for these groups of individuals, these are traditional
reasons to exercise these extraordinary powers. Some of these people were home sent home from prison during the COVID pandemic and conducted themselves in an exemplary manner, suggesting that they did not require being returned to prison. Other people were convicted of crimes that might have been prosecuted differently today under current rules or laws or norms about prosecution with
respect to drug offenses. So these are the kinds of considerations that have typically been taken into account by the presidency and also those working with the president to help the president exercise this power. There is a whole apparatus within the White House and the Department of Justice for reviewing petitions for pardons and clemency to really look at the individual records and the circumstances and also some of
these issues about whether laws and norms have changed. So these seem to be consistent with that tradition.
Josh Wingrove just said, these aren't fifteen hundred hunters. Well, well, the President says he will take more steps in the weeks ahead. And I want to ask you about this idea of preemptive pardons in a minute. But the previous record, I didn't know this was a Barack Obama three hundred and thirty in one day before he left office in twenty seventeen. But this is a COVID phenomenon, right, I guess these are extreme times that call for an extreme number.
Professor, Yes, my understanding is that the vast majority of those pardons and clemencies that were announced today, the clemencies were for people who were sent home to home confinement during COVID and so obviously that is an extraordinary set of circumstances.
What do you think about what we're about to hear Benny Thompson, who chaired the January sixth Committee, Democrat in the House, says he's open to a pardon. I believe the quote was, it's his barrogative. If he offers it to me, I would accept it, but it's his choice. Liz Cheney has been on the list, along with a few O there's what do you think of the concept of a preemptive pardon, doing this for somebody who's technically not in any trouble.
Yeah, I'm troubled by the concept of the preemptive pardon. I was troubled by it, frankly when the President did it for Hunter Biden, although I understood in that circumstance why he would do it, given what some of the statements by President elect Trump and by his prospective nominees, for example, to run the FBI about intending to go after Hunter Biden and some of these individuals on the so called enemy's list. So I understand the rationale for doing it. That said, that is not the norm for
how the pardon power has been exercised. The fifteen hundred people we were just talking about. That is the norm and how the pardon power has been exercised not to do it preemptively in language that essentially gives people immunity for everything they might have done, every crime they could have possibly committed during a period of time. I'm troubled by that becoming normalized. It also, frankly wouldn't insulate people
from all harassment. So, for example, a congressional committee could still investigate individuals who had been granted a pardon, subjecting them to sort of the difficulties of responding to subpoenas and having to testify before Congress, having to retain lawyers to represent them in that regard. Other agencies government agencies could investigate them like the irs. So it's not like a pardon accomplishes everything that people might think that it would.
It does pre empt a criminal prosecution of the individuals
who are named, but it doesn't accomplish everything. And so because of the practical considerations of just how effective is it and its intended aims, and normalizing this idea of a preemptive pardon, and also suggesting that the people involved did anything wrong, for all of those reasons, I am terribly concerned by it, even though I do understand the rationale for doing it given these extraordinary times we find ourselves in where people are literally on an announced enemies list.
You know, even Bill Clinton doesn't think it's a good idea. He was asked about this on ABC TV. It was on the View as a matter of fact, he said, I think it's a very personal thing. But then he stopped himself and he said, I hope he won't do that, this idea of preemptive pardons. And I wonder if it has to do with precedent. Professor. I know we're not in Bill Clinton's head here, but if Joe Biden goes there, what does that mean for Donald Trump in his nextern.
Yeah, So when I said a moment ago, I'm troubled by the idea of normalizing this, I mean, that's really what I'm talking about is sort of setting a norm, a new norm about the use of the pardons in this preemptive broad way, setting the precedent that other presidents then would cite as essentially making it normal and something that is not extraordinary if they were to do so.
I don't know in the case of former President and President elect Trump, to what extent the precedent set by Joe Biden would actually affect what Trump would do himself in terms of granting preemptive pardons, but in terms of how the public receives it, the media receives it, how people in our country think about it. I think it does matter whether Joe Biden does it first, and whether it becomes essentially an accepted part of political and legal actions that we just grow accustomed to.
I hope it won't.
As we spend some time with Jessica Roth here on Bloomberg, I have to ask you about Donald Trump's legal situation is personal legal situation, because Professor, we spent so many months talking about the four cases, the four federal cases or two federal cases against him. We had Georgia, we had New York, and it's interesting to see what's going on here. Jack Smith may be out of business for now, but Alvin Bragg says he's not opposing Trump's motion to
have his hush money case dismissed. Is this going to follow him into his presidency or is his next term, I should say, or be waiting for him when he's done.
Well, we don't know yet. I mean, we're waiting to hear the ruling from the trial court on these very issues, and then whatever the trial court decides would be subject to appellate review at the Intermediate Court in New York, and then the New York Court of Appeals, which is the highest court in New York, and then in theory before the United States Supreme Court. So we don't know yet what's going to happen. Certainly it appears from the filings by the District Attorney's office that they are not
intent on going ahead a full steam. They are open to the idea of holding the whole case in abeyance while Trump serves out his four year term. They're also open to the sentencing going forward and whatever sentence is imposed,
having that held in abeyance for the four years. They're also open to having the sentencing proceed and then there would only be essentially appeals and the service of the sentence, although again the District Attorney's Office is open to a variety of ways in which that fashion that sentence could be fashioned, including no prison sentence, a fine instead perhaps,
or just essentially unconditional discharge. Would be no further action at all, and so the District attorneys offices laying out a whole host of options for the trial court in terms of how to proceed if the court is inclined to proceed currently, or how to essentially hold the case in abeyance for four years. And so we just need to see what the trial court's going to do, and then if there are appeals that ensue before even the next step at the trial court level, and I suspect
that's going to happen. What's going to happen. I don't expect the trial court is going to dismiss the case outright, which is what Trump's lawyers are asking for. And so if that's the case, then I expect we're going to see immediate appeals before any sentence.
Fascinating. I want to take one of your classes someday. You think I could pass her class, James, I'm thinking I'd get confused really quickly, but I know I'd learn a lot. It's like going to school. Whenever we talk to Professor Jessica Roth, I only have a minute left, Professor. Let's come full circle back to where we started. Would it not be whove Joe Biden to pardon Donald Trump on his way out?
Well, that's interesting. Obviously he doesn't have the authority to do that for the state prosecutions. He would only have authority to pardon him for the federal cases.
And no will be talking about Hunter anymore.
It's true. I think people are going to be talking less about Hunter now that the president has exercised his authority to pardon many other individuals who are not related to him. The cases against Trump, the federal cases have already been dismissed without prejudice. I think there's very little likelihood that they would actually be resurrected after the four year term, so I just don't see that happening.
I had to ask. It's great to see you as always, Jessica Roth, Co director Jacob Burns Center for Ethics and the Practice of Law at Cardozo Law. 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.