Sound On: Recession Definition, Trump Speech Preview

pro life administration in American history. Over the past two years, the world has seen the radical left's agenda in action, and it's been very sad to what Bloomberg Sound On with Joe Matthew on Bloomberg Radio Washington argues over the definition of a recession. Welcome to the fastest hour in politics, Just days before an expected negative reading on GDP and a White House trying to get ahead of the news.

We'll go to school with Bloomberg Economics editor Michael McKee, and we'll talk to Marks, the chief economist at Moody's Analytics. Mike Pant's speaking today in Washington. Donald Trump will do the same tomorrow. Is it a forecast for we'll discuss with GOP strategist Jennifer Kerns and our signature panel Bloomberg Politics contributors Jeanie Chanzano and Rick Davis with us for

the hour. President Biden continues his recovery from COVID. White House kicked out a tweet showing and working on the balcony with the suit and aviators and the dog for that matter, nearby this morning, and then the President spoke a little later saying he's feeling fine. He was addressing an event about the Chip Act virtually, of course, and he's not alone with this. If you haven't heard Senators Joe Manchin and Lisa Murkowski both announcing they've tested positive.

So Manchin could make life even more difficult for Democrats, as his in person vote would be needed for never mind uh negotiating a reconciliation plan. Of course, this was already challenged by inflation and growing expectations for a recession. Not that everyone sees a recession the same way. Listen to Treasury Secretary Janet Yellen on Meet the Press. A common definition of recession is too negative quarters of GDP growth or at least that's something that's been true in

past recessions. When we've seen that there has usually been a recession. And many economists expect second quarter g d P to be negative. First quarter g d P was negative, Yes it was, and two in a row. Well there you are. Now. The RNC was quick to pounce on what they see here as a White House trying to change the definition before GDP comes out Thursday. Even Michael Burry, you know, big short fame call about the White House on Twitter over this. So for those of us, uh, well,

I mean we should hear from Janet Yellen again. This is again on Meet the Press with the back and forth. Listen to the back and forth with Chuck Todd. I would you know one that we should be um not not characterizing that as a recession, but you're splitting hairs. I mean, if the technical definition is two quarters of contraction, you're saying that's not a recession. That's not the take. That's not the technical definition. Okay, And that was noted in the White House blog last week, by the way,

which got all of this going. Karine John Pierre followed up on it, and now the interview on Meet the Press with Janet Yellen. So the White House is wrestling with this definition publicly at least of a recession. And so for those of us who are not economists, we thought we would go to school to start things off before we talk to Marks Andy a quick lesson with Bloomberg Economics editor Mike McKee. Alright, professor McKee, what is a recession? Well, we can tell you what a recession

is not officially two quarters of consecutive contraction. That's sort of a longstanding common definition. That isn't what economists use. The economists favorite is the Bureau Economic Researchers traditional definition, which is a significant decline in economic activity spread across the economy that lasts more than a few months. They use about eight different indicators to decide whether or not we've seen that kind of decline and how long would

it take for them to determine that. It often takes up to a year after it begins for them to know because so much of our economic data is revised, and so it's hard for the FED to know exactly where we are at any one time, and NBR doesn't either, so they wait. Professor Mike McKie, thank you so much. I'll bring an apple next time, Okay. And that's where we begin with Mark Zandi, chief economists at Moody's Analytics. Smark, welcome back. It's good to be with you, Joe. Thanks

for having so. We've been talking for months about whether the US is heading for a recession. Is the Fed Titans? But now we're arguing over the definition of a recession. And based on what I'm seeing from you on Twitter, A, you do expect a negative number this week in G D, P and B, it will not mean that we are in a recession this time around. How come? Uh? Jobs? Uh?

You know we're creating a boatloaded jobs. I mean, through the month of June we were creating an average of four or five thousand a month, and typically you might create a hundred thousand. Layoffs are a record low. I can go through a lot of data, but you agree with what Janet Yellen has been saying. She's saying that this is we're not in recession. Correct, because of the strength and the jobs data, the fact that we have such a low unemployment rate and consumer spending and so forth.

I'm not an economist, That's why I call you. Does this mean that we were all taught and oversimplified, if not false definition of a recession. Indeed you are, Yeah, it's a rule of thumb. Yeah, I don't think that was econ one on one, but it might been a econe I'm not sure. But now it's you know, it's a great rule of thumb. Two quarters of consecutive declines, and that's helped in the past to peg recessions. Easy

to get your mind around. But at the end of the day, here in the US, the arbiters, the Business Cycle Dating Committee, a group of academic economist at the National Beeer of Economic Research, and they need define a recession, I think appropriately, so as a broad based, persistent decline in economic activity. I'm paraphrasing, so I may not have the words exactly right, but that's the spirit of it.

When you have a lot of jobs, you have low layoffs from a lot of consumers, spending income growth is strong. That's not consistent with a recession. This, this is not a recession. And but by the way, this is a trumpet forecast, and you'll have to have me on a few years from now to prove it over one or the other. But I think this day is gonna be revised.

You know, it gets subject to significant revision over the years, and I suspect it will be revised up because there are other ways of measuring the same thing, and they are saying something completely different than the GDP data that the gross Domestic income data is saying. Oh no, we grow and actually grew pretty strongly, you know, throughout this pandemic, including in the first half of this year. You see American consumers are the firewall. How long can that last? Uh?

I think I can. I can't last forever. I mean, if inflation doesn't moderate, I think by late this year early next, the firewall is gonna come down and we're gonna go into recession. So we need to get inflation back headed south. Here. It feels like it's moving in that direction. Gas prices are done a lot, you know, over the last four or six eight weeks, so it feels like, you know, we're coming off the boil. But

that's got to happen. If it doesn't, consumers are gonna, you know, just their purchasing power is gonna road to such a point they're gonna blow through all their excess saving they piled up during the pandemic, and they're gonna their sentiments going to collapse and we'll go into recession. So we've got you know, three six, nine months, but

we need inflation back down. Well, having been around politics as much as you have, you know the definition of a recession that Republicans are going to use in this case. They're gonna say, yeah, here's the here's the proof. This is Joe Biden's recession. How do you argue with that it's not a recession. I mean, I don't know how I argue with that. But when perception is reality and politics, this is not an economics one on one or one

or two class. This is most people are going to hear Republican members of Congress and senators saying this pretend presidential candidates, and this is just makes life a lot more difficult for this White House in messaging, you know, going out to teach everybody what's going on, right, Oh yeah, you no, absolutely, and fort time just the economists, not the politician, and I don't have to worry about the messaging per se. But you know, look, people have jobs.

Unemployment is incredibly low, layoffs were rock bottom. You know throughout the first half of this year. You know, people were spending. You know, stock prices are down, no doubt, but aus prices were up. So people are you know, pretty wealthy? Are their debtloads are very low? They locked in those previously low interest rates through REEFINI and saying so, you know, just for the typical person trying to figure out,

you know, where they would land in this debate. Yeah, I don't like paying five dollars for a gawn of gasoline and I'm very upset about it. Rightly so. And this inflation is a real problem. But just think about it for a second. You know everyone's employed. Um, you know, uh, is that a recession? No? Right? As you well know, Larry Summers has been at odds uh with this administration over inflation, at odds with the Fed and even with the likelihood of recession, he says, it's highly unlikely that

the Fed can pull off a soft landing. How can these two economists, Summers and Yelling, both Democrats, be so far apart? Well, I mean this is a tricky time, right, and I mean, look, recession risks are high. Inflation is a problem. We do we need a little bit of luck. We need all prices to get head and lower. That means you know, the problem, the worst of the fallout from the Russian invasion has to be behind us, and you know, there's a lot of reasons to be nervous

about that. You use sanctions, you know, lots of different things. And the pandemic, you know, the pandemic is still launch, still creating havoc in China, where you know, a lot of the world's supply chains begin. And that's you know, we're bating back on us. We need a little bit of luck on the pandemic and on the Russian invasion. I think, actually correctly, I'm wrong, Joe, but I think

the Treasury Secretary Yelling actually used that phrase. We needed a bit of a little bit of luck, and he's right. And that's why recession risk awfully high, because things could definitely go throw us. And and that's those are the

known unknowns, right, What about the unknown unowns? I mean, I had this nightmare that we're gonna have a Cat five hurricane blows through the Gulf and wipe out a refinery on the Texas coast, and you know that that will send gas prices right back over five bucks and we'll probably go in So when you're on the knife sedge. That's all it takes. But I'd throw another one back at you. How about B A five. How concerned are you about another wave of COVID that actually did impact

business is the way it did the first time? Yeah, I mean that goes to the pandemic, right, I mean, I I think my sense is people aren't going to hospitals to the same to a significant degree. As such, I think here in the US and most of the world will be will just navigate through. It's you know, not no no fun, and it's gonna be disruptive, and you know, it just adds to our general angst. But the real problem is China, right, because China still has

that no COVID policy. If they have any cases, they shut down shutdowns or shutdowns. Yeah. And lastly, do foresee a real risk of recession next year? Is that safe to say? Yeah? Oh yeah, I think recession risk are very close to even and and in fact, it feels like it's if we're gonna have a recession as closer, it's sooner rather than later. It's not going to be a year from now. It's gonna be you know, sometime in the next six months. Mark Sandy Moody's analytics. It's

always our great pleasure. Thanks for coming back to talk to son Bloomberg anytime. Joe, thank you. And how about the President himself? He weighed in virtually, of course, during an event today at the White House. Asked about Thursday's g d P report, here he is, we're in our community recession and my view, uh we are. The employment rate is still on the lowest we've had in history, to the three point six area. We still find ourselves

of people investing. Uh my. My hope is we go from this rapid growth to a steady growth and uh so see we'll see some coming down, but I don't think we're going to God, William, I don't think we're going to see a recession. We'll assemble the panel next for the take on this. Genie Chanzano and Rick Davis are with us Bloomberg Politics contributors will check markets and traffic along the way. I'm Joe Matthew and Washington. This is Bloomberg. This is Bloomberg. So long with Joe Matthew

on Bloomberg Radio. So much for the Pence Trump showdown this week here in Washington. The Heritage Foundation now says Mike Pence couldn't make it because of severe weather and flight delays. They've postponed the whole thing supposed to be talking this hour, so he will not be providing the preamble for Donald Trump tomorrow in d C. And we'll have more on that later this hour with Republican strategist Jennifer Kerns. This is sound On. Thanks for joining us,

the fastest hour in politics. Now, we went to school with Michael McKee. We talked to Mark Zany, and we assemble our panel with Rick Davis and Jennie Schanzano Bloomberg Politics contributors on this whole attempt by the White House to try to well give us a different look at the idea of a recession ahead of Thursday's economic data. Genie, as a communicator here in an academic what do you make of this process? You start about a week out here.

It was in a White House blog post, then it came up in the briefing room with Karine Jean Pierre, you guys trying to redefine recession, and now this week, uh, it's it's it's in the air. Janet Yellen talks about it on Sunday and suddenly it's not two consecutive quarters of negative growth. There's all kinds of factors. Is that going to get into the brains of Americans by Thursday? You know, unfortunately it's not. And I think they need Professor McKee to get over there and to clarify exactly

what it is. But you know, the problem for this White House, and and I think you know, we can all be empathetic to this, is that they're trying to do two things. On the one hand, they want to empathize with people, and on the other hand, they want to point to the good things going on. And unfortunately, I think Janet Yellen got caught in a trap in you know, Meet the Press, where she was trying to argue about a definition versus letting people know that she understands.

The White House most importantly understands and is ready to address the incredible pain people are feeling everything they do shopping, buying a house, renting an apartment, whatever it is. So you know, it's a difficult line for them to walk, but they're going to have to do a better job of doing that. And we understand the definitions of these things are complicated, but that's not what the American public

are going to be thinking about. Well, and you look, I guess most of us uh learned in high school one one way to look at this, Rick and I you know, I understand two consecutive quarters as an indicator and a typically reliable one, But it does not define a recession. Does that matter? Oh? I think that this is what they're pushing back on and and and certainly the modern media, excluding Bloomberg, will rush to judgment by using that uh, that standard world will be everywhere. Right.

But yeah, but look, I mean we shouldn't be surprised because this is the same administration it got you know, uh, inflation called transient and that didn't work out very well for him. Now they're claiming there is no recession, and we can only hope they're right. But but they lack the credibility on this, right. I mean, you know, I don't think Yelling made a mistake. I think she was

like sticking to the White House talking points. You know, we're gonna say there's no recession until you know, we're proven wrong. And they were proven wrong on inflation, and let's hope they're not wrong on recession. Well, I mean Look, we heard from Mark zany Uh and look, maybe he's political in your eyes, but we also heard from Michael McKee and they both agreed with Janet Yellen Rick. So do people just need to get smarter on the economy or is it the other way around? The White House

needs to do a better job telegraphing. I think the White House has to sell They've got to telegraph this, They've got to educate the public, they've got to talk about it constantly. This is an administration where you know they're there. They have the attention span of a gnat, Like literally every day they change the topic. There's no ability to kind of stick to a message for four or five days and try and bring the public along

with them. And they and they wonder why when the public has asked, you know, about their initiatives, that they're highly critical because they get confused and they really don't know what's going on next. So I think I think this administration, We've talked about it many times in the past, has had an inability to communicate to the American public effectively. Their numbers represent that they show it, they demonstrate it.

Their lack of success politically lately has demonstrated that, and so the question is will they get it right between now and election day in November? And right now this seems to be the past where they're like, hey, just trust us, no recession, that's it. Well, is this sort of a shot across the bow of of many newsrooms, as I think Rick was was suggesting here, Genie, the headline has already been written in a lot of cases,

recession official two consecutive quarters. You start talking about this now and maybe it doesn't show up on USA to Day or you know, or on Bloomberg. Yeah, that's right, And you know, the difficult case to make politically, as always when you're going to tell people, don't believe what you're feeling, don't believe what you see people feel pain. That's the bottom line here. It's not the White House's fault, it's not Joe Biden's fault. But as president and the administration,

they take responsibility. You know, Gerald Ford wore wore that wind pin whip inflation now and Alan Greenspan said it was incredibly stupid and desperate and and it didn't do much to end it. But this is the trial of a president overseeing inflation of this kind and you know, many of our modern presidents have been lucky they haven't had to deal with Unfortunately, Joe Biden now is having to deal with it more than any president since bush In and it is a hard thing to deal with.

But they've got to do a better job letting people know they're on top of it, and to Rick's point, having a consistent message that they follow through on that is critical. Letting people know they empathy as well. Rick, you mentioned talking points are Republican talking points going out today in advance of Thursday, on the assumption that's a negative number. Oh sure, I mean, and I think everybody has an anticipation that this is gonna be a tough

week for the administration. These reports are going to come out, and Republicans are gonna pounce on it because they had a clean administration. Nobody was charging recession or inflation. You know, when Donald Trump was present. Doesn't mean he didn't add to the problem in the last year of his administration. But the bottom line is this is a Philip of Biden recession exactly, Rick Davis, Jeanie Schanzano, stay with us. I told you Mike Pence has Pope and strategist Jennifer

Kern's I'm Joe Matthew, this is Bloomberg. Donald Trump certainly keeps flirting with the idea, though of course no one knows if he's going to run in and I guess we can say the same for Mike Pence, although they're both talking a lot like they planned to run. Mike Pence was supposed to be in d C today, as I mentioned, speaking right now, and what would have set the table as he outlines his whole policy agenda, would

set the table for Donald Trump's big return tomorrow. This is his speech taking place at In America first summit that got underway today, and Trump will be speaking. This will already happen by the time we're here together tomorrow, so we can tell you what what he said, what took place. But what was set up as kind of a major duel between the two of a virtual duel, is no longer. Pence delayed, that hasn't been rescheduled yet.

But at the Turning Point Action Summit a few days ago, Donald Trump, as I mentioned, still going ahead with the idea that he not only won last time, but is standing by to run this time. Here he is and did much better the second time than I did the first, getting millions and millions more votes than we did in and likewise getting more votes than any sitting president in the history of our country by far. And now we may just have to do it again. We've heard that

line before. I don't expect we're gonna get a line like that from Mike Pence. But how about the timing now? Now Trump sets up the Pence speech, I wonder if that is set up for later this week. We'll let you know. Let's bring in Jennifer Kern's Republican strategist, former spokeswoman for the California Republican Party. It's great to have you with us here, Jennifer. Is this uh an opportunity lost for Mike Pence the whole weather turn here, or maybe on purpose so he could follow Donald Trump and

have the last word, so to speak. Well, great to be with you, Joe. I think if Donald Trump were answering this question, he would say, oh, he did it on purpose, he had the flight, he had the flight diverted on purpose. And I think, really, really, everything you've set this table for it really does show it is shaping up to be one of the nastier and maybe even more cringe worthy battles we're going to see for the next two years all up through. Um. Look, I

think it's going to be cringe worthy. The reason I say that is I think we will see some of the name calling that we saw in the election, where you know, Trump called Jeb Bush low energy and he called Marco Ruby a little Marsa. You get more nicknames. I think more nicknames and more slurs are to come, for sure. Um. But I think as much as there might be some some media interest in in Mike Pence, certainly in the wake of the January six hearings, Mike

Pence's delegation is actually pretty small. And here's why. If you look at the popularity Trump has had among the GOP for the last eighteen months since he left office, He's had about ninety percent support of the GOP, and at his highest point right after he left office, even after January six, by the way, he had ninety of

the GOP. Now that's changed a little bit at the January six hearings, UH say that that's cut into his his lead a little bit about a third or Republican fingers jeer his his impact at the polls with through his endorsements and so forth, have Rick Davis, for instance, you know, referring to him as Mr. Thirty five cent.

So does he really own the party to that extent? Well, well, he does if you look at the polls, and if you look at the cross tabs, which we do as political consultants, and some of the numbers that are embedded in there, the America First policies ring really true to that. You also look at Trump's structure that he has. He's basically created an entire operation that is sort of a private sector White House, and that is the America First

pack organizations. Um, they are ready to turn this on and and be back in the White House, and they're going to be playing in every election now through here. Also, why Mike Pence. I think we'll we'll have a tough go at it. I think he's fine taking the shrapnel from Trump. But he's more of a Lincoln project at candidate. You know, this is this is more of the moderate supermoderate you think, Mike. So Mike Pents is a moderate? He wouldn't. I mean, could Donald Trump have ever gotten

the evangelical vote without him? No? But but here's the thing, politics makes strange bedfellows, right, and loyalties change, Allies change, partnerships change over time, and we're seeing just how dynamic this relationship is um And I think Trump was, you know, according to all of these accounts for hearing that he

was deeply hurt. He really did think Mike Pence betrayed him, and he's going to make him pay for Mike pants really want to run for president, though, do you think or does he just want to be on the right side of history, to be the face of the other side. Yeah, I think you're onto something there. I would not be surprised if Mike Pence makes it maybe to the first presidential debate, but then drops out and go forms his

own pack. He will be a thorn in the side of Trump no matter which way you look at it. I'm sure he's had conversations with the consultants who run the Lincoln Project and other things. But look, Mike Pence has another person to worry about, and this is from his other flank as well. This is Liz Cheney, another person in who is most certainly going to get the arrows from Trump. And I think she is most certainly running And I think really her opening statement to the

January six Committee was really her campaign kickoff. Um, even though they're not supposed to be politicking from the dice, I think that's in effect what it was. So this would be interesting. I don't think it's what's Donald Trump talked about tomorrow. What's the in the in the space that he has Considering the way this has been framed, is this a policy speech or is this a scortched earth kind of speech? I definitely think it's a scortched

earth at speech. I also think he'll have some economic points in there, once again saying I told you so. The White House has denied that these economic problems are coming for the better part of the last year. And uh and and gosh, why don't you put a guy like Donald Trump Becken who knew how to run in the commune? I think that's gonna be the crux. As you mentioned my sense, Oh, I most certainly think that he does absolutely um, you know he by name, and

he'll talk about how disloyal he is. He'll he'll certainly get booze from the crowd. I think that is certainly uh in the offing, and and and yeah, he'll talk about you know, how Mike Pence doesn't represent the majority of the party. And guess what, how we know all of this? By the way, Joe follow the money right. Whenever you want to know the answer, you follow the money. I was in an event with Kevin McCarthy, the GOP

leader who's criss crossing uh the nation. I always run into him in the midterm yere, we're always kind of criss crossing states. Um. And he shared that the RNC they found out pretty quickly after Trump Uh, that he was a big fundraiser six to one. How one Jennifer Kern's thank you assemble the panel. Next, you're listening to Bloomberg sound on on Bloomberg Radio. Bad weather gets the blame for keeping Mike Pence away from Washington today. It

was coming down earlier. So Donald Trump will not be answering his former vice president if you will when he speaks here tomorrow, and that will be Donald Trump's a big return to Washington. Were told since leaving the White House. Let's reassemble the panel. Rick Davis and Jeanie Chanzano are with us Bloomberg Politics contributors. What do you make of

of the change in timing here? If you were actually you know, helping to advise Donald Trump here, Rick, Is this an advantage in a way that that you wouldn't have if you were following him today? Well? I think you know, Donald Trump probably never looked at this as dueling speeches, right, I mean, I doubt if he gives Mike Pence much credit for actually being able to get out ahead of him and lay down, you know, a

vision of the future of the Republican Party. So my guess is, with or without Mike pensive speech, Donald Trump is still going to say the same things, and you know, he's he's going to talk about his agenda. He he does basically the same thing in every rally he he does, so I suspect this will follow that sort of standard

rally approach. Does he have a larger base than some people are assuming, including you know, the conversation that we just had with Jennifer Kern's uh you know, is he gonna end up being kind of a fringe candidate here in the party that that wants to once embraced him, or are there more Republicans who are looking for an alternative, uh than than the sort of nine percent support in in broad polls. Let on. Well, I don't think you'll ever be a fringe canidate. He's got a hundred and

three million dollars sitting in a pack. And you know, he's got a hundred percent name I d whether you like him or not. And and I think though, what is telling is how many of his former administration appointees and governors are prepared to go out and start pushing back against him. Uh. And you know that includes probably half a dozen to a dozen members of his former cabinet who all think that they should be president United States and and are probably willing to stake a position

against him even if he's a candidate. So Uh, the lack of fear within the Republican Party leadership around Donald Trump is a good indication that he's starting to lose his reach into the Republican Party, especially as a candidate for president. But you see, Mike Pence is having a base in this party somewhere. Yeah, no question. He came to the table with Trump, uh as a social conservative, you know, great ties when that was not ruined on

January six. I think it had been ruined prior to January six, And I think on January six, he probably uh, demonstrated a moral superiority to the president, which probably helped him with that that community. And we saw one of his speeches in the last two weeks was down in South Carolina at Baptist Church and he talked specifically about those issues around faith and abortion that that really turned that group on. And so he has a unique ability

to drive a lot of attention in that arena. He talked Jennie we we hit this on Friday, about how honored he was to work for what he described as the most pro life administration in American history. Uh. He was also expected, though, to draw clear lines in this speech today, and I suspect he will deliver it at some point in the coming days of the Heritage Foundation to say, you know, without maybe naming Donald Trump, that

it's time to stop looking back. And we've seen that in the tweets that they've been sending out on behalf of Mike Pence, that he wants to be Trump with all the positives in terms of policy. And I have to underscore many Republicans are very satisfied with what Donald Trump did as president policy wise, So he's sort of Donald Trump without all the fuss, with out of the mess. And he's not back looking relitigating. He's forward looking. That's

how he wants to bill himself. And you know, in this speech that Trump is giving, some people are describing as a state of the Union five point oh. And interestingly, Trump spokesperson said he's going to focus and we have to see this to believe this, but he's going to focus on one issue, primarily rising crime and public safety. And in my mind, the question is can he do that without looking back and trying to once again relitigate. I'll tell you, reliving is has gotten Donald Trump pretty

far along with a lot of his supporters. Here, Rick Uh, the idea of a Mike Pence campaign, However, how long does he have to figure out whether whether he wants to do that or is it is? Is it not as simple as waiting on Donald Trump? Could you actually have these two running against each other? Sure easily envisioned the two running against each other, you know, and and and many other Republicans like de Santis from Florida announcing against Donald Trump if he chooses to run, so he

doesn't clear the field. Andy that that's not in your vision. Look, if you're a secondary candidate, and you know really kind of wondering, is there an opportunity without Trump in the race, Maybe I'll go, But with Trump in it, maybe you know, there's there's less ability to raise money and garner support in early primary states. Then then maybe some of the

second tier fall off. But you know, in politics is all about opportunity, and there aren't these opportunities that come around but once every four years, and so you know, sometimes don't have the luxury of waiting. And I think that's what Pence is thinking. I think he thinks that he's got a strike while the iron's hot. And and the build up you know, in the last two weeks is speech in Arizona around the governor's race there where

he posted up Trump. Um, you know, his Republican Study Committee, which is kind of his base in the House, social conservatives and conservatives alike. Um, you know, that was kind of a rally for his presidential campaign. And then his social conservative speech down in South Carolina. And then you know tonight's speech that got canceled. Uh, you know, in

in the Heritage Foundation. He he's acting a lot like a guy who's looking for a ticket to run in fascinating spending time with Rick and Jeanie with actually amazingly some breaking news here from Washington. The Chips Act has passed its procedural Senate vote here UH to be able to move ahead. And you know, we've been waiting for this, my goodness, for the better part of a year. There was an event today that took place at the White House. President Biden trying to push along the Chip Act, and

he surrounded himself virtually. Of course, he was on screen by some White House officials like Brian Deese. Even the Deputy Defense Secretary was there. And but that's where we're going. This was framed as almost a national security event. He had the CEO of Lockheed Martin among others. They're speaking. Jim Taselet talked about the national security aspect of of this semiconductor chip shortage that we're in right now, the

need to do more. Listen, because much of the production is in China and in Taiwan, access to be guaranteed for US industry, including in defense industry, is fragile. You know.

She China decide to withhold its production or inhibit Taiwan from exporting its chips or building them, we would have a serious economic and eventually national security issue on our hands, and so given the long league times for producing a fab and building the factories, it is important in urgent to begin to rebuild US semiconductor chip manufacturer in the US. I find this interesting that that the timing behind this event today because it's something that we've talked about on

the air quite a bit. We've asked Secretary Gina Romando about it when she's come on. We haven't asked Pentagon officials about it that you know, isn't this a major problem? We not only hear about washing machines and cars, but weapons systems, aircraft that the government, that the military needs and so forth. Uh, Genie, shouldn't White House have have done this from the beginning, taking this angle from the very beginning. They should have. And I give them credit,

and I specifically give Gina Romando credit. I think she's done a masterful job helping move this through. She's even had the supportive people like former Secretary of State Mike Pompeo. You know this, Yeah, this is truly a bipartisan movement. I'm not surprised it just cleared. But the argument, and Chuck Schumer made it the other day this isn't our benefit both financially and also from a national security perspective. It needs to get done. And so you're right, they

are making the right move doing this now. Could they have done it sooner, sure, but you know good they did it now? Well fair enough, but my goodness has already it takes a long time to get a foundry going here. Rick and Intel has since the time this was negotiated what six months ago, has delayed, has postponed the groundbreaking on it's on its big plant in Ohio. You've got Gina Romando talking about other companies being wooed by other countries. Uh, we do and have to wait

a year. Did we know we didn't have to wait a year? Um? This administration lost momentum around this by putting other things like build back Better in their way. That turned out to be an abject failure congressionally. And so now they're turning after that failure to this as a play saver. This administration has to learn it has to do more than one thing at a time. Uh. Congress is able to process these things. This was a

bipartisan bill. UH could have gone through any time if the administration had turned its attention to it and worked it hard. And the idea that we've given up a year to the Chinese regardless of what it takes to build a factory, Uh, makes no sense strategically. Well, I know, Gina Romando to to to Genie's point, is spent an enormous amount of time on this. It's just I don't know how many plates you can have in the air and you know, pick one to be the priority here.

I'd be curious to hear both of you, though, Genie, what what does it mean to have Joe Mansion out with COVID right now? It's they've got another what two weeks in the Senate to play with to get this done, to get reconciliation done? Is that even possible? It's a

lot on their plate. I think they can do it if they stick to doing things like this Chip Act, the things you can get through a fifty fifty Senate, and I you know, it is tough to lose anybody, you know, that's that's always tough, especially with I think they can do it. They may have to call the house back because they don't have much time before the August recess to get all this stuff through. Yeah, well, we all know, reconciliation takes forever. Rick, is that even

realistic to be talking about mansion in the House. I think they can rush it through if they want. Look, the only thing worse than having Joe manin is not having Joe manson. And and so, you know, if I were the administration, I have Dr Fauci posted up on his you know, doorstep, making sure he's got all the necessary tools that he needs to get through this as quick as he can. There's a lot of procedural activity that doesn't need his vote, but when it comes to

final passage, he needs to be there. There You have it from Rick Davis and Jeannie Chanzano. A new week underway with always so much to talk about. Our signature panel on the Fastest Hour in Politics. I'm Joe Matthew in Washington. We'll meet you back here tomorrow for more. Subscribe to the podcast. If you showed up late, Bloomberg sound on, We'll see you early tomorrow morning. On Surveillance