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President Trump on True Social describing that Ukrainian president Vladimir's Lensky as a quote modestly successful comedian, then going on to describe him as quote a dictator without elections. Zelensky better move fast or he is not going to have a country left. Can't imagine how this is received by President Zelensky himself.
Joe That's true, who earlier had suggested that Donald Trump is peddling in Russian disinformation. Donald Trump goes on to write in that same post, Biden never tried Europe has failed to bring peace in Zelensky probably wants to keep the gravy train going, knowing that hundreds of thousands of Ukrainians,
including thousands of civilians, have died since Russia's invasion. And that's where we start our conversation with Seth Moulton, the Democratic Congressman from Massachusetts, is with US, not only a combat Marine Corps veteran who served four tours in Iraq, but now a member of the Armed Services Committee in the House. Congressman, it's good to have you back here on Bloomberg TV and radio. Your reaction to the rhetoric
following the opening of talks yesterday in Saudi Arabia. Did this entire matter just take a turn to favor Russia at the table?
Absolutely? And Trump is siding with a murderous dictator. And I love you, Joe, but thousands of civilians didn't just die in Ukraine.
They were killed.
They were killed in a brutal, illegal war the Vladimir Putin started. And now the President of the United States is saying that Ukraine started the war, that we should side with Russia. I mean, I mean, this is akin to FDR suddenly coming out and siding with Hitler in World War Two. Ronald Reagan must be rolling over in
his grave. And it's unbelievable. It's just unbelievable that Republicans do not have the basic decency and simple courage to stand up and condemn the President for what he's saying. I hate to say it, but I served with a lot of Republicans who we are just absolute cowards.
Well, sir, as we consider the role of various Republicans here, including someone who used to be part of the Republican minority in the Senate. Marco Rubio, the now Secretary of State, did say yesterday that both Ukraine and Europe would be brought to the table at some point in these negotiations, even if they weren't initially. Do you believe that to be true?
No, because Marco Rubio doesn't speak for himself. He speaks for Donald Trump. And when Donald Trump's is that they won't come to the table, then that's what Margot Rubio will do. So no, I think that they'll come to the table at the end of the very day, the very end of the day, and be forced, or at least the Trump administration will try to force the Europeans and the Ukrainians to accept a deal that favors Russia. That's just everything on Putin's wish list. I mean, this
is truly unbelievable. I know, there are a lot of shocking things that have come out of this administration. A lot of the shocking things are things that Trump promised to do. So it's hard to say. You know, a lot of Americans say, well, you know, that's what the president promised. I don't think he ever promised in his campaign to side with a murderous dictator. It's just it's unfathomable in American history.
We talked before, Congressman about the prospect of another Yalta. You clearly do not like what's going on right now. How should these talks proceed?
These talks should by bringing Ukraine and Russia together to negotiate a deal that restores the sovereign voters of Ukraine because they were illegally taken by Russia, that provide some form of restitution for the billions and billions of dollars in damage done to Ukraine and its economy, and some some sort of restitution for the hundreds of thousands of innocents killed in this war, although we know very well
they can never come back. But the idea that an American commander in chief would throw out all of that to side with Vladimir Putin is something that our Congress needs to come to terms with. His Republican supporters need to come to terms with, and you know, everyday Americans walking around Massachusetts right now shouldn't ignore because our safety, our national security is on the line when our commander in chief sells us out to the Russians.
Well, as we consider what all we've heard, not just from the President himself, but from the likes of the Defense Secretary Pete hegset this notion that the US is not willing to have peacekeeping forces on the ground to make sure that any kind of peace is lasting, that that should be left up to Europe. Having been deployed yourself, Congressman on multiple occasions, as Joe mentioned, should US troops have to play that role.
I'd like to think that they won't. But you absolutely don't take that off the table. I mean, at its best, that's just unbelievably dumb negotiating on behalf of the Secretary of Defense and the President of the United States. But what we're clearly seeing, and I suggested a few days ago, is this isn't just bad negotiating. This is negotiating on behalf of the Russians. That's what Trump and Heg Seth are doing. They're negotiating on behalf of the Russian.
As we spend time with Congressman Seth Moulton, the Democrat from Massachusetts. What will then be the answer, Congressman, from your Arm Services Committee. What are you hearing from your colleagues on the committee? What does the chairman want to do?
I mean, look, my colleagues are in disbelief, but the problem is that they're silent.
That's the problem.
Republicans in Washington don't agree with this traitorous talk. They want to support Ukraine, but they're scared. They're just scared of Donald Trump. They're scared that they'll lose their precious little seat in Congress if they say anything bad about the president. And that's why I use the word coward to describe so many of my Republican colleagues.
Well, the argument that I won't say that they're all monolithic in this, but that you hear some making, Congressman, is that Europe should have a greater responsibility for its own defense here. That part of this is that Europeans need to be sharing a greater portion of this burden. Is there no accuracy to a suggestion or do you not see that concern as valid that Europe cannot stand up its own resources and make its own investments in
its defense and security right now? Because the administration would argue that is part of what they're pushing for here.
Sure, that's a valid concern, that's a valid point of view. That has nothing to do with selling out to the Russians. And that's an absurd and absolutely absurd implication. I mean, tell me, you're asking this question, what on earth does that have to do with siding with Vladimir Putin over this murderous war? What does that have to do with giving away Ukraine's sovereign territory? What does that have to do with lying about Zelensky and how this war began?
I mean, I'm sort of a gas at the question.
Well, and only suggesting that what you hear from the President in part is not just his language around Zelensky or around Putin or abound his ability to be a deal maker, but also specifically about the US financing that has been provided to Ukraine. It does seem the money here, Congressman, is an issue for him and he would like to
see Europe standing up more of that. Do you not think if Europe were to say, okay, we're all going to pay or NATO specifically five percent of our GDP, that is now our goal in terms of defense spending that that could make the President come around in some of these other ideas.
No, I don't.
I don't think so, because he's clearly shown that he's going to slide with Russia. That's what he's shown. That's what everything here says. And let's be clear, he's also lied, lied blatantly about European assistants. The Europeans have given more money to Ukraine than America has. He said that America has given three hundred and fifty billion dollars. It's not even close to that. So the president is lying through his teeth as he supports Vladimir Putin. No, I'm not
naiven have to think that that will turn around. And the idea that rush that Europe should help pay for its own defense, that's something. First of all, it's an idea that President Obama put forward first, saying they should reach a two percent target. That's been the goal for a long time. It's not been five percent. I heard some of the European allies at Munich talk about getting to five percent as an ambitious goal. I'd like to see them reach that too. Ill agree Europe should contribute
more to NATO. I am not sitting here selling out.
To the Russians. Congressman, the DOGE is turning its attention to the Pentagon, as I'm sure you've heard that a new directive to get rid of probationary employees that we have seen go through other agencies is in fact now heading for the Department of Defense. As a member of the Armed Services Committee, what are you hearing about this? How many people could be let go and to what extent could that impact readiness?
Look, I'm someone who's championed reform at the Pentagon for a very long time. But reform isn't just throwing people out. Reform is being smart about how we modernize our defense, being smart about how we spend our money, and reducing bureaucracy. But just willy nilly cutting a bunch of people whose
jobs are critical for our national security. That's irresponsible, it's dangerous, and God forbid, it leads to it at some attack on the in the United States that were not prepared for because the people who are supposed to be on the job watching for these signs and signals are no longer on the job. Because Elon Musk, an immigrant, came in and sat behind the Oval office desk, even though he was unelected to do so, and decided to just willy nilly cut a bunch of people out of out
of government jobs. I mean, it's irresponsible, and you know, and yet somehow it's not surprising coming from a commander in chief who, let's not forget dodge draft himself. He was asked to go to Vietnam, he said, nope, someone else, some other American can go into my place. He faked an injury, and now he's hired the South African immigrant to sit with him behind the Oval Office desk and make decisions about our national security. Doesn't sound good to me.
Shouldn't make you feel Congress, your family.
I've had the opportunity to talk to you a lot of times since you became a member of Congress, and you don't seem like you're in a good place as a lawmaker or as an AX. Four years for you, Joe looks four years for you? Or are you going to craft an answer to this as a Democratic Party?
Joe, you know me very well, and you know that I have been out front in redirecting the Democratic Party and saying that it's no longer good enough just to criticize Trump, that we've got to have our own way forward, and that we've got to make some changes as a party to get back touch with the majority of Americans. So you never have to question whether I'm willing to
make changes and reforms in the Democratic Party. But I'm also going to hold Republicans accountable, and that's what needs to happen right now when Donald Trump is selling us out to the Russians.
This was quite a conversation with Congressman Seth Moulton, the Democrat from Massachusetts, with us live here on Bloomberg. Congressman, thank you very much, Kayley. You don't have to guess how Seth Malton thinks about all of this.
No, certainly not, and he is not alone in his views. Specifically about some of the language we are hearing around the description of President of Ukraine, vladimir's Lynsky as a dictator. You are seeing at least some mild pushback from Republican senators on the Hill suggestions that that is not how they would describe the Lame John forne example, but not necessarily full throated pushback to the tactic that the administration is taking here when it comes to approaching these talks.
At least an issue.
Yeah, John Thune is speaking with Bloomberg about this a short time ago, laying blame against Vladimir Zelenski, saying Russia is the aggressor and there is not a question about that.
You're listening to the Bloomberg Balance of Power podcast Kettas live weekdays at noon and five pm, E's durn On Apple Cockley and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa played Bloomberg eleven thirty.
Today, the Senate was gearing up to move forward on a budget resolutionist so called Skinny one, that would address part of the legislative agenda that President Trump wants to pursue, specifically providing funding when it comes to border security and changes to energy policy, a strategy pursued by Senator Lindsay Graham, who leads the Budget Committee in that chamber, as well as the Majority Leader John Thun. The House, of course,
is trying to do everything in one package. And today, as we mentioned, that got the endorsement from the President on True Social who said, in part quote, the House resolution implements my full America First agenda everything in all caps, not just parts of it. The question, of course, though, Joe, is if it is to be everything, how much exactly does everything cost.
That's a great question that no one in Washington, I think can answer right now. But somebody is going to have to come up with an answer. Philip Swagel among them. He's director of the Congressional Budget Office, and when you hear people talk about scoring legislation, this is the entity that does it. He's with us at the table right now ahead of the storm. Philip. Good to see you and welcome. CBO bipartisan, non partisan.
CBO is non non partisan.
Forgive me, one of the most important agencies in Washington, and therefore a very easy target when lawmakers want to complain about the process. We'll get to that. What are you doing right now as an organization when you're waiting for these massive bills to drop? I mean, are you are you? Are you doing exercises? How do you get ready for what's about to happen?
No?
Very good. You know, we're here to support the Congress.
And I said, we're nonpartisan units for both chambers and both sides, and we support both the Republicans, the majority and the Democrats the minority. We've been working with the Congress, with members with committees for months as they prepare for this legislation, and we're working with both sides that both it's Chairman Graham of course in the Senate, Chairman Arrington in the House, and we're supporting them, we're supporting their staff,
and that's just routine. As the committee's jurisdiction refine their legislation, we're going back and forth with them to provide them with cost estimates and other information.
Well, you mentioned Chairman Arrington. Obviously, the budget resolution that he put forward that worked its way out of the Budget Committee called for four and a half trillion dollars in tax cuts that will be allowed in return, you have to have at least one and a half trillion dollars of spending cuts. Keeping in mind that the President said last night that he doesn't want to see Medicare, Medicaid or Social Security touched. Is that mathematically possible?
I mean, for sure, it's mathematically possible, and it depends on the decisions to be made by the Congress in the future. At this point, where the Congress is now is that they're working on a concurrent resolution. It's a resolution, it's concurrent between the two chambers, the House and the Senate. There's no cost estimate of that. Where the cost estament comes in is later in the process, after each chamber comes.
Up with the specific legislation.
And so that's instances we're working with them on a technical basis and confidentially when the eventual legislation comes forward in whichever way it proceeds with, you know, so the bigger or smaller, we will eventually provide a cost estimate that makes the numbers clear.
I want to get to an important debate that's underweight right now in Washington, because we've had people sit at this table and argue that extending the Trump tax cuts will prompt growth that is on quantifiable we get back to dynamic scoring and so forth as a concept. There others are saying that it'll explode the deficit and ravage the economy. We get both extremes. Here a lot you wrote at the end of last year because higher taxes increased revenues. This is the idea of what would happen
if they were allowed to expire. Because higher taxes increase revenues, the federal government borrows less, making more funds available for private investment. These two effects roughly offset each other. As a result, the expiration of the individual income tax provisions here does not significantly affect CBO's projections of real GDP. So does it inspire growth or not?
Okay, no, very good, And that's from a blog post on the CBO website. And the way to think of this is that the Tax Act in twenty seventeen has a number of provisions. Many of them are permanent already. So these international provisions that are largely permanent, there's corporate provisions largely permanent. There's some business provisions that are not permanent, expensing the research credit.
And then there's the personal side.
And so the quote you read is exactly exactly right. It's about the personal side. And as you said, the higher deficits that would result from extension of those leads to crowding out such a downward effect on GDP growth. The positive incentives of lower taxes goes in the opposite direction. Those two cancel out on the business side. So that's
on the personal side. Then on the business side, those have a smaller cost in dollars, but probably a larger bang for the buck in terms of economic growth, and so to know the growth impact of the eventual legislation, we have to see it all and that's what we're waiting on.
Well, and we're all waiting on it. We've been waiting, it feels like, for some time, and I'm sure that waiting game is going to have to last a little bit longer knowing and we've had multiple conversations with Chairman Jason Smith of the Ways and Means Committee about pursuing the tax cuts that Trump would like to see implemented. This notion that he needs more than four and a half trillion dollars because that alone is what it will
cost to extend the twenty seventeen tax cuts. Can you walk us through the math on why that figure for extension is so much higher than the original score of the legislation from eight years ago.
Okay, no, it's a great question.
And well, first of all, I should say, our colleagues in the Joint Committee on Taxation eventually will provide the cost estimates for the cost and so their numbers will appear in a CBO cost estimate, but by statute, their JCT's numbers. So broadly speaking, the twenty seventeen Act when it was enacted in December twenty seventeen, had a variety of lower taxes, but it also had base broadeners. Some of those were one time it changed the indexation of
tax brackets. There's a one time repatriation of foreign income that resulted in revenue, and another number of other provisions. And that's why the original cost of the twenty seventeen Act on net was lower because of these one off provisions. Now, of course, the cost of whatever is extended or whatever changes there are, will again depend on the specifics are there one off provisions, are there other base broadeners, and what exactly is done.
So when you start talking about the process, here, bring us behind the scenes just for a moment, because I picture stables of men and women wearing green visors going through the raps. I mean, just the amount of time required to read all of this is thousands of ours. How do you devour a reconciliation bill of that size?
Now, I'm just I'm sorry, I'm smiling at the green visors. That is our self image. It's a positive here, It's yeah, it's definitely a positive.
You know.
It's what we do. We read the legislation line by line.
And word for word, and we work closely with Congressional staff, and you know, the committees are very helpful as they develop legislation.
We work back and forth. They provide a red line.
So you're seeing this as it's being written. Though you don't get this one night and you all have to go home and no, that's take a chapter.
Yeah, and of course, look, there's going to be changes over time. There could be changes at the last moment, and we support the Congress whatever processes.
That you know does it. That's how we do it.
I can give you an example from twenty twenty one. So this is the reconciliation that happened, then we can build back Better. At the end of the process by which build back Better passed the House. It was never enacted, but past the House. There are a number of members of the House who had questions about the legislation, and we gathered a bunch of us at CBO together in
a conference room. We were still wearing masks, and you know, we'd all been vaccinated, and we're on a conference call with dozens of members of Congress and they're asking us questions.
On page seventy two, line seven. You have this.
The White House says that what's the difference, and the you know, the right analysts from CBO, one of my colleagues, we get on the phone and you know, the conference call and say well, here's what it is, next member. And so that's that's to kind of in the weeds that we do.
If that's what members want.
This is the good stuff, Kyllie. This is literally how the sausage is made.
At some point during that meeting we took I mean, it's going to sound sounds crazy in twenty twenty five thinking about it, but we took our mask off and we're all like, wow, this is weird.
That's what you look.
It was just like, you know, we just we do what we need to do to accomplish the mission.
Well, I guess it's also a question of how your mission, having been completed, is actually received by some of the very same members that you're referring to. Obviously, you'll be well aware that the CBO has come under some criticism for the way in which it scores things. I mentioned the share of the Ways and Means Committee Jason Smith earlier. This was him during our last conversation about the way tariffs should be or should not be involved in all of this.
When you care about the fiscal health of the nation as a whole, you have to look at the possible influx of future revenues that could come from the President's trade proposals and across the board ten percent tariff which the President did campaign on, and across the board tariff that can bring in trillions of dollars. So those are things that you have to look at that can affect
the fiscal health of the nation as a whole. But in the rules of reconciliation, CBO and Joint tax will not allow those to be scored appropriately.
So he's talking about how tariffs fit into the fiscal health of the US overall, but because of the rules of reconciliation, the CBO and Joint Tax will not allow it to be what he described as scored appropriately. Weigh in on the appropriateness of the way all of this comes together, because even the Treasury Secretary says, you can't view these two things in isolation. Taxes and tariffs.
Okay, no, no, and I agree with that. I agree with what Treasury Secretary DestinE said. It depends on how the tariffs are put in place. If they're put in plays through administrative action, through the President using his authority, then it doesn't score in legislation. And so Chairman sim Smith, of course is right about that.
We can still provide information to the Congress.
So we could provide a letter that says, you know, here's what the president is done, here's our estimate of what the revenues would be, and here's the economic effects. And in such as it's going back to what we talked about just a moment ago. If we have revenue coming in that will reduce the amount of crowding out and boost GDP. And of course on the other side, the tariffs would reduce the efficiency of the economy, and you know that would go in the opposite direction with GDP.
Mention that the outset here. You're the easiest target in Washington, aren't you. Almost by design, by structure, you've made it clear nonpartisan. That's almost like a kick me sign. In this incredibly political environment we're in. Does it make your job harder?
It's tempted to look behind me after that sign.
Now you know, CBO is a mission oriented place and the people who come to CBO are two hundred and seventy colleagues. We are mission oriented. We are here to support them.
It's not always.
Vice versa, but that's just part of the and whatever information they need, our job is to get it to them what they need, when they need it.
Well, we appreciate you being here at least right now, as you have those deadlines to meet. Eventually, when we look at ultimately the size of this legislation, however big it ends up. Philip Swagel, Director of the Congressional Budget Office, thank you so much for spending time.
With us here.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple, Cockley and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
We're waiting for a ruling here, a federal judge set to scrutinize the Trump administration's attempt to throw out the corruption charges the case against the Mayor of New York, Eric Adams, remembering yesterday that Hockel was hold up with city leaders trying to figure out the next move. She may in fact following We're waiting for this ruling. Once that happens, may in fact move to oust Eric Adams. That's something that will be keeping tabs on for you
here today as attention shifts to Miami. This is not a crypto story, although I guess it could become. You've got to be crypto bros crawling all around the FII. Right, We'll have to ask Tyler. This is the big summit here, funded by the Saudi Investment Fund, right, the Future Investment Initiative Institute. Not likely a place Joe Biden would have been dropping a keynote speech in the first month of
his first term. But here we are joining the likes of TikTok Ceo, shoot you leaders of other big tech companies, Think Oracle, think Uber. Yes, the President of the United States will be there five pm Eastern time, so says the schedule. We're going to carry the speech live here on Bloomberg. That'll be in the late edition to balance a power. But we get a treat right now because
Tyler has already made her way to Miami. She's got the machete down there, clearing through all the brush to get to the real story, and is with us right now from FII at Miami beach Tyler, what's going on down there ahead of the big speech tonight.
Yeah, hey, Joe, Well, we know that President Trump is likely to really focus this on and increase that he wants to see when it comes to US investment. You'll recall that during his first week in office, the Saudi Crown Prince called him and said that Saudi Arabia would be investing six hundred billion dollars in the US when it came to investments and trade over a period of four years. That was considered to be a pretty big pledge. Right,
That mounts about fifty five percent of Saudi Arabia's GDP. However, President Trump said that that wasn't enough. He called for Saudi Arabia to instead increase that number to one trillion dollars. That number, expert say is highly unlikely. However, it has spurred us. You've been talking about these business interests to come here to Miami to talk about potentially how this increased flow of capital between the two countries could be
beneficial for them. And there's a real sense here on the ground that the Saudis would like to focus on terms of of agreement, right, investments and artificial intelligence of advanced manufacturing things like this, particularly as they find themselves in the center of some of the White House's key policies this week, such as hosting the US Russia talks.
But Joe, to be clear, there are still, of course, other contention points that could come up depending on which way President Trump would like to go, including his plan when it comes to Gaza, as well as recent complaints on oil prices. So we'll have to wait and see. We did inquire with the White House to see if we could get any sort of preview and they just told us to stay tuned, but we will be here at five pm Eastern when he starts.
Well that's the exactly what I was going to ask, So we're going to get the weave then, right, you just rolled out like six stories. He'll probably hit them all. Do the ad lib? What does he have about an hour in store here? And who's in this crowd? Tyler?
Actually yes, about an hour. According to the schedule, he is set to depart here at six fifteen eastern, so give or take there. And we know that there are some big tech titans. You mentioned the TikTok Ceo, so Ken Griffin, Steve Cohen, we know that other industry leaders, including chief executives of Uber and Oracle, will all be here and we talk about the weave. I'm also interested to see if he makes any remarks about potentially a
PGA live merger. That's something that often comes up, and we're talking about Saudi backed ventures, right, and something that has often divided Washington on a biportisan basis when it comes to Congress, which has launched investigations into this merger amid criticism of Saudi Arabia's record when it comes to human rights abuses, for example. So whether or not dat could come up is also a big question, but it could be a wide range of things here as President Trump makes his debut here in.
Miami, the big debut. Yeah, we'll carry it live boy, good luck getting the reservation at Joe's tonight, although Tyler could probably get in. How about Tyler, Kendall, look at the shot. If you're with us on YouTube, Tyler knows how to live set up in Miami. Check this out. Look like you're on entertainment tonight. We'll get back with Tyler a little bit later on Thank you, of course.
As always, Kendall, I'm Joe Matthew and Washington on balance of power, where we're balancing a number of stories that become the weave. We're going to hear about the tariffs as well, right. President Trump was just talking about them last evening. Here's what he said.
Some of the biggest companies in the world and because of what we're doing economically and through tariffs and taxes and incentives, and they want to come back into the United States.
Have you decided specifically what the auto tariff rain should be.
Yeah, I probably will tell you that on April second, but it'll be in the neighborhood of twenty five percent. We want to give them time to come in because, as you know, when they come into the United States and they have their plant or factory here, there is no tariff. So we want to give them a little bit of a chance.
Donald Trump at mar A Lago. This is why Nathan Dean's phone keeps ringing, because the game keeps changing, the dates, move, the timing, the implement the size of the tariff. Now we're twenty five on auto's all right. This is why we have Nathan, of course, our top policy analyst at Bloomberg Intelligence here in Washington, Nathan Dean's the phone just it keeps ringing. What's the big question these days?
Well, I mean, obviously on the tariff front, yes, this question of will President Trump move forward. I mean, we had a client this morning ask you know, he's starting to sound like a boy who cried wolf. And you know what we have to go back to and what we tell our clients is when it comes to tariff's look, President Trump truly believes in tariffs. But the question is what nuggets can we glean from his statements and his truth social posts to see if there's any way that
other countries could come back and create a negotiation. This is what we saw with Canada, this is what we saw in Mexico, this is what we saw with Columbia. The question for these reciprocal tariffs is is this a simple measure of you charge us, we charge you. Then there's a high chance these tariffs will go into fruition. But if there's other things that like, say that there's negotiation with the European Union on cars or maybe banks in Canada.
Things that President Trump has talked about.
If there's negotiationations that take place, potentially these tariffs will come back but you know, ultimately you do have to prepare for these tariffs because at a certain point, we do think President Trump is going to move forward like he did with China and ten percent market.
It's a bit interesting. I mean, you're hearing from investors and they're saying, you know, let us know when it matters, guys, let us know when we should care the yes a piece at a new high yesterday.
Well, but that's the point is these tariffs haven't come in and we haven't seen the impact yet on the American consumer, right, and so one of our basic case scenarios for these tariffs is is that if we are going to see tariffs move forward outside of a universal tariff, if you see tariffs moving forward, they'll probably be in industries the American consumer won't see initially. You know, think of food prices, you think of potash, you know mean
Canada fertilizer, you know the industry there. So you know, we'll see. I mean, obviously it's hard to predict, and we have to always apologize to our clients that we don't know what's going to happen here, but you have to prepare for them always with the idea that these
deadlines are not deadlines. These are self imposed deadlines. And so President Trump can always come back and say, based on upon my conversation with Prime Minister Trudeau or with the European Union, these tariffs have been pushed off, and so then we'll just fight, you know, see that that you know that delay, and we'll have to deal with accordingly with it.
Well, it's interesting because tariffs were supposed to help pay for tax cuts or this is like before we even got to the election, never mind the inauguration. That was part of the argument. You got to have them all together, extend Trump tax cuts. Look at these beautiful tariffs they helped to pay for because they raise a lot of revenue. Uh, we're working on the tax cuts now. In fact, there's a budget resolution that's moving. Well, we've got one on
both sides, both chambers, House and Senate. Whether it's one big beautiful bill or another, we could have a standoff. But aren't we missing a major component here? If these are just threats?
Yeah, you know when it comes to the reconciliation fight, you know, we really don't care from a market perspective, whether it's one big beautiful bill or two bills. Right, well, we care about our Are the tax cuts going to be dealt with? Is there four point five trillion dollars worth of tax extensions?
Yes?
Is that going to add to the deficit or is it revenue neutral or budget neutral? We won't know that until the Senate part of Thementarian gets in there and we start to see what the offsets, whether it's the Inflation Reduction Act. So we're still probably about two to three months away from where the markets really want to start seeing the specifics. You know, we don't think that, you know, the House is going to be able to come up with a resolution, you know, plan with specifics
within Speaker Johnson's time frame of April in May. I wouldn't be surprised if we had this conversation in July and we were talking about specifics then. But when it comes to tariffs, just note that if tariffs do go into the reconciliation discussion, then it becomes a congressional tariff, not a presidential tariff, and it sort of, you know, handcuffs President Trump's ability to negotiate if it goes into
the record. But again, we have never seen what's happened with the External Revenue Service that President Trump floated about earlier.
It's going to have a conversation with the head of the CBO coming up in the next hour. The ability to score all this is impossible, right well, I mean, look, if you start talking about external factors like tariffs, the idea of dynamic scoring, we're not about to change the way we do this now.
And we're telling our clients don't worry about the sea scoring all that much. I mean, because ultimately, and you know, the Congress is going to figure out a way or the Republicans will figure out a way to get it close to the centerm. Parliamentarium will approve it.
Sure.
The question is is that will Republican lawmakers, certain Republican lawmakers go forth to pursue and vote for a reconciliation package that potentially could increase the deficit. If the CBO comes back and says, look, we see economic growth here, but the deficit is going to increase by one to three trillion dollars because of this, can they get the votes in the House when you can only afford to lose three at the moment, Can you get the votes
in the House. That's the more bigger question is the political question because if it looks like this is going to be increasing the deficit, you know, the tariff question, the Doge question, could all be moot because it comes down to those Republican.
Lawmakers, comes down to three w Wasserman Schultz is on the other days say we're just looking for three good Republicans. We'll see about that, because we have breaking news from New York. Looks like you're going to be able to maybe drive south of sixtieth Street again here and park
your car the lot, confirms the Department of Transportation. If you're with us here on Bloomberg, I know this is important to you, especially if you're driving around New York, or maybe you're not driving around New York because of the congestion pricing confirming the termination of the New York congestion pricing program. This was a New York Post report, as you heard from Trolley Pellett a short time ago. Now it's a fat headline from the US government DOT
confirming termination of congestion pricing program. Just another example of Donald Trump putting his finger on the scale here on the state level as well.
Yeah.
Absolutely, that's them o coming out of this White House. Nathan Dean Bloomberg Intelligence. You're his client because he's with us here on Balance of Power. Thank you. Nathan is always as we try to find our way forward on so many issues from reconciliation, tax cuts, and tariffs coming up, will assemble our panel, Rick Davis and Kristen Hahn with us today right here on Bloomberg.
You're listening to the Bloomberg Balance of Power Podcast. Catch us live weekdays at noon and five pm Eastern on Apple, Cocklay and Android Auto the Blueberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa played Bloomberg eleven thirty.
The big sit down with not only Donald Trump but Elon Musk. I guess they recorded this several days ago. It actually went to tape last week. Talking about their relationship.
They really do seem to love each other. My goodness after listening to this conversation for a while, but also the work of the dough Now this got to be a little bit interesting because the White House, since the interview was recorded, had to delineate in the courts that well, Elon Musk doesn't actually run the doge and he's a senior presidential advisor, but speaking for the apparatus here, Elon Musk talking quite a bit about the work that they're
trying to do here and the functions, as he calls it, of this entity. Listen to Elon Musk on Fox.
One of the biggest functions of the Dog team is just making sure that the presidential executive orders are actually carrying out. And this is I just want to play it. This is a very important thing because the president is the elected representative of the people, so it's representing the
will of the people. And if the bureaucracy is fighting the will of the people and preventing the present the president for implementing what the people want, then what we live in is a bureaucracy and not a democracy.
Let's start there with our great panel today. Rick Davis is with US Republican strategist partner at Stone Court Capital and Bloomberg Politics contributor, alongside Kristin Hahn, Democratic strategist and partner at Rock Solutions. Kristin, Rick, great to have both of you here. You know, look, we could talk about the Doge all day long, and there's a lot of news. The group is turning to the Pentagon next here, Rick, But I want to ask you about the optics of
that presentation. I'm not sure I've ever seen an interview where a sitting president of the United States chose to share the stage with someone else, you know, I guess other than their spouse. Maybe. What do you think about Donald Trump showing himself on par with Elon Musk taking questions about policy together, speaking openly about their relationship. What was the point of that exercise?
Yeah, I think that it seems that President Trump is a little sensitive to all the stories about Elon Musk and his influence and whether he's really the shadow president. Even he even addressed it in the interview where he's talking very frankly about people are all claiming that, you know, basically, I'm a puppet and you must admit. I mean, like, that's a I've never seen an interview like that with a president and Elon must sitting there with a blue blazer and a T shirt that says tech support.
It's like, yeah, I'm nothing but a tech support for the guy.
I mean, like, I mean, I'm sorry, I mean like it's like a Saturday Night Live routine.
To have a president himself involved. Kristin what did you think of all of this? And what do you think jd Vance was doing at home as he watched this on TV?
I don't know, hopefully it's not watching this. I mean it's interesting because you know, apparently Elon Musk's son doesn't seem to think that Donald Trump is the president either, if you believe what he whispered to him during that weird other press conference that they had. But at the end of the day, you know, Elon Musk, if you try to like wade through all the crazy and the weird, I mean, he's doing a lot of things that are having a massive impact, and he just says that he's
being you know, transparent. He just and that we should believe him because he's tweeting things here and there, and there's crowdsourcing of information. But I can tell you that people even inside these agencies don't quite know what's going on. They ended up firing a number of people who are working on the bird flu epidemic on accidents. They're trying to hire them back now. So I'm not sure exactly what Elon Musk is referring to when he's talking about transparency.
You know, I saw Mitch Landrew was doing. A former mayor of New Orleans was doing an interview earlier. That made a lot of sense to me. He said, you know, I had to cut the budget by twenty percent at a really difficult time, and you have to do it surgically. He's like, you know, I can cut off twenty percent of my weight of my body, but if I cut off my leg, you know, I'll bleed to death. So I think that was a pretty good analogy.
A scalpel, not a chainsaw. Rick. I don't know if he saw the wall of receipts. You guys can both weigh in on this, but you know, there has been a real public relations effort, not just in the interview last night, but to show what the DOGE is doing online. They're even debunking tweets and putting up cost cutting. But it hasn't always gone the way they hoped. As The New York Times reports, the cuts on the page amounted to about sixteen billion dollars in savings that were itemized here.
Almost half of the line item savings could be attributed to a sinking contracts for Immigration and Customs Enforcement, an eight billion dollar contract, it said. Closer scrutiny found that was an eight million dollar contract Rick, And so the receipts are leaving some people wanting how important is it for Doughs to be transparent to the dollar figure here?
Yeah, well, I think it's especially trans important now because I see, you know, moving around the internet that I don't know if this is the case or not, but Elon Musk suggesting, hey, let's write everybody a five thousand dollars check as a dividend from all the hard work that we've done at DOGE, and you know, it just hearkens back on you know, George W.
Bush.
You know, we had a surplus when he took office, and he decided to give everybody you know, a cut of that and didn't make a material difference in most americans household budget, but it killed the surplus that the federal government had and we immediately started definit spending, which is where we've been ever since. So I'm a little confused because I read the same stories you do, Joe.
Whether or not this is a six billion dollar savings or sixty billion dollar savings, that's a pretty big gap, you would think if they're doing all this work and you're taking all the shots for doing it that you want to itemize like what the taxpayer's benefits are the receipts wasn't a great way to do it. There ought to be a more professional way to do that. We ought to be knowing what we're savings as we cut.
And by the way, all this should be factored into the congressional activity because I heard the President in that interview say we're not cutting anything associated with Social Security, Medicare, and Medicaid, which is fine. I mean, he's been saying that for quite a long time, except you know, eight hundred and fifty billion dollars worth of savings that they're applying to the tax cuts comes out of medicaid. And so maybe the Republican House leadership didn't get the memo
that Donald Trump saying, don't cut any Medicaid funding. So it's all a lot of confusion right now, which I think is the one thing that everybody can agree on is nobody really knows what's going on.
So maybe we're cutting off a pinky finger down a leg here, Kristen. But this idea of the Doge dividend, this this came from Elon Musk on Twitter. He posted this says, going to check with the President on this idea to pitch the president on a dividend based on savings that the DOGE achieved. But I thought the point here was to cut the deficit. If you send all the money back, the deficit still needs to be paid, doesn't it.
It does that. It really was remarkable when I saw that, and I totally agree with Reco. Mean, you've got to figure out what what are we trying to accomplish here? I mean, never mind the fact that you will never get at the truly get at the debt and deficit without you know, with just waste frawden abuse, it's not possible. You have to address entitlement reform, and you have to
look at tax reform as well. So, you know, I'm not sure exactly what what they're trying to accomplish, because they're looking forward to moving the baseline around and figuring out how to add, you know, to renew the Trump tax cuts without adding to the deficit, which is just funny money and which should be offensive to your viewers and listeners. But you know, I think if Elon Muss has said that he's trying to draw down the deficit, like you said, what are we doing here? What are
we trying to accomplish? And also it doesn't take a whole lot of scrutiny to realize that it was eight billion and not eight billions.
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