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Happy Friday, and thanks for being with us here at the threshold of the weekend on the fastest show in politics. We've got a lot to talk about today if you're just joining us. Donald Trump has left the bubble, stopping down in North Carolina just a short time ago, where he's surveying damage left by the hurricanes. Of course, asheville, we've talked so much about the reality changed by Hurricane Helene. And then it's on to California a little bit later
on today. This will be in the evening hours East Coast time. Gavin Newsom will be greeting Donald Trump on the tarmac in LA and of course he's going to be surveying damage from wildfires, which just moments ago in North Carolina he again blamed on the valve as he calls it in northern California that he says is steering water into the Pacific, and he simply wants them to turn the water back on. As we've discussed on this program,
it doesn't work that way. In efforts to save the two inch long delta smelt appear not to have much to do with what's happening with the response to these fires. The conversation around FEMA, though, is getting pretty interesting here. You remember everything said about FEMA in Asheville following the hurricanes, the miss and disinformation flames are being fanned here on this trip, and Donald Trump suggesting FEMA shouldn't have much of a role in the future, that it should go
to the States. Here's what he said on the tarmac.
Because WEBA just hasn't done the job, and we're looking at the whole concept of FEMA. I like, frankly, the concept when North Carolina gets hit, the governor takes care of it. When Florida gets hit, the governor takes care of it, meaning the state.
Takes care of it.
To have a group of people come in from an area that don't even know where they're going in order to solve immediately a problem is something that never worked for me.
That's where we start our conversation now with Wendy Benjaminson in Washington. This is an interesting trip. Great to see it. By the way, I feel like it's been forever since you were on the broadcast. And boy, I think last time we spoke, Joe Biden was still the president. So consider that that long. That was like four days ago. Look the optics that surround a trip like this mean high stakes, right, potential risk, potential high reward for Donald Trump?
How's he starting out today in North Carolina? What are we talking about with FEMA here? I didn't realize until recently this was even a very controversial agency, right.
Well, I mean we've come a long way. I was just thinking about this since twenty years ago when George W. Bush put his arm around the FEMA administrator in New Orleans. It is that heck of a job, Brownie. The trouble is, Brownie didn't do a heck of a job in twenty years ago. And FEMA has always been underfunded, has always had problems getting on the ground and doing everything they're
supposed to do. So to that point, okay, maybe you know, maybe they didn't do enough in Ashville, maybe they're not doing enough in California. However, this idea that it can just go to the states. I think is going to be met with a lot of resistance from both red state Republican and Democratic governors because it is one of those, if you remember the term unfunded mandates, where the federal government says, you, guys, take care of this, but we're
not sending you any money to do it. A lot of Republican states have really, you know, lowered their taxes and they don't have the kind of revenue. So you know, in a state like California, which is rich maybe and what if a tornado hits Alabama, you know, are they really going to be able to fix restore themselves with only their budget. So that's the conundrum for Congress.
Well, so there are a couple of things that play here today when you consider the remarks from Donald Trump questioning FEMA, blaming the Biden administration and for what he says was a no response, even though there was a robust response in North Carolina. We've been through that. But now also conditioning aid a couple of days ago, it was the debt limit. Put that together with maybe California wildfire relief. Now it's voter id. He says, this seemed
to just jump out of the gates. This morning, California gets voter ID, then they get the money. Is that how it's going to go?
Who knows, because, as you said, the goalpost keeps changing. What struck me in that moment there was interesting was a reporter in Ashville said to the President, are you going to condition the age in North Carolina? And he didn't answer, but he said, well, the people of North Carolina have been through so much, Yes they have, you know, they've been through ours, but so of the people of California.
And apparently there is no talk of conditioning aid. He was even being told at this briefing how many people in affected counties in North Carolina voted for him. So, you know, is the question are you loyal to Donald Trump? Or is the question did your home? Yeah, burn to the ground or get destroyed by a waterfall?
From our reporter on the ground by the way next stop about twenty minutes away, they're driving. He will speak and also meet with families. It'll be outside. They have a podium set up. It's likely that we'll hear from the President again in North Carolina during the broadcast. It's going to be in front of an RV. This is to consider the optics. As I mentioned the RV park next to a washed out house, it's going to look
like North Carolina has had no help. Yeah, what are the optics that he's seeking here?
Those are the optics that he's thinking that these are people who are suffering, that these are Trump voters who have been suffering. And I guess this is him being consoler in chief, because if he's saying the federal government's going to leave you on your own, then I don't know exactly what he's going to say. This house is going to be rebuilt, either what through private insurance or whatever.
Of Course, he can't just wipe out a federal agency with the stroke of a pen, no matter how much Elon Musk might really want to do that, I believe. I'm not positive, but I believe it takes an Act of Congress. So that would mean.
Much like creating one, much like creating I suppose.
So you know, he's going to have to figure out some way to get Congress from states that are all being hit by natural disasters as the climate change is to agree to get rid of the one agency that can that at least tries to.
Help you know, we talked about Joe Biden as consolar in chief all the time. That's what he was said to be good at. He would tend to show up with the first lady. By the way, Milania Trump is with him today. That's important, right, You can't meet with the families, I'm assuming without the first lady joining you, or at least that's probably the drive here. I've heard more references to paper towels today than I have since he went to Puerto Rico. He knows what people are
talking about here. Does that affect his posture and dealing with people talking to reporters.
I think it does, and I think we're seeing it today. He has not been overly glib. He has not been. I mean, he's he even you know Senator Adam Schiff, who was invited to go with him, but he was a leader of the resistance, you know, in the first term. He chose for scheduling.
Conflex not to go.
Yeah, he's got too many he's got to wash his air. He can't go to California with the president. I mean, and I think you know, Schiff is politically smart not to join him on that trip for his own political purposes.
But yeah, I called him scum from the Oval office this week.
Yeah, that's not the right, and so's he's decided.
Gavin Newsom a different story, though. He will be on the tarmac, even though Donald Trump calls him scum and has blamed him for the fires. Right, but what's that work there? Though Gavin Newsom doesn't want to be seen as an obstructionist obviously, can they work together?
I think they might try. I think when they all the cameras are off and you're talking about the second largest city in the United States being devastated by this, I think that two of them will probably work together. For a senator, it's less important he can say, you know, I'm not getting on the plane with you. Go just do it. But the governor has to make sure that money comes to the things and that the president sees this and all that. So he will probably put aside
any personal animas, any irritation. I guess Trump will put aside his irritation perhaps, and we'll see what happens. We'll see what, you know, when he gets out there. It'll be interesting to see if Trump also moderates his tone about absolutely yeah, when he's in front of people and including his own supporters like Mel Gibson and actors like that who lost their homes.
I forgot about the Hollywood ambassadors. How quick this so much that you alone?
And yeah, John Royd, I think.
Sure, John Voyd. You know this is the part of the conversation where I asked Wendy to pull up to about thirty thousand feet because this is one of those weeks that calls for it. As I just mentioned, Joe Biden was still the president on Monday morning. So much has happened. People talk about the fire hose, the news cycle flooding the zone. How would you describe this week and the ground that shifted under Washington's feet?
It's insane. I actually yesterday said something to a reporter in the newsroom. I said, oh, thanks for helping me out on Sunday with some story, and he goes, Sunday, wasn't that like a year ago? I mean, the idea that it was five days ago just wasn't computing. I think we all are going to get used to this pace again. Trump will probably also begin to calm down and just get into governing after he does this. You know, he wants to run shock and awe this way right,
shock and awe, But I think we are. We all have to get used to and why we all, I don't mean journalists, I mean America and the world has to get used to the fact that things are going to come out of left field at weird times. Biden ran a nine to five presidency and I think that and we might have gotten something similar with Kamala Harris. But Trump operates on his own schedule, on his own timeframe, often intradicting his press secretary while she's at the podium. Hard to see that again.
Are we going to get briefings? By the way we are? What do we know about this? Will there be daily briefings?
So that's that's tool about Jaily But I know Caroline love it. The new press secretary has done a couple I think, and you know she probably won't today because they're traveling, but I think she will do briefings. The trouble is that for her predecessor was that Trump would would in those days tweet right the opposite of what she was saying, and the.
Reporters are reading that to the or he'll just wall to the room and take over the briefing, which I suppose. But that'll happen from time to time around here. I find it interesting editor's news organizations, people writing op eds to say it's going to be different, that we're not taking the bait every time, not every headline. We're not going to stop down. We're going to be discerning. And I'll tell you what none of them have actually done it yet, is this is going to take some getting
used to. That's why we have Bloomberg though, because we don't do it quite the same way as the other networks. It's great to have you back. Wendy Benjaminson with US Live in Washington on the first week of Donald Trump's new presidency.
You're listening to the Bloomberg Balance of Power podcasts. Catch US Live weekdays at noon and five pm e's durn on Apple, Cocklay 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 Play Bloomberg. Eleven thirty.
We just heard from President Donald Trump on his visit to North Carolina alongside families affected by Hurricane Helen, once again talking about FEMA federal emergency response, of course, suggesting that if it were up to him, it would be eliminated entirely. As we'd already heard him say earlier today,
he thinks this should be up to the states. It is unclear, though, Joe, how exactly that would work, considering states don't kind of have the kind of emergency personnel readily available, which is a lot of what FEMA provides, let alone questions around resources for emergency response. And once again, of course, we heard him criticizing what FEMA did during
the Biden administration in response to Hurricane Helene. Although he has repeated some misinformation about what was and was not available during that immediate aftermath.
That's correct, including the fact that Joe Biden did visit North Carolina. Donald Trump said he did not, And we know that there were thousands of FEMA workers who were staying up all night working in extremely dangerous conditions following those storms in North Carolina. The Asheville area, western North Carolina into the hills is something we talked about for weeks, Kaylee.
There was an enormous amount of misinformation online that actually led to some FEMA workers being attacked or being blocked from getting into areas where they were trying to help people. Donald Trump leaving this particular stop in North Carolina. They're going to continue on and we'll be following his travels throughout the day, not only in North Carolina, but also
in California where Kayley. The matter of climate is something that's been talked about a lot with regard to these wildfires, as Donald Trump blames a valve that he says exists somewhere in northern California that he says Gavin Newsom used to turn the water off in La.
And of course authorities in California deny the existence of such a valve. There is no factual evidence that that is what has happened to here. Buy and large authorities say this is an infrastructure problem in that the municipal infrastructure and around Los Angeles simply was not designed to have the kind of waterflow and pressure to fight fires with hurricane force winds the Santa Anto wins essentially blowing them around. It was just a hard thing to fight all of it.
Though.
To your point, though, whether it's the hurricanes in North Carolina and mountainous regions that usually aren't experiencing the impact to as great a degree, two wildfires like what we're seeing take place now on the West Coast. All of it does speak to climate oriented events that the US finds itself having to respond to. So on that note, we turned now to Gina McCarthy. She's former White House
National Climate Advisor and also former administrator of the EPA. Gina, welcome back to Balance of Power here on Bloomberg TV and Radio. We appreciate your time as we consider these events on both the East and West coast. Is the common denominator here a changing climate with no sign that you should not anticipate events of this scale and potentially as damaging as we have seen in the future.
Well, first of all, thanks for letting me be here and absolutely what you're seeing here, both in North Carolina and California our climate impacts. What you're seeing here is
the threat to people everywhere. And I have to say that after listening to some of the remarks by the President, I'm not sure how to feel better and more confident about the federal government jumping in and making sure when we see climate disasters like this, we aren't running towards folks making sure that they can get the safety and security that they need. So my hope is that over time the President will learn that FEMA is a great agency. It stepped in in North Carolina. Everybody is on board
to fight the fires in Los Angeles. So before we make any of these issues political, we ought to make sure that we're protecting peopleople in communities.
First. Donald Trump's going to touch down in California a little bit later on. We understand the Gavin Newsom will meet him on the tarmac, having been blamed by Donald Trump for these fires. I just wondered if you could speak to the situation involving We've heard a lot about the valve and the delta smelt from Donald Trump. Tell us in your view, why Los Angeles is burning and why these fires have been so hard to fight.
Well, we've seen, as you indicated earlier, we've seen some tremendous wind one hundred mile an hour winds. We're seeing a basically two months of literally no rain in southern California. We're seeing challenges that we've never seen before in terms of the drought that's hitting that area, which means it was a tinder box. It was ready to go, and with those fires it's been carrying, fueling it consistently and now refueling it again, so we have to recognize that
this is not about pointing fingers. It's about recognizing that in the challenge of climate change, you're going to see these kind of disasters hitting because the weather's not the same anymore. We are talking about impacts that we need to face and respond to and be prepared for.
Well.
In that response, in part is mitigation and adaptation, right, trying to work with a changing environment so that you can best avoid things like this to the extent that we can brace against Mother Nature. Gina and I do wonder as California is creasing a lot of criticism, perhaps unwarranted in some instances.
It comes to things like.
Waterflow and supply and this valve and the delta smelt as Joe has referred to you. But are there things California should have been doing from a mitigation aspect that if we're talking about conditions on aid, maybe should be included in those conditions.
How could it be handled better?
Well, we have seedfires consistently in this area, and I think California does it's best to try to respond to this. But look, every community is at risk as a result of climate impacts, so we do have to work together not pointing at fingers, but figuring out how we can continue to move forward in the face of a president
that doesn't acknowledge that climate change exists. So I think it's really important that we move together, that we maintain our relationship with the international community, even though that the Paris Agreement has now been avoided again by President Trump. We are working with Mike Bloomberg and others to make
sure that we still maintain a vital role internationally. But we also have to recognize that governors and mayors and business leaders and institutions all have to step up now they know the challenges facing and we have to make sure that we continue to invest in our communities in a way that's moving forward with clean energy and not making the climate worse by continuing to advance oil and gas, which is ultimately the main reason why we are having the climate challenges we're seeing today.
Gin, I want to ask you about some of the things that we've seen take place this week since Donald Trump took office. We saw a flurry of executive actions, starting of course, on day one, as he promised. I'm looking at one of them right now, called Unleashing American Energy. It's date of the twentieth of January. This executive order disbands the Interagency Working Group on the Social Cost of greenhouse Gases that Joe Biden helped to establish in twenty
twenty one. It excludes the work of this group as well. To this point from government policy, what do you make of the reversals of some of the work that you were involved in in the Biden administryation and what will be the impact?
Well, you know, I think one of the most important things to remember, and it's pretty clear that they're trying to reduce the impact of any of the efforts underway to address climate change and to move towards clean energy. But what's I think important for the American public to understand is that we have seven hundred and fifty plus clean energy projects moving forward in the United States. Now we have already moved forward with four hundred thousand new
clean energy jobs. The American people want clean energy. It's saving their money, it's keeping their air cleaner, it's keeping them safe and more secure. And remember, half of those projects are in Republican districts. So now we have Republican congressmen standing up saying we don't want to dismantle all of the work that's been done before. So it's really important for us to remember, rather than continuing to fight about everything, let's look at what is already in our hands.
The eighty four percent of money that's already gone to cities and states and Great America is all in colleagues, governors and mayors who are going to stand up and talk about the real things happening in the world and how we can continue to move forward on clean energy, because that's the challenge that Donald Trump faces. Fossil fuels
are expensive, clean energy is cheap. That's what the American people need to know and understand, so we can begin to get over the hump and work together to move forward to make our country work the way it's supposed to.
Well, Gina, as you talk about the resources that are needed here, we should not. As you mentioned earlier, some of those resources have in fact come from Michael R. Bloomberg, who is the founder and majority owner of Bloomberg LP, which is the owner of this network. Before we let you go, Gena, obviously we all have our eyes on the Senate as a number of Donald Trump's cabinet nominees are teed up for confirmation votes that includes Lee Zelden, who he is tapped for your old job running the EPA.
What would your advice to mister Zelden, B.
Well, I think my advice to him would be to take a deep breath when you get there. EPA is a terrific agency. Take a look at what they do from a science perspective. Get you an understanding of what's going on across the United States, where the environmental challenges are, and how he can work together, even within this administration, to make sure that these layers are focused on protecting the American public. After all, that is the EPA's role.
We are there to protect our environment and our well being and bring safer communities to the table. And I hope that he'll have the wherewithal to give it a little bit of time, understand that agency and utilize them as some of the best, most professional scientists and policy people that any agency has in the United States.
So beyond.
With us from the Paradise of Jamaica plane, Gina McCarthy. It's great to see Gina. Thank you and come back and see us soon here on Bloomberg TV and Radio. Not just formerly EPA, former White House National Climate Advisor.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Alpa Cockley and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Round out the trading week and round out what has been an incredibly long week here in Washington, and of course began on Monday with the inauguration of Donald Trump.
Who is now ending his week on the move.
Right now as we speak, he's heading back to the airport in Ashville, North Carolina, where he'll take off for Los Angeles to be the damage from wildfires. He'll be spending his weekend traveling. You know who won't be traveling
this weekend, though, Joe. Members of the United States Senate he are going to be kept in town, we understand, to vote on Donald Trump's Countinet nominations beginning tonight, relatively late tonight, nine pm Eastern time, the expected confirmation vote for Defense Secretary nominee Pete Hegseth.
Yeah. Lawmakers in the House left town, even though apparently the leadership wanted them to hang out for the March for Life, which is something else that's taking place today in Washington as we speak. This is an annual fifty second as a matter of fact. But senators have no choice. They could be voting for Pete Hegseth around nine or ten o'clock tonight, depending on how things go, and it looks like they could roll straight through the weekend. Remembering John
Thune wants everybody in five days a week. Yep, no days off.
He's playing hardball with the schedule.
Five days of the Senate is nothing sacred. We reassembled our panel. Rick Davis and Jeanie Shanzino are with us on the Friday edition of Balance of Power. He is, of course Republican strategist partner Stone Court Capital. She's democratic analyst and political science professor at Iona University. Ricky spent enough time in the Senate to know how outrageous this whole idea must be seriousness, Pete hegg Zeth looks to have the votes. Will he be Defense Secretary by the end.
Of the day, Yeah, very well, could be certainly by midnight. You know, there was a test vote yesterday that you know, called Clochar on this nomination to bring to the floor, and he lost two Republicans. He can lose to one war and still become secretary, but if he loses another fourth vote, that ends his nomination.
And it is interesting.
I mean, Donald Trump today has said repeatedly that he wasn't counting on Mitch McConnell to vote for Hegsittt, although McConnell supported the cloture vote, So.
I don't know.
I mean, it will be interesting to see if they have to use the vice president to break a tie, if Mitch McConnell joins Collins and Markowski in opposing heg Sath.
You know that's what we're talking about here.
Right jab in the motor kid yep, having to cast a tie breaking vote knowing that the others we were watching, Senators Young and Ernst, Joni ERNs of course, the female combat veteran who now res Iowa, and the Senate having.
Said they're still standing by Pete Hegseth.
Which makes the question, Genie, if all of this does feel inevitable, if Democrats do know heg Seth ultimately is likely to get confirmed, why we're still seeing the kind of slow walking of the procedure. Why not just let it be fast tracked and get it all done with instead of having to do these hours of debate and stay the weekend. What's really the point if they can't stop the confirmation.
Yeah, you know, I don't think they want to make it easy for the Republicans to get this through, and they're certainly not going to do that. And I think they do have some legitimate frustrations about these FBI background checks. It looks now like Tillis may support and I'm saying may because we don't know heg Seth, and he has said had he gotten different information from those background checks,
he may not be there for heg Seth. And so, you know, I think there is frustration on the part of Democrats and some Republicans like Collins and Murkowski, who feel that they simply didn't get the information they needed. The reality is, even if heg Seth is confirmed, and it looks like he will be tonight, it'll be the by the smallest margin, or one of the smallest margins
in history for a defense secretary. These are normally bipartisan level votes, strong bipartisan support, something like we saw with Marco Rubio, and he's likely not going to get that, and that I think sets him up for a very very tough go of it as Defense Secretary, which again he likely will be by tonight nine or ten o'clock.
Well, the national Security team is taking shape here John Ratcliffe now CIA director. That vote was seventy four twenty five, not too bad. In next week we've got a doozy all in one day, Cash Betel, FBI, Tulsea Gabbard right DNI, and then we've got RFK Junior obviously not part of the National Security team. When we think about Pattell and Gabbard, though, Rick, this is going to be a heck of a day following all of these UH, these hearings that are taking
place at one at once. Tulsea Gabbert seems to be the one at most risk of not clearing committee or not being confirmed on the floor. How do you see it? Yeah, I think you're right.
Both Tulci Gabert and and Cash Pateel have some headwinds. Republican centers have questioned their fitness for the for the posts and UH and Tulci Gabbert has not seemingly been able to clear some of the hurdles around things like visiting the head of Syria while she was a congressman and and and issues related to her background. So yes, there's going to be some debate around these during their hearing.
I have no doubt Democrats will launch a full scale assault on both these individuals, uh and and And we'll see how that shakes out. I mean, one of the things that is just a parlor game in the United States Senate. But but assuming heg sith clears his way to the nomination tonight, with the floor vote scheduled later this evening, does that mean that they're looking for a scalp you around the nominations of Gabbert and Cash Pattel.
So if he goes down and.
For whatever reason doesn't make the cut tonight, does that make actually their ascension to their posts easier. It's a parlor game, has no real relevance in fact, but it is what happens in the halls of the Senate during periods.
Of time like this.
Well and Genie, what we've seen so far with a lot of these confirmation hearings is a pretty partisan split, if you will.
In the line of questioning.
Democrats are going really hard after these nominees, Republicans less. So that certainly was the case in the heg Seth hearing, but others too. I do wonder if you think it will be as partisan though, when it comes to these next individuals we're talking about RFK Junior, who conservatives have a problem with them things like abortion, Tulcy Gabbard, who
national security hawks have concerns about. Is this actually going to look like everybody's singing from the same hymn book at least a little bit?
It might be we might see some strange bedfellows. You know, just as an example the issue with RFK Junior, Do we see Republicans, for instance, who don't like his stance on abortion line up with some Democrats? Do we see Democrats who really do like some of what he has said about issues surrounding food safety and other things line up with Republicans? So we could in some of these see some really strange bedfellows. I'm really looking out for
cash Ptel's hearing. I think that's going to be fascinating. I wouldn't be surprised if Democrats come in with big poster boards of his children's book, which has really a lot in it that people may be surprised to learn about. So some of this is going to be Democrats and any Republicans who opposed these folks, using this time to get the message out about who indeed is for a vote and letting the American people get more knowledge about who these people are. But I still think the most
vulnerable here is going to be Tulsi Gabbert. She is vulnerable from both sides of the aisle at this point.
Rick, You've prepared a number of elected officials, members of the military, and others for hearings like these, for very difficult conversations that could involve very sensitive information. I wonder how much the strategy will be trying to get to these issues in opening remarks to try to get them off the table. If you're RFK Junior, do you address the polio vaccine? Do you say I'm going to allow
you to have GLP ones? If you're Tulsi Gabberd, do you have Fizis seven oats who in your opening remarks to try to disarm the questions that are coming.
Yeah, I think that with Kennedy, especially related to some of these social issues and especially around abortion, he'll try to knock that down and the Republicans will will basically hold a colloquy with him, it won't be more like Q and A, but more like a conversation, and they'll say, well, of course you wouldn't be for you know, federal funds being spent on abortions, and he'll say, yes, of course that would be wrong, you know, uttering the policy of
the Trump administration, and then you know, he'll just revert back to that conversation every time he gets hit by the Democrats. I would say, little trickier for Gabbert on the national security issues. So there are Republicans who have issues with the FISA system and could actually share some of her concerns with this, and and Democrats ironically would potentially be more bullish on some of these issues than even some of their Republican counterparts or certainly Tulci Gabbert.
So I would watch that one as a much more of a mixed bag, because I think that the issues around surveys are much less partisan and much more open to how you view the appropriate role in the United States government spying on its own citizens. And that's always been a hot button issue in the Senate, and I think one that you'll see rise up in the conversations around her nomination.
Finally, Genie as we consider those who have been nominated four roles in this cabinet. I was struck by the ethics disclosures today that were released for Howard Lutnik, who has been tapped to be the Commerce Secretary, revealing he has roles and at least eight hundred legal entities and net worth of north of two billion dollars. Obviously, he has pretty complicated financials that somehow need to be dealt
with here if he is to take this role. Does any of it really matter, especially considering other folks who have had roles in the first Trump administration and potentially this one too.
It absolutely matters. And this is something on both sides of the aisle that has long been problematic. I don't suspect we are going to see a resolution to this, but we do have to figure out a way in the US system to ensure that people that are serving the government are able to do so without being tied to businesses and other organizations that leave people wondering where their loyalties really lie. And of course it stretches just beyond the individual, which is one of the toughest things.
It stretches to their spouses, It stresses to family members. We see this both to with people appointed to the cabinet others in the White House. And again it is not just on the Republican side, it's on the Democratic side as well, and it's in Congress. But Congress then would have to make take steps to do some ethics reform, and we haven't seen them likely to move in that direction.
So very very troubling for those of us who want a ethical system in which fairness and transparency is number one our minds.
All right, Jeanie Shanzeno and Rick Davis, our signature political panel. They'll be back for more in the late edition of Balance of Power coming up in the five o'clock eastern hour. Meantime, we still have more ahead in this early edition. Up next, we're going to take a closer look at Trump's executive orders yesterday around artificial intelligence. So stick with us right here on Bloomberg TV and radio.
You're listening to the Bloomberg Balance of Power podcasts. Catch us live weekdays at noon and five pm Eastern on Apple Cocklay 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 play Bloomberg eleven thirty.
I'm Joe Matthew alongside Kaylee Lines in Washington and earlier this week, Kayley to think that it was all one week kind of has us juggling the AI executive order. Yes, that was also this.
Week, it was yesterday.
That was yesterday. It was the day earlier. He appeared with Larry Ellison and Sam Alton. Right, I'm trying to keep the day straight in my head. Of course, artificial intelligence driving the market and driving the conversation here in Washington with a new president seems eager to not only own the space, but take the guardrails off of AI the way Joe Biden had wanted them.
Yeah, we should remember it was at the beginning of this week, on Monday, Inauguration Day, when he signed a series of executive orders, one of them being the repeal of seventy eight executive actions under the Biden administration, inclusive of the sweeping AI executive order that Biden had signed talking about safety and transparency guidelines, creating a group basically within the Department of Commerce to think about voluntary guidelines
that people could subject themselves to, and it wasn't clear what was going to replace what was repealed.
Then we got the executive order.
Yesterday, at least one of them, which calls for an interagency group to craft a new policy within six months, intended not for safeguarding and that kind of thing, but to ensure US dominance in AI.
Back to animal spirits, I guess I suppose if you're hanging out with Larry us Though and Sam Altman. The investment from SoftBank was one hundred billion. They say it'll get up to five hundred billion by the time this project is done.
So here we go, yes, Stargate, although Elon Musks has some doubts about whether or not that funding is there. It's a fight that's playing out in public, but we'll save that for another time. In the meantime, we really do want to talk about what this technology development is going to look like under this administration and turn to an expert in that arena. Matt Pearl is here with us in our Washington, d C.
Studio.
He's director of the CSIS Strategic Technologies Program, also former director for Emerging Technologies at the National Security Council. Thanks for being here on Bloomberg TV and Radio. I don't know if you've had a chance to look at these executive orders in greater detail. But essentially, how do you read the way this administration is going to be approaching AI?
How regulated will it be?
So I think that this administration is not going to be interested in examining models and looking at specific details that these companies are doing. I think they're looking to power them. I think it's going to be a combination of if there are ways that they can use tariffs that are helpful, if there are things that they can do in terms of further deregulation, and I think tax credits as well. And I think they're going to try to support it and bring it along and instead of trying to regulate it.
It's not like there's a lack of money being invested in this space. When you look at the capex from the hyperscalers, it's like its own country here in Meda. Today's talking about a sixty billion dollar investment. It can go on down the line. What does this unlock when you talk about regulations or investment. Does this hasten the end game when it comes to AI.
It remains to be seen. Because I think that Xijing Ping is all in on this and I think the scale of the investments, you know, when you look at what they've done in telecom, for instance, where they've spent hundreds of billions of dollars on an industry that's not particularly profitable and in some ways is not as important. I think the scale of the investment that we're going to see there needs to be matched in the US, and that's going.
To really folding data centers on the scale that we are.
I think they have the ambitions to and I think that Juawei among others, are really scaling up to do that at a frightening rate, but they're not yet competitive with Google and the other hyperscalers.
When we consider Google and other players in this space who are operating learn language models. Something else that is in this executive order is preventing AI systems from being built. And this is a quote with ideological bias and engineered social agendas. Obviously, Google and others have come under some scrutiny for what is perceived to be anti white bias
or something else. How does that actually work though, because people are the ones who are initially programming this, and some inherent bias i'm sure.
Has to be in there. Can that be unlearned by this technology.
Yeah, this is going to be very tricky for the AI companies to navigate because content it comes back to content moderation. Essentially, it's very similar issues. Right, you can't fail to curate what's going to come out of these models and what the public sees can create all kinds
of problems. But as soon as companies do that, they're going to be confronted with some of these issues about whether their interventions, for instance, did have an effect in terms of how a gender was portrayed or that sort of thing. And so I think it's going to be
very difficult for the companies to navigate. But I also think they're going to be working really hard with the Trump administration to make sure that they make the case that that is not something that holds them back from releasing a new model, so that I think that there's a good chance that the way that it's enforced will allow them to innovate. But we'll have to see.
I want to try to get to this from a slightly different angle for a moment, how much of this through the eyes of the White House, and what's possible in say the first one hundred days or even the next four years for Donald Trump. How much of it has to do with AI technology or the models that you're discussing versus energy. This is the President's going to unlock energy and you can't get these data centers powered without energy that we apparently do not have when we
talk about nuclear but more immediately natural gas. Is that actually the lasting mark that the Trump administration will have on AI?
It very well could be, because that is the long pole in the tent, or looks to be one of the long poles in the tent. Just the sheer amount of energy that's going to be needed, and I think that they're going to have to take in all the above approach. I think obviously with something like nuclear, that's critical and you know, cutting through the red tape, you know, having a permitting process, getting states to approve it. I mean,
I think that's going to be really critical. But there are some other technologies like geothermal that we're really seeing some breakthroughs, and so I think they're going to have to be open to all of those possibilities if they're going to be successful.
Well, so, when we consider here the perhaps deregulating that needs to happen in order to accelerate it, whether it's energy creation or whether it is actually just development of this technology. What is going to be the role of those outside the White House for some of these other agencies who are usually typically charged with enforcing regulation. Just walk us through who the key players to watch here are going to be other than like Donald Trump and David Sex.
I think it really strengthens the role of agencies like d OD and the agencies and the intelligence community. Obviously they're already very powerful, but they are huge customers and they're going to use this technology and drive requirements, and so I think agencies like that are really going to
have a huge role in this administration. I think that it could have an effect on agencies like the Commerce Department and others that would take have taken a more regulatory role, looking at things like data centers and AI and so it remains to be seen. I think they'll have to focus on things like export controls the administration supports. But I think this expanded portfolio that you saw under Gina Romundo, I think is going to narrow up quite a bit for.
Those What does that mean for the videos of the world? Then, where Joe Biden was cracking the whip. When it came to export controls, will some of those loosen for companies making sensitive equipment like GPUs.
I think that's a really good question, and it's going to depend. I think that the National security team that I've seen so far, from National Security Advisor Walts all all the way down, are very serious about that issue, and our laser focused on it. And it's a question of whether the President and others in the West wing are going to have diplomatic overtures from Beijing and decide
in certain cases to go in a different direction. So I think the defaults is going to be to impose more export controls or at least keep the ones we have, but we could see individual cases, particularly where suddenly it changes on a dime.
I'd like to ask you as well about PSI security in addition to this, as we consider the holistic security picture here, knowing, for example, that the Treasury Department was subject to a hack perpetrated at least it's understood to be perpetrated by the Chinese, how do we safeguard against that kind of thing happening When we're talking about federal systems that are being hacked into what needs to be done to fortify them to a greater degree.
So in the case of federal systems, and if you look at the Treasury hack, this was an example where you had a third party vendor that was mishandling its keys that they were providing a tool to the Treasury Department that allowed it staff, for instance, to remote into computers. And because they had mishandled their keys, the PRC actors
were able to get into the unclassified network. And so that's an example of how we don't just need the federal government system secure, we also need those third party vendors. This is something that in the late late days of the Biden administration that they started to do with their procurement power. And one of the things that's interesting if we contrast is you talked about the AI order being revoked.
They haven't revoked the cybersecurity yeos. And I think that that that doesn't mean they won't make changes, and we can talk about what changes I would predict they'll make. But I think that the framework that has been used by the Biden administration, I think there are significant parts of it that they're considering keeping in order to safeguard the country.
Does Donald Trump understand these technologies. He talks about, you know, beautiful AI and being the world uh dominant market for AI, the biggest developer or is that irrelevant? Does he have the know how on his team?
So I've never met him, so I don't I don't want to speculate too.
Much fun of lawmakers for not knowing how to go on social media? Is there an equivalence a year?
But but I think that in terms of getting him information and in terms of getting him really good options, I think that the National Security staff and the other components in the White House will continue that interagency process where what comes to his desk is you know, their best reflection of what the US should do in the context of you know, his approach generally and his.
Ideologies have Elon Muskin is zero. I guess that helps well sure.
And Elon Musk obviously is involved in a lot of this technology development to a certain degree. Obviously, now that he's president again, he's once again subject to the kind of intelligence that you don't necessarily get when you're outside of the White House. What kind of information do you anticipate he's getting around the technological threats facing the United States, Whether it's cyber or something else.
How real is that right now as we speak?
So he's getting very scary stuff. I mean, I can tell you from when I came to the NSE that it's very disturbing in terms of some of the intrusions that could impact public safety. And you know, because we have such wonderful government officials that are working every day as well as companies working to stop it. But I think it's going to be getting a lot of information
on the threats. Obviously I don't know the details. I no longer have a security clearance, and so I think I think he'll be getting good information about that.
Are these on the level of Salt Typhoon or greater?
So I think Salt Typhoon is actually a great opportunity in some ways because it is a finally a public example of this advanced persistent threat that we're seeing. It's a different approach, right, This isn't just somebody breaking in.
This is somebody squatting and in your walls and in your basement and in your ceiling right where they they gain access to the network, and then they stay there and they hoover up Intel financial data, you know, whatever they can and they prepare for the possibility that they could use it to disrupt financial markets, to disrupt telecom networks and so on, and then the other aspect of it that.
Sorry, the clock is stopping us.
OK.
I want you to come back and have a conversation about the things that keep you up at night, because you're going into some very interesting areas. He agreed to that. Kaylie, We're going to take Matt Pearl, director of the CSIS Strategic Technologies Program, making his debut here on Balance of Power.
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 with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Onto Ashville today for Donald Trump. He has left the Bubble Air Force one to Ashville. This is on the way to California. It's disaster day for the President. He spoke a short time ago of briefing on the damage left behind from the hurricanes, realizing this is a couple months ago now, and made some pretty controversial remarks about FEMA and in terms of California, about the valve we talked about the Delta smelt. We'll hear a lot more about the poor smelt, I think a little bit later
on today. He'll get to California in the second half of the day. He will likely be speaking soon. As we mentioned, they've got a staging area set up for the president. A couple of folks are standing by some families and RV what appears to be a damaged home, and they've got the podium and presidential seal setup for him. So we'll keep tabs throughout the day on his travel. By the way, this is what day four and a half.
A lot of people woke up this morning to try and remind themselves that it's been only a week, and it's been exacerbated by this uncertainty that has followed alive. We talked about uncertainty in the markets, right you can't plan for stuff when you don't know what the tariffs are going to be, the tax cuts. How does the
Fed plan anything with the idea of incremental tariffs. There's just as much uncertainty for hiring managers right now as Donald Trump moves to reshape the federal workforce, and there could be echo effects in the private workforce. Remembering a couple of nights ago, we told you five pm DEI offices were shut down. People who worked in them were put on paid leave. By the close of business today, those managers are expected to put forth paper on how
they're going to reduce the workforce. They will likely lose their jobs. That could be thousands of people, and it could impact programs far beyond the sort of nature that you think of with DEI, race and gender. As we've told you, this impacts veterans and rural services. So we've got a lot of confusion here as the world shifts under our feet a bit, which is something that we wanted to talk about with an expert. Amyd Frain is the founder and CEO of a company called HR Standards
Institute HRSI. This is a credentialing teaching organization that's geared toward the HR world. Is with us now in st Amy. Great to see you.
Great to see you too, Joe.
Your head spinning. I'm guessing what the rest of us is if the world is shifting under your feet and you've got this kind of confusion. Let's start with the federal workforce, because that's where the President is starting here talking about illegal diversity equity inclusion policies. This is something that's going to change the face potentially of the federal workforce. I don't know what the unions think about this, what do you think about it?
So this is really gray area that we're entering into right now, not only for the federal government, but for the private sector as well. We're seeing in the federal government not just the anti DEI efforts, but the hiring freezes that are taking place right now. People are sort of struggling with what this means to them. We're seeing folks that are having their job offers resended and those seasonal employees that come in to help by IRS process paperwork.
Are you know, they're not going to have those seasonal employees based on what we're seeing right now, And there absolutely are concerns about these offices being shut down and these people losing their jobs around how does this impact unions and what does that mean? Which is huge and there are contracts in place, agreements in place, so what does that mean for those organizations. It also, when you think about all this, you think about the component of
the morale of the people that are left behind. What does that look like for them, you know, how are they going to navigate through this? And I think that when you think about you talked about the jobs those folks that are doing DEI, sixty percent of their roles was focused on DEI, but they had other parts of their jobs that were non DEI focused. So what is what happens to that Where do those functions of their
responsibilities go. And when you talk about the private sector, you're looking at organizations that are shifting their DEI policy. This is not in the past four and a half days, as you pointed out, but you're looking back for you know, the past couple of months or past couple of years of what's been happening in the DEI space. Companies that have been pulling back on their DEI efforts like John Deere, companies that have been reimagining what DEI looks like like McDonald's,
and companies that are really digging into deies. Companies like JP Morgan, who Jamie Dimond this week talked about refocusing and doubling down on their DEI efforts because there is profitability in the bottom line for the bank for those efforts.
Wow, okay, so there's a lot here. You mentioned the unions. Why don't we start there. We haven't heard an outcry from federal labor unions. I suspect that they're trying to figure out the impact of this and what their next move is is. Will that be the next call in response here from the UNI.
I think that's going to be one of them.
They push back on the president.
I think they certainly will. I think they're trying to figure out the impact of the executive order that was signed on the twenty first. They're really trying to understand what that looks like. I've been seeing and talking to attorneys in the employment space that are really also trying to understand how are we going to advise our clients on what this means from impacts on some of the federal laws that are out there.
So for sure, remembering federal government's the biggest employer that's right in the country, and it's not just where you and I are sitting now in Washington, these are federal offices. Sometimes people need to be reminded all over the country, in every state. The echo effect, though, in corporate America is something that I find fascinating, and this hits close
to home for you. You consider government contractors for instance. That's right, But even beyond that, you said McDonald's, some of the other companies home depot where DEI pages are going away different approach to business for fear of crossing the president. What's the motivation.
Here, right?
I think that they are. I think companies are really looking at what's important to them in their culture and their values. I think that's what JP Morgan Chase is doing, That's what Costco is doing, focusing on what are our values and what does that look like? And there will be some risks that these organizations may be facing by really doubling down on their efforts for DEI, but it's part of their bottom line. They're seeing results from that,
and they want to reflect their customers. They are hearing from their customers that this is important, So all those things will continue to be focused. As for the private employer.
The EO that I mentioned directs federal agencies as well. It's to create a list of companies. It's like kind of a black list of companies to be targeted for potential investigations for what again is being called illegal DEI practices. Is this a labor story or is this a legal story? Because these companies have the lawyer up.
That's right.
I think it's both.
I think it is a story about labor, but I think it's also a legal story, and a lot of this is going to be litigated from both the private employers and for the federal government as they're focused on these long embedded laws and practices that companies have embedded in their cultures, federal contractors being one of them. I mean they have redesigned and are redesigning their uh the contracts that they're putting in to service the federal government,
and they're having to reimagine that. So this is a really a challenging time to be an HR. Yes, HR is up for the challenge because HR has done a lot with the gray area out there from COVID to return to work to machine learning and AI and.
This is so your phone's ringing. Obviously if it's time to consult an HR executive or department, we're going to go hire Amy and talk about this. Do you tell them to hold on because we don't know what's going on? Is it slow the role? Because I don't think anybody has this. So we just had one order, for instance, on birthright citizenship overturned yesterday in court. We could be in a complete different world two weeks from now, that's right. How do you make a plan for anything.
That's right? Well, I think you know, I've been talking to folks who are losing their jobs right now because they were doing DEI work for the federal government. So that's obviously happening right now. I think in the in the private sector, I think those organizations need to continue to focus on what's important for values and their culture.
And you know, there's risk in all business decisions, right, So how are you going to make sure that you are doing the best for your organization and you have your shareholders and or your board behind we do we end.
Up with two classes of companies, those with DEI programs and those without.
I think we're already there, yeah, and we have seen that.
I mean, some will hold the line.
Though, that's right, that's right.
Well, I think it's just what's important to their culture, right, what's important to them as a business, and what they value and where you know, there's a lot of research out there that shows that organizations that invest and have a diverse workforce, their bottom line profits are better.
The proof is in the data.
Okay, So that that brings us back to Wall Street. Then you said the shareholders? Do shareholders consider this when they make investments? That's a long walk for side folks on Wall Street how to connect those thoughts that is?
It's so there have been there have been pushes from the SEC on this. I think right now that's you know, sort of off the table with this new administration and looking at how do we value the human capital on a balance sheet? What does that look like? Because organizations have been saying on their publicly reported documents that they have a diverse workforce, but what does that mean? How
is that defined? And I think some organizations have been really good at valuing that and others have just made like in statements about what that means and looks like. So I think this is the time for organizations to really dig deep and to look at their values and what's important to them.
So what's your time frame when when you have your arms around this? Is it first one hundred days for you? Like everyone else?
Yeah, I think this is you know a lot of this is going to get caught up in litigation, so it's going to be a lot longer than one hundred days. But I think organizations are going to have to be paying really close attention to what is what the president is saying, and what's coming out of this administration.
Great, I'm really glad you could come by. Let's do this again when we learn morely, it's great to have the voice of experience in Amy Dufrain hrsi HR Standards Institute for you to remember. Many thanks. Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already, 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.