Ex-FEMA Head Says Trump's Done Everything Right on Harvey So Far

in London. The President saying he's going to travel to Texas tomorrow to inspect what's continue to happen there, the storm continuing to range over Houston many parts of the state of Texas. He's gonna head to St. Louis a little later this week as well to talk about taxi form. A lot of politics and policy to talk about with the conversation. Mark Walker who joins us here in a Bloomberg eleven three studios in New York. He's a Republican

who represents the sixth district in North Carolina. He's the head of the Republican Study Committee as well. Let's start with with the budget, with all the obligations to Congress faces when they get back here in September. I have to pass a funding bill, have to do something with with the death ceiling. Who are you listening to? Who should we be listening to in leadership for guidance on

what's going to happen and when? Well, I believe, first of all, I want to commend Chairwoman Dyeing Black and her work on the Budget Committee. Uh, it's rare. I believe that you have to go back ten years where you had a unanimous Republican support on a budget and there members across the board, including Freedom Caucus members in there.

So I know she worked weekends, stayed on the phone, But to pass that out of Budget Committee, I believe deserves a very quick vote and we're certainly encouraging leadership to get it to the House floor. One of the things that we feel very impressed about it is over the next ten years, it does take an honest look and reform close to two hundred billion dollars of some specifically some of the Medicaid. Uh. We we've seen the

current healthcare budget. As we move forward, as another forty million Americans to the Medicaid roles over that ten years, it's certainly something that we can't afford. And and I will tell you as a former pastor, I don't believe it we're doing a service to people by continuing to create a spirit of enablement as opposed to maybe an incentive to be able to continue to pull yourselves different

levels out of out of poverty. So when it comes to who we're listening to, we're listening to cheerwoman Black, but we're also listening to the leadership as well. Do people talk about regular order on Capitol Hill anymore? Have we gotten used to this process of continuing resolution after continuing resolutions? UH? Short term funding bill after short term funding bill? And and do you think we're gonna get back to a point where we see a regularity of

the budget process in Washington again? Well, being there in my second term, there's a legend that a regular order once existed. Yet, but we're I don't I don't know how much of it. We We talked a lot about it, but it's probably more rhetoric than anything else. And there is some guys that are the purest traditionists. As far as trying to get back to it, I believe there's good measure and good reasoning why we should be focusing on it. However, we live in such interesting days back

and forth with administration different caucuses. Uh, different leadership that that's up even since I've been there. So it's all over the map right now. On the issue of tax reform, We've gotten a piece of paper from the White House. A few months later, we got two pieces of paper from the White House. We know that the border just a tax is no longer on the table. What's your sense of the timetable here for for tax reform? And is it a belief of yours that we need to

get tax reforms? It's deficit neutral if I can get away from my talking points, I believe there is legitimate, legitimate hope that this is something we can get across the board. Uh. We use the word hopeful and optimistic

and all the different things that we talked about. But from what I'm seeing in the work with Kevin Brady and ways and means um he and Speaker run obviously, as you just mentioned, we're very keen and very hopeful that they can get this thing through with a Board of Adjustment to tax because of what it would do to the growth immediately. Uh, that is something that we're going to have to look as for as how we

do find that money somewhere else. But as far as when it comes to legitimate tax reform the first time in thirty woidant years, I believe there's some sign off on from the White House, both with a Senate and with a House. So that is something that we can never get to on the same page with health care. Every time this piece moved a little bit, then it then it calls the equal and opposite reaction somewhere else.

But I believe when it comes to tax reform, without putting a hard timeline, I would be very surprised if we didn't have this pass before Thanksgiving. UM Congressman, what does it mean being a Republican a two thousand and seventeen? Is it more frustrating now than it was a year ago? I believe it is. I'm one that's relatively new to the political scene, and I was a pastor for nearly eighteen years and work in business and finance right out

of school for about five or six years. But in the two and a half years three years that I've been here in in the political scene, uh, my job is still continue to put a lot of attention, a

lot of energy into relationships. I'm very proud that I represent UM all of our communities, I represent the largest historical black college and university and in all of the country in my district, and making sure that Republicans are still talking about things that are important to us long term when it comes to fiscal but also understand there's there's a heart component of this. Uh. As far as how we message, I've learned that Republicans are pretty notorious.

They have a good objective long term, I believe, but sometimes fumble in and trying to express why that's important to all of our communities and not just to select few. How's our president doing? How's your president doing? President Trump? UM? I believe that overall I would give marks UM that are positive because of how much that we've been able to get done in the regulatory component, obviously had it

has impacted the markets. Uh. Now that we were nine months almost into this at ten if you want to count since the inauguration, but moving into month and or nine since um since January. Uh, there are things I feel like that continue to be improved. I remember speaking to him not too long ago and and and him remarking, hey, listen, I'm still I'm still learning this. Uh. You know, I thought I was not one that had a huge pedigree

of two and a half years. This is something that's certainly he has, uh, certainly more room to grow, more room to learn. UM, and I understand from a leadership component, when you been someone that really hasn't been accountable to anyone else is specifically in your line, there's there was

no board. He answered to uh in learning now that there are three equal branches and trying to find the balance and all that, as well as trying to motivate people to pursue or to to complete what he feels like is an agenda that American people elected him to accomplish. All of that has been kind of a working order.

Have we arrived We have not. But if you look at people like Taylorson and Madis and Gorst's there are some winds here that I believe we can celebrate Gods but thank you so much of the time, and they appreciate that. Joining us here on Blombergradi and Blomberg Television as well as Corns and Mark Walker, who represents the sixth district in North Carolina, the chair of the Republican Study Committee here on Bloomberg Surveillance on Bloombergradio, David Garray

in New York. Francy and Lapwa in London. This is Bloomberg Warn. David Gray in New York, Francy Lackwoy in London. Tom Keene is offten. This is Bloomberg Surveillance on Bloomberg Radio. We continue, of course, to monitor the storm bearing down on Texas, on Houston in particular. That's Tropical Storm Harvey, downgraded from hurricane status. He's still pouring a ton of rain on that city. Flooding a huge issue there, and we'll have updates on the situation there throughout the morning.

Looking at today's agenda, the President schedule to deliver a joint press conference with the President of Finland a little bit later today, that's at four twenty. Wall Street Time will have coverage of that for you here right here on Bloomberg Radio. Well, there's a lot of news on Friday afternoon, of course, as the hurricane approached the Gulf coast.

Also the President electing to part in the former sheriff of Maricopa County in Arizona, controversial Sheriff Joe R. Peo, and the President wrote in a statement on the heels of that decision, he's now Joe or Peo now eighty five years old and after more than fifty years of admirable service to our nation, he is a worthy candidate for a presidential parton. Somebody who thinks differently about this is no filment. He's a professor of law at Harvard

Law School, a columnist for Bloomberg View as well. He's written about this. He wrote about this in advance of that and saying if the president were to do that, it could be an impeachable offense. In his words, no Felton joins us now on our phone lines, Noah Joe Pio convicted of contempt of court by Judge Susan Bolton, explain, you know what what what he's being pardoned from. I

think that's key here, It is absolutely key. The background here is that UM a group of citizens sued our Pio and the Maricopa County Sheriff's office for unconstitutionally detaining I think people mostly Latinos, on suspicion that they were undocumented and then holding them indefinitely in prison. And a court held that was unconstitutional, that it violated the basic rights of the people who were being detained, and the court ordered our Pio and the office to stop doing it.

Our pile refused to stop doing it, and he told his staff, We're going to keep on doing exactly what we've been doing. First he was held in civil contempt and then the Justice Department prosecuted him for criminal contempt um, which is pretty unusual, and he was found guilty and sentenced to a fairly symbolic sentence of about six months. You write about the effect that this could have, this pardon could have on the integrity of the legal system.

Just explain what you mean by that. The President, by doing this calls into questions sort of the strictures of our legal system in this country and your estimation. Yeah, well, here's the thing. It's pretty rare for a sworn law enforcement official to be ordered by a court to do something and to flat out say no, I'm not going to do it. It's even more rare when the thing that the law enforcement official has done is to break

the constitution. And it's even rare for the person than to be convicted by the courts, specifically at defying a court order. When the President pardoned someone under these conditions, what he's basically communicating is that it was fine for law enforcements to ignore what the courts told him to do, and that it was fine for him to violate the Constitution itself. So that's a basic challenge to the rule

of law. It's saying that a law enforceani can ignore the law, ignore the power of the courts to say what the law is, and do whatever he wants, including violence the constitutional rights of ordinary people. And that's pretty stunning. Frankly, It's pretty different in a situation where someone is pardoned for committing a crime, because in this instance, the problem is not so much that what our pio did is against the laws, that it was in direct violation of

what a judge told him the constitution required. But no, he suggests this is an impeachable offense. But then I thought, the president pardon who he wanted. Great question. The bottom line is this. It's true that the presidents can pardon whomever he chooses to parting, probably himself excluded in the sense that once the pardon is issued, our Pio can't go to jail. I mean the pardon worked in that sense. It doesn't mean that the president is free of any

sanction for what he's done. If the president abuses his power by partnering people, let's say, who were close to him, or to serve his own interests, or in this instance, to basically fundamentally contravene the idea the constitution binds law enforcement officials. The thing that we can do about that is to invoke the impeachment power. And it's not just

me who's saying that. Uh. In When they were ratifying the Constitution of the United States at the Virginia Ratifying Convention, James Madison, who was the lead draft into the Constitution, he was asked specifically about the part in power. The people were saying, well, we shouldn't have a part in power in the constitution. Is a bad idea. What if the president abuses the part in power? Madison said, essentially, well, the president uses the part in power, you can impeach him.

That's the power you have available to you. So the idea here is that the part in power, it's not it's absolute in the sense the president can do it if he wants to, but it's not outside the bounds of sanction. And the sanction that's available is impeachment. Right, you have to refresh my memory because it's been a couple of years that I haven't done constitution a law. This is not the abuse of power our article, right,

this is you're talking about something else. No, Well, in the constitution um, a president can be impeached for what are called high crimes and misdemeanors. But I tradition, this was very clear of the founders. High crimes and misdemeanors does not mean breaking a statute, doesn't mean breaking a law only it would include that, But it also means any abuse of the presidential power, and that is part

of the impeachment structure. And it's been the case when previous presidents have been impeached that Congress has not restricted itself to presidential violation of a written statute. They've also gone after the president for what they considered abuses of power. So abuse of power is a sort of general catch all phrase that I'm using to capture the idea of

high crimes and misdemeanors, and that would cover impeachment. There's plenty of things the president can do that would deserve impeachment that don't violate a specific law that's on the books, but that obviously subvert the structure of the Constitution and subvert the rule of law, no fel What does this, this story, this case tell us about the relationship between

the federal government in the States government. Just reading between the lines here and the statement from the White House, and from what I've read of the former sheriff, it seems like there are a lot of people who think that he was simply taking a taking the rule of law into his own hand. Rightfully, that the federal government wasn't doing what it needed to do when it comes to protecting the federal the border with Mexico. He was doing that. But what does this say about the state

of that relationship between states and the US federal government. Well, it's pretty badly afraid. Um. In this instance, a state of elected official was violating the Constitution. Now, he may have been doing it because he thought that the federal government needed to do more, but that the federal court which convicted him and which ordered him not to do what he was doing, believe that he had overstepped his bound. If he was just enforcing federal law, he would not

have been convicted. Our pile would not have been convicted of contempt of court. This is not about him acting in a way that the federal court didn't want to state official that this was about our pio acting in a way that no official connect under the constitution. Um. It's also true that in principle our Pio could still be charged under state law or convective contempts under state law, and if that happens, the President would not actually have

been able to pardon him at all. So this is exact an instance of the president intervening as is his power to do over the federal courts. And the federal courts we're doing what they're empowered to do by the fourteen Amendment of the Constitution, namely, supervised state officials and make sure they're not violating the Constitution under color of law, which is exactly what our pile was doing. No, fellmen, what does this tell you about this president's attitude toward

presidential pardons. I can look back at all of the pardons that President Obama made, a lot of them centered on drug cases in particular. Um, there are a lot of people here wondering a sort of what lessons we can draw from this particular pardon, how it might be used to say in the Russian investigation, how the president might use his power of pardon, and going forward, what lessons can you draw. Well, I'm warious of the interpretation that says that this is some sort of a message

with specifically with respect to the Russian investigation. Um. What I think is very clear here is that the president ignored the usual process that other presidents have in the past gone through before they chose to make a pardon. There's a special part in office and the partner of justice. It was ignored here. Ordinarily, appeals have to be exhausted. That was not the case here. Ordinarily it just goes to a complex and complete vetting process before any pardon

is issued. I'm not saying that every past part in is one that I would agree with, but in this instance, the president circumvented those usual processutes. It also happened early in his term rather than late in his term, a way of saying, essentially, I don't care what people think about this. I'm going to do it on my own.

So if nothing else, this communicates the president thinks that it's within his authority and that he conclearely get away with partnering people whenever he wants, and probably however he wants to suggests the willingness to be quick with the partning power, but no, so he's advising the president actually on all matters of law and constitutional powers. Are they

ill advising him or is the President just ignoring it? Well, in this instance, Um, the usual process that would have been created to the Department of Justice through the Partner Office, we've been told was not followed at all. So the strong suggestion is that the procedures that are ordinarily in place to advise the president simply were ignored and we're

not followed. Often the White House Council's office would also be involved in the pardon process, and we haven't been told publicly whether in fact the White House Council was involved in this process or not. Now again, constitutionally, the president doesn't have to listen to anybody. He can pardon

whomever he chooses to pardon. Um. But those procedures have been put in place by previous administrations with the goal of rationalizing the process and not making a pardon look like it violates the basic principle of legality, which I think this pardon does look like. David Guray in New York, Francy Laqua in London, Tom Keen is off to damn

looking at news out of Berkeley, California. Big protests yesterday there in Martin Luther King Jr. Civic Center Park, a big confrontation between antifa and anti fascist anarchist protesters and others who were gathered there. Around two thousand people were gathered in that park yesterday, and I just wanted to

bring in our our guests. No Felton, who's a law professor at Harvard Law, of course, columns from Bloomberview to talk a bit about a free speech and light of the protests that we've seen here, in light of the protests from both sides that we've seen here over these last few weeks, of course, most paramount being in Charlessville.

When you look at history and how we deal with free speech, no matter how how violent is what have you been thinking about over these last few weeks now, Well, I think there's a whole bunch of really fascinating and subtle issues. The most important one is that we need

to keep on distinguishing two different things. We need to distinguished peaceful protests, which is protected by the First Amendment and should be protected by the First Amendment, no matter how vile the content is, from violent incitement, which is when you take an action that you know is likely to cause an imminence incitement to violence, and is actually causing that, not just that you know it's going to cause that, but it isn't that going to cause that.

The police have every right to prevent the ladder from happening. So if there are a group that are confronting each other, and there are people trying to provoke violence, then the police are wholly within their rights, and indeed, I would say their responsibilities to stand in between and to separate people and to make sure that violence doesn't break out. We don't really think about it this way, but without the police protecting us against the violence, the free speech

right that we have becomes pretty empty. And so we actually need both components. We need the order on the streets in ordering sure that our free speech rights are protected. It strikes strikes me as we talk about this, as we talk about the Ropio case as well, the the a c l U is at the center of both of these these stories. Of course, the a c l U has said it's now going to represent hate groups that march with with firearms. What do you make of

that decision? There? Obviously, the a c l U has taken heat, as it often does from both sides here for for a decision like that one, Yeah, I mean, I think the needs to and I think it's trying, for better or worse, to carve out a space that

protects peaceful speech. But that doesn't open the door to armed groups marching in what looks like ordinary military formation, because when that happens, those people aren't really potentially dominating the streets, potentially either provoking violence or intimidating other people. And there you have the confluence of two different rights. You have a Second Amendment right to bear arms and a First Amendment right to speak and to associate. So

in theurious sounds like what should be fine. If you can march peacefully, that's fine. If you can carry weapons peacefully, then that should be fine. But if you actually do both together, then at some point you cease to be a peaceful marcher and you actually become a militia that's challenging the authority of the police, and that I think the law does not protect. And the was trying to find, I think a way to to weigh in there. It's hard to the sell you because traditionally their position has

been absolutists. They have gone the most extreme free speech positions possible. You know. You remember they actually supported what became the Supreme Courts holding in the Citizens United case, which maximize corporate free speech. So traditionally they've been absolutists. Here they're pulling back from that a little bit, probably in the wake of Charlotteville and other other recent events.

But don't know what you're arguing is that basically, to almost avoid a situation where too many radicals, you know, contribute to destabilization, you just need a much bigger so you protect free speech, but you have a much bigger police force. Is that right, Yeah, you need a bigger police force. Sometimes you need to assign different groups different locations to march. In theory, it's great to be able

to say, well, we can march wherever we want. But if you have a large group of anti fascist protesters in a large group of you know, not your white supremacist protesters, it's constitutionally perrinsipal to the police to say you're not marching right in front of each other. You have to be separated by you know, thus in such a distance, and we're gonna put this group of you here. We're gonna put the scoop of you there. And of course it's always controversial, and the police do that much

in the way. It was controversial when the police isolated protesters at the Democratic and Republican national conventions in recent years, moving them away from the convention location. But the police are justified in specifying time, place, and manner of speech when it's necessary for safety and security. So you also need to keep people apart from each other. And last, but not least, the police have to be very well trained so that they know the difference between peaceful speaking

and potentially violence provocation. You can't just expect police intuitively to be able to do that. They need to be trained in order to make sure that free speech is protected while class the order is preserved. No, always great to speak with you, Thank you very much being so generous with your time here on this Monday morning. Now a film and ne Felix Frankford, the professor of law at Harvard Law School, column is for Bloomberg View, writing

prolifically and importantly for Bloomberg View. Do check out his columns. I'll tweet his latest on Joe or Pio. This is Bloomberg surveillance on Bloombergradio, David Gura and Francine Lack with Tom keene is off today m h now speaking in an interview with Bloomberg and Kathyen Hayes and Jackson Hall. Governor Krota said the BJS yield curving control program has been working quite well. That he was talking about the fact that he also needs to have more very accomgnative

monetary policy. He warned that his inflation target remains distant and that the current pace of growth looks unsustainable. Here is Governor Kruder. Four percent grows is excellent, but we don't think four percent grows can be sustained. Around to pocent grows is likely, and that this amount of growth infringel rate to gradually crime up towards the two percent. That was Governor Kroda speaking to our Kathy Hayes over in Jackson Hole, Wyoming. Now, let's bring in Alice Rivlini

is former FED Vice chair from our DC studios. Mr Ryvelin, thank you so much for joy in us today. What did you make of Jackson Hole? It was rather uneventful compared to previous you know, Jackson Hole, Wyoming forums, and yet we learned a little bit more about how they see risk, yes, and I thought we learned actually quite a lot. I thought that Janet Yellen's speech focused on exactly the right topic. She hardly mentioned meant monetary policy

at all, which I thought was appropriate. She mentioned and discussed at considerable length the case for UH continued vigilance about instability in the financial markets, and particularly the risks of rolling back the Dodd Frank Act, which she quite persuasively pointed out has made our financial system a lot safer and less subject to the kind of turmoil that we are instant two thousand eight, Alice Rivelin, what is the one thing that actually Governor Croda has not said?

I guess yet reading between the lines, he's worried about the FED, isn't he? Well, he may be worried about the FED, but I think he's more worried about the Japanese economy, which is UH persistently deflationary. That's been the same story for UH for many, many years, and uh uh, I think that has got to be his major concern. Alice, great to speak with you here on this this Monday morning. I wonder if we could shift our attention to Europe a little bit is what we heard from Mario, drawing

you the president of the ECB. There was some speculation that he might try to job own the euro a little bit, talk it down. He didn't do that. What did you make of what what he had to say and what do you make of the situation he faces on the European continent right now? Well, he faces a more difficult situation, I think than than Janet Yellen does UH, in part because he doesn't have a cohesive country. He's got a whole group of economies that are UH not

entirely in sync, and that's always very, very difficult. But I thought he, like Yellen, made the right speech for Jackson Hall, pointing out that the big threat was not from UH inflation, it was from the possibility of trade war or deteriorating UH regulatory cooperation among the major countries on the issue of of regulation. Will come back and talk a little bit more more about this, but just summarize stories, if you would, what what Yellen's thinking is

on on bank regulation at this point. She's making a pretty forceful defense for some of the regulations have been implemented. But she also spoke of it as sort of a plastic thing, right that it's it's it's it's useful to reevaluate her to constantly evaluate the efficacy of regulations. Yes, and I think she's absolutely right about that. We put some much stronger regular sations in place after two thousand and eight. Uh, but uh, and they seem to be working,

but we haven't tested them yet. And uh. What she was warning against was wholesale rolling back, although she did stress and she's right that you have to keep reevaluating regulations. There's no such thing as a permanent regulatory regime. You have to adjust, and particularly you have to make sure that the costs of the regulation to the financial sector isn't excessive. But she made that point. All right, Alice, thank you so much. Alice really in there. The former

FED Vice chair stays with us. We'll be talking to her a little bit more about. I guess the possible currency war is what we made Also of the rest of the FMC members we talked to. We had two Federal Reserve officials talking to her, Michael McKee also taking opposite sides of I guess David, this central bank ongoing debate right about how you were bond to disappointingly low inflation. Of course, policy makers gathered in the at Jackson Hole

at the annual symposium. We're pretty tame. Three years ago we had Mario Droggi saying, you know, he'll do whatever it takes and to actually put a number on the balance sheet. This time we're in a different move. We did hear from Kansas City Fed President Estra George saying that it will all depend on whether the economic data in the US will hold up, on whether there is another opportunity or not to raise interest rates again in two thousand and seventeen. So we'll talk more about Jackson

Hole and we'll talk dollar dynamics. David Gurray in New York Francy Lackway in London were joined by Alice Rivlin or Bloomberg Studios in Washington, d C. She's former vice chair of the Federal Reserve, now a senior fellow at the Brookings Institution. And Alice, I hope I'm not telling tales out of school when I said, the last time I saw you in Washington, you said the media tends to focus too much on monetary policy and not enough

on regulatory policies. So let's continue talking about it, if if, if we could hear we're looking at a FED that could be radically changed from a personnel perspective, and I wonder what that could pretend for for its regulatory responsibilities. Do you see them shifting here over these next a few months, a few years. Well, I think there's a risk that the administration and the Congress will roll back regulatory financial regulation more than I and Janet Yellen think

is wise. That was the burden of her speech. Be very careful. It's the big threat to the stability of the US economy is that we have another two thousand and eight. We don't want that to happen. Uh, So be very careful about deregulation. Now. I'm not sure that the President and many of the Republican majority in Congress agree with that message, and they may try to roll back regulation the including putting a much more deregulatory person at at the FED. How much more regulatory person at

the FED? I wonder, as we have this conversation about personnel who might lead the FED, who might be in these jobs, how much an academic background matters you have? One? Of course, Jennet Yellen has one. Ben Bernanki had one as well. There's there's speculation that the next appointing might not come from that background, might be somebody from the world of business with oh, just a b a degree

from from Does that matter to you? Do you think that makes the difference whether or not somebody has the academic background. Uh? Not necessarily. It would depend who it was. The tradition of having a PhD in economics is UH is pretty strong at the FED. But market experience and

financial sector experience is extremely important. Uh. The real criterion I would think is, UH, is this person really familiar with how the economy works and how markets work and committed both to a sensible monetary policy and UH to UH keeping us safe from another financial crisis? All right, Alice, we're beating around the bush here. It's Gary Cone the

right person for FED. Oh, I'm not gonna do I'm not going to endorse very nice try Okay, But but would a former banker be the kind of profile that could be good for the FED? Well, it would depend who it was, But I think you could find somebody from the financial sector who would do a very good job.

It doesn't have to be an academic PhD. Economist. Although I think we were extremely fortunate, uh in the crisis of two thousand and eight to have Ben Bernankee at the HELM, because not only was he a very highly qualified academic, but he was an expert on what they did wrong in the nineteen thirties and very determined not to do that again. We got changed change position here a little bit. Um. You know, I know that when there's a big storm like the one that we're seeing

in Texas, the Federal Reserve is on alert. Of course, the Federals bears some responsibility for the banking system here in the US. Of course, what does the FED do when there's something like this, when people may have difficulty getting to banks or just banking normally? This is this is part of the Fed's responsibility as well. Oh absolutely, And the FED communicates with the banking and financial sector that it stands ready uh to help and that they

shouldn't worry about liquidity. They should uh be as helpful to their clients as they possibly can be. Of course, we're the two time director of the Congressional Budget Office, and let me ask you a bit about sort of the challenges that lawmakers face when they get to Washington. Uh in just over I guess maybe a littless than the webs that just overweight, little less that a week

is we're on the press fas of reaching September. Uh do do you do you foresee there being real difficulties here passing some sort of ending bill in time to avert a government shutdown. How worried are you about that? And of course about the reaching the dead ceiling and not seeing that raised in time to meet the government's obligations.

I'm medium worried. I think cooler heads may prevail and we will probably get a short term continuing resolution as they call it, to keep the government funded past the end of the fiscal year so that they can then uh make some more serious decisions in November, perhaps even into December. That seems to me the most likely. I don't expect that we will have a government shut down, but we might. And the President is still threatening if he doesn't get his border wall to close down the government.

I hope that doesn't happen on the death ceiling. I really hope that Secretary Venution and others can convince the Congress and the President that it would be just terribly stupid for Uh, the United States to even flirt with a debt crisis. We don't need to do that. We should raise the debt ceiling as much as is necessary to accommodate the spending and revenues that have already been voted.

How did the FED look at this risk? We heard from billionaire head fund manager Rate Dalio that you know it's time to off float risk and this is mainly because of what's happening in Washington. Well, uh, yes, I mean the FED looks at it nervously as as we as we all do. But I don't think the FED has a real role. These are of fiscal matters to be decided between the President and the Congress as to uh, when we fund the government adequately and when we raised

the dead ceiling. The FED can stand on the side and look nervous. But that's about all I can do. Right. But by looking nervous, would they be right for examply, for example, in delaying a hike because of this new politic uncertainty? Well they might, um, but the economy itself looks pretty strong, and uh, inflation, while not up to the two percent target, isn't doing isn't plummeting? Uh. So, Um,

I think that will be the main things on their mind. Uh. They might be a little more cautious because of the turmoil and the Congress, but I would expect that mostly the conversation would be about is the economy strong enough for us to keep on the track that we'd like to be on, really get back to a more normal

interest rate. You know, the FT hasn't been shy about saying it's not going to speculate what the federal government's going to do when it comes to tax reformer, fiscal policy, regulatory reform, all of that, but how much just to complicate things, the FET has taken some criticism for how it forecasts, how well it forecasts. Give us a sense of just the the complexity infused into that process. By having so much uncertainty in Washington right now, well they

starting to have to take it into account. Uh. But um, that's a question without an answer really. Uh, the everybody is a little nervous that turmoil in Washington, or hurricanes on the Gulf Coast or other sources of uncertainty may may be there. But you make your best forecasts and stick and go with it. Just lastly, here does Washington is there more uncertain than there has been? Which are

thinking about the death feeling again? You and I have talked about it, you know eight out of the nine last years, it feels like does this time feel different to you in Washington? Yes, I think it does feel different, and it's largely because we have a quite inexperienced and unpredictable president. We don't know what Donald Trump thinks about the debt ceiling or other things, and how much he is willing to risk chaos to get some of the

things that he cares deeply about, like the border wall. Alice, great to speak with you always. Thank you very much being so generous with your time this morning. Alice Freeland, Senior fellow at the Brookings Institution, former vice chair the Fed Reserve. Because I said, two time Director of the Congressional Budget Office, joining us from studios in Washington, d C. This morning. This is Bloomberg Surveillance. David Garray in New York,

Francy Lapwa in London. Tom Keane is off today. Big news that here in the U. S as well, we continue to watch what's unfolding in Texas and pleasure now to be joined by James Leewitt, who is a former director of FEMA. He joins us on our phone lines. Great to have you with us as all of this contends to unfold. As I say this, this terrible storm in Texas. What are you watching for when it comes to government response? In other words, how should we be

assessing the degree which things are going apace? At Mr? Ware? Well, I think the you know, the President appointed Brock Long as administrator FEMA, who's a farmer state director of the Merchants Management whose is very experienced, very capable, and I

think he'll be leading FEMA extremely well. And uh in all the eight years I was at FEMA and female employees are very dedicating about what they do, and so I think that will go well as supporting the state and local governments and that and I think the President has done everything right so far. You know, he made the Decorate disaster declaration Friday and um and that was very important for the state and locals to know that

there's a lot of these costs go and reimbursable. And I think the trip that he's making down to Texas tomorrow is important just to show the people that the federal government is there behind them and will be there for the long haul. I think it would be important that he meet with the governor and local officials as

much as he can without disrupting the response. But also I think it's important that he if he can, reach out into where shelter is and let those people know and give them hope, because right now, you know, they're devastated, They've lost everything they've worked for all their life, and this could come down as the costliest catastrophic event we've seen in the United States. Just understand what FEMA is

doing at this point. As I said that, the storm is still raging, it's pouring rain across Houston the surrounding area. There's a there's a tremendous amount of flooding here. What what at this point is FEMA, UH and and all the groups that's working with What are they doing at this point. Well, primarily FEMA's role right now is to be responsive to state local government and what resources they request and the team you know as the full federal

government behind them that they coordinate all those resources. So it's there right now and in the role of responding with those resources, supporting the state and local governments and

what their needs are. And then after this that is the response is finished in lives have saved and you get into the recovery side of it, then FEMAL will take the more prominent role, particularly in the public assistant side as well as the individual assistant side and uh and so then you know, after they get all the assessments done, after this water goes down, and then what's going to be important is is what the governor going

to ask for? You know, I would ask for reimbursable costs and be response for how long that takes, and then whatever the cost share will be to state and local governments after that, which could be or it could be SETI if I I would definitely ask for uh. Mr, Well, thank you very much for the time. I hope we can check in with you a little later this week. Is so we continue to watch the response to the

tropical storm over Texas. Right now, it's Change le w former director of FEMA, joining us on our phone lines. Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom Keene. David Gura is at David Gura before the podcast. You can always catch us worldwide. I'm Bloomberg Radio.