Trump Is Getting a Civics Lesson in First 100 Days, Haass Says

and of course, on the Bloomberg. Can I bring Richard Os? Please bring in Richard? Host Joins is now President of Council and Form Relations, author of A World in Disarray, American Foreign Policy and the Crisis of the Old Order. He's in our Bloomberg eleven three our studios with Tom in New York. Sorry about that, Chard. Let me let me start by asking you about what's happening in New York today. The Secretary of State rex dealers and headed up to the U n UH. He'll be talking about

North Korea. What do you expect to hear from What would you like to hear from him on the issue of North Korea today at the U n What the United States is doing and the presidents doing it regularly

in his tweets. It's just essentially saying this is an intolerable, unacceptable situation, and they're signaling Beijing that they have got to put much more pressure on North Korean And I think this is the prelude to in the uh to an effort to open up a negotiation between the United States and North Korea to see not if we can resolve the problem, but at least put a ceiling on it in the way both sides can live with. When you look at what the President said thus far, is

he indicating that he's moving toward likely preemptive strikes? He does, he want to have more conversations as he want to rely more on on sanctions. When you look at what that policy might be, what do you see as the contours of it. Well, what you're seeing is the putting the military option quote unquote on the table, as the cliche goes, and they keep talking about it, but no one's anxious to go to war. The reality of what a second Korean war be is it should make anyone

pause and then pause again. But they've got to put that out there because it is a real option, because the whole idea of allowing this to continue to drift is a truly unattractive future. And this though, is a necessary prelude to set the table again for a negotiation, and that requires Chinese pressure on North Korea. Let me ask the right wing question, can we negotiate with a nation? I guess it's a nation that barely is ruled by law? I mean, do they even observed the North Korea even

observe international law to a limited extent? And the answer is, well, you know, again, the alternatives are lousy. That's where the Chinese come in to put to use their leverage. And we'll try. And we've had negotiations with North Korea before, both bilateral and multilateral. We've had shall we say, limited success, which is another way of saying also limited failure, And you know, we'll go at it one more time. David

Guray in Washington and Tom keenan New York. David, we have Douglas holtz Eken coming up later on tax reform. Maybe that's a good way to secure you with Ambassador hass into the domestic front. Yeah, when you look at all of the let's let's use the hundred day metric, and we've had a president here has been uneasy about people holding that up. He was keen to talk about all that he hoped to accomplish in the free hundred days earlier on in them, and now he's he's downplaying

the importance of it. When you look at the ambitiousness of his foreign policy and domestic policy, how do you how do you rate sort of what what he's been able to do and and what's he learned about governing here in these first hundred days. On the farm policy society's probably had two pluses, the limited use of force in Surria and the marshaling of pressure on on North Korea.

I think the real diant downside on FIGM policies. He's injected so much uncertainty into American FIGN policy that he's really worked against the fabric of almost all of our alliance relations. I think at home he's learned the difference between campaigning or business life on one hand, on political governing on the other, whether it's health care or now these other issues. He's having real problems building a viable coalition with Congress, and more broadly, I think he's seen

the strength of independent institutions in American democracy. So he has his his orders on homeland security and immigration and refugees, and time and time again has been rebuffed by the courts. So this is almost a course. And Professor Dick new stat my former colleague at Harvard about that we have separate institutions, each wielding independent power. I think Mr Trump

is basically getting Civics one O one. You know, after after the US launched those tomahawk strikes on Syria, I think a lot of people wondering what would happen next? Have we gotten any more clarity on what has changed when it comes to US Syria policy? And can you draw a line between what happened in Syria and indeed what our outlook is, what our policy is at toward North Korea? Are they Are they connected? On the first part. Not a whole lot of change with the American Syria policy.

We're not going to make the removal of Bosher Alassa and his regime of priority. We we can't. Instead, you're going to have a focus on hammering isis trying to eliminate their control of territory, and the real challenge there will coming up with a policy for who would run it if and when they don't. I think the use of force in Syria wasn't part meant to signal China. If you remember, the use of force happened while she Jumping was dining in Mara Lago with that delicious chocolate cake,

and I think it's most delicious. It was. It was a message to him and North Korea that this is an administration that's more comfortable with the use of military force. Then was Mr Obama's help me with with a president's doctrine? How long did it take before we got the so called Obama historical on a Friday? Well, I'm not so quite sure we ever had in Obama. You don't think so, No, I think what we had was a bias towards restraint and retrenchment. The doctrines have to be real explanations of

what you're going to do in the world. They have to explain big things. They've got to be enduring. I'm not sure Mr Obama had one again, much more than theme. No, I thought it. Usually doctrines are conferred by history in retrospect. Anytime you you declare a doctrine, you don't you haven't done looking a little bit silly doctrines are the judgment of his three that what you've done really matters and

really lasts. I have failed David Gura this morning, and that I did not speak to Richard hass about the Canadian events of the week. We featured the Canadian dollar at the beginning of the show one thirty six forty. Christiph Friedland, their Foreign Affairs minister, was quite sharp with our Matt Miller about how they've never lost on the lumber issue. What is the CFR backgrounder on this relation that we just take for granted? Well again on this

on the lumber issue, there's nothing new. When I worked in the European Bureau of the State Department in the early this was Teddy Roosevelt. It feels like there was lumber one of those roads belts. We had the same issue. Then every day we'd start the European Bureau staff meeting with the latest on softwood lumber. Very little hash j became actually something have a standing joke. Well here we are,

you know, thirty forty years later, the same issue. I think, more broadly, though it wasn't a bad day for Canada yesterday. The fact that the president got pushed by so many of his senior adviceisers to essentially say enough with breaking up napptick. You know, whatever your tactical positioning, this relationship is simply too important with Canada and Mexico. So I

actually think things yesterday got back to reality. In your study of history and all the work of the Council on Foreign Relations, can you teach a dealmaker to negotiate within the US world? Uh? So far at least it's not clear. The president still New York Times actually is a story about it today. Is his whole approach is what worked in real estate. You are these narrow, one off approaches. You come out out of the box tremendously ambitious or aggressively, and what happens then is you've almost

always got to back down. We had to do it with the Chinese over Taiwan. We're doing it with the Mexicans over the Wall. So you get a reputation for backing down, But in the meantime, you not only lose credibility with others, you undermine your friends. The thing with Canada, to be so aggressive with your friends sends the message

we don't really value this relationship. I really think Mr Trump has got to figure out the difference between what what purportedly worked for him in real estate and being president. It's a totally different tool set. You sound like a marriage counselor my wife would tell you probably Richard as the president of the Council on Foreign Relations and of course a former ambassador with work in Northern Ireland a

few years ago in our studios in New York. Right now, we are thrilled to bring you Horondo Rodriguez with black Rock, but more importantly with immense public service to finance and Treasury for the government of Mexico and uh out of Stanford and economic systems and operation research as a Horodo. We were talking earlier about Mexico, but we really didn't get the NAFTA to President Trump caused damage with a relationship with Mexico. This they have nft off and then

left back on. I think that, um, what he did is introduced an additional element of uncertainty that had been going away. Um. Mexico again is not considered political or economic threat by any relevant political constituency in the US. It is a country that has been a strategic ally in liberal matters when it comes to trade, when the world when when the US engages with the rest of the world. So that the work that has been done on both sides prior to the recent comments is one

of preparing institutions, preparing Congress for an upcoming negotiation. There is a clear interest to improve NAFTA, and these in a way is just sending a message that you've gotta be careful because surprise may comment use. Three or four years ago, Mexico was opposed to child for an eleven success. Is that success still there? I think I'm a growth of Mexico. I think it is, But other things have

happened at the same time. Mexico sort of stood out because of its reform impetus, not only the willingness but the capacity to push through several reforms of the constitutional and legal level, opening up the energy sector, telecoms, competition label,

and other things. Now, at the same time, what has happened is that oil prices and oil production in Mexico decline significantly, creating macroeconomic challenge especially on the fiscal side, that have been starting to be addressed, But at the same time also challenges on corruption matters at the federal and state government level have actually created a political environment where the popularity of the president is at all time

lows and in anticipation of next year's presidential election. Clearly the left wing candy they UH left wing party candidate has been benefiting from all these sort of UH social dynamics in Mexico. Where is their their opportunity right now? Yes, in Mexico, but in Latin American more generally, when you're when you're looking at where to investor, you're looking at corporate,

so you're looking at sovereign's what's attractive to you. So clearly as you say that the Mexican peso, with the weakness around these commerses, is clearly one of the most attractive investment opportunities that we see out there in the emerging world. We like Colombia as well. Columbia is an interesting a case where the macro rebalancing after major shocks both on production and other agricultural elements, have forced a

significant adjustment of the external and physical accounts. In UH Colombia, the central Bank is in the middle of an aggressive easing cycle, so long term rates in Colombia is actually something that we like. We like Brazil on the equity side as well, the very aggressive easing cycled by a central bank. I mean they're lowering a hundred basis points per meeting, perhaps going to a hundred and twenty five next meeting. It is an economy that has turned the corner.

The country has also turned the corner politically. It's starting to get ready for the next year's presidential election. And although the economy is somewhat of flatlining at this point, the prospects of reform to restart economic growth in Brazil is looking good. It is clearly one of our topics on the equity side, Brazilian equity markets. Thank you so much. Quickly this wanting too quick with black Rock as well

in Mexico, Thank you so much. And the course on Emerging Markets with black Rock Worldwide, brought to you by Bank of America. Mary Lynch dedicated to bringing our clients insights and solutions to meet the challenges of a transforming world. That's the power of global connections. Mary Lynch, Pierce, Feeder and Smith Incorporated Member s I p C. There's something

new from Bloomberg. It's called Lens. Starting right now, you can use the Bloomberg Io s app off your iPhone or iPad or our new Google Chrome Extension to read any news story on any website, scan it, and then instantly see the news stories relevant market data from Bloomberg. In addition, see all the bios of the key people mentioned in the story. It's called Lens, and it is just that, a lens into the people and the data of any story you may be reading. Again. Lens brings

you the power of Bloomberg's news and data. Download or io s app or search for the Bloomberg extension at the Chrome Store to try lens out. Learn more at Bloomberg dot com slash lens. Join me here in our Bloomberg ninty nine studios. Now is Zekemmanuel, healthcare expert zekem Manual,

Professor of healthcare Management at the University of Pennsylvania. As we look at what's happening on a Capitol Hill, there was some optimism in the Republican camp that there would be the votes needed to get their legislation through this week. It seems that last night all of that change. There will not be a vote here this week. The House leadership saying, Zeke Manuel, great to have you you with us, get us up to speed. You've been talking to to lawmakers.

What's what's the objective here? Is is policy driving? This is politics driving this? What what Republicans hope to do? Where is their agreement between these two sides. This is definitely not about policy. The two point oh Republican reform bill is, if any worse than one point oh uh, and so it's gonna have a hard time. I don't think there's as much attention on it. But um, moderate Republicans do not like it. It doesn't bode well for

them in the election. The public doesn't like it because what the public is concerned about is the high costs of healthcare. They're concerned about high deductibles, high copayments, high drug costs, and this bill does absolutely nothing on that. And so I think this builds chance of success are law I was not at all surprised that, in fact,

they didn't. They pulled a vote because they don't have the votes, and they're not going to have the votes, and I've predicted that they won't pass anything, and hopefully after we go through this feudal exercise a few more times, we will actually get too serious negotiations about policy and about what to do about the state of healthcare. There

was a great piece by bloom Review. Comes Peter Rizager looking at this and saying, if if you want by partisanship, if you want something to happen, focus here on containing consts and improving value. Is that the problem of the legislature is that where that needs to happen or can it happen elsewhere? Well, there are some things the administration can do from a regulatory basis, and UH that you

know that those are would be good. Unfortunately, Secretary Price put on hold some of those changes when he put on hold introducing the bundled payments for cabbage bypass surgery and acute my cardial infarction. We need those bundle payments, we need different ways of paying um, and we should

not put them on hold for re examination. I think over the long term, UH, costs are going to be the key thing that Americans care about, and I would just have your listeners remember Massachusetts in two thousand and six, they began this sort of universal coverage approach. They've gotten

pretty well, they're sort of covered in Massachusetts. And then once you get coverage, you then automatically more or less shift to costs and trying to get costs under control and I think that's where we are in the United States. We did the Coverage Bill. It's not perfect, but it

actually advanced things pretty well. We're about ten percent uninsured in the country now, um and so naturally people, I've got coverage, but it's really hard and expensive to use, and let's get the system better, both in terms of costs and in terms of quality. And that's I think the natural progression of these debates. It strikes me that the chief challenge here as Republican lawmakers look at this, is there aren't components of the affordable caring that are

well liked by a lot of people. Be that letting your kids stay on your plan until he's X age, be that not having to worry about pre existing conditions that makes reform difficult. Having those things that everyone seems to like, well for Bloomberg people. You guys know behavioral economics pretty well, and there's something called loss of version. Once I have something, I don't like it being taken away, and that's what we're seeing with healthcare. Oh, I got

have this health insurance. I don't like it taken away. I have the safety net under me that if you know, God forbid, my employer pulls the insurance or I become unemployed, or I want to start my own company. I have the safety that I can get coverage. People don't like that being taken away, but they also want it now to be affordable. And they've their drug prices go up. They've seen the deductive bowls go up, and they are very upset by that. So I think that's our next,

our next phase. Tom Keene in New York City with John Tucker, wonderful spring morning. It's beautiful. David's in Washington. David's in Washington, And don't let our steam guests know that the only reason we booked him was because maybe he can get US Cubs tickets. I possibly we'll broker that. We'll broker that during the next break. Zac Comnuel with us here, professor of healthcare management at the University of Pennsylvania,

joining us in our Bloomberg Students time. I know you want to talk about insurance here in just a moment, but Zeke, let me ask you about lobbying might in this town during the Trump administration. Every article I read about what's been happening on Capitol Hill says special interest groups have been key in scuttling this or pushing it one way or another. How does healthcare lobbying look look

to you? And the year two thousand seventeen, it's pretty intense as usual and getting the right people, uh to listen to you. The drug companies still have a lot of might. But you know, one of the reasons I think, for example, this Republican proposal is not doing so well is the fact that the A m A, the American Hospital Association a r P, and a whole slew of

other people in the healthcare industry are against it. They want the exchanges shored up, and uh, this bill doesn't do that, and so they've come out strongly against it. And so when you've got all the healthcare industry against it, uh, and uh, you know, it's a hard, uphill fight. Zeke help us here into the weekend. And that I see map aftermap of regions of the nation with four insurers, three insurers, two insurers, one insurer, and the scary thought

of no insure under the Affordable Care Act. What do those insurers want? Do they want to be part of the Affordable Care Act? Or is this just an excuse to run Well, let me let me make two points. First, if you look at Anthem recently reported that they're doing well and the exchanges, thank you very much. Despite all chatter out there, most of the insurance companies who are participating are doing okay. Uh. They raised their rates and they got that matched their risk pool, and so they're

doing okay. The big problem is insurance hate uncertainty, and what we have and how is a huge amount of uncertain Three things would actually make them much happier and therefore would bring rates down. Uh, and certainly rate increases down. First, say you're gonna enforce the individual mandate so that you get more young people coming in, and don't say you're not going to enforce it and not impose penalties and

undermine the situation. Second, we need risk corridors and reinsurance payments. Uh. Those were scuttled by our good friend Senator Rubio. Uh. Those are very important in case a insurance company gets a disproportionate number of sick people. That again brings rates down. Sometimes I've heard as much as five uh. And then the third element is these cost sharing subsidies. So for families in America earning up to two of poverty who are on the exchanges that means they're earning sixty roughly

or less um. They get help paying the deductibles and the code pays um. And if they don't, uh get government support for that. The insurance companies around the hook and they're like, oh, why should I participate? And the Republicans say, oh, we'll decide those on a month to month basis. That that is no good for literally no help for insurance company. And again that's worth another ten percent on the premiums. So you want to get premiums down,

attract insurance companies in because the market is stable. You have to do those three kings. And you know, and they're not by the way, Tom, they're not complicated. Everyone knows they're there um. And if you you know, if the Republicans upset the market by not paying the cost sharing subsidies, not enforcing the mandate, everyone knows who knows who's at fault. Now, when you control all branches of government, you can't point the finger and say, oh, it's a

Democrats problem. No, you have the power to solve the problem. You have to solve it. My theme for the first hundred days has been the phrase the minority majority Party and that's a Republican party struggling with leadership and governance, and what what is their majority position going to be? What do the moderate Republicans want out of the Zeka

Manuel world? What's their best outcome? I think the best outcome is let's fix the Affordable Care Act UH and get what's working working, and let's get some meaningful cost control enacted that will actually, over the long home the next four or five years, get costs down to growing so healthcare costs doesn't don't go any faster than the overall economy. Those two things eminently possible. There is a deal here. There is a bipartisan approach to this. Cost

control is not one or the other. What the problem with the UM Republican bill, and I've said this over and over and I've said that to the President and to UH Speaker Ryan, is this is a cost shift bill. It's not a cost control bill. It takes costs from the government shifts them to individuals. That is not a solution to keep for the long term. We do have and you know, I have produced paper on this for various people. We do have a number of ways that

we can actually reduce costs in the system. We could start with drugs, since there's a big bipartisan group for that, the American public wants to do that, but we have to extend it to hospitals and doctors and everyone in the system. But there is a very, very big middle. What we can't be UH is wagged by either the far right Freedom Caucus, which seems to control the day and doesn't want to do anything UH to have the government intervene, or fire left people who are only interested

in single pay. There's a vast middle, and that's where we have to focus. And if we did focus on that, we would have a bipartisan UH group that would support a lot of reforms, again shoring up the exchanges, making sure everyone can get coverage, and then moving on to good cost control. And I think you can do it all together. As you go to the White House into Capitol Hill and talk to policymakers here in Washington and elsewhere, is there anyone who says the Affordable Care Act as

it stands is fine? In other words, is there agreement that there needs to be some reform to the legislation. Well, even Hillary Clinton, when she ran for the presidency, said, you know, we need to make fixes Look, it's been seven years in one month roughly since the Affordable Care Act has been passed. You know, problems are going to develop, un anticipated problems as well as problems that the bill was never perfect in the first place. So we know

it needs to reforms. Does it need drastic surgery? Uh? No? And uh, you know, I think that's where the big mistake is. And the American public once't you say we're taking it away, whoa, whoa. No, we don't want it to go away. We do want it to be fixed. Um. And so I think that's where the public is. And that's one of the reasons it's so hard for the Republican Party to just repeal it. I mean, it's a eight piece of rhetoric to get elected, but it's not

a great way to govern. And I think unfortunately these things have come together so that all we have now is rhetoric on the political campaign rather than substance. Let's roll up our sleeves and actually do something substittive here that most people will be happy with. Let me just situate this in all that's going on the conversation about yes, government funding, but also tax reform and financial market to

regulation reform. There's a lot happening. Can you attribute the fact that we're maybe not having the kind of serious conversation you'd like to the fact that there were so many distractions. We've talked to people who have said, look, in any given year, if you would have just pursue tax reform alone, that would be an ambitious undertaking for this Congress. Are there simply too many distractions or is it that coupled with the politics. I think it's all

of it. I don't. I don't. I wouldn't call them distractions. Look, you have an agenda that you want to get past. I actually think the irony is if you could get bipartisan agreement on healthcare, it would actually give you more political capital to attack things like a tax reform, h infrastructure build. Those are the three big issues. Let's do them serially and go for the middle. And that has

not been what's happening. Uh. They have tried to go for an extreme one party uh a solution, and that won't work because the Republican parties have shown we're not unified on the Republican right. UH. And so we need to go to the middle where it's going to be both Some you know, a fair number of Democrats and a fair number of Republicans, and that's I think where we're directed. But if you did that, then people say, hey, yeah, I can work with these people. We can find some

modern solutions. I'm not going to get everything. We'll go back to actual politics, where politics is the art of the compromise, the art of the deal, where not everyone walks away with everything they wanted, but things actually improve. And that I think is what's really uh missing here. Um we've got you know, uh controlled by the most

extreme elements, and we've seeded control. If the Republicans say we're only going to pass this bill with republic looking volks, then you have the most extreme people dictating what's at stake, and that is no formula for success. That is for sure not gonna work. You remember twenty three uh House Republicans uh are in districts that Mrs Clinton won. Okay, they're not inclined to vote the way the Freedom Caucus wants to go. Uh. So you just can't pass anything

under those circumstances. You know, I think the real important thing is is for us to look, you know, two or three years down the line and say all right, what's the big issue. There's a lot of cost control. That's the big issue, all right. See Commanuel joining us here our nine studios with the University of Pennsylvania. This

is Blomberg Surveillance. David Gura and Tom Keane David Garray in Washington, d C. Today, Tom Keane in New York looking forward to this interview we'reou to have here with Douglas Hoole, Seek and the president of American Action Form, former director of the Congressional Budget Office. We spent a lot of time, Doug yesterday talking about your opinion piece in the Washington Post. Trump's tax plan is built on a fairy tale. We also were marveling at what that

tax plan looked like, just physically. This this one page document, two hundred words, a variety of typefaces. Here we are ninety nine days in. Did you expect that we were going to get more from the White House than we did? Look, I think we have to acknowledge the accomplishment. Not only is the return now on a postcard, the tax code is one page. I mean, it's never been done before.

Let's let's let's dig into the substance a little bit here, A lot of what was on that piece of paper mirrored what the President had been talking about on the campaign trail when he was a candidate. What what did you see there that you like? And what did you see that you didn't? Uh? What I saw that I liked was a focus on some things that would be genuinely pro growth, lower tax rates on business, a move to a territorial tax system for our corporations. That's a

switch from the campaign, I think, a significant switch. Um. And you know, we saw some movement down in the individual rates. So in terms of the sort of basic recipe of of tax form, lower rates, broader base, you see the lower rates. Um. What's missing, and the thing that troubles me the most is the absence of any real discussion of the base broadening and the casual assertion by the Secretary of Treasury that we can just grow enough that will it'll pay for itself. And that's that's

simply not true. And that's the part I don't like about that casual assertion. I mean, we hear in time and time again the prospects of getting to three percent growth. We hear the Treasury Secretary saying what we here the President saying it as well. And there's something elliptical about this that you would be in favor of taxi form because that's gonna boost growth, and boosting growth is gonna pay for taxi form. It goes around and around and around.

How problematic is that? It's absolutely true that if you have a solid piece of pro growth tax reform that is revenue neutral and as a result, could be passed in a permanent fashion, you could have a significant impact on the growth rate. I don't think you can get a percentage point, and I certainly don't think it pays

for itself. So if for example, you fleshed out the House Blueprint, passed that as a piece of legislation in revenue neutral fashion, the joints of the antaxation is going to give it something that looks like maybe three five hundred six hundred billion dollars in in feedback. But but there's a limit to what you can get, and you

should just acknowledge. If we assume that the President United States Doug has not read Intertemporal Analysis of State and Local Government spending tests this by Douglas Hole, teacon As Tilly, and the wonderful RV. Rosen. If they haven't gone back and read your ra that's French word there, Doug, help me with the who instructs the President and the Secretary of the Treasury on how this gets done. If they're not listening in their fairy tale two people like you,

who will they listen to get legitimate reform. So I think there was some good news that came out of this, and I will answer the question. The good news was the President signaled by by having this rollout and by putting out the proposal, however thin that rough outline was that the status quo is unacceptable, and that really is true. The status quoto. We all know that. Okay, So step number two. If you look at that that proposal, it does not rule out anything that has been discussed on

Capitol Hill. There's nothing in this blueprint they got ruled out. There's nothing in the Senate integration approaches that that got ruled out. And that's where they're going to end up going for the expertise. Now they have it in house, if they can get staffed up, if they could have an Assistant Secretary for tax policy, that would help sort if they did those sort of you know, appointments and

got them done Treasury has a very deep bench. It's there, it just isn't being put into action at the moment. You represented Senator McCain in his effort for higher office. Maybe he wouldn't have played as much golf as a president, Doug, What will the Senate first toward war zones for creation? What will be the response of good senators to a deal making president on taxed from I can't get there. Look, the White House has to has to provide a lot

of leadership to get tax form done. I mean, we we learned that in the thirty one years since we last got it done. It took a Ronald Reagan running for reelection on the promise to tax reform. He won forty nine states, which is pretty good. He then wrote the tax reform, sent it to Capitol Hill, and it still was extraordinarily hard to get it done. So in this environment, you're going to need a President Trump saying to the people who sent him to Washington to make

the economy better, this is what I want. This is what's going to help the average American. And they're gonna have to be all in. Now, what they're all in on is an important thing, and they're gonna have to negotiate with that with the House of the Senate in the White House. That's the process that that needs to get deeper and richer over the course of next couple

of months or simply isn't gonna happen. Tuck the sole Teken with us here in our Bloomberg nine nine studios in Washington, d C. We're gonna come back and talk more perhaps about the prospects of a government comment shutdown, talk about funding, talk about what was reported to be a return to regular order. I've yet to see the

contract of that coming to finder focus. But we'll talk about budget policy as well with the cold t can hear, former director of the Congressional Budget Office, on Bloomberg Surveillance and from Bloomberg Radio. Taka sold Tea can here with us in the Bloomberg nine. Is you want to react to the to the numbers here that just generally speaking, react to s the growth that we're seeing in the US right now. Expected it was, um, I thought it's coming out point eight, So you know that's that's exactly

the same number. It has the characteristics that I worried about, which is the soft PC number. We saw the household sector weekend. Over the course of the second half of two thousand sixteen, we've seen sort of mixed data coming out of the monthly data, and so I'd say the jury is still out on genuine acceleration UM And I'm with the President in the sense that I think there needs to be a turning of the dial on the policy front and some genuinely UM supportive pro growth policies.

The biggest of those would be the tax form we talked about if that was done and done well. But but I will say I think one of the things that the administration and Congress have done that hasn't really been appreciated is just the complete freeze on on regulatory activity. And the difference between what was going on and now is really quite dramatic. Yeah, we're joking about watching Painter. I think there are a lot of people in this town who would love to watch Painter. I would love

to see return to regular order here. We are looking at the projects for another short term spending bill. Will get something that will keep the government open for a week while Congress continues to hammer out what their what they're hammering out, how used to that is washing at this point were used to continuing resolutions. It is way

too used to to that. I mean, how often in the past decade have they passed twelve appropriations bills in the House of Sentence signed them the way they're supposed to. It doesn't happen. I think it's happened once, maybe twice. And so this stop gap way of doing business has become the norm. It was supposed to be the exception, and I don't I don't think it benefits anyone, Doug, I want to rip up the script here the uproar today in pagedro over it, pay the cost over it.

Business Insider had a great article on this. I think it was in Foreign Policy. Can't remember yesterday on speaking feast, the Senator Warren of Massachusetts is I was troubled by that that being a large speaking fee by the former president of the United States. I don't accept speaking feast, folks. That's part of my agreement with Bloomberg. But Doug, you

do is an esteem public official. You've got many agencies including l A. I isn't somebody able to serve public service at the low salary like you did at CBO. You made like forty eight thousand, three hundred dollars a year or whatever it's CBO and then when you get out, you got to make the bacon to catch up, don't you. Uh. In my case, I had two kids in college and it was the way to pay the bills, and I was happy to do it. Um. I don't have any

deep objection to this. Uh, it's why are we having this upward now that it's a world to make a big fat fee to provide immense wisdom to people after X number of years of government service. UM, I don't understand this. There's a a close corollary, which is accepting the large fee speaking and then somehow being tasked to change policy. But but that's that's not what goes on.

I think that's the concern that somehow, by accepting the fee, you've turned in this case the foreign president United States into the agent of of some some group. That's that's a that's a fantasy. That's not what happens. And David, to help you out here Google with room room board and fees combine Dennison University sixty thousand, seven hundred ten dollars,

that's where darken the door you have to look forward to. Yeah, I mean, David, I mean, I I don't mean to get up on my soapbox, but once again this Friday, David Gurrow, we have this uproar over speaking face. There

you go. We do, We certainly do on the news that President bomb I think it's going to travel to Europe to give a speech for for four it's a big I mean, the whole seacons now at that level, well, yes, I would you would accept it if for those for those listening who are concerned about giving the president dollars give it to me. He will gladly. I just ask you about congressional leadership, and let me let me pivot

away from that just a little bit. We looked at President Obama here for for wisdom on the future of the Democratic Party. Where else are you seeing leadership in the Democratic Party? In the Republican Party? You mentioned John McCain during War zones on on on his holiday getting out there doing. Who are the iconic figures in these two parties right now? Aside from from the President, I think the party's in flux. I think we saw that

in the two thousand and sixteam election. The sort of traditional standard bears and the presidential primary didn't do very well. We saw Donald Trump win the nomination in the end, uh that that bleeds back into the House in the Senate, where there's a clear leadership at the moment, but it's not obvious who's the next in line. So that's sort of pecking. You know. Republicans have traditionally always liked to know who the next person was, and it's not been

that way for quite some time though. Tuchas will taken with us here in our Bloomberg nine Studios the Breaking the American Action form. Former director of the Congressional Budget Office, former Chief Economist to the President, George Which Council of Economic Advisor David this interview was like a fairy tale. Do do read his Do read his piece in the Washington Post Again, Trump's tax plan is built on a fairy tale. I'll put that out on Twitter. I know

you will as well. Top, but a useful read here. As the conversation about tax reform in Washington continues. Secretary State Rex Taylors And in New York today meeting with members of the UN Security Council. He will share a special meeting on Worth Korea here at ten o'clock at Wall Street Time. Force and perspective on this. Let's go

to Victor Jaws. He's the Korea Chair at the Center of Strategic and International Studies, the Song Chair the Department of Government, the School of Foreign Service at Georgetown University, and former Director for Asian Affairs at the National Security Council.

I looked at the Reuter's interview that's making a lot of headlines this morning, Professor Chaw, the President saying, quote, there's a chance that we could end up having a major, major conflict with North Korea, and perhaps worryingly more worryingly to people who read that interview, the word absolutely following it. What did you make of what the President had to say and what do you expect to hear from the Secretary of State today when the UN Security Council meets. Um, Well,

I think there are a lot of there. There are a number of conflicting signals coming out of the administration right now. On the one hand, as you mentioned, President Trump made those comments about conflict. On the other hand, yesterday UH Secretary tell us and said the United States was also ready for diplomacy with North Korea. So Um, I think, I think what they are doing, they're putting

all their options on the able. Right now, the focus is on trying the economically pressure North Korea through the China relationship, but the purpose of the pressure is to try to get them back to the negotiating table for some sort of deal. I think that the message at the u N is going to be one, UM, this is the number one national security issue for the United States today. I've heard that all week in Washington, d C.

On Capitol Hill and around town. And to that, UM, the u N has to be ready to move quickly with sanctions and a new you are and Security Council resolution. If North Korea does a six nuclear test. Where do

you see that the pressure being applied. I look at the rhetoric in particularly with the rhetoric on Twitter as ones want to do here under this UH, this current administration, the president seemingly expressing a lot of confidence in his his friendly relationship with with the Chinese president, moving away from labeling the country a currency manipulator. What kind of pressure can the US apply on China at this point when it comes to North Korea. So I think there

are two types of pressure. One is um our movement of military assets to the region, as we've seen with the carrier strike group that Carl Vincent that eventually made it to the waters off the kreen eventually that eventually made it there off the Korean peninsula, And that I think is something that Chinese don't like. Um. And then the other is really Trump leveraging the overall US China relationship that Chinese want. They don't want instability to see here.

This is the year of their big Party Congress, So Jumping doesn't want a crisis on his border. Um. And China does have a lot of economic influence on North Korea. They don't have any political influence. But you know on North Korea's trade is with China. You are truly one of our nation's experts on Korea. I would suggest I need education, and maybe the President of United States needs education.

Outside of the capital, What does North Korea like? If I take the road north northeast from the capital and I'm distant from the Yellow River, there's Chang Gang or John Chung Chang Gang. I can't pronounce it. I guess it's a mining district. How medieval. How backward is the rest of North Korea? Um? It is pretty backward. I mean, once you get out of the capital, city, the pattemptin village of of the of kung young Um it deteriorates rapidly,

very little electricity electricity. I once took a drive when I was in government doing this, and I drove for about sixty miles and I didn't through farmland, and I did not see a mechanized vehicle anywhere. The only thing I saw was a farmer with a with an ox and a plow um. And you pass buildings that have no windows in them, but you know people live in them because there's laundry hanging in the windows. Um it is.

It is quite quite bad. And when you talk about the mining areas, this is this is an area where they have a lot of a lot of their uh their human rights violations. They have they who they deemed political criminals working in the mines, you know, digging, digging out with their bare hands, with no safety precautions whatsoever. Do we have intelligence on this? I think of the failure of US intelligence at nineteen I believe it was

eighty nine with the collapse of the Soviet Union. Would you suggest that the president has available a level of intelligence where informed decisions can be made? Um? Well, North Korea is famously known as the hardest intelligence target in the world. UM, and and I think that is true. I think our intelligence community does the best they can with the equipment and the capabilities they have. But of

course we don't. We are not able to penetrate North Korea like we can other countries, Iran or other places. It's just not it's just not the same. So it is this is the biggest security challenge and it is also at the same time the hardest intelligence target. That's not a good combination. Professor jaw A few Americans have been in the room negotiating with the with the North Koreans. You've been there as part of that Six Party Talk

delegation team a while back. What do they like in negotiations? What what is North Korean diplomacy look like? And and judging based on that, how how how high is the likelihood here we can have a diplomatic solution. Um. So, I you know, they're they're not sort of banging the table and screaming. I mean they are professional diplomats. They have a brief, they have instructions. Um. They you know, they're aiming to get in agreement as well as everybody else at the table. Um. I would say one of

the big differences is that they have absolutely no flexibility. Um. They it's harder for them to call back to capitals to get approval, to to try out a new idea. UM. So in that sense, Um, their inflexibility is really a function of the way their whole system is organized. And for that reason they cannot They're not very nimble negotiators. UM, they're sort of they have one brief, that's all they can say, and then everybody else has to figure out how to try to make it work because they really

can't move. And in the last thirty seconds, so we have with here, we are we seeing market change. You when it comes to US policy toward North Korea. We you've mentioned this with attention that the issue is is getting is the policy itself changing? I think the context of the policy is changing, and that is largely because North Korea is driving too for an i CBM threatn interconno ballistic missile threat that can range the United States. That's something no previous U S presidents has had to

deal with. That makes it a homeland security threat. And so for that reason, I think that means the United States is willing to take more risk, whether that's in terms of military policy or in terms of diplomacy. President Trump is going to have to sect except more risk as he maps out of policy and strategy for North Korea. 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, brought you by Bank of America Mary Lynch, dedicated to bringing our clients insights and solutions to meet the challenges of a transforming world. That's the power of global connections. Mary Lynch, Pierce, Fenner and Smith Incorporated, Member s I p C.