Balance of PowerWatch Joe and Kailey LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Washington Correspondents Joe Mathieu and Kailey Leinz deliver insight and analysis on the latest headlines from the White House and Capitol Hill, including conversations with influential lawmakers and key figures in politics and policy. On this edition, Joe and Kailey speak with:
- Committee for a Responsible Federal Budget Senior Vice President Marc Goldwein as Kamala Harris floats a plan to not tax tips for service workers.
- Democratic Strategist Kevin Walling as President Joe Biden tells CBS that running for a second term would've been a distraction to down-ballot Democrats.
- Bloomberg Politics Contributors Rick Davis and Jeanne Sheehan Zaino about new swing-state polling that shows Kamala Harris in front of Donald Trump in a few races.
- Bloomberg US National Security Team Lead Nick Wadhams about the latest developments from the Middle East.
- Host of Bloomberg's Odd Lots podcast Joe Weisenthal about questions of Federal Reserve independence raised by both presidential candidates.
- Center for Strategic and International Studies Senior Fellow Natasha Hall about negotiations for a cease-fire between Israel and Hamas.
Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Balance of Power podcast. Catch Just Live weekdays at noon Eastern on Appocarplay and then Roudo with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Welcome to the Monday edition of Balance of Power here on Bloomberg Radio, on the satellite radio, and on YouTube, where we invite you to join us. Search Bloomberg Business News Live. Simple as that you'll be with us here in the studio. One week from today. We will be talking to you at this time from Chicago and what will be day one of the Democratic National Committee, the convention of course for Kamala Harris and Tim Walls, and we're going to talk more about that, what role Joe Biden will play on this night a week from now, and what role protesters will play. This some pretty interesting out there showing that tens of thousands of pro Palestinian protesters could be in Chicago even with the change at the top of the ticket. And with that change, we're waking up again today to new questions about Kamala Harris's agenda. We don't have much of one, a skeleton of an agenda, if not what we saw in the Biden administration. And it's interesting as well to see the agenda form on the Trump side. What kind of a world are we in here where jd. Vance is promoting expanding the child tax credit and Kamala Harris is parroting Donald Trump on ending taxes on tips. So that's where we're going to start here. This is the one thing we can hold our hands on, right with a couple of exceptions. Kamala Harris already said that she would support an independent FED and so forth, but this is specific. When I'm president, we will continue our fight for working families of America, including to raise the minimum wage there's one. And eliminate taxes on tips for service and hospitality workers. There's two. Donald Trump, by the way, says, hey, wait a minute, that was my idea. He rolled it out in June, and at that time we talked to Mark Goldwin, Senior Vice President of the Committee for a Responsible Federal Budget, who had crunch numbers on this, finding that ending taxes on tips would add a couple of one hundred million dollars, if not more, to the deficit. He's with us right now to talk about this. I should say billion. By the way, live on Bloomberg Radio, Mark Goldwine, it's great to have you from the Committee for a Responsible Federal Budget. Did your eyes roll when you heard about this one from Kamala Harris? Now both presidential candidates are calling for this.
I mean, the tip for tat here is amazing. You know, it just seems like Biden wants a child tax credit.
So now JD.
Fance was bigger child tax credit. Donald Trump says no taxes on tips, So Kamala Harris says no taxes on tips. Who's going to pay for all of this?
That's what I'm going to ask you now, because if there isn't a plan to offset that, it would result in about two hundre billion dollars in deficit spending based on your calculations, right.
That's right.
We think the Harris plan, and they've given us some more details, including that it's income tax only. But we think that Harris plan to exempt tips from taxes and raise the minimum wage would cost between one hundred and two hundred billion dollars. That's real money, and if there's not a plan to pay for it, it's going straight to the credit card.
Okay, if you put that together with the other one here, the expanded child tax credit. JD. Vance is suddenly promoting this and I'm not sure he talked to the boss about this one, because Republicans have been pushing back pretty hard on Capitol Hill with every time the Biden administration proposed doing this. What would that also mean for deficit spending?
Right? So, the current chow tax credit two thousand dollars.
Some Democrats have been talking about raising it to three thousand, even thirty six hundred in some cases. Vice President cho candidate Vance has now said five thousand dollars. That five thousand dollars, depending on design, that could be another two to three trillion dollars over the next decade.
That again, like that.
Makes our two hundred billion look small, even though two hundred million is already massive.
This is incredible. So without a way to pay for these, we add to the deficit no matter who we elect, and therefore potentially increase inflation while we're at it. Am I right?
Yeah, you know.
One of the ironies is the idea of the child taxpert is to help children, But how much are you really helping children if you're burning them with all this new debt, Like, who is going to pay this back?
It's going to be higher taxes on future generations.
Spending time with Mark Oldwine at the Committee for a Responsible Federal Budget, the knock on the Harris campaign Mark has been no real agenda, no real details. What does the committee want to hear?
Well, it's only been a few weeks, so I'm looking forward to the convention and hoping that we'll get some more details there. But what we want to do is have a full plan from Donald Trump and a full plan from Kamala Harris, and then we will score those plans. That's what we've done in every other election, and so far we're not there in this one.
Well, give us a sense of what she's required to tell us. What it is that we're actually asking about here. You want a tax proposal, I'm sure more broadly than taxes on tips or a child tax credit. You want her to weigh in on the twenty seventeen Trump tax cuts that are set to expire in the term of whomever becomes president next. What else do you want to know? What should we be listening for?
Yes?
So, what I really I want to know her agenda, but what I especially want to know is her solutions. As you mentioned, we have tons of tax cuts expiring at the end of twenty twenty five.
I want to know what she's.
Going to do about them, and I want to what Donald Trump is going to do about them. We have three major trusts Funds, Highway, Medicare, Social Security, all hurdling towards insolvency. I want to know how she's going to address that. We have a debt limit that's about to come back and we need to raise it. We have discretionary spending caps that are going to expire. I want to know how she's going to solve all these problems. I also want to know what she's going to do about our massive debt and interest payments.
Interest costs this year will.
Be larger than Medicare, larger than Defense, our second largest government program. That's just not sustainable, and I want to hear how President Trump and how Vice President Harris are going to turn that around.
Well, you know we're going to want to hear from you when we learn more. Mark, It's great to see you and thank you for the reality check as ever. Mark Oldwine, Senior, Vice President, the Committee for a Responsible Federal Budget here on Balance of Power on Bloomberg Radio and on YouTube. Just coming off of this interview with Joe Biden, a lot of folks are wondering what it is he might say a week from tonight at the Democratic National Convention. It's clearly going to be a passing of the baton the torch, whatever cliche you want to reach for. He did talk about it with CBS News the headline on the terminal, Biden says he dropped out due to risk he'd be a distraction. Interesting listen to the President speaking with Bob Costa on CBS.
Folse we had showed that it was neck and neck race down on the wire. But what happened was a number of my Democratic colleagues and the House and Senate thought that I was going to hurt them in the races, and I was concerned if I stayed in the race, that would be the topic you'd be in interviewing about. Why did Nancy Pelosi say? Why did some it? And I thought it would be a real.
Distraction, a distraction the President of the United States, a distraction from his own election. Of course, he was looking down ballot I presume when he said that, and it's one of the many things I want to talk about with Kevin Walling. It's been way too long since he's been with US Democratic strategist, former surrogate of course, for Joe Biden the twenty twenty race. He's back on it now with Kamala Harris. Kevin Walling, welcome back to Bloomberg. It's good to see you. I want to ask you about the convention. I've got a lot of things that I want to talk to you about, Kevin. But of all the people we're going to talk to you and hear from today on Bloomberg, I will venture to say that you know Joe Biden more than any of them. And I wonder your thoughts on this as he's trying to go through the motions, trying to emotionally, of course, to deal with this decision that he's now billing himself as a distraction. What did you make of that?
Yeah, Joe, good to be back and good to be with you. I think you're seeing the president in real time, still processing some of the emotions with regards to his decision not to seek reelection. He took some time off this weekend gathering with family. Your right to point out just a week from today, it's going to be actually kind of the Joe Biden Knight at the convention in Chicago, so there'll be a number of tributes to the president. He will obviously have a speaking role on Monday night and kind of kick off the convention, and to your point, passed the baton to his number two, to his running mate. And in that conversation he had on CBS, he talked about being a transitional president, a transitional leader, something that he talked about early on in his term, then wanted to run for reelection, and then through a discernment process, realized that, you know, Donald Trump, to him is an existential crisis to this country. And we've seen, you know, just in the past couple of weeks with the rollout with the Harris Waltz ticket, that you know, their best positioned to take on the former president.
When he says I thought it would be a real distraction, you can almost tear Nancy Pelosi in that remark, Kevin, and I wonder if that just underscores the idea that it was not so much his own election he was thinking about. It was all the House races, all the members, all the Democratic front liners who were looking at him asking for him to step aside.
Yeah. I mean the president at the end of the day as a team player and cares deeply about his legacy. He knows, you know, if the House and the Senate were to become totally in Republican control and the former president to come back, most of his legacy would be washed away with the Republicans in control. So this is a guy, you know, forty years in the Senate, eight years as Vice president, four years as president, you know, who served with any number of these individuals, both in the House and the Senate, and I think really cares deeply about the bench and making sure that Democrats not just the win the presidency, but are successful down ticket in a way that's contrasting with the former president who really seemingly only cares about his own election and not being the best kind of surrogate for you know, down down ballot races.
Well, take us to Chicago, Kevin, We're all going to be there together, DNC. A lot of questions about the form this is going to take. I'll ask you about the element of protesters in a minute. There's some troubling reporting on that this morning. But Joe Biden's going to open this convention. That's going to be the sort of passing of the baton, maybe literally on the stage in front of the delegates in Chicago. How high should our expectations be for Kamala Harris to outline a detailed agenda by the time we leave Chicago.
Yeah, I think she's certainly going to. And that's what the convention is all about, not just in terms of, you know, putting our two front folks front and center, in terms of, you know, making it issues of character and experience, but also laying out a vision. And you're starting to see the Vice president talk about key aspects of her agenda, right. So she talked about lowering the cost of prescription drugs in addition to all the drugs that they've done over the last three and a half years with the Biden administration, making housing more affordable. You brought up Joe and the outset taking a line from Donald Trump in terms of taxes on tip to tip workers in Nevada that she previewed before that crowd of twelve thousand folks. So we got to not forget that, you know, she just became, you know, the nominee officially just last week, and will continue, I think, to roll out each of these policy prescriptions. She also talked about some of her positions on the border and immigration in that speech outside Phoenix last week as well, teasing some of the elements of that signing on to that bipartisan border bill that we had that reformed asylum laws and things like that. So as this process goes forward, she's going to outline a lot more for her policy prescriptions, and certainly that will be on displaying Chicago.
Well, I wonder how worried you are about this event being interrupted, Kevin. There is reporting this morning that just because there's a change the top of the ticket, Joe Biden is not going to be the nominee, pro Palestinian protesters will be out in force, in fact large numbers next week, tens of thousands, is with the Washington Post reports creating scenes of fury and dissent. It says, in a moment when Democrats will be working to project unity. A coalition of Muslim and Arab American grass roops groups lived based in the Midwest, have sent a letter to Kamala Harris outlining what it would take to win back their votes, including a plank in the party platform calling for a permanent ceasefire, Kevin. They're not going to get that. So what are these protests going to look like?
Well, as we saw you know, Vice President handle protests in Michigan last week, you know, kind of when they were trying to shout her down, I think she pretty effectively managed that situation. She was the first, you know, senior administration official to call for a seas fire. Got some grief from different aspects of my party being so outspoken on that front. So, as she said in that event in Michigan, I don't know why you're protesting me go after Donald Trump that wants to bring back a Muslim band for example, that would never sign onto a ceasfire, who stands lockstep with Bebe in terms of the current situation on the ground in Gaza. So you know, we'll see these protests. Chicago is obviously set for that. I think you know, in conversations with the convention team, they continue to extend the perimeter of that with an eye towards security. These people have every right, obviously to express frustration. But you know, as the Vice President said, focus your frustration on where the actual issues are, and you'll see that she's much more lockstep in terms of calling for the ceasefire and trying to work and bring an end to the Hamas Israel war than we've seen, you know, from the other side.
Kevin, I have to ask you before you leave us as a Capital D Democrat, what went through your mind when you heard JD Vance make the rounds on Sunday morning calling for an expanded child tax credit.
Yeah, listen, I love you know. I'm a Catholic, so you know I believe in converts. So we're happy to have you know, JD Vance, you know, touting our line. I'll note that his voting record doesn't line up for what he's actually calling for. I think he actually missed the vote to extend that childhood tax child tax credit serving in the Senate. So you know, words speak, you know, less louder than actions here. But certainly you know, if you're looking for a pro family party, that's the Democratic Party. It ain't these attacks on IVF and other things that jd is trafficking in.
Well, it's interesting JD. Vance. He likes Lena Khan, he wants a higher minimum wage, and an expanded child tax credit. Maybe he should talk to Kamala Harris about getting those done to have them on board. It's just, you know, maybe nothing matters. Kevin. It's good to see you. I'll meet you in a week, Okay in Chicago. Thanks for being back with us as always, Democratic strategist former Biden surrogate in twenty.
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Here in New York at World Headquarters. Yes, indeed, the fastest show in politics is on the road here. Kaylie will join us about twenty minutes here in the studio as well as we carry on our conversation on a campaign that is going to bring its focus to X Tonight, we just got another post, I say tonight. Apparently this is an all day affair. Donald Trump posted on what most people still call Twitter for the first time in about a year a short time ago to talk about the campaign. He posted a campaign video whatever, But we just got a new one. Now it's an image. It looks like kind of a wrestling promo or something. Donald J. Trump and Elon Musk live on X remember the big interview tonight eight pm Eastern. He writes, enjoy just one word, Enjoy exclamation point, and we probably will. Genie Shanzano and Rick Davis were taking the phone off the hook starting at eight o'clock tonight. We do wonder how well this is going to work, knowing how these have gone before. This is a Twitter spaces or an x Spaces thing like Elon Musk did with Ronda Santis. Now we've got a whole pile of polls to go through, and I want to hear from the panel on that. But since we just got this drop, Genie Shanzano, I know, is excited. Bloomberg Politics contributor, Political science professor, Ioni University, Rick Davis partner, Stone Court Capital, also Bloomberg Politics contributors. Happy Monday. Great to see both of you, hear Genie, eight pm Eastern time. What is going to happen on X? Is Donald Trump going to endorse evs or something? How does this go tonight?
I think it could be anything. You know, they're going to be hoping to your point that they don't have a repeat of what happened to poor Ron DeSantis when he did that. But you know, I think this is an indication that we've seen actually for the last few weeks that the campaign really feels like if they can target this small group of under fifty men who don't get their news from traditional news organizations. They're described sometimes as low information voters, gamers and others that people like he went and talked last week with Aiden Ross that these will be the people who can put him over the edge in this campaign, and they are very narrowly focused on this group. So we've had them upset about the Rogan endorsement of R of K, which he took back the Aiden Ross interview, and now tonight Elon Musk, I think it's just a continuation of where they feel they can pick up this support and start to turn this thing around where they've had a bad few weeks.
Now, Rick, I don't know your thoughts on this as a campaign tool, but let's be honest, an endorsement by Elon Musk is a pretty big deal. This is one of the most famous people on the planet. Does he bring too much baggage for it to help?
Well?
He does divide the room. I mean, there's no question that there's a lot of dissent in amongst the world domestic politically around Elon Musk. He puts himself out there. He's sort of veered toward the right all year long. He's been a topic of scorn and also inspiration to hundreds of thousands of people. He's even claimed he's gonna deliver just under a million votes for Donald Trump. That's powerful stuff, and he's got the financial means to do it. The question is who does he turn off in the process. I mean, sure, matth is, politics is addition and subtraction. So in addition to trying to target these voters that GINI was just talking about, what are you losing in the process, because these are tough acts to follow us literally, suburban women, goodbye to the Republican Party again for another cycle. They've found somebody else that can speak their language. And then how deep does it go? How far out in the experts do you get, you know, losing votes while getting them in the rural areas.
We've got a couple of important polls out they dropped over the weekend. They don't all agree, and I'm curious to get both of your impressions on them, because we spent the last two weeks talking about a honeymoon, and now we can put numbers on some of these. We had the Bloomberg Swing State pole showed them statistically tied in the seven swing states. Now Sienna is out with its Swing state pole, Harris at fifty percent to Trump at forty six percent among likely voters. That's important, not just registered, are likely voters in Michigan, Pennsylvania and Wisconsin. Now we can talk all day long about the headline numbers, but there's something specific here, and Genie, I'll start with you that argues with what we're seeing in the new FT poll. The Financial Times worked with the University of Michigan Ross School. Also it's in Kamala Harris's favor on the headline, but they found as well that there's disagreement among voters on who to trust when it comes to the economy. The Econ pole on the ft looks good. The Siena poll, however, finds that voters still prefer Donald Trump when it comes to whom they trust to handle the economy as well as immigration. Genie, how are you dissecting all of these.
Numbers, Yeah, it was difficult to make sense of the ft Pole in conjunction with what we've seen throughout the campaign, and of course the latest New York Times Sienna Pole and on the issue of the econ me. Overall throughout this campaign, pre Harris and now post Harris, the Republicans and Donald Trump have had a strong advantage, So I would not suggest that she has turned that around. This may be an indication that the numbers are moving in her direction, that she is doing better on the economy. She is not as tied to Joe Biden's economic record in the mind of likely voters as as he was specifically responsible for, So numbers may be moving in her direction. But I think it's really premature to say she is winning, certainly on this economic numbers. The reality is those issues economy and immigration favor the Republicans and Donald Trump. The problem is he doesn't have the discipline to talk about those and that's where the rub is. I mean, we even heard that in the Wall Street Journal editorial the other day. Can Can he be disciplined enough to talk about these issues which favor him. Still, if he continues with these sort of meltdown diet tribes on truth, social X, and on these rallies about everything except issues, then he is going to lose this middle of the road that he needs in these some of these swing states on these issues. And that's maybe what could be driving down his numbers. There are probably more, to the point driving up per numbers.
Rick before the weekend, most of the polls showed and remarkable in its own right, Kamala Harris essentially tying up this race statistical tie, making up for the gap that Joe Biden was showing in the polls. Do you believe these new numbers showing her actually taking a lead in such a small period of time.
You know, I don't get hung up on the actual number, you know, I see these as directional signals, and She's got some pretty good directional signals, and they're all pointing up. And literally, ever since Donald Trump's speech at the Report Looking Convention, his directional signals, pulling wise, have been pointing down. So this is where the Democrats want to be going into their convention. This is a fully scripted event in about a week. So the assumption is they'll punch through even more positives than they have today, maybe get a buck bump in the convention, which means you're rolling in a labor day with those directional signals pointing up for the Democrats a critical period of time to start that campaign. You know, you have to count this as a you know, toss of a coin election right now. And I would say on the economy, what was interesting about that Financial Times poll that I read was that sixty percent of the people pulled thought that Kamala Harris needed to take a different direction than Joe Biden's economic policy.
And what you're.
Probably seeing is this idea that Kamala Harris is sort of people are writing what they want on her right now. They don't really know much about her sense of specific metrics on issues, so they're willing to give her a chance, right and I think her speech at the Democratic Convention, which will be the next time tens of millions of people see and hear her, is going to be her opportunity to either make that good for them, in other words, be able to appeal to the broadest section of America she can, or start to take people off of that list of folks who kind of are sitting on her ballot right now wondering who she's all about.
Really interesting, Rick, because Kamala Harris says this week she will roll out a more comprehensive economic agenda, So presumably, Genie, we're going to get that before the convention. There'll be a lot of reporting on it over the weekend going into day one on Monday, and that's when we're really going to learn how fragile this lead is because we're adding actual policy positions to her candidacy. But the other side of this convention, Genie, could be a very difficult one when it comes to protests. The Washington Post today reporting tens of thousands are still expected even without Joe Biden at the top of the ticket. In fact, a coalition of activists, Muslim and Arab American groups based in the Midwest have sent a letter to the Vice president outlining what it would take to win back their votes. They include demands that are clearly not going to be met, like changing the party platform to call for an immediate and permanent cease fire. What are we in for. You're going to be there, We'll all be there a week from today. How much will these protesters change.
The DNC, you know, I don't.
Obviously they're not going to get that on the platform for the DNC. I think this is a test for the DNC and for the Harris campaign, and quite frankly Harris herself. How does she manage this? I think she really does have to speak her truth to these to these protesters and say where she stands on this issue. We saw her do a little bit of that after her meeting with Benjamin and Yahoo. I think we're going to see her do more of that, and I think we're going to see her resort to the argument she made the other day at the rally when they interrupted her, which was, if you want to elect Donald Trump, then go ahead, because he is even further against the positions they're at than she is. So she is going to, I think, keep with those messages. But it certainly will be a test, and I think Democrats have to hope this isn't a repeat of nineteen sixty eight. There's no suggestion at this point there will be, but this is where they are at and they have to be ready. And to Rick's point, this is a scripted event, so they should have this under control in the venue it's going to be outside where we hear a lot more about this.
Yeah, we'll meet you there. Rick, What would you advise the candidate to do in this case? Do you take the hard line? Do you continue to say no, let me talk if you want to fit this problem, I'm your only hope because Donald Trump will make it worse. Or does she invite them into the room, have a sit down, try to welcome them to the party.
What would be your approach, Well, you kind of hope a lot of that is that sort of sitting down is happening now, right You want to preempt this as much as you can, and then if they show up, they show up. But right now, I would think it's smart on her part to have some leaders from her team, you know, sitting down with these groups and you know they want to argue, they want.
To make a case.
That's great, Just do it peacefully, do it and assign locations. Don't you know, harass delegates, don't harass the media. You know, get it as contained as you possibly can, and then and then don't give it much Brooke, I mean, honestly, the performance that you want reported is on the inside, not the outside of that convention. Hall, and and if they make it interesting enough, they'll get their share of eyeballs. And and the reality is I think that that the student protests at the end the last semester really wore out the American public, right.
There wasn't a whole lot of you know.
Kind words for these folks who held up people's graduations, tore up school buildings, you know, and made a mockery of a lot of the rules and regulations governing speech at these famous universities. So I don't think there's a lot of good will for them going into this thing. They they're they're they're they're very vulnerable to having this backfire on their movement, and I would think that they should consider that before, you know, basically trying to disrupt a Democratic convention that, as we've all been saying, makes no sense if you look at the politics, who's more likely to bring a ceasefire to the Middle East? Donald Trumper or the Biden administration. Look, we could even see a cease fire between now and the Democratic Convention, So all of this could even change. But again, I mean, you know, you've got to be positive if you're the Democrats and run your own convention.
Well, that's a great point. A lot of things could change, including this expected retaliatory strike against Israel by Iran. There is reporting on that as well as Lloyd Austin, the Defense Secretary, orders the USS Georgia guided missile submarine to the Middle East, speeding up the Abraham Lincoln the aircraft carrier to get to the area. With a strike still expected this week, that could be the backdrop of the convention that we're talking about starting a week from today. By the way, the big Donald Trump Elon interviewed tonight. Shares of DJT down five percent. This is Bloomberg.
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No matter where we are.
Joe, We've obviously been tracking carefully all of the headlines coming out of the Middle East, as Israel is still a waiting retaliation from Iran for the killing of to leaders of Iranian proxies. And then of course there's also the questions around ceasefire talks, which allies would like to see happen later on this week. We just got a statement out from the National Security Council here in the US that says President Biden today spoke with France, Germany, Italy and the UK to discuss the situation in the Middle East and ongoing efforts to de escalate tensions and rese ceasefire and hostage deal in Gaza.
Important update here, Kaylee, this is ahead of talk starting on Thursday. Is the idea that everyone, at least so far we think might be at the table. Hamas has been suggesting. It will not have a representative there, But how you have this at the same time as this impending retaliation from Iran is remarkable that has not gone away. Reports today suggest that this is still in the works and could in fact happen within days. Kailey, Defense Secretary of Lloyd Austin now ordering more assets into the region, the USS Georgia that's a guided missile submarine. We've also got the Lincoln Aircraft Carrier Strike Group said to be speeding up its voyage to the area. The end of this week is going to be remarkable, and that's going to be the backdrop for our convention in Chicago next week when I say we were all going and it's going to be quite a conversation that we have at that point. So before we get to the stalwarts, you know, Joe Wisenthal's coming in here. If this is one of the benefits, remember he sends one tweet and then we'll have like this is going to be the most listeners we've ever had. Nick Wadams is with us in Washington right now, of course, leading our national security team. With the headlines on Israel and Iran, Nick, it's great to have you. Are we going to see possibly both of these happen this week, a ceasefire and a retaliation.
Well, that is definitely the question everybody wants an answer to. I mean, I think these two things are actually linked in the sense that the Biden administration and allies are hoping to get more momentum around the idea of a ceasefire in part to try to head off that Iranian attack. The idea being that if they can show Iran and others, look, there is a credible possibility that we could get this thing buttoned up by the fifteenth, when they're supposed to be a new round of talks for the seasfire that that may in some ways deter or shape the Iranian response. If you can basically make the argument, hey, listen, an Iranian response an attack on Israel will scuttle the chances for the ceasefires. So obviously Iran feels that it's compelled to attack Israel. Though Israel has not taken credit for the killing of a senior Hamas leader in Tehran. But these two things are very much connected. We're all waiting to see what happens next.
Well, and the question I have listening to you, Nick, is the other party that needs to agree to the ceasefire is Hamas, which is an Iranian proxy. So if Iran doesn't want the ceasefire to be agreed to so that they can retally against Israel, why would Hamas say, Okay, we're on board, here's your hostages.
Well, yeah, I mean it's a great question because we're always trying to figure out who exactly has the influence and to what degree Iran is actually shaping this thing. I mean, you know, I think it's just also the death of Ismaeil Haniya a couple of weeks ago really upended the whole power structure. I mean, one thing we really have not been able to get to the bottom of anyhow is how much either side really wants to have this ceasefire because their goals, as we've talked about so many times before, seem to be so opposite. Hamas wants Israel out of Gaza for good. Israel wants Hamas no longer to exist. So it's very unclear where you find an actual resolution when the two sides demands are so opposite. But I think what you're seeing here really is a sense that what the US and Allies want is listen, let's just pause the fighting, get this thing to stop for a little bit, try to ease some of the pressure out of this situation, avoid the s into a bigger war, and then we can figure out what happens next. So many big challenges over the long term, but in the short term, what you really are seeing is just let's just get the guns to be silent for the time being and then kick the can down the road a little bit.
Nick, we have to ask you about Ukraine while you're with us. Just in our last moment here, massive evacuations in the Cursk region of Russia. As of course Ukraine continues, this incursion across the border. Vladimir Putin is sending reinforcements. What is this going to turn into? Are they in fact moving the border in the process.
Well, I mean a lot of questions about the Ukrainian motivation here, But obviously if they are able to hold, to occupy, and then crucially to hold that Russian land, that's not something that they're going to be able to do for a very very long time, presumably given the number of forces they actually have. But whether that would be some sort of a bargaining chip when you do start thinking down the line about the possibility of negotiations, a little bit of like, hey, you took some of our land, Now look at us, We've got some of yours. It gives Ukraine a little bit of leverage, a little bit of something to trade. Obviously, a big shock for Vladimir Putin makes him look very very bad, looks like he's not totally in control. Certainly something that gives a little bit of an advantage to the Ukrainians.
All Right, Nick Wadams, who leads our national security coverage in Washington, thank you so much. As always, Obviously, President Biden keeping himself apprised with this phone call today of what's happening in the Middle East, surely what's happening with Ukraine and Russia as well. But Joe, he's also gearing up for later this week to actually appear beside his vice president now Democratic nominee on Thursday in Maryland to talk specifically about the economy and bringing costs down for people. This is something we're hearing Harris talk more and more about.
I guess a preview of Monday. He's going to be speaking the first night of the convention, Kailey. This will be the first time we see them together though on a stage, even as they've been both talking around this incredible that we've seen. He sat down with CBS News over the weekend, Joe Biden suggesting he left because he was becoming a distraction, presumably down ballot. And she's been asked about fed independence, whether she would continue the line of independence that we heard and saw, of course from Joe Biden. Every time we talked to Jared Bernstein, we joke about it, or be like Donald Trump, who would like to be basically setting interest rates himself.
Yeah, Well, he said that at mar A Lago.
He thinks the president should have a role in setting monetary policy. He had just said that at the end of last week. Obviously, the Vice president thinks differently about this. And someone who's thinking always differently or not is Joe Wisenthal, who is here with us in New York. He's co host of Bloomberg's Odd Loot Odd Lots podcast, also the Way Stalwart.
Here from the other side of star Wart.
We can't get you on the Sherwood lest we come to New York.
I'll come down sometimes. Irritation, all right, I will call it any time you want me to call in. But I'm thrilled to be here.
So cool, I r O.
You guess, well, what do we talking about?
We were talking about this.
In our morning editorial meeting. Does the voter care about FED independence or is it just us sitting in this room?
And there are many FED independence voters, even on Wall Street. I mean, I'll say a couple of things about this. One is that you know, there is a widespread consensus internationally among economists that economists or that economies benefit when there is an entity that is not directly directly politically sensitive, that the FED share doesn't have to stand for re election, et cetera. There is a view that you know, countercyclical monetary policy is good, particularly when inflation gets too high. I mean, you see this look right like, so right now we're at a period where inflation has come down a lot. But you know, the talking point that both of you mentioned is the idea of cutting taxes on tip to workers right now. Now economists would say, when the economy is doing really well, that is not a good time to cut taxes. That's an accelerant. It's the exact opposite. But no one wants to talk about that, or no one wants to do that. That's difficult politically to do. There was the comment that I believe Trump also made about ending taxes on Social Security, which is essentially another you know, it's a tax cut, it's more spending, et cetera. Again, probably not the type of thing you'd necessarily want to do when the inflation is as high as it's been. All that being said, Trump had some decent instincts about monetary policy. Many people would say he was right, particularly in twenty eighteen twenty nineteen during some of the tightening cycle, and in fact Powell himself had to walk back some of the cuts prior to COVID. So you know, there is a sense in which Donald Trump seems to have some pretty good instincts about where the economy is, what's necessary at the time, but fundamentally changing. You know, who has a say in interest rates setting? I think many people consider it to be a fairly radical idea.
He's sitting down with Elon Musky. Yeah, did you see that's like a wrestling ad that they put up here.
Yeah, so he's been gone other than so he last year he tweeted his photo of the mugshot. Yes, he's been disappeared from Twitter. First sold. It's kind of amazing.
DJT stock is down five percent. Now, yeah, that's an earthshaker, it is.
Because that's like the one thing that truth social had going for was the.
One guy posts. So what what are we in for here? Are you compelled by this sort of uh pairing of personalities? Is their policy? Here? Does the Elon Musk endorsement mean a lot to somebody who does who cares about it?
We'll see. I mean, look, both Trump and Musk have their sort of cults of personality, so to speak, and they obviously dovetail ideological on a lot of things. You know, it's an interesting it's an interesting choice. Is it a vote getter or a dial mover? You know what I will say, though, there is something about Twitter specifically that I believe is very influential in the media. And it's the sense that like reporters, and I'm guilty of this myself, like we see stories, things that people talk about on Twitter more than any other platform, become things that we write articles about, two podcasts about, et cetera. And there's no there's no escaping that fact that. So I don't think like Twitter itself is a medium that like changes votes, but Twitter itself, I do honestly believe changes what the media will cover. And so therefore I think if you want to influence reporters, which I think is important for both candidates, if you want to influence reporters, it makes a lot of sense to be active on Twitter.
So we're still calling it Twitter to be close.
Oh yeah, what happened this old school?
What happens on this is the one that I was trying to call it x too, and now everyone's.
You know what's funny is I think During uh Trump's trial in Manhattan last year, Trump's legal team objected to a juror who still called it twitter, which I know was really interesting and they were probably right to because I feel like the sort of like Elon Musk fans like they're really quick to like switch from Twitter to X. Where's the old school? People were like, we're going to keep calling it twitter. So when that potential Jersey, No, I still call it twitter. The Trump lawyers are like, no, he's out.
Well, I also am curious.
I think we all remember what happened when Ron DeSantis launched his presidential campaign over spaces and it was.
Didn't go very well.
And I noted Elon Musk tweeted last night X posted exit.
Yeah, no, that's the problem.
The verb still feels like tweet.
But he said he's doing scaling tests ahead of this thing because you potentially break the system.
Again.
No, And that was a disaster because then they had other folks like the VC David Sachs was on that call and he was getting interrupted like, probably the worst way to introduce your campaign, imaginable.
That's saying a lot on the platform.
Yeah, that's right, that's right.
I spent a lot of money on who cares about this election right now? In the financial world because we keep hearing analysts tell us that nobody pays attention until we come back to the beach and the kids go to school. But I feel like Joe, people are paying closer attention than ever earlier.
Well, what I would say is it felt like nobody was paying attention at all of the election until the debate, and I feel like the debate mark basically day one of this election. You know, it's a really good question because if you took if you take Trump's at his words seriously about what he wants to do, there's some pretty big implications for the economy. I'm thinking particularly on tariff policy specifically, which he takes seriously. It's one of the things that in the twenty sixteen he talked about tariffs, and he kept his promise. You know, politicians don't always keep their promises. He did introduce new tariffs.
He believed Joe Biden kept this promise.
But if you look at like the market, does it look like we're about it's like enters some major escalation of a trade war. I don't really see it. So, you know, one of the questions seems to me is like, well, why isn't the market more anxious about you know, I'm not even saying bad or good. I'm just saying potential changes. There's still kind of hard. It's hard to see the fingerprints on the election, so or you know, at this point in twenty sixteen, everyone's like in the twenty sixteen cycles, like we're all watching the Mexican peso, right, and like when Trump's polls would go up and the paco would go down, et cetera. It's not obvious to me looking at this market that there's like some clear Trump trade that has emerged.
Well, that's just because everybody's trying to figure out if the Fed's gonna cut by twenty five that's right, the next month, right, data so important, Yeah.
And everyone's looking at the short term and the what is happening with the state of the labor market. But there's not some clear basket of stocks or something that seems to be directly like toggling related to what happens in this election, at least as far as I've seen.
Well, that's honest, what do we get after this thing tonight? He endorses EV's and does Elon must work with the UAW or something that does. He He's gonna complain about the unions. That's why he hasn't been invited to the White House.
It's so right, it's it's really funny. I don't know there was a comment, because you know, Trump made a comment in his speech recently saying, oh, he likes evs, he owns an EVA and in part because Elon musk endorsement. It's so refreshing to hear a politician talk like that in some way, because we're not really supposed.
To, like be honest.
Yeah, you're not really supposed to say like, well, this person endorsed me, so now I'm gonna say good things about their product or their industry, et cetera. We know that Trump has been really critical of electrification. He's talked about all the problems it's going to cause, and he's talked about if we have electric trucks, then they're not going to be able to The weight that bridges can stand is not going to be enough for them. Some interesting points. It'll be interesting to hear if EV's specifically come up.
Amazing, he landed the plane just like that. I thought with podcasts you just talked there's no outtime ever, like we have noil On Bloomberg.
You're listening to the Bloomberg Balance of Power podcast Ken Just Live weekdays at noon Eastern on Applecarplay and then roud Oro with the Bloomberg Business at You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa play Bloomberg eleven thirty.
Kaylie, we should talk more about what's happening in Israel right now. Of course, we have the potential at this moment for a cease fire with Hamas this week. We also have the potential for a new war between Israel and Iran, or at least a retaliatory strike. Joe Biden was talking about it in that CBS interview we discussed in which he referred to him is a distraction. That's why he left the presidential race. He also talked about the chances of a ceasefire emerging in Israel. Here's what he said.
The plan I put together, endorsed by the G seven, endorsed by the Uman Security.
Council, etc.
Is still viable and I'm working literally every single day too and my whole team to see to it that it doesn't escalate into a regional war, but it easily can.
So it easily could escalate.
And that's the other complicating factor in this Joe that yes, they want to achieve a ceasefire between Israel and Hamas, which is a proxy of Iran, and yet the threat of Iran is still very much hanging over Israel, as an Israeli military spokesperson just delivered a televised statement moments ago saying that they are at the highest state of alert. So for more on this, we bring in down Natasha Hall. She a senior fellow with the Middle East Program at the Center for Strategic and International Studies. So Natasha, were really on watch for two things this week that theoretically, at least to me, would seem that they would counter act each other or they contradict each other to a certain extent, reaching a ceasefire agreement, which would be cooperation between Israel and Hamas. At the same time that Hamas, which is a proxy for Iran, is potentially going to take part or at least could in an Iranian retaliation against Israel. What are you actually expecting will go down in the coming days.
Well, thanks for having me. I think that's a perfect way to put it. It's essentially a checkmate at the moment between Iran and Israel. As you had mentioned earlier, Israel had assassinated Ismail Hanie, who is the top sort of humass negotiator within Tehran, in a very highly secure IERGC building. This was a huge humiliation for Iran and they felt like they probably would have to respond in some way. At the same time, you see a new Iranian government taking shape, which could be delaying sort of a response towards Israel, and you also have these ceasefire negotiations which are supposed to be jumpstarted this Thursday, and many of the negotiators have said, this is the final this is the final step.
This is it.
There won't be any more real efforts, doesn't You don't know what that means. But Iran is in a very difficult situation. They know that any kind of retaliation would likely attracts a much larger Israeli retaliation, and at the same time they also know that it could blow up the ceasefire negotiations.
What does it tell you, Natasha, when you see the news that we're seeing at the Pentagon Here the Secretary of Defense surging the guided missile submarine USS Georgia and the aircraft carrier Strike Group Abraham Lincoln into the area. What is the Pentagon bracing for.
Yeah, I mean we see aircraft and warships and even a submarine heading into the region. I think a lot of this could be also, what posturing making it known that the United States will be there if there is any regional escalation and hoping to sort of check it before it begins with that predominant posture in the region that said it will be there if it needs to be used. But I think that what they're hoping to do is to signal signal something to Iran and to Israel. I think that regional escalation should not be in the cards at this point, at this very very tenuous point of ceasefire negotiations.
Well, and considering at the parties in those negotiations are not just Israel and Hamas, it is also the US and Egypt and Cutter and these are the allies who have been pushing for these talks to take place this coming Thursday. What role are they playing here? And how do you expect the dip matic back channels between these countries and others in Tehran or elsewhere are working right now?
Yeah, I mean this has been the really fascinating part. You actually saw the Jordanian Foreign Minister go to Tehran for the first time a high level diplomat from Jordan has gone to Iran in about twenty years, to really try to take the pulse I think of the Iranian regime. You saw this unprecedented joint statement from cut Out in Egypt and the United States on Friday, really imploring the warring parties to take these ceasefire negotiations seriously and get it done. So you have a lot of other players here, and that could be who Iran goes to for their response. These other players, like the houthis to to try to demonstate some kind of plausible deniability for a military retaliation on Israel, and that could be what US forces, the US Defense Department is bracing for at the moment, because it remains to be seen where that response will come from, and so it makes sense to have this sort of overwhelming presence in the region at the moment.
Natasha, there was a strike, an Israeli strike on Saturday in Gaza against a school killed nearly one hundred Palestinians, and the Idea of says there were Hamas fighters operating in that school. But this is just yet another example of why so many people have been upset about what's happening here, calling for restraint, calling for the protection of Palestinian civilians. This is one of the deadliest bombings that we've seen in this ten month conflict. Is it just part of the day to day headline now or could this in fact jeopardize a ceasefire from being reached this week?
I mean, unfortunately, it wasn't a new incident. We'd seen schools that are being used as essentially displacement camps being bombed about five times in just the past few weeks. This one was particularly devastating, probably killed around one hundred people. There are about six thousand people that were sheltering in this school mosque compound that had been told to evacuate from other areas by Israeli forces. So I think it just shows the sort of the lack of clarity on how serious warring parties, including Israel, are about ceasefire negotiations and really the way forward, because at the end of the day, if Israel still sees the elimination of Hems as the end goal, it remains to be seen how you can get these ceasefire negotiations done with that very same group, and that's why all of these various attacks are so devastating for Palestinians and for their future as well.
All Right, Natasha, it's always great to have you here on Balance of Power. We really appreciate your time, as we are all on watch for what happens Thursday or potentially even sooner. Natasha Hall of Center for Strategic and International Studies, where she is a Senior Fellow with the Middle East Program, Thank you.
Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already, at Apple, Spotify, or wherever you get your podcasts, and you can find us live every weekday from Washington, DC at Noontimeeastern at Bloomberg dot com.
