Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple, Cockley and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube here in Washington.

Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple, Cockley and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube here in Washington.

Of course, involvement captivated by the first days in office of Donald Trump as he begins his second go at the presidency, and he has wasted no time executive ordering, using the office of the President to do everything he can. You will, not unilaterally, but for all the stuff that comes next, he's going to need the cooperation of Congress, specifically as we've discussed frequently on this program when it comes to tax policy. Hence multiple meetings about the legislative way forward at the White House this week.

Of course, involvement captivated by the first days in office of Donald Trump as he begins his second go at the presidency, and he has wasted no time executive ordering, using the office of the President to do everything he can. You will, not unilaterally, but for all the stuff that comes next, he's going to need the cooperation of Congress, specifically as we've discussed frequently on this program when it comes to tax policy. Hence multiple meetings about the legislative way forward at the White House this week.

Yeah, and a big one on salt. We talk about salt every day here because we're Bloomberg. And there's a question about how much you can be fit into this package to extend the twenty seventeen tax cuts, because that's going to compete with no taxes on tips over time.

Yeah, and a big one on salt. We talk about salt every day here because we're Bloomberg. And there's a question about how much you can be fit into this package to extend the twenty seventeen tax cuts, because that's going to compete with no taxes on tips over time.

All the other proposals that emerged on the campaign trail.

All the other proposals that emerged on the campaign trail.

But this is a big one, and we know that Republicans from states like New York, particularly those who won in Biden districts, have an enormous amount of inflatable I should have said that probably have an enormous amount of influence over this process right now, because every vote will be needed to make it happen.

But this is a big one, and we know that Republicans from states like New York, particularly those who won in Biden districts, have an enormous amount of inflatable I should have said that probably have an enormous amount of influence over this process right now, because every vote will be needed to make it happen.

Yes, hence why you saw not just Republican leadership at the White House earlier this week, but yesterday three key Republican moderates, one of whom is from the aforementioned state of New York, and he's joining us now live from Capitol Hill.

Yes, hence why you saw not just Republican leadership at the White House earlier this week, but yesterday three key Republican moderates, one of whom is from the aforementioned state of New York, and he's joining us now live from Capitol Hill.

Indeed, let's go to Mike Lawler, Republican from New York, seventeenth Congressman.

Indeed, let's go to Mike Lawler, Republican from New York, seventeenth Congressman.

Welcome back to Bloomberg TV and Radio.

Welcome back to Bloomberg TV and Radio.

It's a pleasure to have you live from Capitol Hill because I know it's a busy time right now, to the extent that you can bring us in the room. The question of how high to raise the cap I'm sure is something you discussed with the President.

It's a pleasure to have you live from Capitol Hill because I know it's a busy time right now, to the extent that you can bring us in the room. The question of how high to raise the cap I'm sure is something you discussed with the President.

How did he respond?

How did he respond?

Oh?

Oh?

Well, first, thanks for having me.

Well, first, thanks for having me.

I'm not going to get into the specifics of the conversation out of respect for the President, but I will say, obviously it was a very productive meeting with the President, great opportunity for myself, Brian Fitzpatrick, Don Bacon, the three of us who won districts that Kamala Harris won juxtaposed to four years ago, there were eighteen districts that Republicans won that Joe Biden won in twenty twenty two. So you know, obviously the country has moved right word, These districts have moved right word. But there's three of us left in Harris districts, and so it was a good opportunity to sit down with the President. Salt did come up, of course, you know, and the President reaffirmed his support for lifting the cap. We talked extensively about it down at mar A Lago just ten days ago with a group of us from California, New York, and New Jersey. But this is I mean, I've been very clear on this issue. If we do nothing, if we pass no tax bill, salt comes back unlimited, which I would support. But the problem is that it would be associated with the largest tax increase in American history.

I'm not going to get into the specifics of the conversation out of respect for the President, but I will say, obviously it was a very productive meeting with the President, great opportunity for myself, Brian Fitzpatrick, Don Bacon, the three of us who won districts that Kamala Harris won juxtaposed to four years ago, there were eighteen districts that Republicans won that Joe Biden won in twenty twenty two. So you know, obviously the country has moved right word, These districts have moved right word. But there's three of us left in Harris districts, and so it was a good opportunity to sit down with the President. Salt did come up, of course, you know, and the President reaffirmed his support for lifting the cap. We talked extensively about it down at mar A Lago just ten days ago with a group of us from California, New York, and New Jersey. But this is I mean, I've been very clear on this issue. If we do nothing, if we pass no tax bill, salt comes back unlimited, which I would support. But the problem is that it would be associated with the largest tax increase in American history.

The Alternative minimum.

The Alternative minimum.

Tax would come back, which would have a detrimental impact on New York. So you know, we have to negotiate in good faith. It's incumbent on everybody to do that. We are working through the numbers right now with the Ways and Means Committee to come up with a number that actually will provide real tax relief to middle class families. This is not an issue of the uber wealthy or rich. This is not an issue of those awful blue states. This is an issue of fairness. It's an issue of double taxation and providing real tax relief to working families.

Tax would come back, which would have a detrimental impact on New York. So you know, we have to negotiate in good faith. It's incumbent on everybody to do that. We are working through the numbers right now with the Ways and Means Committee to come up with a number that actually will provide real tax relief to middle class families. This is not an issue of the uber wealthy or rich. This is not an issue of those awful blue states. This is an issue of fairness. It's an issue of double taxation and providing real tax relief to working families.

Well, when you say working families, we've had sources telling Bloomber that in a listening session yesterday, Congressman Fitzpatrick actually suggested that he's worried about the Republican Party having a disconnect with what is increasingly its base versus those who might be able to benefit from something like an elevated salt cap. Congressman, were you part of that. What have your conversations been with some of your colleagues, not from these blue higher tax states, about the way forward on this.

Well, when you say working families, we've had sources telling Bloomber that in a listening session yesterday, Congressman Fitzpatrick actually suggested that he's worried about the Republican Party having a disconnect with what is increasingly its base versus those who might be able to benefit from something like an elevated salt cap. Congressman, were you part of that. What have your conversations been with some of your colleagues, not from these blue higher tax states, about the way forward on this.

Well, I'll let Brian speak for himself, and I'm not going to discuss what occurred in conference, but i will say, obviously, when you look at the coalition that President Trump built, It was comprised of working class families, It was comprised of union workers, It was comprised of folks who, day in, day out, are working to put food on the table, to pay their mortgage, to pay their car loans, etc. So we have a responsibility as we work through this tax bill to focus on the issue of affordability, to focus on the issue of tax relief from middle class and working class families. And that is really what all of us are are focused on. Obviously, you know, when you look at historically some of the policies that have been pushed by some Republicans within the conference, you know that may be at juxtaposition with where the party is today and certainly where our bases and certainly where the coalition that Donald Trump put together is. And so I think a key part of this is obviously what the President wants. He's talking about no tax on tips, He's talking about lifting the cap on salt. That is certainly, you know, a little bit different than obviously where the party was in twenty seventeen when the Tax Cuts in Jobs Act.

Well, I'll let Brian speak for himself, and I'm not going to discuss what occurred in conference, but i will say, obviously, when you look at the coalition that President Trump built, It was comprised of working class families, It was comprised of union workers, It was comprised of folks who, day in, day out, are working to put food on the table, to pay their mortgage, to pay their car loans, etc. So we have a responsibility as we work through this tax bill to focus on the issue of affordability, to focus on the issue of tax relief from middle class and working class families. And that is really what all of us are are focused on. Obviously, you know, when you look at historically some of the policies that have been pushed by some Republicans within the conference, you know that may be at juxtaposition with where the party is today and certainly where our bases and certainly where the coalition that Donald Trump put together is. And so I think a key part of this is obviously what the President wants. He's talking about no tax on tips, He's talking about lifting the cap on salt. That is certainly, you know, a little bit different than obviously where the party was in twenty seventeen when the Tax Cuts in Jobs Act.

Passed, right, and of course your legislation, we could remind our audience calls to lift a cap on salt to one hundred thousand dollars for single filers two hundred thousand dollars for married couples. Your Salts Fairness and Marriage Penalty Elimination Act. We want to have a broader conversation about taxes, Congressman. But while we're on the matter of salts, you've said some of your fellow Republican lawmakers are quote reflexively opposed because they think they're subsidizing bad blue state policies.

Passed, right, and of course your legislation, we could remind our audience calls to lift a cap on salt to one hundred thousand dollars for single filers two hundred thousand dollars for married couples. Your Salts Fairness and Marriage Penalty Elimination Act. We want to have a broader conversation about taxes, Congressman. But while we're on the matter of salts, you've said some of your fellow Republican lawmakers are quote reflexively opposed because they think they're subsidizing bad blue state policies.

You referred to that a second ago. Why are they wrong?

You referred to that a second ago. Why are they wrong?

Well, first of all, New York is a donor state. We send more in tax revenue to the federal government than we get back. I don't disagree about the disastrous leadership in New York or California under Kathy Hochel and Gavin Newsom. And in fact, the policies in New York do need to change. The tax burden does need to come down, The overall cost of living and cost of doing business does need to come down, and I've long advocated for that. But folks shouldn't be penalized for living in these states.

Well, first of all, New York is a donor state. We send more in tax revenue to the federal government than we get back. I don't disagree about the disastrous leadership in New York or California under Kathy Hochel and Gavin Newsom. And in fact, the policies in New York do need to change. The tax burden does need to come down, The overall cost of living and cost of doing business does need to come down, and I've long advocated for that. But folks shouldn't be penalized for living in these states.

And the fact is there are red.

And the fact is there are red.

States in which they get more money from the federal government than tax revenue they send.

States in which they get more money from the federal government than tax revenue they send.

To the federal government.

To the federal government.

So you know, if we want to get into the whole argument about who's subsidizing who, we can do that, I don't find that overly productive.

So you know, if we want to get into the whole argument about who's subsidizing who, we can do that, I don't find that overly productive.

I think the bottom.

I think the bottom.

Line here is we want to have a tax bill that provides broad based relief. If you look at where people are today from twenty seventeen and the median household, the fact is that in twenty nine of fifty states they blow through this ten thousand dollars salt cap with their tax burden, property taxes, income taxes, etc.

Line here is we want to have a tax bill that provides broad based relief. If you look at where people are today from twenty seventeen and the median household, the fact is that in twenty nine of fifty states they blow through this ten thousand dollars salt cap with their tax burden, property taxes, income taxes, etc.

So, you know, what may have made.

So, you know, what may have made.

Sense to some of my colleagues back in twenty seventeen, I think in some of these states, they're starting to see that ten thousand dollars cap is woefully insufficient and really does cause harm to taxpayers.

Sense to some of my colleagues back in twenty seventeen, I think in some of these states, they're starting to see that ten thousand dollars cap is woefully insufficient and really does cause harm to taxpayers.

So look, we're working through that.

So look, we're working through that.

I have confidence, certainly in my conversations with the President that we are going to get a tax deal done that does lift the cap on salt and really provides real tax relief to middle class families.

I have confidence, certainly in my conversations with the President that we are going to get a tax deal done that does lift the cap on salt and really provides real tax relief to middle class families.

Well, Congressman, I'm sure you well know. The President addressed the World Economic Forum at Davos earlier today, yourself virtually joined a panel related to NATO over the course of Davos this year, And I do wonder what you make of his remarks specifically and as we heard him or at least saw him post on True Social yesterday about trying to bring Russia to the negotiating table to end the war in Ukraine. How are you viewing this through your lenses to whether or not Russia is ready for that, and whether or not Ukraine is going to be able to negotiate good terms with Russia at this point.

Well, Congressman, I'm sure you well know. The President addressed the World Economic Forum at Davos earlier today, yourself virtually joined a panel related to NATO over the course of Davos this year, And I do wonder what you make of his remarks specifically and as we heard him or at least saw him post on True Social yesterday about trying to bring Russia to the negotiating table to end the war in Ukraine. How are you viewing this through your lenses to whether or not Russia is ready for that, and whether or not Ukraine is going to be able to negotiate good terms with Russia at this point.

Yeah, well, I think you know, President Trump is absolutely correct to start to apply pressure to Vladimir Putin to come to the table and in this war. I've been very clear in my support for Ukraine. I do believe Russia, China, Iran, and North Korea are engaged in an holy alliance that seeks to undermine and destabilize the United States, Israel, Europe in the free world. But we cannot have endless conflict. And I think President Trump is beginning that negotiation, extending out a hand to come meet him and have a conversation about how we bring this to a close. We have spent hundreds of billions of dollars, supporting our allies, supporting Ukraine, supporting NATO in this effort. But when you see, for instance, Europe purchasing gas from Russia and helping fund Russia's invasion of Ukraine at the same time while they are trying to guard against it, you see some of the foolishness that has been going on. The Biden administration was extremely weak. The fact that Joe Biden did not speak to Vladimir Putin in any meaningful way over the last three years contributed to allowing this conflict to continue uninterrupted. So there's a lot of work ahead, not just with respect to the Russia Ukraine conflict, but obviously the Middle East and with respect to China and the Indo Pacific. President Trump is here now to reassert America's role in the world and re establish peace through strength and reverse many of the policies of the Biden administration that created this tinderbox that we find ourselves in. And that was in part what I discussed last night overnight with Jony Ernst and Ambassador Grennell when we spoke before the conference in Davos.

Yeah, well, I think you know, President Trump is absolutely correct to start to apply pressure to Vladimir Putin to come to the table and in this war. I've been very clear in my support for Ukraine. I do believe Russia, China, Iran, and North Korea are engaged in an holy alliance that seeks to undermine and destabilize the United States, Israel, Europe in the free world. But we cannot have endless conflict. And I think President Trump is beginning that negotiation, extending out a hand to come meet him and have a conversation about how we bring this to a close. We have spent hundreds of billions of dollars, supporting our allies, supporting Ukraine, supporting NATO in this effort. But when you see, for instance, Europe purchasing gas from Russia and helping fund Russia's invasion of Ukraine at the same time while they are trying to guard against it, you see some of the foolishness that has been going on. The Biden administration was extremely weak. The fact that Joe Biden did not speak to Vladimir Putin in any meaningful way over the last three years contributed to allowing this conflict to continue uninterrupted. So there's a lot of work ahead, not just with respect to the Russia Ukraine conflict, but obviously the Middle East and with respect to China and the Indo Pacific. President Trump is here now to reassert America's role in the world and re establish peace through strength and reverse many of the policies of the Biden administration that created this tinderbox that we find ourselves in. And that was in part what I discussed last night overnight with Jony Ernst and Ambassador Grennell when we spoke before the conference in Davos.

All Right, Congressman, we appreciate you joining us in the Aftermath. That's Republican Congressman Mike Lawler of New York here on Balance of Power Live from Capitol Hill.

All Right, Congressman, we appreciate you joining us in the Aftermath. That's Republican Congressman Mike Lawler of New York here on Balance of Power Live from Capitol Hill.

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm. E's durn on Apple Cockley and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa played Bloomberg eleven.

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm. E's durn on Apple Cockley and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa played Bloomberg eleven.

Thirty as we were discussing with the Congressman. Donald Trump obviously spoke at Davos earlier today, where he talked about a wide variety of subjects, including the speed with which he has been moving since taking office on Monday.

Thirty as we were discussing with the Congressman. Donald Trump obviously spoke at Davos earlier today, where he talked about a wide variety of subjects, including the speed with which he has been moving since taking office on Monday.

My administration is acting with unprecedented speed to fix the disasters we've inherited from a totally inept group of people, and to solve every single crisis facing our country. This begins with confronting the economic chaos caused by the failed policies of the last administration.

My administration is acting with unprecedented speed to fix the disasters we've inherited from a totally inept group of people, and to solve every single crisis facing our country. This begins with confronting the economic chaos caused by the failed policies of the last administration.

The other thing he wants to confront economically, according to his remarks, is what he says is the trade deficit with the EU, that something should be done about that. That he wants to have a fair relationship with China. All of this as he was talking once again about tariffs today with those gathered at Davos, and of course the CEOs that were questioning him. So for more on this, we turned to Sarah Bianki. She's former deputy US Trade Representative during the Biden administration, now senior managing director and chief strategist of International Political Affairs and Public Policy at Evercore ISI. Sarah, welcome back to Bloomberg TV and Radio. As we just heard the President there talk about how he's doing a lot of things very quickly. Enacting new tariffs is actually not one of them, even as he suggests maybe we're looking at a deadline here of February first for Mexico, Canada and China. But how are you viewing the way in which he, if not slow walking, does seem to be at least thinking through and calibrating the way in which these levees are implemented.

The other thing he wants to confront economically, according to his remarks, is what he says is the trade deficit with the EU, that something should be done about that. That he wants to have a fair relationship with China. All of this as he was talking once again about tariffs today with those gathered at Davos, and of course the CEOs that were questioning him. So for more on this, we turned to Sarah Bianki. She's former deputy US Trade Representative during the Biden administration, now senior managing director and chief strategist of International Political Affairs and Public Policy at Evercore ISI. Sarah, welcome back to Bloomberg TV and Radio. As we just heard the President there talk about how he's doing a lot of things very quickly. Enacting new tariffs is actually not one of them, even as he suggests maybe we're looking at a deadline here of February first for Mexico, Canada and China. But how are you viewing the way in which he, if not slow walking, does seem to be at least thinking through and calibrating the way in which these levees are implemented.

Yeah, it's a good point.

Yeah, it's a good point.

He put out a framework on Monday, but that was a far cry from some of the detailed policies that he had spoken about. He had said he was going to do twenty five percent a tariff on Canada and Mexico on inauguration day. I think what's going on is that his team on this issue does have some divisions.

He put out a framework on Monday, but that was a far cry from some of the detailed policies that he had spoken about. He had said he was going to do twenty five percent a tariff on Canada and Mexico on inauguration day. I think what's going on is that his team on this issue does have some divisions.

That's how he likes it.

That's how he likes it.

On trade, he has a very very pro tariff part of the community, with the USTR nominee and others, but also some who are less comfortable, and I think he does understand actually, this economy is in pretty good shape, and he does have some anxiety in the markets, particularly in the bond market, about inflation and about tariff. So I think they're trying to calibrate. I don't put much stock into the February first deadline, but I do believe that Donald Trump always comes back to tariffs, and our projection is that with due time, we will get tariffs, not only in China but in other parts of the world.

On trade, he has a very very pro tariff part of the community, with the USTR nominee and others, but also some who are less comfortable, and I think he does understand actually, this economy is in pretty good shape, and he does have some anxiety in the markets, particularly in the bond market, about inflation and about tariff. So I think they're trying to calibrate. I don't put much stock into the February first deadline, but I do believe that Donald Trump always comes back to tariffs, and our projection is that with due time, we will get tariffs, not only in China but in other parts of the world.

Sarah, it's good to have you.

Sarah, it's good to have you.

What did you make of the tone of this conversation, dear leader, The way that Donald Trump was showered with compliments everyone there, the elite being so deferential to the president, not terribly concerned with even kind of insulted Brian moynihan, Well, he was at it, who thanked him for his service. They talked about his family, what does it tell us about the influence that Donald Trump has.

What did you make of the tone of this conversation, dear leader, The way that Donald Trump was showered with compliments everyone there, the elite being so deferential to the president, not terribly concerned with even kind of insulted Brian moynihan, Well, he was at it, who thanked him for his service. They talked about his family, what does it tell us about the influence that Donald Trump has.

Over the titans of this industry finance.

Over the titans of this industry finance.

Well, for right.

Well, for right.

Now, Donald Trump is at the height of his power, and I think a lot of leaders coming in understand that this is a very, very transactional president and that working with him when possible has a big advantages. We could Ultimately we'll start to see that splinter a little bit. Again, we are in inauguration week that is again the height usually of support.

Now, Donald Trump is at the height of his power, and I think a lot of leaders coming in understand that this is a very, very transactional president and that working with him when possible has a big advantages. We could Ultimately we'll start to see that splinter a little bit. Again, we are in inauguration week that is again the height usually of support.

And look, there's some things that Trump wants to.

And look, there's some things that Trump wants to.

Do that they welcome, an easier m and a environment, you know, some things on digital taxes, so I think they're willing to kind of take some of the side flights that come along with that. But ultimately, as we get into the agenda, the markets are worried about deficits. They're worried about these tariffs. Business leaders are too, So the governing, the hard part is still really yet to come.

Do that they welcome, an easier m and a environment, you know, some things on digital taxes, so I think they're willing to kind of take some of the side flights that come along with that. But ultimately, as we get into the agenda, the markets are worried about deficits. They're worried about these tariffs. Business leaders are too, So the governing, the hard part is still really yet to come.

Well, and when we consider the deficit, and we were just having a conversation about looming tax cuts with Republican Congressman Mike Laller, which could help to balloon the deficit if there's not offsets to it. Donald Trump also used things like tariffs as not just a way to recalibrate trade relationships that the US has with other countries, but also as a way to raise revenue. And I wonder, Sarah, you can just give us a reality check as he's outing this external revenue service as to what that revenue would actually look like with the kind of figures that he has floated to this point.

Well, and when we consider the deficit, and we were just having a conversation about looming tax cuts with Republican Congressman Mike Laller, which could help to balloon the deficit if there's not offsets to it. Donald Trump also used things like tariffs as not just a way to recalibrate trade relationships that the US has with other countries, but also as a way to raise revenue. And I wonder, Sarah, you can just give us a reality check as he's outing this external revenue service as to what that revenue would actually look like with the kind of figures that he has floated to this point.

Well, the challenge that he has is that a number of tax cuts in you all I heard were just talking about salt, and that's even more money.

Well, the challenge that he has is that a number of tax cuts in you all I heard were just talking about salt, and that's even more money.

Uh.

Uh.

And they're not that interested in spending cuts. So there's a real uh, you know, the hard facts of numbers are a real challenge for this president. And the other challenge that they have is lots of the tariff stuff they can do through executive order, but our Congressional Budget Office and our budgeteers don't count that as revenue when it's done that way, and so they're trying to find a way to get credit for that that money. You know, I don't put a ton of of of stock in it. I think, Look, they're they're right in the sense that if they do do more teriffs, more revenue will come in.

And they're not that interested in spending cuts. So there's a real uh, you know, the hard facts of numbers are a real challenge for this president. And the other challenge that they have is lots of the tariff stuff they can do through executive order, but our Congressional Budget Office and our budgeteers don't count that as revenue when it's done that way, and so they're trying to find a way to get credit for that that money. You know, I don't put a ton of of of stock in it. I think, Look, they're they're right in the sense that if they do do more teriffs, more revenue will come in.

The death sit will go down who collects it is really.

The death sit will go down who collects it is really.

Just kind of a Washington accounting gimmick, really and signed to show.

Just kind of a Washington accounting gimmick, really and signed to show.

But but but it does raise revenue.

But but but it does raise revenue.

Uh.

Uh.

And I don't think Congress is particularly interested in the tariffs, so I think he's trying to square that circle. Well.

And I don't think Congress is particularly interested in the tariffs, so I think he's trying to square that circle. Well.

It's interesting because Scott Bessett would tell you can't have one without the other. It's the combined effect, right of the tax cuts and tariff policy that they say will in fact raise enough revenue to lower the deficit. Are you suggesting that there there might be some sunlight between the two.

It's interesting because Scott Bessett would tell you can't have one without the other. It's the combined effect, right of the tax cuts and tariff policy that they say will in fact raise enough revenue to lower the deficit. Are you suggesting that there there might be some sunlight between the two.

Donald Trump, the stroke of a pen gets the terriffs.

Donald Trump, the stroke of a pen gets the terriffs.

This tax debate is going to be tortured as we make our way further into the year. Could we be in a world where where you've got tariffs but no tax cuts.

This tax debate is going to be tortured as we make our way further into the year. Could we be in a world where where you've got tariffs but no tax cuts.

I think ultimately they're going to get a tax bill done. It's just really complicated given the deficit situation that we're in. And despite that, the Secretary of Treasury nominee uh, you know, claim that we can reduce the deficit. There aren't any really hard plans And the problem is the numbers get sticky. Most of the death most of the deficit and government spending comes from social Security, Medicare, interest we pay on the debt, and uh, if you don't want to touch those, very very challenging. So some of the things that he's doing with DOJE and other issues are welcome initiatives, but I don't see any plan right now that does They're lucky if they keep the death cit even I expect the more like the scenario.

I think ultimately they're going to get a tax bill done. It's just really complicated given the deficit situation that we're in. And despite that, the Secretary of Treasury nominee uh, you know, claim that we can reduce the deficit. There aren't any really hard plans And the problem is the numbers get sticky. Most of the death most of the deficit and government spending comes from social Security, Medicare, interest we pay on the debt, and uh, if you don't want to touch those, very very challenging. So some of the things that he's doing with DOJE and other issues are welcome initiatives, but I don't see any plan right now that does They're lucky if they keep the death cit even I expect the more like the scenario.

Is that it goes up.

Is that it goes up.

Sarah.

Sarah.

Something else we heard the President talking about today's the ongoing war between Russia and Ukraine. This is after he took to True Social yesterday saying that Putin needs to come to the negotiating table. It can be done the easy way or the hard way, and he outlined the hard way as being greater sanctions but also taxes and tariffs on Russian imports or exports being imported into the United States. To what extent is that actual usable leverage against Russia, given the relatively small amount that we actually do import from the country, given the ongoing war, and the fact that there are already or sanctions which were tightened just at the very tail end of the Biden administration.

Something else we heard the President talking about today's the ongoing war between Russia and Ukraine. This is after he took to True Social yesterday saying that Putin needs to come to the negotiating table. It can be done the easy way or the hard way, and he outlined the hard way as being greater sanctions but also taxes and tariffs on Russian imports or exports being imported into the United States. To what extent is that actual usable leverage against Russia, given the relatively small amount that we actually do import from the country, given the ongoing war, and the fact that there are already or sanctions which were tightened just at the very tail end of the Biden administration.

Yeah, I think that you've outlined it exactly correctly. The iminustration has taken a lot of action too. Took a lot of action to Titan sanctions. Potentially one could do more that is going to be more impactful on Russia than any tariff on an import into the United States, which, as you noted, is a.

Yeah, I think that you've outlined it exactly correctly. The iminustration has taken a lot of action too. Took a lot of action to Titan sanctions. Potentially one could do more that is going to be more impactful on Russia than any tariff on an import into the United States, which, as you noted, is a.

Small part of the challenge.

Small part of the challenge.

But look, I think it is I'm glad to see Trump uh talking tough on Russia. I think some of us were concerned that given of the pressure that he feels to sort of get a mission accomplished with on this ongoing geopolitical issue, as as well as many others. You know, definitely was hired in part to address these quote forever wars. You know, I think some were concerned that he was going to cut a deal quite quickly that that might not be advantageous to Ukraine.

But look, I think it is I'm glad to see Trump uh talking tough on Russia. I think some of us were concerned that given of the pressure that he feels to sort of get a mission accomplished with on this ongoing geopolitical issue, as as well as many others. You know, definitely was hired in part to address these quote forever wars. You know, I think some were concerned that he was going to cut a deal quite quickly that that might not be advantageous to Ukraine.

So we'll have to see where it all lands.

So we'll have to see where it all lands.

But I don't blame the President now for starting the conversation by talking tough.

But I don't blame the President now for starting the conversation by talking tough.

Sarah, It's always a pleasure to have you, former Deputy US Trade Rep now senior managing director, chief strategist of International political Affairs public Policy at Evercore is Si Sarah Bianki with us once again on Bloomberg TV.

Sarah, It's always a pleasure to have you, former Deputy US Trade Rep now senior managing director, chief strategist of International political Affairs public Policy at Evercore is Si Sarah Bianki with us once again on Bloomberg TV.

And Radio.

And Radio.

I'm Joe Matthew alongside Kaylee Lines in Washington. I had to stop down, which she said, it's still inauguration week. It's the same week. It's only Thursday.

I'm Joe Matthew alongside Kaylee Lines in Washington. I had to stop down, which she said, it's still inauguration week. It's the same week. It's only Thursday.

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on almal Corkleay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on almal Corkleay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Balance of Power at the early edition.

Balance of Power at the early edition.

We do have breaking news here, Kaylee, and it has to do with Donald Trump's confirmations his nominee, specifically, in this case, his nominee for Defense Secretary, Pete Hegseth.

We do have breaking news here, Kaylee, and it has to do with Donald Trump's confirmations his nominee, specifically, in this case, his nominee for Defense Secretary, Pete Hegseth.

We've been counting the votes here.

We've been counting the votes here.

It does appear, just to be straight up on this, no matter who we talk to, Kaylee, Democrat or Republican, they tend to think that he will be approved. He will be confirmed as Defense Secretary. But we do now know that there is a Republican vote that he has lost.

It does appear, just to be straight up on this, no matter who we talk to, Kaylee, Democrat or Republican, they tend to think that he will be approved. He will be confirmed as Defense Secretary. But we do now know that there is a Republican vote that he has lost.

The Senator from Alaska is not on board, yep.

The Senator from Alaska is not on board, yep.

Senator Lisa Murkowski just putting out a statement on x in which she speaks about her concerns of regarding mister Hegseeth. She talks about how she is concerned about the message that confirming Hegseth would send to women currently serving in those inspiring to join. She also talks about character, noting not just allegations of sexual assault and excess of drinking, but behaviors. She says Hegseth has admitted to, including infidelity on multiple occasions and a lack of which demonstrates to her a lack of judgment that is unbecoming of someone who would lead our armed forces. She says, above all, I believe character is the defining trait required of the Secretary of Defense and ends her statement saying I regret I am unable to support mister Hegseth. That is one Joe three knows he can get through because Jade Vance would provide a tie breaking vote four nos, though.

Senator Lisa Murkowski just putting out a statement on x in which she speaks about her concerns of regarding mister Hegseeth. She talks about how she is concerned about the message that confirming Hegseth would send to women currently serving in those inspiring to join. She also talks about character, noting not just allegations of sexual assault and excess of drinking, but behaviors. She says Hegseth has admitted to, including infidelity on multiple occasions and a lack of which demonstrates to her a lack of judgment that is unbecoming of someone who would lead our armed forces. She says, above all, I believe character is the defining trait required of the Secretary of Defense and ends her statement saying I regret I am unable to support mister Hegseth. That is one Joe three knows he can get through because Jade Vance would provide a tie breaking vote four nos, though.

He wouldn't be able to and we have a sense that Susan Collins and Mitch McConnell may not be on board, so that fourth vote will be critical. We've also learned by the way that we're going to have a flurry of confirmations next week. Pete Hegseth may not in the end have had the most dramatic session. Remembering he did not meet with Democrats, he knew he would likely not get a single Democratic vote, and the members from.

He wouldn't be able to and we have a sense that Susan Collins and Mitch McConnell may not be on board, so that fourth vote will be critical. We've also learned by the way that we're going to have a flurry of confirmations next week. Pete Hegseth may not in the end have had the most dramatic session. Remembering he did not meet with Democrats, he knew he would likely not get a single Democratic vote, and the members from.

The other party certainly assured him of that.

The other party certainly assured him of that.

When you heard from Tim Kaine, Elizabeth Warren, Tammy Duckworth and others, yep.

When you heard from Tim Kaine, Elizabeth Warren, Tammy Duckworth and others, yep.

And as you say, more fireworks to come next week, but we're dealing with these headlines now. And joining us for some live reaction from Capitol Hill is a member of Congress who represents a district that has a large military population. Congressman Jennifer McClellan of Virginia's fourth District of the Democrat is joining us now here on Bloomberg TV and radio. Congresswoman, thanks for being here. I do wonder what you are hearing from your constituent, specifically the ones who are going to have to report up through the chain ultimately to the Secretary of Defense what they think about mister Hegseth.

And as you say, more fireworks to come next week, but we're dealing with these headlines now. And joining us for some live reaction from Capitol Hill is a member of Congress who represents a district that has a large military population. Congressman Jennifer McClellan of Virginia's fourth District of the Democrat is joining us now here on Bloomberg TV and radio. Congresswoman, thanks for being here. I do wonder what you are hearing from your constituent, specifically the ones who are going to have to report up through the chain ultimately to the Secretary of Defense what they think about mister Hegseth.

I am hearing a lot of women who are in our armed forces that they are concerned first his comments opposing women in combat, many of whom are decorated and have acquitted themselves very well with his own sexual assault allegations. There's a concern that it would halt or reverse progress that we have made addressing sexual assault in the military and creating an environment less hostile to women in the military. But I'm also hearing concerns about his drinking and the fact that you need to be sure that you have someone who will decide whether we attack someone or who could decide to what extent nuclear weapons could be used, having the presence of mind and not being impaired, and their concerns about mister Hexeth in all of those areas.

I am hearing a lot of women who are in our armed forces that they are concerned first his comments opposing women in combat, many of whom are decorated and have acquitted themselves very well with his own sexual assault allegations. There's a concern that it would halt or reverse progress that we have made addressing sexual assault in the military and creating an environment less hostile to women in the military. But I'm also hearing concerns about his drinking and the fact that you need to be sure that you have someone who will decide whether we attack someone or who could decide to what extent nuclear weapons could be used, having the presence of mind and not being impaired, and their concerns about mister Hexeth in all of those areas.

The senator congresswoman wrote about the message that it would send. I remain concerned about the message confirming mister Hegseth sends to women currently serving and those aspiring to join. And that's the part that I want to ask you about what that might mean in your view for recruitment, for attracting new talent in a massive navy hub like Norfolk.

The senator congresswoman wrote about the message that it would send. I remain concerned about the message confirming mister Hegseth sends to women currently serving and those aspiring to join. And that's the part that I want to ask you about what that might mean in your view for recruitment, for attracting new talent in a massive navy hub like Norfolk.

I would say, and I have been saying since he was first announced, that his appointment would have a chilling effect on attracting and retaining the best and the brightest in our armed forces, women also minorities, and making sure we have done a really good job making sure that our armed forces reflect the diversity of the country that they defend, and we've had challenges meeting some of our recruitment goes for a wide variety of reasons, and mister Hegseth would add to those problems if he were confirmed.

I would say, and I have been saying since he was first announced, that his appointment would have a chilling effect on attracting and retaining the best and the brightest in our armed forces, women also minorities, and making sure we have done a really good job making sure that our armed forces reflect the diversity of the country that they defend, and we've had challenges meeting some of our recruitment goes for a wide variety of reasons, and mister Hegseth would add to those problems if he were confirmed.

Well, so as you speak to the reflection of the country the US military is defending. What do you make of the unwind of DEI programs across the federal government as of last night, but the Pentagon included.

Well, so as you speak to the reflection of the country the US military is defending. What do you make of the unwind of DEI programs across the federal government as of last night, but the Pentagon included.

I'm very concerned about it. I mean, these go so far as to even to rescind a nineteen sixty five executive order from President Johnson that applies to contractors federal government contractors that includes contractors that serve our military, contractors that build our warships, and it basically means now there's nothing prohibiting them by executive order from engaging in discrimination against employees simply for who they are. It's appalling and undone so much progress that we have made over the past sixty years.

I'm very concerned about it. I mean, these go so far as to even to rescind a nineteen sixty five executive order from President Johnson that applies to contractors federal government contractors that includes contractors that serve our military, contractors that build our warships, and it basically means now there's nothing prohibiting them by executive order from engaging in discrimination against employees simply for who they are. It's appalling and undone so much progress that we have made over the past sixty years.

Well, congresswomen, our viewers and listeners are going to get a good sense here of how important your district is and some of the issues that we're talking about as Kaylee mentioned Virginia's fourth disc that DEI undoing if you will, and we understand now according to reports that the administration is actually asking federal.

Well, congresswomen, our viewers and listeners are going to get a good sense here of how important your district is and some of the issues that we're talking about as Kaylee mentioned Virginia's fourth disc that DEI undoing if you will, and we understand now according to reports that the administration is actually asking federal.

Workers to rat each other out.

Workers to rat each other out.

If there are DEI processes left in place, it's going to end up with a lot of layoffs. You have a lot of federal workers in the state of Virginia. You also have a lot of veterans, and this could impact some veterans programs as well with the undoing of DEI. When you put that all together, what's the net effect? How many people could lose their jobs?

If there are DEI processes left in place, it's going to end up with a lot of layoffs. You have a lot of federal workers in the state of Virginia. You also have a lot of veterans, and this could impact some veterans programs as well with the undoing of DEI. When you put that all together, what's the net effect? How many people could lose their jobs?

Well, we have over two hundred thousand federal employees and contractors and over one hundred thousand, over one hundred and forty thousand veterans. It's already having an effect. The VA hospital in my district had a meeting yesterday to talk about how it was going to impact their ability to provide services to veterans. They were about to open a new VA hospital in Fredericksburg, Virginia, less than thirty minutes away from my day strict. Now they're not sure they can do that because they can't hire the staff to staff it. We've seen VA hospitals and other states that have rescinded employment offers to nurses. We already have a nursing shortage. We are already struggling to meet the healthcare needs of our veterans. This is going to make it worse. The VA is concerned they're going to have to start sending veterans to hospitals, in civilian hospitals in the region. They are already struggling with nurses and provider shortages. This is a mess, and this is not what the American people voted for when they voted for Donald Trump. They thought they were voting to reduce costs. Instead, he is burdening our veterans, He is burning our soldiers, and he is burdening our military families.

Well, we have over two hundred thousand federal employees and contractors and over one hundred thousand, over one hundred and forty thousand veterans. It's already having an effect. The VA hospital in my district had a meeting yesterday to talk about how it was going to impact their ability to provide services to veterans. They were about to open a new VA hospital in Fredericksburg, Virginia, less than thirty minutes away from my day strict. Now they're not sure they can do that because they can't hire the staff to staff it. We've seen VA hospitals and other states that have rescinded employment offers to nurses. We already have a nursing shortage. We are already struggling to meet the healthcare needs of our veterans. This is going to make it worse. The VA is concerned they're going to have to start sending veterans to hospitals, in civilian hospitals in the region. They are already struggling with nurses and provider shortages. This is a mess, and this is not what the American people voted for when they voted for Donald Trump. They thought they were voting to reduce costs. Instead, he is burdening our veterans, He is burning our soldiers, and he is burdening our military families.

Well, we really appreciate your insight into these matters, Congressoman. As we consider as well, where this administration is now sending our soldiers with the deployment of troops to the US border, do you see this as an appropriate use of the mility Terry, considering he has declared an emergency.

Well, we really appreciate your insight into these matters, Congressoman. As we consider as well, where this administration is now sending our soldiers with the deployment of troops to the US border, do you see this as an appropriate use of the mility Terry, considering he has declared an emergency.

Well, what we need to do and what Democrats were ready to do with Republicans last Congress was pass an immigration border security bill that invests in border patrol agents and put them on the border so that our armed forces can do the job they were trained for, and that is to serve our needs both here in bases but also overseas.

Well, what we need to do and what Democrats were ready to do with Republicans last Congress was pass an immigration border security bill that invests in border patrol agents and put them on the border so that our armed forces can do the job they were trained for, and that is to serve our needs both here in bases but also overseas.

What are you concerned about as we consider the impact in your district that changes to military policy would have here when it comes to climate, when it comes to resources, shipbuilding, etc. This is something that Donald Trump has talked about a lot when it comes to the proposed.

What are you concerned about as we consider the impact in your district that changes to military policy would have here when it comes to climate, when it comes to resources, shipbuilding, etc. This is something that Donald Trump has talked about a lot when it comes to the proposed.

Purchase of US steel.

Purchase of US steel.

Is that a conversation that you'll be part of considering your district and your constituency on Capitol Hill?

Is that a conversation that you'll be part of considering your district and your constituency on Capitol Hill?

Absolutely?

Absolutely?

Absolutely.

Absolutely.

I mean, first of all, a member of the Armed Services Committee and the last Congress, when I went to Norfolk Naval Station and asked their commanding officer what is the number one thing that keeps you up at night? She talked about the fact that when they have heavy rains, not just increased storms and higher intensity storms, but heavy rains, there is a street that bisects that naval station that floods, and she can't get her people from one side to the other. How is she going to be able to deploy ships in an emergency or when they are deployed if she can't get across the base because it's flooded. And by rolling back all of the efforts that we have made to address resiliency and climate action, particularly in the Navy, in the Armed services, what the President is doing is ignoring the impact that climate change has on military readiness and on our soldier's ability to do their job and frankly, their quality of life.

I mean, first of all, a member of the Armed Services Committee and the last Congress, when I went to Norfolk Naval Station and asked their commanding officer what is the number one thing that keeps you up at night? She talked about the fact that when they have heavy rains, not just increased storms and higher intensity storms, but heavy rains, there is a street that bisects that naval station that floods, and she can't get her people from one side to the other. How is she going to be able to deploy ships in an emergency or when they are deployed if she can't get across the base because it's flooded. And by rolling back all of the efforts that we have made to address resiliency and climate action, particularly in the Navy, in the Armed services, what the President is doing is ignoring the impact that climate change has on military readiness and on our soldier's ability to do their job and frankly, their quality of life.

As we consider a climate change Congress women, of course, we all have our eyes on the West coast with fires still raging in the Los Angeles area. And I'm sure you're well aware that there are colleagues of yours in the House on the Republican side who are suggesting any emergency aid for LA should be conditioned and that it could be leveraged to get Democratic votes on other matters like raising the debt ceiling for example. Where do you come down on.

As we consider a climate change Congress women, of course, we all have our eyes on the West coast with fires still raging in the Los Angeles area. And I'm sure you're well aware that there are colleagues of yours in the House on the Republican side who are suggesting any emergency aid for LA should be conditioned and that it could be leveraged to get Democratic votes on other matters like raising the debt ceiling for example. Where do you come down on.

That this is a rubicon Republican should not cross. The American people expect their government to solve problems and help people, particularly when there is a natural disaster. There are people in California that voted for mister Trump. There are people in California that voted for Kamala Harris. There are people in California that did not vote at all, but they all expect their government to help them in an emergency. And we have never conditioned in a natural disaster. And there's so much misinformation that they're even using to justify these conditions, but they're ignoring the fact that it is difficult to fight a fire and hurricane force wins. So we need to make sure we're doing everything we can in California and North Carolina and anywhere else to address the needs of the American people, especially in a natural disaster.

That this is a rubicon Republican should not cross. The American people expect their government to solve problems and help people, particularly when there is a natural disaster. There are people in California that voted for mister Trump. There are people in California that voted for Kamala Harris. There are people in California that did not vote at all, but they all expect their government to help them in an emergency. And we have never conditioned in a natural disaster. And there's so much misinformation that they're even using to justify these conditions, but they're ignoring the fact that it is difficult to fight a fire and hurricane force wins. So we need to make sure we're doing everything we can in California and North Carolina and anywhere else to address the needs of the American people, especially in a natural disaster.

Well, so how do you how do you work against miss and disinformation, whether it's in Asheville and we heard a lot about that when FEMA showed up following the hurricanes, or now in California, where Donald Trump says Gavin Newsom only has to turn a valve that he's refusing to provide water to Los Angeles. A lot of people are going to believe that Donald Trump's on his way there tomorrow.

Well, so how do you how do you work against miss and disinformation, whether it's in Asheville and we heard a lot about that when FEMA showed up following the hurricanes, or now in California, where Donald Trump says Gavin Newsom only has to turn a valve that he's refusing to provide water to Los Angeles. A lot of people are going to believe that Donald Trump's on his way there tomorrow.

Congresswoman, Well, I think we need to make sure that all of us this is all hands on deck moment. It's me as an elected official, it's you as a member of the press, making sure we are calling out this misinformation and that we are countering it. But in every medium where people will receive their information, and so that's what we need to make sure we are doubling down and being more aggressive. Whether you get your information from social media or your neighbor next door, we've got to make sure that we're giving you the truth.

Congresswoman, Well, I think we need to make sure that all of us this is all hands on deck moment. It's me as an elected official, it's you as a member of the press, making sure we are calling out this misinformation and that we are countering it. But in every medium where people will receive their information, and so that's what we need to make sure we are doubling down and being more aggressive. Whether you get your information from social media or your neighbor next door, we've got to make sure that we're giving you the truth.

All right, Congressman, Well, we just have a minute left here. But I do wonder as we look ahead to Monday, in the Republican Conference meeting that will be happening in Florida that Donald Trump will attend, is they're discussing their legislative agenda border measures, energy measures, tax related measures they would like to implement. Are they going to be able to count on any Democratic votes for any of these things? Could this be a bipartisan process?

All right, Congressman, Well, we just have a minute left here. But I do wonder as we look ahead to Monday, in the Republican Conference meeting that will be happening in Florida that Donald Trump will attend, is they're discussing their legislative agenda border measures, energy measures, tax related measures they would like to implement. Are they going to be able to count on any Democratic votes for any of these things? Could this be a bipartisan process?

Well, I'm gonna they have proven that even with a five person majority, let alone a one person majority, they are unable to do anything without Democrats because they fight each other. Democrats stand ready to work together to meet the needs of the American people and to put people over politics. Republicans are going to have to come to the table and do that. But we are not going to a violate our values, and those values include making sure we are centering people, that we are centering their needs and helping them, that we are not pitting one group of amer Americans against another, and that we are protecting our democracy. So if they want bipartisan help in governing, we stand ready to meet an easy the American people, but they are going to have to come to us and not just expect us to bend the knee and to their will and violate our values.

Well, I'm gonna they have proven that even with a five person majority, let alone a one person majority, they are unable to do anything without Democrats because they fight each other. Democrats stand ready to work together to meet the needs of the American people and to put people over politics. Republicans are going to have to come to the table and do that. But we are not going to a violate our values, and those values include making sure we are centering people, that we are centering their needs and helping them, that we are not pitting one group of amer Americans against another, and that we are protecting our democracy. So if they want bipartisan help in governing, we stand ready to meet an easy the American people, but they are going to have to come to us and not just expect us to bend the knee and to their will and violate our values.

All right.

All right.

Democratic Congressoman Jennifer McClellan of Virginia, thank you so much for joining us here on Balance of Power as we round out this early edition, where we've gotten some breaking news on a few fronts, Joe one being the first no vote in the Senate for Pete Hegseth's defense secretary, Lisa Murkowski saying she cannot support him for defense secretary. The other being a Cord in Seattle knocking down at least for now temporarily blocking Donald Trump's executive order ending birthright.

Democratic Congressoman Jennifer McClellan of Virginia, thank you so much for joining us here on Balance of Power as we round out this early edition, where we've gotten some breaking news on a few fronts, Joe one being the first no vote in the Senate for Pete Hegseth's defense secretary, Lisa Murkowski saying she cannot support him for defense secretary. The other being a Cord in Seattle knocking down at least for now temporarily blocking Donald Trump's executive order ending birthright.

Citizenship, as well.

Citizenship, as well.

Telsea Gabbard confirmation hearing set for next Thursday.

Telsea Gabbard confirmation hearing set for next Thursday.

Next week is going to be wild. Thanks for listening to the Balance of Power podcast.

Next week is going to be wild. 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, d C.

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, d C.

At noontime Eastern at Bloomberg dot com

At noontime Eastern at Bloomberg dot com